SECTION I: INTRODUCTION

Real-Life Negotiation Situations
You feel you’ve been had. Sucker-punched. Taken for a ride. Why? You’ve been talking to your next-door neighbors about their cell phone service, and you find out that they are paying roughly half the monthly rate that you are paying! To make matters worse, you learn that their phone has text-messaging, a camera, no roaming charges, AND e-mail capability! Your cell phone does not have these functions. And the final insult? They didn’t have to sign a contract— and you still have 18 months left on yours. At first you get mad, thinking the phone company made a mistake that is costing you money. After all, you pride yourself on being an informed consumer— how else could this have happened? Then you ask your neighbor how he got such a good deal. He tells you that he and his wife simply negotiated the agreement when they switched providers. Boy, do you feel frustrated and foolish. You realize how easy if would have been for you to have negotiated the same deal, if only you had tried. The fact is that most people miss many opportunities to negotiate in their professional and personal lives. Negotiating is a critical ability that many of us lack, yet anyone can become a competent negotiator. It simply requires (1) knowing when a particular situation is ripe for negotiation; (2) knowing who is able to make a decision for the other party (you often need to ask to speak with the supervisor or manager in charge); and (3) knowing how to negotiate. Read this easy-to-follow book, and learn how to negotiate by practicing a few tactics presented here. As you read, you’ll be amazed at all the everyday situations in which having the ability to negotiate effectively can enrich your life.

Introduction

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Practical Tactics for Work and Life
In this book, we provide the reader with 50 proven, practical, and easy-to-apply negotiation tactics. We minimize the jargon and long-winded stories so you can quickly learn how to use each tactic (usually in less than a day!). You do not need to wade through hundreds of pages to find a single useful tactic. In fact, most people find a few interesting tactics right away, and try them out immediately. Each tactic is briefly defined and used in work and life examples—no lengthy anecdotes and no wordy theoretical discussions. Each is written to stand alone; the reader does not have to read and retain many pages of discussion just to understand how to use the tactic.

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50 Practical Negotiation Tactics

Tips on Getting the Most Out of This Book
Read the book through, from start to finish. It only takes about two hours. Read all 50 tactics and flag the ones you believe you can use immediately and in what situations. (Or use the Notes pages in the back). For example: • Nickel and Diming (Tactic #43) – Use with copier vendor to reduce toner cost. • Commit the Offer to Paper! (Tactic #50) – Use with kids for household chores and driving privileges. Keep it handy. This book, as the title states, is a resource book. After you have familiarized yourself with the content, keep the book on your desk or shelf next to the dictionary, encyclopedia, and other reference books. Use the tactics! Practice makes perfect. Start with the ones you flagged or recorded in the Notes section. The next time you are about to enter a negotiation situation, refer to the notes you made, and try the tactic. It won’t cost you anything to prepare ahead, and the experience of trying it out will build your confidence. Everyone can negotiate, once they know the tactics and practice them. The first time you realize that using a tactic gave you a significant gain, you will be ready to try more of them. Develop your own style. The fifty tactics presented in this book are not intended to be recipes for success in any negotiation situation. Instead, they are general methods that should be adapted to fit one’s personal style or negotiation circumstance. As you use a tactic, record the results in the back of the book so you can recall how it worked the next time a similar situation comes up. Use the exercise forms in Section IV. They will help you think about how you can use these tactics. On the form, briefly describe the situation; list the parties involved (including the people who can make a decision); describe the issue to be negotiated; and finally, list the tactics that you believe might be especially helpful. Take the Quiz! Can this book help you? Circle yes or no next to each of the ten quiz questions on page 7. Score your answers: one point for each “no” on questions 1, 6, 7, and 10 and one point for each “yes” on questions 2, 3, 4, 5, 8, and 9. Total your points. If your total score is a 9 or 10, you are already a successful

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This book is designed to give the reader an understanding of the negotiation process by presenting fifty proven. Instead. • A child wants a new toy now. Unfortunately. practical tactics useful in real-life situations at work or at home. accept what is given. 4 50 Practical Negotiation Tactics . are the negotiators most people deal with each week in their work and personal life? The list will be long: • • • • • • • • a neighbor a spouse a child other family members a supervisor a co-worker a salesperson a boyfriend/girlfriend • • • • • • a home builder a hotel clerk an electrician/plumber a lawyer a vendor/buyer a human resource director (who might make a job offer) • a manager Most people expect to have to negotiate when buying a car or purchasing a home. Most readers will no doubt recognize some of these strategies. or engage in an unproductive argument.negotiator! Pass this book on to someone else who needs it. But if you scored 8 or less. with family members. but many of us miss the opportunity to bargain in other situations. • A co-worker asks for volunteers for a new project. they pay the sticker price. few people understand that normal interactions represent bargaining opportunities. start reading! Most people come face-to-face with a negotiation situation of one type or another on a daily basis: on the job. at a flea market. such as these: • You receive the wrong order at a restaurant. exactly. some will in retrospect even remember being the victim of one or two of them. Who. with neighbors. Learning how to use these tactics and knowing when to apply them will make you a more skilled negotiator when you are faced with the opportunity to strike a favorable agreement.

what can you do for me?” Or this to a restaurant manager: “This food order is wrong. and I don’t have time to wait for another. For example. Your spouse wants to buy new furniture. Your boss reviews your past year’s performance. 3. All of these situations are opportunities to negotiate. 2. Two or more sides are involved. condition. A friend is about to select the movie he/she wants everyone else to see. In some situations. A service repair person gives you an estimate on some work. be prepared to bargain. Mutual goals. “I’d like Introduction 5 . What are my alternatives?” During an employee evaluation. or items of value. In some circumstances. time. The parties involved are interested in reaching a common goal. The parties involved can make a decision by themselves. that can be negotiated. Therefore. such as price. The parties are interdependent: what one party does affects the other. one party is only allowed to follow policy or must wait “until the manager arrives. Both sides want a settlement. A teenager wants to buy his/her first car. 4. Interdependency. Flexibility. Multiple parties. There are flexible elements to the situation. some resolution must be negotiated. perhaps the employee can say. Decision-making ability. and each side can involve one person or several people (each representing one “side” of the issue). since you lost my reservation. Each one has the five key characteristics necessary for bargaining: 1. There must be a conflict in the sense that what one wants is not what the other wants. perhaps you can say to a hotel clerk.” When you recognize that something can be negotiated. 5. “Well. you must advise the other party of your intention to negotiate.• • • • • • • A hotel clerk tells you that your reservation was lost. A neighbor wants to remove an old tree on your property line.

You can then use one or more of the tactics presented in this book to achieve the best possible settlement. and use the forms in the back to identify the issues. the facts. “I see why you want to cut down the tree. negotiations can be concluded with a written or oral agreement. Once a settlement is reached. the parties and their interests. and meet with you again.time to look over this performance review and respond point-by-point. Choosing and applying the appropriate tactic to a particular situation will become easier as you begin to use them.” To a neighbor you can say. You might need to follow with a statement that clarifies your desire for a settlement but indicates that you are flexible and you do intend to negotiate. and the tactics that might move the negotiations along. 6 50 Practical Negotiation Tactics . Keep this book handy when preparing for any type of negotiation. but I believe it adds value to our house. the other party will realize that you intend to negotiate and do not accept the situation. Scenarios based on actual real-life situations are used to show how each tactic can be used in business or everyday situations. How can you compensate us for our loss?” Once you’ve suggested that you see the situation as something to be negotiated.

do you routinely negotiate a last add-on before you close the deal? 9. allowance. but you did not? 8. Do you routinely negotiate for better accommodations when you check into a hotel? 3. Do you wish you could negotiate a change in your job duties or salary? 7. The last time you received sub-par service or food in a restaurant. have you routinely resolved differences with a neighbor or a friend through a negotiated agreement? 5. Do you often refrain from negotiating a better price or service because you believe that you do not have good negotiating skills? Introduction 7 .How good are your negotiation skills? Place a check in the box that applies to you. In the past. spouse. do you believe that you negotiated the best possible deal? 4. As a parent. When making a major purchase. When you purchased your last home or car. or division of household duties. In the past. or child. have you ever required a written agreement covering chores. Yes No Self-Assessment Quiz 1. Have you ever found yourself in a negotiation situation in which your best alternative was to walk away. did you request appropriate compensation? 6. have you ever felt that you were not adequately prepared to negotiate a job offer? 2. etc.? 10.

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etc. the process will be fairly straightforward. if the situation involves a number of detailed or complicated issues or the stakes are relatively high. • an allocation for moving expenses (employee goal) traded for a set number of travel days per month (employer goal). The Quick Model The easiest way to prepare for a simple negotiation is to identify all the issues. On the other hand.SECTION II: THE NEGOTIATION PROCESS Before you begin the process of negotiation. thus allowing each side to achieve one of their goals. If it is a relatively informal situation. The Negotiation Process 9 . including those that are less obvious. The “Quick Model” approach outlined below is good for simple negotiations.) • primary sales territory • a starting date Exchange Issues: Those issues that might be traded. They’re referred to as “win-win” because each side can achieve their goal. one for another. the process will probably take several weeks or months as the parties move through all the stages. state. Examples: • office location (city. decide how complicated the issue is. Examples: • a signing bonus (employee goal) traded for an annual travel budget (employer goal). Then classify each one into one of three categories: Compatible (Integrative or Win-Win) Issues: Those issues for which both parties might have the same desirable outcomes.

Depending on the situation and the parties involved. rearranged. The most typical stages are Preparing to Negotiate Planning a Strategy Exchanging Initial Offers Making Counteroffers (the Give and Take) Applying Pressure Making Progress Reaching Agreement The tactics are organized according to the stage at which they can be used to best advantage and listed as such in the Table of Contents at the front of the book. Examples: • an item sold by one party and bought by the other • wage increases won by one side. or even skipped altogether. The Comprehensive Model Negotiation is more of an art than a science. 10 50 Practical Negotiation Tactics . What one side gains. the other side loses. stages can be combined.Distributive (Win-Lose) Issues: Those issues that the parties are directly at odds with. but feel free to try them when they seem most appropriate to your specific circumstance.

Power #1– #6 Stage 2 Strategy: Choose Overall Approach to the Process #7– #14 Stage 3 Initial Offer: Getting Started Stage 4 Counter Offer: The "Give & Take" Stage 5 Pressure Bargaining: Striving for Conclusion Stage 6 Key Methods: Achieving Progress Stage 7 Reaching Agreement: Settlement of Impasse Tactics to Consider #15– #21 #22– #31 Negotiation Phase #32– #38 #39– #46 #47– #50 Initiation Phase Resolution Phase 11 . Information.The Negotiation Process Table 1: The Negotiation Process: Seven Basic Stages Stage 1 Identify situation as one for negotiation Preparation: Key Factors – Time.

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SECTION III: 50 TACTICS FOR SUCCESS

Stage 1: Preparing to Negotiate
n many negotiation situations, the parties have time to prepare for the actual bargaining. In other situations, such as when you’ve been served something at a restaurant that you did not order, there is no time to deliberate. You have to be prepared to instantly recognize that the situation can be negotiated, and begin to bargain. You can have time to prepare if you simply ask for it. For example, at the end of an employment interview for a management position, the candidate was surprised to receive a job offer on the spot. The candidate wanted the job, but wisely recognized that she could negotiate the contract. She said that she was very interested, but needed forty-eight hours to make up her mind. She used the time to talk to current employees, and developed a list of perks and conditions that she then negotiated, before accepting the position. To prepare for a negotiation, do as many of the following activities as you can: 1. Have realistic objectives. Identify everything that can be negotiated, and set realistic objectives for each item. If, for example, price is a factor, determine the desired outcome and set a minimum (or maximum) acceptable outcome, beyond which you will walk away and choose another alternative (see Tactic #1: Know Your BATNA). Also determine your opening offer in light of your desired and your minimum outcomes. It is often helpful to list each specific item to be negotiated and your minimum acceptable offer for it, as well as your desired goal and an acceptable opening offer (see Tactic #5: Listing Items). Thus, for each factor, write down and stick to three figures:

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Preparation

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1. An opening offer. 2. The desired “best” offer. 3. A minimum (or maximum) “worst” offer. 2. Learn about your opponent. By whatever legal and ethical means possible, learn everything you can about your opponent. Talk with friends, neighbors, co-workers, past negotiation foes, even family members. If you are able to guess or find out about your opponent’s real objectives and/or limitations, you can gain an invaluable edge (see Tactic #2: Know Your Opponent’s Real Objectives). 3. Gather all the facts. During the heat of negotiations, presenting critical facts or objective criteria can turn the tide in your favor. You can usually anticipate and collect this critical information in advance during the preparation phase (see Tactic #4: Use Objective Criteria). 4. Set ground rules. In labor negotiations, the parties first agree to ground rules such as where, when, who, and how often the negotiation sessions will occur. Detailed ground rules are not needed in most everyday negotiation situations, but there are times when they help people come to agreement. Agreeing in advance on the location for discussions can give one side an advantage (see Tactic #3: Control the Setting), but in other situations, the critical ground rule will be about timing (see Tactic #6: Timing is Everything), forcing both sides to reach agreement faster. In negotiating with family members, friends, or neighbors, one well-advised ground rule is to stop the talks as soon as anyone raises his/her voice, curses, or makes a threatening comment.

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50 Practical Negotiation Tactics

Tactic 1: Know Your BATNA
At what point will you walk away from the negotiation? You improve your position in any negotiation if you can walk in already knowing your BATNA—your best alternative to a negotiated agreement. The BATNA is the outcome you prefer over what the other party has proposed; if you define it at the outset, you are less likely to agree on something during an emotionally charged discussion and regret it afterward.

Example 1
Harvey Huff bought a new 1956 Chevrolet from a local dealer. After forty years, he finally decided to sell the car he had loved and carefully maintained in original condition. Harvey did not need the money, but he intended to move three thousand miles away, to a condo in Arizona. The ad he placed in the local newspaper produced only one potential buyer: Patrick Knight. Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Mr. Knight: Harvey: Well, now that you’ve checked it out, how do you like it? It’s in great condition, just as you described it. Any questions? Will you take less? No. It’s easily worth at least $20,000. That’s the price. $18,000, tops! No thanks. Okay. $20,000. I need it for a new restaurant. Restaurant? Yes. We cut off the top of the vehicle and people sit in it and get served their meals in our “oldies dream car!” Never mind, I’ll keep it. I haven’t maintained it for all these years just so you can destroy it.

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They told the union that their age and the fact that they had no heirs to carry on the business was leading them to seriously consider selling out and permanently closing the doors. and final offer. selling became an attractive alternative to a strike or prolonged battle. They learned that their assets would be easy to sell and were worth more than originally estimated. which the Jaggers believe will cause them to increase prices to the point where they will no longer be competitive with other West Coast firms. The Jaggers gave the union their “last. With only two weeks remaining before a threatened strike. and it now employs 230 craftsmen. as Harvey had for many years. notified all the employees of their intentions. The $56 million dollar business took them 30 years to grow.” which was refused. Example 2 Shari and Jim Jaggers own a successful West Coast pottery company. The threatened strike became a reality. When negotiations with the union became hopeless. but rather what the buyer planned to do with the car. The union negotiators thought the Jaggers were bluffing. and equipment. The owners.Conclusion Harvey’s best alternative—his BATNA—was simply to hold on to the car for the moment. and the Jaggers decided once and for all to sell their business assets and invest the proceeds conservatively. inventory. In this case. the Jaggers decided to seek buyers for their land. For the past two months. providing them with a very good income for life. The union negotiators convinced the employees that this too. his BATNA was not to hold out for more money. was a power play. The union is demanding wage and benefit increases. labor contract negotiations between the Jaggers and a local labor union representing the pottery’s craftsmen have stalled. and either move it with him to Arizona or find another classic car collector who might buy it (perhaps for less) and preserve it. as a last resort. best. 16 50 Practical Negotiation Tactics . Conclusion Selling their business was the Jaggers’ BATNA.

000. If you are the party making the offer on the house. and told John several times to let him know if he ever wanted to get rid of it. sure. Just running out of space. What changed your mind about getting rid of it? It is still in perfect condition. you know. Gosh. Example 1 Tom had always admired John’s 1861 Confederate rifle. what the other party’s desired outcome is. John assured Tom that this would never happen. Just as important is the why. You have an advantage and are in a position to produce a better agreement if you understand what motivates your opponent and what “hidden” interests lie behind their position. Preparation 17 . you still interested in my rifle? Of course. Tom: $20. A person who has to sell her home because her company is relocating her. so Tom was surprised when John called him out of the blue one day with a proposal. she might have to take a lower offer just to be able to move. I guess I couldn’t take less than $20. How much are you thinking it’s worth? John: Well. it’s to your advantage to know what is behind a seller’s decision to put it on the market. at some point.000? That’s more than I planned. Make me an offer. might not be willing to lower her asking price because she knows that her company has agreed to buy the house if she can’t sell it. John: Tom: John: Tom: Tom.Tactic 2: Know Your Opponent’s Real Objective Each party in a negotiation will know. I’ve been thinking of getting rid of it for a while. I’ll have to think about that. because if the company does not provide relocation benefits. right? John: Sure. Are you finally ready to sell it? Yes. I think so. for example. It is extremely rare—one of only 100 made with that bore and handle. This is a good thing to know. it’s still perfect.

and we’re committed to keeping it open as a major division of our company. but then he will be happy to retire. BigManu: Rick. it made the negotiations easier. Example 2 Rick. Rick needs to remain president of the company for the next two years. The sale price for the company has not yet been agreed to. we 18 50 Practical Negotiation Tactics . John: Well. No longer worried about John’s motives. Tom: Okay.000. so he is making it a condition of the sale that ALL current employees must be retained for a minimum of two years.Tom: Okay. let’s do it. Well. I’ve been thinking about your offer. let me think about it and I’ll get back to you. but thought this might explain John’s sudden interest in selling the rifle. if you could come up a little—say $18.) Tom: John. I don’t think I can go higher than $18. Conclusion Tom entered into the negotiations suspicious of John’s motives. the owner of a small manufacturing company. One of them mentioned that someone who is negotiating with him to buy a restored Winchester rifle for $18. and now the two-year requirement has become a stumbling block in the negotiations. He doesn’t want BigManu to know this because he thinks it will hurt his negotiating position.500—we’d have a deal. (Tom investigated the “market” for a restored 1861 Confederate rifle by calling a few other collectors. Without some trust. He is two years away from retiring and does not want his business to fail before he does. but I could get the money to you right away. has begun negotiations to sell his firm to BigManu Company. When Tom found out why John decided to sell his rifle. we really want to buy your company. fearing that this will put all of his employees out of work. parties to a negotiation are not likely to reach agreement.500 had an 1861 for sale. Tom now felt comfortable negotiating the price. However. Was Tom interested? Tom declined.

BigManu: We just don’t see a way to give you what you want on this. Let’s talk later. Without this commitment. you will have a say in how the employees are treated. You’ll be in place to participate in our employment decisions. In hopes of pushing the deal forward. Rick: These people are the best at what they do.) BigManu: Okay. Within the parameters of efficiency and effectiveness. let’s talk about the job guarantee you wanted. and I hired every one of these people. I just can’t go through with this sale.cannot guarantee to you that ALL of your employees will be retained for two years. We just can’t make good operational decisions with our hands tied. Rick: I built this business from the ground up. and we think it’s an odd request anyway. I just don’t want it to change after I’m gone. Working as a division of your company. and he accepted it subject to agreement on the two-year employment guarantee clause. BigManu: You know we want you to stay on and manage this division for us. I just want them to have a real chance to show you how good they are. (Between negotiating sessions. Preparation 19 . We still can’t find a way to do it. I need to give them some sense of comfort if this deal goes through. BigManu’s negotiating team concluded that they were in the dark as to why this two-year requirement was so important to Rick. The price they gave Rick was actually more than he had expected. What is it you’re afraid is going to happen? Rick: I am convinced that with a two-year time frame. they decided to put their price on the table and revisit the issue after a price was agreed upon. my employees will prove to you that they are uniquely able to run this place. they will make you plenty of money and more than make up for any “operational” difficulties it might cause you.

Rich almost lost the deal. I certainly want to do all I can until then to protect my people. Let me get back to you. to tell you the truth. BigManu: Why don’t we guarantee to you that you will stay for two years? That way. 20 50 Practical Negotiation Tactics . This wouldn’t have anything to do with your own plans for the future. you’ll have a guaranteed “in” to protect your people. I’m hoping to retire in two years. Rick: Well. but we won’t be completely tied to operations as they are now. he agreed to allow BigManu to accommodate him without limiting their ability to make business decisions. Surely you’ll be able to “protect” your people if they are as good as you say.BigManu: We intend for you to stay and become a big part of our company. that might work. would it? Rick: Well. Conclusion By masking his real objective (giving himself two more years as president before retiring). Once Rick realized that he no longer risked anything at the negotiating table by making his need known.

girls. the frog is everybody’s favorite. Bailey: Cybil: Preparation 21 . (thirty minutes later) Bailey: So. Make up your minds. I’ll give you my duck and frog for your whale and horse! Cybil: I already told you that I don’t really like that frog much! Jenny: (Bailey’s sister) What? Bailey. Mother: Hush. I like the frog. Inexperienced negotiators fail to realize that the other side has an advantage if the meeting is held on their home turf: they are more comfortable. and so on. such as a hotel conference room. Cybil. they have the information they need at their fingertips. but never to THEIR advantage! Example 1 (Two ten-year-old girls are talking. it’s a deal. they control the breaks and environmental factors. how can you trade the frog—he’s your best one! Dede: (Bailey’s other sister) Yeah. and go play somewhere! Cybil: Well … Okay. too.) Let’s take all our Beanie Babies to my house to trade! Okay.) Prepare for the negotiations by controlling the setting—to your advantage or to mutual advantage.Tactic 3: Control the Setting There is a logical reason why professional negotiators setting ground rules agree to conduct the talks at a neutral site. (Think of the showroom tactics used by car dealers.

having set up beds. around the clock. knew that her sisters liked the frog best and that they would help convince Cybil of its “value” and help Bailey make the trade. non-stop negotiations wore down the members of Team A. The physical and emotional demands of 24-hour. not one member of Team A was chosen to return to the table. The chief negotiator for Team A publicly challenged Team B to “negotiate non-stop. The firm deadline was only four days away. as long as they met in the boardroom of Team B. and other conveniences in the adjoining room.” The chief negotiator for Team B agreed. although only ten years old. Team B had clearly used its home turf to gain a substantial advantage. After forty hours of negotiating. Team A was whipped physically and emotionally. while members of Team B were able to stay fresh. They were blamed for accepting the same deal that had been rejected only days earlier. When negotiations resumed in two months over another piece of property. They had all been replaced after their decision to negotiate “around the clock” in Team B’s boardroom became known. Conclusion Team A did not realize the practical advantage they gave Team B when they agreed to negotiate in B’s boardroom. That’s why she wanted to go to her house. in their own familiar setting. About thirty-six hours later. 22 50 Practical Negotiation Tactics . Example 2 Two five-person negotiating teams had been trying to work out a deal for over a month. Team B.Conclusion Bailey. Team A agreed to change the meeting place. meals. Both sides desperately needed to settle a property dispute. was still going strong. until we have a settlement. Team A agreed to a settlement almost identical to the one rejected days before.

Let’s get the guys back in who gave you estimates. though. I did get some estimates from plumbers. Prepare for the negotiations by having an outside authority measure or weigh in on each side’s position. I gave you my “family” rate. and show them the actual work that got done. it became clear that all of those pipes had to be pulled and new ones put in. about your bill. Will is a licensed plumber. Larry: But Will. After all. Will: Larry. and he and Larry have always gotten along. If they tell us that they either Preparation 23 . When you first told me about your project. Larry had expected to pay him for his time. Believe me. Example 1 When Larry’s cousin offered to help Larry finish the renovation on his bathroom. If you think that the other party knows more than you do. Larry: Just make sure you’re comparing apples to apples. you are likely to resent them for it and hold out. these plumbers certainly acted like they understood the work when they gave me their estimates! Will: Tell you what. rather than give them the “advantage.” This can hold up an agreement and cost you in the end. Larry was thrilled. I would have charged anyone else much more. It was twice as high as the estimates Larry received from other plumbers before they started the project. When we got into it. based on objective criteria (think property appraisals in real estate).Tactic 4: Use Objective Criteria Use objective criteria to judge the quality of each side’s proposals—you will probably improve your chances of coming away satisfied. This uncomfortable negotiation followed: Larry: Will. I was kind of surprised at how high it was. I anticipated much less work. but was shocked at the amount of the bill. Larry: Well. Things turned sour. and they were much lower than this. when Will presented Larry with his bill.

I’ll revise my bill to meet the lowest estimate you get. From a look at the portfolio. my first reaction was that some of the investments 24 50 Practical Negotiation Tactics . Settling on the right objective criteria upon which to base a negotiation requires that both parties think through their options. Comparing the estimates to Will’s actual costs would have been counterproductive. she had been investing the college’s endowment funds for many years. he used his financial expertise to analyze the investments of the college’s endowment fund. Conclusion When the other plumbers looked at the work. He was disappointed in the performance of the fund. The estimates would have been higher than what cousin Will charged. The chairman of the Board suggested that Stuart and the budget officer meet to discuss the investment policies and practices as they relate to the endowment funds. they said. I have been very diligent about making sure that the fund makes the most money it can without putting us at risk. they had to agree that their early estimates were low.disagree on the need for that work or that they would have done it for less. I certainly didn’t mean to offend you. Budget Officer: I don’t know what your problem is. and no one had ever questioned her performance. I find your suggestion to the Board that I haven’t been doing my job right to be very insulting! Stuart: I’m sorry. while she wasn’t an expert. and decided to bring the matter up at a Board meeting. because (as Will pointed out) it wasn’t an apples-to-apples comparison. Example 2 After Stuart was appointed to the college’s Board of Trustees. The college’s budget officer was understandably offended. Larry: That sounds fair. Had they actually prepared bids on the work. they would have had to revise the figures.

In this situation. but we can ask them to plan and cost out each move. Okay? Budget Officer: Okay. We just can’t make up losses to the endowment fund without considerable impact on our annual budget. but such a strategy also increases risk and costs more money to administer. Preparation 25 . but I think they more than offset the gains. and the budget officer was comfortable that the risk and expense of such a strategy was small and worth the effort. As you know. I don’t want you directing how they’re going to go. Stuart: Yes. then you and I can talk about changing our investment strategy.were stale. I have a suggestion. Now. and its resources are limited. Why don’t we ask two investment advisors who have some alumni ties to the college to do a mock investment of the endowment fund for a month or two? We won’t tell them about each other and they won’t actually do any real trades. the college is a private institution. Stuart: No problem. there might be increased risk and some expenses for commissions. how can we identify the right parties? Conclusion The two-month experiment did produce the results Stuart had anticipated. but some of these stocks have really lost their value. but I want to be involved in the discussions with them about what we’re asking. if both of them demonstrate a similar strategy and produce better results after expenses. I don’t question that they were sound at one time. considering commissions and all. because she did not have the background in investments necessary to trust such advice. Budget Officer: Yes. At the end of two months. I find that a more aggressive investment strategy produces a better return. Stuart realized that the budget officer needed very-specific “criteria” (such as the actual experience of investing the school’s endowment fund) rather than relying on an investor’s experience.

Shari: Well. you should each put together a “package” of several items on the list and work out a win–win agreement for these things. if I give you an increase. Example 1 Shari. Mother: That’s a large increase—and we just raised it last year! Shari: Well. and ask the other party to add to the list. wash the cars. what else can I do. Once you both agree on the list of things to be negotiated. cut the grass. It will cost me more than $10—about $35 per week. your little sisters will want equal treatment. You can’t treat me the same! Mother: Well—so we’re talking about several issues. a sixteen-year-old who lives with her parents and three younger sisters. not just an allowance increase! There is: (1) a $10 increase. besides washing the dishes every night and cleaning my room? Mother: You could cook dinners. (3) more chores. and for going out with my friends. Mother: But your allowance is based on what you earn in your weekly chores. not on what you want to spend. and (4) different treatment from your sisters! 26 50 Practical Negotiation Tactics . (2) a later curfew. Shari: I’m four years older than the next-oldest. clean the whole house—should I continue? Shari: Whoa! I want to stay out longer—past my curfew of 10:00—not work more! Mother: Well. baby-sit your sisters.Tactic 5: List All Items to Be Negotiated Break down the issues to be worked out into separate items ahead of time. This strategy can build trust in the negotiation process itself. I need more money for clothes and CDs. has asked her mother for a $10/week increase in her allowance.

The union’s chief negotiator. Now it is time for each side to list their desired outcome for each item. Union: We will agree to your proposal on item #6 (the number of paid holidays) and item #14 (the new overtime hourly rate). and item #23 (the wellness program voucher). The trading of items (where initial demands are discussed and agreed upon) begins. since all of their items were included as requested. Shari got the $10 she wanted and a later curfew. was avoided. An allowance increase. Shari: (pause) I like it! Conclusion Shari’s mother helped negotiations along by listing all of the items being discussed. in the first session. but unlike your sisters. opens by proposing the list of items. Then a “win-win” solution could be determined. Management agrees. while your Dad and I go out. And if you clean the whole house on Saturday. if you agree to our proposals on item #3 (the paid vacation schedule). which the other children would have requested as well. you get to stay out an hour later that night. item #11 (the clothing allowance). Now we have a package deal to propose … Preparation 27 . Example 2 The union and management negotiating teams opened discussions with a list of 48 demands. Management: (after calculating the total value of the five items during a break period) We agree to your package of five items. while the mother won a Saturday house-cleaning and a night out each week. I’ll pay you $10 to babysit every Wednesday night.Shari: Right! Mother: So … I suggest no allowance increase.

Conclusion In most labor negotiations. other trade-offs are proposed and agreed to until only a few items remain. thus removing them from the discussion table. Then negotiations can resume on the remaining 43 items. the two sides will at this point sign and date the list of proposed items. 28 50 Practical Negotiation Tactics .

the following conversation occurred: Bob: Car owner: Bob: Car owner: Bob: Car owner: Bob: Hello. my name is Bob Hillard. time of day. Bob followed the man home. Not even for.) Preparation 29 . as he left the supermarket. which turned out to be only a few blocks from his own house. Bob made it a point about once a month to go out of his way and drive by the man’s house. just out of curiosity. and do your homework. I love this car—restored it myself. he saw an elderly man get in his dream car and drive away. As the man got out of his car. One day. but money doesn’t mean anything to me at this point in my life … Well. That’s a generous offer. on Briarwood Road. day. Would you possibly be interested in selling it? No. He stopped and knocked on the door. Timing is everything! Example 1 Bob Hillard had been coveting a turquoise 1963 Chevrolet Impala Supersport convertible for several years. say. Prepare carefully. (For the next three years. I live a few blocks from here. One day. Hi! What can I do for you? I’ve admired your ‘63 Impala for years.000? No. he noticed a FOR SALE sign in the yard. The external pressures put on the parties involved (which might not be related to the issues under negotiation) can sometimes be used to advantage if you know about them. $12. and general circumstances under which negotiations take place can substantially impact the outcome. thanks. It was nice meeting you.Tactic 6: Timing Is Everything The exact month.

Follow me. December 31st. as a matter of fact. Conclusion While Bob did not achieve his goal during his first negotiation effort. I can’t take it with me. and wondered if your ‘63 Impala might also be for sale … (obviously not remembering Bob) Well. Well.m.000. A third vote at 3:00 p. resulted in another 6-6 30 50 Practical Negotiation Tactics . for tax reasons. and I promise to take good care of it. (after a careful inspection) It’s a very nice car! I’ll give you $12. and a twelve-member board of a large non-profit organization was holding a special meeting to decide whether or not to enter into a multi-million dollar capital project with a partner organization. I’m moving to California to live with my daughter. the proposal would die at midnight. The partner organization. that’s a fair price. had issued a deadline of December 31st. and the vote was a 6-6 tie each time. Can I see it? Sure. if a seventh vote could not be found by the pro-agreement side.m. so I guess I will be selling it. A majority was needed to pass the partnership agreement. beyond which the project would have to be abandoned. The board members had met twice before. to seal the agreement at the courthouse? Sure. Example 2 It was Sunday. Can you come back on Monday at 10:00 a. I’ll see you on Monday. the timing of his second effort was perfect and it enabled him to negotiate for the car of his dreams.Bob: Car owner: Bob: Car owner: Bob: Car owner: Bob: Car owner: Hello! I noticed your FOR SALE sign. Then it’s a deal? Yes.

That effort failed. during an hour break in the meeting. and it worked. Then. the project had been stalled by 6–6 votes.m. For weeks. When the meeting resumed at 4:00 p.. in the end.m. Conclusion The leader of the pro-project group recognized that they might have a unique timing advantage. Both sides caucused: The leaders on each side met to negotiate a compromise. Preparation 31 . timing was everything.. At 5:30 p.. A member of the pro-project group quickly called for a vote after the leader gave a signal. the pro-project leader told his members to filibuster until he gave a signal and called for another vote. the leader of the pro-partnership side heard someone say that the meeting needed to end by 5:30 p..deadlock. because one member of the anti-partnership side had to leave at that time to attend a church service he had not missed in 27 years.m. as predicted. He planned for it accordingly. a member of the anti-project group left the room. and the meeting was adjourned. The measure passed 6–5 at 5:45 p.m.

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The overall strategy chosen does not limit the use of other tactics. If you prefer to take a firm and direct approach. such as actively trying to keep one of the two parties from winning a contract or influencing a colleague or spouse to accept an offer for personal reasons. then Tactic #13: Set a Deadline or Tactic #11: Have an Expert Witness might be helpful. might step in and help settle negotiations between a union and administration negotiators. if you want to begin in a friendly. you must first evaluate your needs and those of your opponent. Before you can do this. cooperative manner. a third party can serve as a mediator (a legislative body. such as Tactic #19 (Make a First and Best Offer). Tactic #43 (Nickel and Diming). For example. Third parties sometimes have their own hidden agendas. decide whether the negotiations should be continuous. but in practice it will likely influence the whole process. Look at the personalities of each negotiator and see which side will be more vulnerable to pressure bargaining (Stage 5). Some of the tactics listed in this book are only suitable for single-session negotiations. such as a buyer and a seller or a city and its union. Tactic #33 (Bluff). and Tactic #10: Make a Reciprocal Buy-Sell Offer) are also useful alternative strategies. Are there any outside people who might influence the process. uncaring approach (Tactic #9: Control Your Emotions. Be sure you are aware of this at the beginning. After you have evaluated these factors. such as a third-party negotiator. A favorite strategy of some successful negotiators is to start with an extremely low or high offer (Tactic #7: Decide How “High” is High) in the hope that the other T Planning a Strategy 33 . as well as their bargaining history and financial and political positions.Stage 2: Planning a Strategy he next stage is critical: Choosing a strategy. for example. In some cases. A neutral. or someone’s colleague or spouse? Third parties such as other buyers or governmental agencies might have to approve the agreement before it becomes final. as it can substantially alter the negotiations between two primary parties. and Tactic #48 (Walk Away). or one-time-only. Identify all outside influences and hidden agendas before you develop your strategy. Tactic #12: Find Common Interests can be helpful.

let’s say a homebuyer new to an area is shown a house that was owned by someone who had been transferred to another country. but the inside was a complete turnoff. you should consider disarming the other party by acknowledging the weakness at the start so that you can reduce the impact of the weakness if it is used by your opponent (see Tactic #14: Don’t Always Hide Your Weakness). with “All right. His teenage sons had “trashed” the house. If there is a significant weakness in your position. I offer half the asking price. The buyer loved the location. 34 50 Practical Negotiation Tactics . The buyer said he wasn’t interested. Another strategy often employed by parents with their children (and investigators with suspects) can be easily used when one side has two negotiators (see Tactic #8: Use the Good Guy/Bad Guy Routine). By assuming opposing roles. and the buyer was able to completely renovate the house and still have a great deal. two people on the team will be more successful because they evoke different emotions from the other side. half-serious.” The agent took the offer to the seller. “Please make any offer—they are motivated!” The buyer responded. The agent explained that the seller was desperate. The desperate owner agreed.side is either caught off-guard or (in some rare cases) a negotiator will be able to achieve an unexpected fantastic settlement. For example. Weeks later. the seller’s agent called the buyer about the property.

The market hasn’t gone up that much in six years. and just refuses to reduce it. but the redecorating is of little value. Example 1 Carol has been unhappy with the house she and her husband bought six years ago. your request must not be so low that the other party concludes that you are not negotiating in good faith.Tactic 7: Decide How “High” Is High Your first demand in the negotiation process is the most important decision you will make. However. And I don’t see a lot of difference in the neighborhood. Planning a Strategy 35 . six years ago you bought it for $60.000. First. Carol: Maybe not. one buyer shows some interest. it is likely that your opponent will. We also think that the neighborhood has improved over the last few years. It’s a good neighborhood. we think $160. but we simply can’t take less than $160. Finally.000 is very high. with no success. Surely there’s some flexibility in your asking price. After all. Carol wants $160.000. so do not underestimate what you might be able to achieve. as well. and then look at the demand from your opponent’s perspective. but quite frankly. Your demand should be high enough to give you room to compromise. Each time. we’ve put a considerable amount of money into a new air-conditioning system and in redecorating. If you consider the demand ridiculous. Anyone buying the house would want to change wall colors or add new carpets. but not so high as to end the negotiations before they begin. Carol: We really want to sell. Buyer: The air conditioning might have increased the value of the house. She has had it on and off the market for the last five years. her real estate agent told her that they were probably not going to get a buyer because she is asking too much. so think this through well ahead of time.000. Be realistic. but certainly not exceptional in any way. Buyer: We really like the house. You are not likely to get more than you request. but the house has increased in value.

000? Carol: We really can’t take less than $160.000 offer by coming down in price at least a little. Carol drove off a potential buyer by setting an asking price that was just too high. but they have no idea what the value of their firm’s name might be in this nearby city.000. the buyer took it as a signal that either Carol didn’t want to sell. the founders of the firm. as to how you think the name is going to benefit you. or she has unreal expectations. In any event. Neither Edward Bits nor Edmund Bites. We’re curious.Buyer: What if we offered you $100. A new law partnership from a nearby city contacted Bits & Bites and offered to “buy” the rights to the name to use in their law office in their city. though. The partners are interested in selling the name. were still alive. Inquiries to other law firms were not very helpful because in almost all of the instances. When Carol refused to budge. Example 2 The law firm of Bits & Bites was a Sioux City institution. Here’s how the initial negotiations went: Partners: Well. The other law firm was prepared to pay $100.000 or 1% of profits (whichever is less) over the next ten years in order to use the name. we are certainly interested in your request to “buy” our firm name to use in your city. Buyer: Good luck!! Conclusion The buyer expected Carol to counter the $100. enjoying a statewide reputation for quality representation.000 immediately. and then $10. 36 50 Practical Negotiation Tactics . the transaction also included some degree of consolidation of the law firms involved—not just the use of the firm’s name. The firm now had over twenty-five law partners who owned the firm and continued to benefit from the reputation and name recognition of Bits & Bites.

one of these two attorneys carries the surname of the firm they are leaving.New law firm: We are establishing a partnership of ten lawyers—the top two moneymaking attorneys in each of five local firms. And even though you don’t have an office in our city. Yes. Thanks so much for meeting with me. it would be impossible to create a new name out of the names of our key partners. I really don’t feel comfortable doing that now. expect to pay for that. (concerned about loosing the opportunity) Wait. that is a very high number. starting with the ten partners you describe. but we get to keep all of the money we’ve received up to that point. then. In every instance. I guess this is just not something we’ll be able to pursue. What number were you thinking about? Well. We should assume. because you are in the state capital and your firm has handled a lot of high-profile political cases. we want $500. Well. If at any time we feel that you have “harmed” our name. Let’s just pretend this didn’t happen. we do. because we were not even close to that number. To offer it now would be an insult. of course.000 initially. We weren’t really thinking about that amount of money. And we. We probably won’t be insulted. (surprised) Well. Partners: New law firm: Partners: New law firm: Partners: New law firm: Partners: New law firm: Planning a Strategy 37 . I’m kind of embarrassed now. Give us some range. that’s just our initial figure. and then 10% of your profits each year for as long as you use the name. Using the Bits & Bites name can only enhance our profitability. you have a very solid reputation there. we reserve the right to withdraw our permission. that you anticipate to build a very profitable law firm. So.

The price they were willing to pay would have indicated what the naming rights were worth. because there was no “objective” criteria available to help them set a reasonable price.Conclusion Bits & Bites lost an opportunity here because their initial demand was so unrealistic with what the prospective firm thought the “naming rights” should cost. 38 50 Practical Negotiation Tactics . since they had initiated the contact. rather than negotiate. Bits and Bites should have let the prospective firm make the first offer. Both parties were probably at a disadvantage. Either side could have asked for too much. It immediately dropped the idea. In this situation.

200! We should get $1. only three years ago.Tactic 8: The Good Guy/Bad Guy Routine The “good guy/bad guy” routine is a useful one. threatening. Half what it cost us new. Andy: No. Your opponents will want to avoid confrontation and unpleasantness with the “bad guy” and are likely to be more willing to cooperate with you. And take the leaf-catcher attachment and the gas can. since they are sitting out in the driveway with it. I don’t know what the deal is now. Peggy: So. Peggy: That’s fair. you’re really moving! I hate to see you leave. Peggy. I heard that you want to sell your riding mower. angry.200. Peggy: I assumed they went with the mower. Andy and Paula: Yes. while another acts difficult. Peggy: Planning a Strategy 39 . and I know how you take care of things. Andy: I want them… Paula: Go ahead and take them. I can use them. I want to keep those. what’s your price? Andy: $1. we won’t need it at the new condo. Peggy: I’m hearing one thing from Paula and another from Andy. etc. not for $1. Andy: No. One member of your team acts friendly to people on the other side (the good guy) in order to gain their trust and support. so I’ll take it. Example 1 So. (bad guy) and implies that his or her side will hold firm on their demands. They cost about $300. Andy and Paula. Paula: Go ahead and ride it home. I’ll go home and you can call me if you two can reach an agreement.400 if the catcher and can are included.

your rate of $3. and your training programs. Sandy. And we need to add a clause that holds your company responsible for machine damages.000 in service calls last year alone because your damn people don’t take care of the equipment. Miguel: But not at this ridiculous rate. She realized that it put her in an impossible negotiating position. we’ve been fairly happy with your responsiveness. We estimated that it has cost us more than $50. Miguel: I’ve figured $4. For the past three years. And cut the training hours from 55 to 20. Miguel: Well. You are located outside our primary service area. firm offer if they decided to continue negotiations. causing our reps to spend hours on the road. perhaps even unintentionally. the quality of the technicians’ work.200 will be about right… Sandy: I can’t begin to pay that! Liz: Calm down.000 per month is one of the highest in town. Example 2 Sandy (business owner): Miguel and Liz (representatives of a computer firm). Liz: But we still want to renew your contract. Let’s talk. Sandy. your account has taken too much time. we’re here to negotiate a new service agreement. 40 50 Practical Negotiation Tactics . And we want to change the 24-hour service response time to 48 hours. She very wisely recognized the routine and forced Andy and Paula to give her a clear.Conclusion Peggy thought she was getting the old “good guy/bad guy” routine. Sandy: What? First of all.

I’m afraid our relationship is over. Miguel! We’ve worked out a deal I think you can live with. but Miguel’s right.m. Our customer base has grown. I’m going on to lunch. even though it was far above the previous contract. Sandy believed that she was able to avoid a terrible deal and negotiate a fairly good one. these terms will put me out of business—I’m a small 20-person operation. you two? Good news. What can I do? Let’s try to negotiate something reasonable before Miguel gets back. Conclusion Miguel and Liz used the good guy/bad guy tactic in the classic form: Miguel scared and threatened their opponent. with a position he knew was unreasonable. Sandy. Sandy. If not. Any luck. Liz. I’ll stop back about 2:00 p. Sandy. I hope you can meet my terms. (Three hours later) I’m back. Planning a Strategy 41 .Miguel: Sandy: Liz: Sandy: Liz: Miguel: Liz: No. I’ll explain on the way back to the office. and it’s not efficient enough anymore for us to handle smaller firms—especially those outside our region. Then he left so Liz could convince Sandy that they needed to quietly reach an agreement she could “sell” to Miguel later. I want to keep you as a customer.

Control your emotions and use them to your advantage! Example 1 Mike prided himself on being an informed and educated consumer.Tactic 9: Control Your Emotions Stay cool. Here’s how the phone conversation went: Customer representative: Mike: Over-the-Air Long Distance. because we have had a sick relative out of town and we used long distance a lot this past month. This will put you at a distinct disadvantage from this point on. I noticed this. when he discovered that the long-distance company serving his home phone was charging him four times the rate currently being marketed by that company.10 a minute rate at my office location. Your opponent might conclude that they have made a serious misjudgment and want to make a conciliatory move to get you back to the bargaining table. he was very unhappy. A display of temper or frustration can indicate to your opponent that you are uncomfortable with your side’s negotiating position and they will assume that it is weak. made some very good purchase decisions for his small business. 42 50 Practical Negotiation Tactics . such as deals on computer packages and phone services. So. I have a problem with my recent bill and my billing rate. He had. It seems that the rate you are charging me on my home phone is $1. How may I help you? Hello. He decided that the best approach was to act indignant when he spoke to the company representative. The fault was partly his because he did not stay on top of changes. Be sure that the emotion you display is calculated and strategic: A strategic flare of temper at an “insulting” offer made by your opponent can buy you time because you can make an abrupt exit from the room without having to respond to it in any substantial way. in fact. and might even harden your opponent into an unfavorable position (for you or for both of you). but I recently was sold a $.00 a minute.

It hasn’t been increased at any time. Mike. of course it is not always possible to give existing customers some of the “offers” we have out. I would have known I was paying too much. Customer representative: Let me pull up your account. But as a very good customer of yours. we certainly would have discussed your options. but this was quite a shock. I realize that that might be the rate I started paying when I first took your service over eight years ago. Mike: Customer representative: Mike: Customer representative: Planning a Strategy 43 . But I am able to offer you a $. Had you brought this to our attention before. how would anyone who might only have residential service even know to ask? Well. and I also realize that if I had examined my bill closely.I expected the bill to be higher than usual. The company might have had any number of different introductory rates and incentives for people to buy our service over the course of eight years. (beginning to sound irritated. although he wasn’t really angry) Are you suggesting that it was my responsibility to advise you when one of your “offers” was available to lower my rates? How would such information even come to my attention? More importantly. I would think you would have given me the best rate you offer new customers. to begin now. Well.10 per minute rate on your long-distance service. I see that the rate you are being charged is the rate we offer for the type of service you have with us.

44 50 Practical Negotiation Tactics . but I am very angry with Over-the-Air Company. don’t think this is directed at you personally.Mike: I would imagine so. Customer representative: Mike: Customer representative: Mike: Customer representative: Conclusion The supervisor waived the long-distance charges for the $500 bill and adjusted Mike’s rate to $. In doing so. The latter would not have produced the desired results. (with a much angrier tone) Madam. controlled voice) I need to talk to someone who can do it immediately.10 per minute. I … (interrupting and in a stern. between controlled. Wait—I’ll get my supervisor. she kept Mike as a residential customer as well as a business customer. and I should be treated with more respect! I’m sorry. He was walking a thin line. after all. If you can’t get me someone to talk to. and I want to speak to someone in authority so I can terminate my service. however. a long-time customer of your company. The best we can do is fix the rate for the future. strategic anger and abusive behavior. there’s no reason for this conversation to continue. I would hope that you would credit my account for this better rate for past service. We certainly don’t want to lose you as a customer. I am. But I’m looking at a $500 longdistance bill. but I can’t do that. either. Mike’s willingness to show a measured “flare of temper” brought results. Is your supervisor there? I’m certain that he cannot adjust your account retroactively. which should rightly be $50.

Owner: I’m just not willing to let my best people refuse to work the extra shifts during our busy season. On those overtime shifts. The owner told the employees that he was worried that during the overtime shifts. Where are your managers? Where is the training necessary to make Planning a Strategy 45 . The most-senior employees want to have the right to refuse overtime and have those less-senior employees take the overtime. Employees’ negotiator: (with a stern voice) You have been saying this for three weeks. Working with fireworks is working with explosives.Example 2 The contract negotiations between the employees of a fireworks plant and its owner had been stalled for about three weeks over the issue of mandatory overtime. Just admit that what you really don’t want is for your best employees to realize how much of their pay is from the overtime they work. I’ve got to have the employees with the most experience to protect this place. and that they should be asking for a fairer base wage for the work they do for you. They will be putting the plant AND their fellow workers at risk by not being here. and it’s not what we’re even talking about. The employees’ negotiator finally decided to use “indignation” to break the stalemate. and it’s getting old. The owner was afraid that if the mostsenior employees routinely passed up the overtime and the overtime pay. Negotiator: (now beginning to get irate) You talk about the risk to your plant if the less-experienced workers are there on overtime shifts without the senior employees. they would become dissatisfied with their pay and want their base pay increased. that’s just not fair. Owner: Now. and you just can’t be too careful. lesssenior employees might be at greater risk of injury because they have to handle explosives.

The negotiator was also running a risk with his flare of temper. Sit down. That’s all. most of them continued to take all the overtime they could get. Either they are properly protected. All I’m saying is that the most-senior employees have to be on the overtime shifts. 46 50 Practical Negotiation Tactics . But we protect our people. but not all? Conclusion The owner was on shaky ground with this one. But the fireworks business is a business that involves risk. You are not addressing the real issue for you: money. The safety of the plant demands it! (standing up to leave) This is just ridiculous. or they’re not. Until you’re ready to talk about that. Then you can’t have it both ways. The end result was that the most-senior employees did win the right to refuse overtime. or they’re not. now. don’t be so hasty. either the employees are properly trained. the negotiator would have had to find a way back into the negotiations without losing ground. he became more reasonable. No one who takes a job with us can be unaware of that.Owner: Negotiator: Owner: Negotiator: Owner: sure these employees can protect themselves? Are you telling me that your employees are being put in dangerous conditions without adequate training and safeguards? No. In practice. I’m not coming back. not at all. (He begins to walk out. Had the owner let him leave. sit down.) Now. After the employees’ negotiator threatened to walk out. though. What if we were to agree that the senior employees could refuse half of the overtime offered to them.

a well-known negotiations professor from Harvard University. I’ll give you 48 hours to decide the price.Tactic 10: The Reciprocal Buy-Sell Offer What do you do when both sides seek to own something when there is only one and it can’t be divided equally? You have three options: 1) Both parties can “bid” to own it. Both sisters covet it. The second party then decides to either buy it at that price and pay the first party. The first party decides on a price for which he or she will either buy or sell the object to the second party. A fourth option.” is the recommendation of Howard Raiffa. and split the proceeds. my kids and I looked on eBay and everywhere else and found out that coffee grinders in perfect condition sell for about $500. However. with winner taking all. you’re the oldest. 2) They can flip a coin. Planning a Strategy 47 . Mike. since this one is in perfect shape and it was Mother’s. Then Susan. 3) They can agree to sell the object to a third party. The following examples explain how it works: Example 1 Susan and Mary Anne learned from their brother Mike that their recently departed parents’ estate included a somewhat valuable antique coffee grinder. Mike: Mary Anne. has decided to use the “reciprocal buy/sell offer” process to settle this last piece of the estate. called the “Reciprocal Buy-Sell Offer. with the highest bidder paying the amount to the other side in compensation for their loss. All the rest of the estate has been divided among the family. I’m willing to pay or let it go for $800. the executor of the estate. or sell it to the first party and consequently receive the full amount from the first party—thus giving up the object. so you set a price at which you agree to buy or sell the coffee grinder. you will decide if you want to buy it for that price or receive that amount from Mary Anne (but lose the grinder). Susan. (two days later) Mary Anne: Well.

to submit a sealed offer to buy/sell the business sixty days from today. Conclusion The “reciprocal buy-sell offer” process caused both Mary Anne and Susan to research the market value of the coffee grinder. Here is my check for $800. Both came to Raiffa to help negotiate a settlement. They accepted his suggestion to use the “reciprocal buy-sell strategy. I choose to buy it. in writing. which will bind us to the outcome. I suggest a slight modification to the process. (sixty days later) 48 50 Practical Negotiation Tactics .Susan: Mike: Well. After I open the bids. Two business partners had been working together for ten years to build a successful business. Both sisters felt that the process enabled them to resolve the issue fairly. but each partner had grown to dislike the other and wanted to end the partnership (but continue to own the business without a partner). They thus were able to determine the highest price each was willing to pay for it or receive for it. and then decide how much more “emotional value” it held. Lectures on Negotiation Analysis. I’ll pick it up tonight. Example 2 Howard Raiffa described a consulting situation in which he used the “reciprocal buy-sell offer” process in his book. Thanks for making this last step as easy as possible.” Howard: Since in this case you are talking about a multi-million-dollar business. Agreed? Abe and Bobby: Sounds good! Let’s draft and sign a written agreement detailing the process. the lower bidder must agree to sell his half-interest to the higher bidder at a price that evenly splits the difference between the two bids. You will both agree.

Agreed. Bobby. you agree to sell your half-interest to Bobby for $180 million. and to close within ninety days. Planning a Strategy 49 . your bid is $190 million. Conclusion Both parties wanted to keep the business. Bobby was willing to pay more than Abe to remain sole owner. The reciprocal buy-sell tactic enabled one of them to achieve his goal of sole ownership and allowed the other to feel that he had an opportunity to purchase sole ownership.Howard: Abe: Bobby: Abe. and both men had carefully estimated the market value of half the business. and we close by July 1st. And I will arrange financing to pay you $180 million to become sole owner. your bid is $170 million. I will arrange to sell him my half-interest for $180 million. The partner who was out-bid in a fair process received a fair settlement: $10 million above what he was willing to pay. Abe. but only if they could become the sole owner.

It can also work in reverse: establishing the other person as the expert. The wife was determined to buy the least-expensive brand rated excellent by consumer publications. she glanced at it and immediately deferred to his opinion. he decided upon a strategy: First establish himself as the “dimension expert. and the husband felt like he saved them hundreds of dollars. They knew that sitting on dozens of couches in a single day would be confusing and would make it difficult to determine which one is the most comfortable and roomy. The couple decided to limit their selection to those rated “excellent. and created a spreadsheet to compare the five best-rated couches on their list. This approach can also be reversed: The wife in this situation is a banker. When it came to comfort. The husband found the dimensions of the couches in the brochures and Web sites. They both expressed an interest in finding a couch that offered the most “interior” space. the one that was the most expensive was superior. When he showed his wife the detailed spreadsheet. He thus ended up having greater negotiating power.” but there were substantial differences in price—differences that the wife did not see as a problem.” and then argue for the frugal alternative.Tactic 11: Use an “Expert Witness” Establishing yourself as the expert on a certain topic in order to get what you want can be an effective tactic in the appropriate situation. so when the husband wants them to make an 50 50 Practical Negotiation Tactics . Looking at these statistics. the one he wanted (one of the least-expensive) was superior. Conclusion The husband became the “expert” in this situation by doing the homework. This strategy worked. Based on seating capacity. Example 1 A young couple were discussing a possible purchase of new furniture for their living room. and forcing him or her to control the discussion of the issue.

investment decision or deal with an error in a bill. you gain an edge when negotiating a new plan for your company. a negotiator in a similar situation was able to get the other side to agree to include a plan that they had opposed only days before! Planning a Strategy 51 . He claims to lack the knowledge or insight to do the work—which he is then able to avoid! Example 2 A negotiator can often gain a valuable advantage on issues such as medical insurance or labor contracts by doing the homework and becoming an “expert.” If you spend many hours learning about Health Maintenance Organizations (HMOs). he argues that she is the expert. Many bargainers on the other side will not know their HMOs from their PPOs or their POSs and are likely to leave important details up to “the expert” to decide—just as the negotiator planned! After explaining in some detail what each of these three types of insurance plans are. and should therefore handle the problem. Preferred Provider Organizations (PPOs). and Point of Service (POS) plans.

If this was chocolate icing. Example 1 When Russ and Bill got home from school.Tactic 12: Find Common Interests You are more likely to come away with a satisfying outcome if you and the other party set the stage for agreement. When they boys returned. This is done by deciding at the outset what you both have in common: You both want to reach an agreement. Be clear on what you have in common at the start. because I am so conscientious about my paper route. she made them share whatever it was. she decided to try something different. The boys quickly huddled. I missed dessert the other night because I had to get to baseball practice. That simply rewards your continual squabbling. Mom: I’ve decided that I’m not going to cut this piece of cake in half and give you both some. you want to reach an agreement that is favorable to an outside party. like we usually have. The two boys fought over the last piece of everything. and their mother was tired of it. This time. you both want to complete negotiations by a certain date. particularly when things seem to be at a standstill. Usually. neither of you want to be embarrassed at the outcome. the last piece of cake will get thrown away. and then asked their mom for a chance to negotiate with each other. I also took out the garbage last week without being asked twice. they saw that there was one piece of cake left over from their mom’s bridge party. These positive things are part of your goals and objectives. here’s what they said to her: I think I should be rewarded with the piece of cake. and so on. and neither boy was very happy. I wouldn’t care so much. Unless you can convince me otherwise. and I really love the banana/butternut/ sour cream frosting on this cake. They immediately began to fight over it. Russ: 52 50 Practical Negotiation Tactics . point them out at the very beginning of negotiations and refer to them throughout the process.

she opens her shop at 7:30 a. your new shop hours have caused your customers to park in our parking spaces. One day. Customers have started to park in nearby apartment lots. I got an “A” on my book report that I really had to work hard on and when you got home from the store last week. she got a visit from some of the residents. Marilyn originally set her shop’s hours for 10:00 a. and keeps it open longer so she can attract customers on their way to and from work.m. Example 2 Marilyn’s Memorabilia Store was located along the main commercial street of a residential neighborhood. That sounds like a wonderful solution. and better than a fast-food restaurant with late-night hours and a drive-through window. and that’s not my favorite either. I helped with the bags without being asked twice. This cake is white cake. Residents: Marilyn. It was the type of shop the nearby residents preferred. Planning a Strategy 53 .m.Bill: Russ: Mother: I think I should be rewarded because I cleared the table for Russ the other night when he had to get to baseball practice. so these hours worked out well.m. and her children were in school. because there is no parking along the street during morning and evening rush hours. The last cake we had was chocolate cake. We really want you to go back to your original times. Conclusion Once the boys realized that they had a common interest—not letting the cake get thrown away—they were able to negotiate a solution both of them could live with. and I really like white cake. We realized that if we cut the cake lengthwise. so that your customers can park on the street. I can have the part with the icing and Bill can have the part with the cake and filling. to 3:00 p. Now that her children are in college.

if residents haven’t left for work yet. and usually the car is gone by the time a tow truck shows up anyway. Do you? Marilyn: No.m. Can’t you post signs that tell non-residents not to park in the lots? Residents: The problem is that for the signs to be very effective.m. I really need that extra income to stay in business. and 9:00 a.m.m. the off-street lots probably won’t be used by my customers. and the residents needed Marilyn’s shop.m. Lets try it.m. But in order to keep my new customers. But I really am increasing my sales by being open longer hours. The shared parking arrangement did work out for Marilyn. Most of our residents are gone by 8:00 a. So.? Residents: We certainly want you to stay in business here. I have to convince them to come before work. or so anyway.m. Between 7:30 a. rather than after work. and is probably empty in the afternoon if they haven’t gotten home yet. and between 4:00 p.00 a. It is very costly to have cars towed.. And we don’t think you want your customers’ cars towed. Okay. and 6:00 p. Identifying their shared interests caused the nearby residents and the customers to reach agreement. Do you think the residents of the apartment house would agree to let me advertise that my customers can park in their lots between 7:30 a. and see if it works.m. 54 50 Practical Negotiation Tactics .m. my customers can’t park on the street.I’m sorry this is happening. Marilyn: Conclusion Marilyn needed the extra parking. We think they’ll be agreeable to the morning parking. I don’t think that would be very good for business.. and 9:00 a..m. The parking lot used for apartment residents is probably full from 7:30– 9. and I close at 4:00 p. let’s see what the options are. If you need to have the shop open more hours. then we’ll try and accommodate you. if I go ahead and open the shop at 7:30 a. we have to be willing to tow the cars that violate it.

etc.m. How can I do that? You all live in this town and you know this house. Deadlines can be imposed externally (such as the government’s deadline to get a tax break) or internally (set by one side.Tactic 13: Set a Deadline Be sure you know well ahead of time what the deadline is for completion of negotiations. such as a deadline beyond which the union will strike or the date that an outside party has set to withdraw an offer that is in both your interests). Well. one at a time: the youngest. Example 1 Four adult children have gathered at the home of their recently deceased mother. A few hours? I can’t—I’ve got to leave shortly for the drive home. how should we go about dividing up the furniture and possessions? I can’t talk about it. That will take days! I haven’t been in this house for twelve years. and start choosing things. But at Planning a Strategy 55 . we can each take turns selecting things … Like each tool or dish. let’s all take two hours to look around and make a list of things we might want. but it can also work against you if you set one that is unrealistic or you fail to plan for it adequately. Then we can sit down at this table at 3:00 p. Well. I don’t. let’s all take a few hours to look around. the first. We just don’t have the time … We’ve got to do this—the house is sold! Okay. Deadlines can also be set by both parties to a negotiation when they want to put some pressure on themselves to come to agreement as quickly as possible. Jenny: Everett: Sue: Everett: Mary: Sue: Everett: Mary: Jenny: Everett: Okay. A deadline can help you make the best possible agreement in the shortest amount of time.

Allan: What! Why did you not tell us this before? David: We never thought you would take three months to get to this point. David: I understand your concern. if we are not finished. can sell or give away what is left. December 31. we all leave.. Okay. Conclusion The mutually agreed-to process and self-imposed deadline was a fair method of negotiating—a lot better than the four of them arguing over their mother’s possessions. your attorneys know the tax laws. then the whole deal is lost because my company will lose $10 million in tax benefits under a federal law that expires on midnight.Sue: Mary: Jenny: 5:00 p. and I appreciate your interest in the historic structure. 56 50 Practical Negotiation Tactics . And besides. Allan: Let me confer with the city attorneys. we cannot agree to these development plans submitted by your company until we have reviewed how they will affect the historic buildings. if I cannot carry a negotiated and signed deal to my board by noon on December 31. Example 2 Allan: As the negotiating team for the city. this is December 29. Agreed. However. Sue. being the oldest.m. All of us must come back before Saturday to take what is ours—agreed? Okay.

we can’t get the reports we wanted in 48 hours. Let’s continue. Obviously.Allan: (One hour later.) I understand the December 31 deadline. and I don’t like it. He waited to bring it up until it was clear that doing so would help him get the settlement his side desired. Conclusion Knowing the external deadline gave David a significant negotiating edge. Planning a Strategy 57 .

Mom: I gave you money to buy a workbook a few weeks ago. I’ll give you money for it. His mother disapproves of his study habits. There will be times during a negotiation when you will want to catch your opponent off-guard. and Jason knows he is getting a D in Spanish. We had one at the beginning of the semester that we were using pretty often. and one of the ways to do that is to reveal a weakness at the beginning.Tactic 14: Don’t Always Hide Your Weaknesses Be sure you know what your strengths and weaknesses are. but that was actually a different workbook. Jason: Mom. as well as strengths. don’t get mad. but remember that both sides have weaknesses. I bought the second one. we need to talk. One day mine disappeared. He decided to preempt the discussion in order to make the best deal. and we used it a couple of times. He knows that a D will mean that he will have to change the way he studies. as well as those of the other side. But don’t lose it again. Then the teacher went back to the first one. but I have a problem in my Spanish class. while watching TV. I’ll need to buy it again. Now. The objective is to negotiate from a position of strength. so he was able to prevail upon her to let him continue. Unfortunately. Did you buy it? Jason: Yes. Control the use of the information. before your opponent tries to catch you off-guard. but his grades are good. and you can neutralize its effect on the negotiations. 58 50 Practical Negotiation Tactics . Mom: What’s that? Jason: A few weeks ago I lost my workbook. Have a clear goal in mind AND all the information you need to make your points. first-quarter grades are coming out at the end of the week. Mom: All right. and this usually means having all the right information. Example 1 Jason likes to play video games as soon as he gets home from school and do his homework later. and I missed some assignments.

but all three deals Planning a Strategy 59 . she trusted it more. It’s because I didn’t have the book. But that Spanish grade needs to come up to a B!! Jason: Okay. The work I did turn in was fine. I’m sorry. B.Jason: Another thing. Since I missed some assignments. Mom: Well. I’m getting a D in Spanish for the first quarter—but it’s not because I’m studying in front of the TV. English. I think I can do that. Thanks. Example 2 Jane once owned a piece of property she wanted very much to sell. Obviously. And those are hard classes—Algebra. I think you need to give me the rest of the semester before making me change the way I do my schoolwork. Pizza Boy was interested and had even made inquiries about the property. Although his Spanish grade was only a C+. and since he offered her the information up front. The location was ideal for a convenience store or a fast-food restaurant. Jason’s decision to warn his Mom ahead of time rather than have her see the D on his report card gave him an advantage in the negotiations about study time.(maybe C+). Environmental Science. but I think you do need to change your study habits. I’ll give you more time. so there’s no reason to think I need to change my study habits. Mom. Jason: Spanish is just one class. then I’ll agree to make changes. or borderline B. All of my other classes are A. And I know I have to be better about getting in all of my assignments. my study habits are okay. and the D is directly related to my losing the book. His explanation made sense. Conclusion All of Jason’s grades did improve over the next quarter. Mom: Well. all right. he was able to continue to study the way he wanted to. If I don’t pull the D up to a C or better. I don’t think you’re taking your schoolwork seriously enough. Its owners found out that at least three other buyers had been in contact with Jane.

A tentative deal was signed. it’s only the neighbor to the right of the property who has a problem. the other interested buyers already have businesses in the neighborhood. and it’s zoned for commercial use.had fallen through. Pizza Boy was prepared for her call. What are her grounds for complaining? Jane: She doesn’t have any. she will want you to think it’s the whole neighborhood. This is how the negotiations went: Jane: Pizza Boy. I’m very happy you’re interested in my property. The neighbor’s attitude suggested that there would be major resistance in the neighborhood if Pizza Boy tried to put in a commercial establishment. I think you’ll find that this is only one person. let’s assume that you are right. since they were well aware of the negatives. Pizza Boy: Well. I’ve got to warn you—you might hear that there is neighborhood resistance to your putting in a pizza restaurant. and was able to politely ignore her. I know. was that Jane’s neighbor had contacted each of the previous potential buyers and complained about their plans to use the property. really. When she contacts you. Furthermore. Pizza Boy: Well. You are a big enough corporation to withstand her objections. though. we’re not interested in neighborhood fights. What are you asking for the property? Conclusion Jane told them her asking price. however. either. I’m sure. Actually. there were no unpleasant surprises to stop the deal. however. 60 50 Practical Negotiation Tactics . which was way below the price they were actually willing to pay. she started her campaign to keep them from closing the deal. But unlike your company. When the neighbor heard about the new buyer. They decided not to fight a disgruntled neighbor. Jane: Oh. Jane’s up-front disclosure of a potential problem allowed Pizza Boy to weigh the negatives with the positives. Pizza Boy: We’ve checked the property out. The Pizza Boy people figured that Jane’s asking price must be too high or that she is unwilling to negotiate. The real problem.

(2004). None is as important as the first one. Perhaps the worst-case scenario with initial offers is when a negotiator has his or her initial offer immediately accepted and ends up feeling that he or she could have negotiated a better settlement if the initial offer had been lower or higher—the so-called winner’s curse.750–$25.000 22 23 24 25 26 27 Initial Offer $28. Many negotiators make their initial offer the highest acceptable offer (Tactic #19: Make a First and Best Offer).500) M $21.500) Fig. Experienced negotiators often view negotiations as a process in which the goals of one party are in direct conflict with the goals of the other party. in negotiating a labor agreement or the price of goods or services: The monetary gain realized by one party is also the monetary loss of the other party. “Distributive” bargaining (“win-lose” or “zero sum”) is used. such as proposing to continue at the current rate or price. by Michael R. The negotiator firmly states that it is their best offer in an attempt to gain a nice. 190–192. This is a practical starting point that will not anger the other side (and might even be expected). for example.000 Buyer Initial Offer ($21. Exchanging Initial Offers 61 .000) Target Point ($23. The initial offer sets the tone of the negotiations and reveals something about the strategy of each side. Carrell and Christina Heavrin.500) Resistance Point ($25.000) Settlement Range ($22. quick agreement.Stage 3: Exchanging Initial Offers any offers and counteroffers are made during a typical negotiation—sometimes even hundreds. as illustrated in the following figure: Seller Resistance Point ($22. The initial offers of both parties are usually set reasonably above or below what each believes to be the settlement range.750) Target Point ($24. Adapted from Labor Relations and Collective Bargaining. 2: Distributive Bargaining Process. Another common strategy is to start with the status quo.

When the two parties agree to a price within the range. these points have set the outer limits. usually. it is termed the settlement point – not the “right price” or “fair price. thus producing a true “win-win” negotiation. Resistance points are the maximum or minimum beyond which a negotiator is likely to consider an offer unacceptable (and possibly walk out). Experienced negotiators will begin the negotiation of several items by quickly proposing such a package. the process quickly narrows to the range between the initial offers. the other side does not agree to this value). thus starting out on a positive note. A target point is the desired settlement value a party has set as a goal when negotiations begin. each initial offer ($21.000. You can use a tactic in making your initial offer that will give you an advantage: When multiple items or issues are on the table.000) is reasonable. In the example.In this example. include others that are actually of no value to you in your initial offer (Tactic #16: Use Throwaway Items) to hide the true items of interest and show that you are willing to give in on some items. yet is positioned well above or below what the party believes to be the opponent’s resistance point (thus avoiding the so-called winner’s curse). the seller would immediately accept it because it is greater than the target point and the buyer would suffer a winner’s curse. The most common method of negotiating more than one issue or item is to combine two or more in a deal that gives each side something (Tactic #17: Package Items).000 and $28. The settlement range is the distance between the resistance points. Two extremely helpful tactics to be used immediately after initial offers are made are Tactic #15: Caucus and Tactic #20: Posturing. Both of these tactics give experienced negotiators an edge when they face novice negotiators who are more likely to rush the process and expose their position. and is the range in which most negotiations actually occur. After initial offers are exchanged.” but the settlement price. 62 50 Practical Negotiation Tactics . See Tactic #18: Agree on Something As Soon As You Can. if the buyer’s initial offer was $25.

And that’s just my friends from school! I haven’t started Exchanging Initial Offers 63 . the negotiations got out of hand when Shelly’s dad forgot what had been decided. A caucus is when a negotiating team calls for a break and leaves the negotiating table to confer in private. If the team is feeling pressure to concede on certain items. Mom: We’re planning on having your party here on Saturday night. because it might disturb the neighbors. and presumably had an agreement. If the negotiations are heated. A caucus is certainly called for if individual members of the team become agitated or express frustration with the progress of the negotiations. If negotiations seem stalled. a caucus can be used as a break to calm the situation down. We don’t want it to be a late evening. Shelly: Twenty friends? You’re kidding! I’ve just started on my list.Tactic 15: Caucus If you are part of a negotiating team.m. calling for a caucus gives you a chance to get your team to recommit to a particular course of action. so her parents sat down with their daughter to discuss the details. Example 1 Shelly’s “Sweet Sixteen” party was coming up. We’ll just have chips and soda. Unfortunately. There are many ways to use this strategy. so we’ll have the party from 7:00 p. without revealing their ideas to the other side. call a caucus so both sides can brainstorm new solutions to keep the negotiations going. You can invite up to 20 of your friends. If the negotiations have suddenly gone in an unanticipated direction. make use of the opportunity to call for a caucus. it gives the parties an opportunity to reassess where they are and determine if everyone involved agrees that they should be heading in this direction. or if a member takes on a role in the negotiations that has not been assigned to them. Shelly. Her mom and dad had already talked about it privately. A caucus gives you an opportunity to work out problems with your own team in private. To do so in front of your opponent would obviously undermine your team’s position in the negotiations.–10:00 p. and I already have 25 names.m.

And midnight is definitely too late. Your dad and I already talked about this and agreed that 20 guests would be the limit. okay. Jerry from down the street is in a really good band that all of the crowd likes. It’s special!!! Well.Dad: Mom: Dad: Shelly: Mom: Shelly: Mom: Shelly: Dad: Mom: Dad: Shelly: Dad: Mom: on the friends I’ve made over the summer at the pool. Oh. (shocked) Jerry’s band from down the street? They’re a punk rock band! Their music is totally inappropriate for sixteen year-olds. Mom! This is my “Sweet Sixteen” party. alone. (with some irritation) I’m not sure. (During the caucus. That would be great! It would keep everyone entertained. I could invite everyone!! Hold on! I thought we agreed that this was to be a simple party. I guess the VFW will work. We could play records and you guys could dance. I’m sure we can ask them to tone it down a little. Actually. We’ll get a band—everyone does. And can we bring in pizza? Or maybe one of those “mile-long” hero sandwiches? I like those—let’s do the hero sandwiches. we could rent the VFW hall. And they can’t go home at 10:00 p. Dad. In fact. Shelly.m.—that’s so “baby. Time out! Dad.” They would never expect a party to end before midnight. Shelly’s parents reviewed their first planning discussion and went over what Shelly’s mom thought they had already 64 50 Practical Negotiation Tactics . (excited) That would be so cool. and then the number of kids won’t matter. we need to talk. That sounds like too many for here at the house. we’ll call you when we’re ready. I think we can handle a few more kids—how about 35? And midnight sounds okay. I think the band would be fine.

Mom’s call for a caucus gave them a chance to regroup and re-state their original objective. Agreed.Mom: Shelly: Mom: Shelly: Mom: Shelly: Dad: Shelly: Mom: Shelly: decided. All right. is for little kids!! No. Okay. but no Sweet Sixteen birthday party decorations. And we’re serving chips and sodas. Dad.m. Your mom and I agree—11:00 p. but your dad and I agree on getting a DJ to play. That’s so lame. But we can have the band. this mom-and-dad negotiating team became unglued during the negotiations. sorry. The item currently on the table was the company’s offer to give each Exchanging Initial Offers 65 . but we’ll schedule the party for 8:00 p. But you are limited to 40. causing them to lose control and make compromises they hadn’t intended to make. and we will need to approve the list. A DJ? I guess that’s okay. we will be better able to chaperone. which was to make sure Shelly’s Sweet Sixteen party was a fun and safe evening. That way. and not a huge production. please!! 11:00 p. her mom presented the revised proposal. can’t we? No band.) Okay. too? No way!! I want presents!! Conclusion In spite of their prior planning.m. we’re going to rent the VFW hall. Does that mean no presents. When they called Shelly back in. midnight. and you can invite more friends. Example 2 The contract negotiations between the company and the union had been going on for days. to 11:00 p.m.m.

A lot of employees have spouses who can get health insurance coverage through their work. some attempt to undermine me with my members? Company: I don’t know what you’re so worked up about—we’re willing to spend the same amount of money!! Union negotiator #2: Can we take a break? Union: We don’t need a break—we’re not discussing this stupid proposal. and the following conversation occurred. The tuition benefits will encourage the workers to be prepared for new job opportunities. Tuition in place of health insurances? They’ll think I’ve lost my mind. Union negotiator #2: Please—just a moment outside. What is this. Union: You’re offering a choice between health insurance and tuition payments? What kind of a deal is this? Company: Hey. 66 50 Practical Negotiation Tactics . With the cost of college educations so high.individual member of the bargaining unit the option of being in the health insurance plan offered in the contract or receiving the same amount of money the company pays for health coverage as a tuition reimbursement benefit for the employee or any member of his or her immediate family. The union’s lead negotiator misunderstood the proposal. and thought he was being asked to choose between a health insurance plan and a tuition benefit plan for all members. The company’s negotiator didn’t recognize the misunderstanding. many will want to use it for their children’s education. Union: Why are you so concerned about new job opportunities? Are you holding out on us? Company: No. it’s a good proposal. Union: (angrily) I’m not presenting this proposal to my people. I’m just saying that tuition benefits are sometimes a good substitute for health insurance.

and I apologize for explaining it poorly. I thought that the contract would cover one or the other for everyone.) I’m sorry. I didn’t understand that your proposal was to allow each individual member to choose between the health coverage or the tuition benefit. Negotiator #1 regained his footing. Good. Now. Conclusion Negotiator #2’s timely call for a caucus so she could explain the miscommunication in private saved the session. let’s move on. the parties returned to the room. and the parties were able to complete their negotiations. I think that what you’re proposing is a really good idea. we’ll be back in 5 minutes.Union: Union: Company: Okay. Exchanging Initial Offers 67 . (After Negotiator #2 explained that the choice of tuition or health insurance benefits would be an individual choice for each unit member and not a change in the contract for everyone.

I’ll go get him. A has gained something of true value and given up nothing he values in return. we’ve got expenses and we need to make some profit. It is a useful tactic in any negotiations. Salesman: Well. Salesman: Let me talk to my manager. and noticed that none of the vehicles have a green exterior. He doesn’t really care about the color of the new vehicle. this conversation takes place: Hobbs: Yes. quickly checked the dealer’s inventory of sport utility vehicles in stock. according to my figures. you are making $200 profit over the true dealer’s cost. it’s a great car and a fair deal. Hobbs. when the two sides are only a few dollars apart.” Throwaway items are those things that hold little or no value to you. but he makes a mental note to use color as a “throwaway” item. not revealing that the item exchanged is a “throwaway. Mr.” Party B thinks that A has sacrificed one important objective to gain another. according to the Consumer Reports listing of the cost of the vehicle. but the key to making it work is to include the throwaways in an initial list of demands OR add it in at a strategic time. you don’t want your opponent to know what these things are. I know. Here’s how it works: Party A exchanges the item for something of true value. However. But for this price. Hobbs: Yes.Tactic 16: Use Throwaway Items Identify ahead of time what you place a high value on and what you are willing to give up easily—your “throwaways. but … Salesman: But what? Hobbs: Well. so be sure you present them in a way that suggests importance. At a point late in the negotiations. I can go to another dealer and get a green exterior—the color I like best. Example 1 The buyer. (Salesman returns with manager) 68 50 Practical Negotiation Tactics . but in reality.

. All three employees must agree to the schedule. I’ll take the red one for $100 less. The days in question are: Exchanging Initial Offers 69 . and seniority will be used to determine who gets to choose the first day. so I might as well get the color I want! What if we offer you the red one for $100 less? Is the color worth $100? I . Then we have a deal. he brought it up and convinced the salesman and manager that it was an important item to him—possibly even a deal-breaker. and Carolyn) to develop a mutually acceptable (to the three of them) holiday schedule in which at least one person will cover the office on each of nine “slow” days. The three are sitting at a lunch table to discuss the schedule. At the very end of the negotiations. Employees will be paid time-and-a half for each of these days. Miguel. Why didn’t you mention the color before? I didn’t expect to actually buy a new car today (note: not the truth). The manager was convinced enough to sacrifice a final $100 for the throwaway.. but you’ve made me a fair offer and you have been pleasant to negotiate with … Then why not buy the red one you drove—the one we based the figures on? I keep cars 8–10 years. Example 2 The office supervisor told the three internal sales representatives (Jenny..no it’s not. Hobbs successfully chose color as a throwaway item.Manager: Hobbs: Manager: Hobbs: Manager: Hobbs: Manager: We are offering you a great deal. Conclusion Mr.

She proposes to work five days. 70 50 Practical Negotiation Tactics . if they let her choose the two days she will be off and the five days she will work. They all agreed to their schedules. A second and third round produced the following allocation: Jenny: December 23. but that is a secondary consideration. They agree. She would actually prefer to work the extra days and get paid time-and-a half. 31 January 1. December 24 Conclusion Carolyn has achieved her objective: She will be off December 24 and 26. She got what she wanted by giving up something she did not value: the two other days. They have decided to start over. 2 Jenny: December 23. December 30. 26 Miguel: November 25. and each chooses their days to work: Carolyn: December 27. This would allow Jenny and Miguel to each work only two days. 30. 27. each made a first choice of days they will work. Jenny and Miguel feel that they received something of value from Carolyn: She must work two more days than they must work. Carolyn has decided to use as a “throwaway” the number of days she will work (previously. 30. it was assumed that each would work three) in order to have December 24 and 26 off to be at home with her children. in exchange for giving up earlier choices due to seniority. December 31 Miguel: November 25. December 27. 31. 24. 2 In the first round of negotiation. January 1 Carolyn: December 24. January 1. January 2 None of the three are totally happy with the results.November 25 (the day after Thanksgiving) December 23. 26. December 26.

their mom left specific pieces of jewelry and art in the will to each of the girls. but I’d like to talk about the house and the furniture. The process of grouping items can be an educational exercise because the response to one party’s suggested packaging of items might reveal how the other party views the various items on the table. and a collection of antique furniture. Anne and her sisters. it is often helpful to package the items in distinct groups and then deal with each package separately. The house and much of the furniture has been in the Exchanging Initial Offers 71 . Example 1 When their mother died at age 82. and the stock and distribute the proceeds. the antiques. along with the cash. for example. realizing that the total cost of a deal might make or break the agreement. When the girls decided it was time to talk about the estate. For example. we need to sell the house. Autumn and Angela. a house valued at $250. Their mother’s will was very clear: the three daughters were to all have an equal share of her estate. Anne: As I see it.000. one might package all of the financial issues in one group and negotiate on that package as one issue. three ways. they met at the house. In addition. The house was closed up at the time of their mother’s death because she had been in a nursing facility for a couple of months. Autumn: I don’t have any objection to selling the stock and distributing the proceeds and the cash three ways. A reluctance to include one particular financial item with other financial issues.000 with no mortgage on it. were faced with the task of selling the house and disposing of their mom’s personal belongings.Tactic 17: Package Items In a negotiation where there are multiple issues or items to be negotiated. The estate’s assets included a checking and savings account totaling $450. 300 shares of stock in a pharmaceutical company. can indicate that something you think is minor is really a major concern to your opponent.

In fact. and if we wait a couple of years. Anne: Okay. If Angela wants to hold on to her stock. If we want. Soon. we will have a more valuable asset. we’d get a lot more for them. and now that we have them. Autumn: I think its awfully soon to be making these kinds of decisions. there’s a lot of work that needs to be done to get it ready to sell or to make it livable for one of us. Frankly. Angela: I live close by. So we agree: We’ll leave $30. With no one living here. There was a reason why she gave us what she did. What would you think about agreeing today to distribute the cash and stock three ways. I’d like it all to stay in the family. don’t you think? Angela: Maybe. Mother was born here and grew up here. And we’ll fix the house up.family for years. I’d like to talk about the art works Mom left each of us. it’s a magnet for vandals. Anne: But that means we have to continue to take care of the house and its contents. we’re really free to do with them what we want. It’s a buyer’s market now. we can sell ours.” She gave those things to us. Why don’t we leave some of the cash in the bank. she’s free to do so. I’d really be interested in talking a trade for some of them. and use it to fix the house up? Then when we make a decision. and letting everything else wait for another discussion. Anne: I’m not sure I’m comfortable talking about trading the jewelry and art Mom left to each of us. Angela: And we can talk about the art and jewelry? 72 50 Practical Negotiation Tactics . We’ll split the stock three ways. Autumn: Sounds good to me. but the operative word is “give.000 in the bank and distribute the remainder three ways. we’ll discuss again what happens to the house and the antiques. Angela: Now’s not a good time to sell either the stock or the house and antiques. so I will be able to keep tabs on it.

etc. and deal with one area at a time? The first: Wage issues (pay schedules and the annual and merit raise issues). vacation. funeral. Anne: Same with me. deciding whether there would be annual wage increases as well as merit increases. Waiting to make decisions on those items until some time has passed gives the women an opportunity to look at a number of options. The following tasks needed to be a accomplished: establishing basic pay schedules. The second: working conditions (work schedules and promotional opportunities). Employees: We’ve got a lot of items to cover.Autumn: I can agree not to do anything with the jewelry and art Mom left me before we talk. and the assignment of the limited number of parking spaces. Conclusion Autumn’s suggestion to package the money and stock because they can be easily divided by three made agreement on those items possible. deciding to base the increases on a percentage or equally distribute the funds for increases among the professional and clerical staff. sick. health benefits. Example 2 The attorneys and staff of the local Legal Aid Society formed a union and were about to negotiate their first contract with the executive director. the jewelry.). what kind of paid leaves there will be (personal. tuition benefits. The third: Ben- Exchanging Initial Offers 73 . but I’m making no commitment to trade. Several issues also needed to be addressed: the ability of employees to move up through the organization. May I suggest that we divide the items into three areas. The negotiations on the other items—the house. Angela: That’s fine. and establishing a work schedule to accommodate evening and weekend clients. the antiques. including benefits for partners in non-traditional relationships. and the art works—will be more difficult.

Wages should not include merit pay raises. because they’re really an incentive for better performance. we are an agency supported generally by public funding. the paid leave categories are pretty clearly defined. Employees: Okay. Conclusion The executive director’s request to move merit raises out of the Wage category and move paid leave into that category because there is little flexibility to finance those areas allowed the parties to resolve the wage issue first. paid leave times. tuition benefits. that makes sense. I think it also makes sense to include tuition benefits in the Working Conditions category. Employees: I’m surprised that you would take merit increases out of a general discussion of wages.efits (health insurance. so there’s not going to be a lot of discussion on what our pay schedules and annual increases can be. but the parties were able to come to agreement because the wage issue had been resolved. I would include that under the Working Conditions category. Later negotiations were difficult. to be honest with you. but I’d change your list. Let’s get started. And paid leave clearly belongs with Wage issues and should be discussed with the pay schedules. Executive Director: Well. as well. and the parking spaces). There is more flexibility to use non-public money sources to reward employees who will cover night or weekend hours or who qualify for merit increases. 74 50 Practical Negotiation Tactics . Executive Director: Sounds like a good agenda. Also. Executive Director: I think it’s a good idea to group items together. That’s a program that can have a lot to do with how employees are able to increase their worth to the organization. So I’d like to see us get through the wage issues quickly and then move on.

Their “property division” was mostly about dividing their debts. no matter how insignificant. They had also furnished their house on credit. They were in the middle of buying a house. too. They met and married in college. Example 1 Tim and Kathy. because Tim felt that Kathy had taken advantage of him during the marriage. You signed those papers. rather than disposing of assets. sets the stage for mutual respect and communication. An initial agreement. after a brief marriage. and both have good jobs. and she agreed. and might not even be able to keep the house.Tactic 18: Agree on Something As Soon As You Can Negotiations are more successful if both sides can agree on something—anything—almost immediately. with her promotion sending her out of town. are divorcing. They have no children. Now. and that you are entering into the negotiations with the intent to reach agreement. Consider starting things off by presenting your opponent with a proposal you feel confident can be agreed upon without argument. Kathy was asked by her employer to relocate to another city. Exchanging Initial Offers 75 . It was her idea to buy the house and go into debt to furnish it. It indicates to your opponent that you are a reasonable negotiator. Tim began working right after graduation. but don’t think you’re going to stick me with all of the mortgage and credit-card payments. Kathy borrowed more money to go to graduate school full-time. without suggesting any changes or modifications. You can also make an effort to agree on something your opponent offers early in the negotiations. Kathy’s first job paid more than Tim’s because she had a graduate degree. The discussion might become very heated. The couple hoped to do the divorce without involving lawyers in order to save money. Tim worried that he would be stuck with all of the debt. and they were making payments on school loans (for his undergraduate degree and her undergraduate and graduate degree) and on two cars. Tim: You might be leaving town.

I can hardly argue with that. ABC usually uses UPS 76 50 Practical Negotiation Tactics . and you got your sports car. What do you want to do about them? Conclusion Having agreed to two items very quickly. Kathy: I suppose we should look at the school loans next. Okay. If both of us had been working the year I went to graduate school. about the house and furnishings. Tim: Okay. Kathy and Tim were able to agree that Tim would take over paying for the house and furnishings and Kathy would get 50% of the equity accrued by the time of the divorce. Frankly..Kathy: Hey. hold on. an art gallery. a wholesale art dealer. I say we agree to transfer the convertible loan to me and you take over the loan on the sports car. I got my convertible. yes. I think it only fair that I take over repayment of all the school loans. Kathy: Now. as you remember. even though the convertible is being paid for through a 48-month loan and the sports car through a 36-month loan. I don’t intend to “stick” you with anything. They also agreed that Tim wouldn’t have to pay her that amount for five years. I think that makes sense. The first thing I’d like to talk about is what we are going to do about the cars. we decided to each pick out our “dream car” and that we would not overrule the other’s choice. When we bought them two years ago. and XYZ Co. Tim: Well. we would have paid down our school loans more. entered into a contract through which ABC sold to XYZ twelve works of art by 19th century American painters of modest talent for a post–July 4th sale. and he could pay it in annual installments over a five-year period. The monthly payments are about the same. Example 2 ABC Company. as long as the cost was approximately the same.

let me make XYZ an offer: We will deliver three additional artworks to you by the end of the day tomorrow so you can conduct your promotional sale as advertised. There was no indication that the gallery’s electricity had gone out over the weekend. We’ll expect you to pay for the 12 works that will be in your show. ABC: Before we begin. it was obvious that the art in one of the boxes had suffered considerable water damage. and put the company on notice that it was not going to accept the order because the planned sale needed a dozen works of art to make it profitable. The three parties agreed to hold a conference call late Monday afternoon to try and resolve the dispute. XYZ’s manager failed to open the boxes or remove the artworks. WeCanShipArt claimed that the boxes were not damaged in shipment—the artwork was already water damaged. You can get the three new artworks here so that we can hold the sale as scheduled? Yes. XYZ decided to cancel the promotional sale that was to start on Wednesday. and the boxes showed no external damage. Unfortunately. water from the gallery’s air conditioning unit pooled on some of the surfaces of the warehouse area.to ship artwork. ABC refused to pay WeCanShipArt until it received payment from XYZ. and began preparing to return all of the artwork to ABC. but only if you let us ship it UPS. They arrived right before the holiday weekend began. when the boxes were opened on Monday. XYZ contacted ABC immediately. Holiday weekend storms caused the electricity to go off for different periods in different parts of the city. and arrived on time and apparently in good condition. The other times this happened. XYZ: ABC: Exchanging Initial Offers 77 . or else the box was damaged in XYZ’s warehouse. and we will continue to discuss who is liable for the three water-damaged works. but XYZ asked specifically that a little-known company specializing in shipping art known as WeCanShipArt be the shipper. The artworks filled four boxes. and that XYZ needed to either go to the shipping company or its own employees for compensation for the damage. ABC’s position was that the artwork was fine when it left their location. However.

They also agreed that if the investigations are not conclusive. You can’t just ignore us. And we’ll eat the cost of shipping. they will split the cost of the three damaged pieces three ways. XYZ: Okay. Now. I can’t see how I can refuse that. tomorrow and we’ll wait for payment on both shipments until we resolve how the artworks were damaged. WeCanShipArt: Wait a minute. Having reached an amiable solution to the immediate problem. 78 50 Practical Negotiation Tactics . ABC: Well. and if word gets out that you think it was. at its financial risk. We can guarantee that we will deliver the new order in perfect condition by 5:00 p. we’re ruined. we’ll take responsibility for all of the consequences: the lost sale to ABC and the lost promotional sale by XYZ. The artwork was not damaged while in our control.XYZ: Agreed. that’s okay with me if it’s okay with XYZ. regardless of where the original three artworks were damaged. the three companies were able to agree to undertake an investigation within each company to determine when the artworks were damaged. how do we resolve the issue of the damaged artworks? Conclusion ABC’s decision to offer a solution to XYZ’s immediate problem.m. generated a like offer from WeCanShipArt and a reasonable response from XYZ. If we don’t make the deadline.

Can you check others in the paper and just give us your best price? We will either take it or advertise the tractor in the paper. Okay? No quibbling. but ONLY if you have a bottom line or definite point at which you will accept an agreement and you believe the other party will make a reasonable offer. Jeff spends many hours mowing the yard every week.000 for it six years ago. The “first and best” tactic enabled them to settle the matter easily. It is important that both sides know that there is no negotiating beyond the single “best offer”—that the first offer will either be accepted or rejected. no hard feelings either way. period. Conclusion Ann and Colleen did not feel like negotiating over the tractor and running the risk that it might affect their friendship. Exchanging Initial Offers 79 . What do you want for it? Colleen: Well. we paid $5. and even more hours in the fall picking up leaves. Why don’t you give me a price? Colleen: Oh. consider using the “First and Best” tactic. Ann: That sounds great! I don’t want this to affect our friendship. I don’t want to quibble. Ann: Well. Example 1 Colleen: Ann. we’ll sell it to you. I know you and Jeff said you’d like one because you have about five acres. Ann: Thanks! We really need one. and it came with the bush hog and the leaf pick-up. We plan to put an ad in the paper next week. we plan on selling our Ford tractor when we move. I don’t have any idea. but if you’re interested. You must mean what you say and be prepared to walk away from an unacceptable offer.Tactic 19: Make a First and Best Offer If you want to cut a deal but you don’t like the “give-and-take” negotiation process.

except salary. how about you making your first salary offer your best one. Here it is. Okay? Vernon: That sounds good. but we have internal budget considerations and we must consider equity with other employees. We want you. He also started the job with a positive working relationship with Vernon. I think we have agreed to all aspects of the job offer.Example 2 Archie: Well. because it was several thousand dollars above what he decided was the minimum it would take for him to change employers. I expect a fair increase. I’ll either accept it or reject it. who admired the way Archie negotiated his starting salary. on this slip of paper. I want the job. I came up with the best salary offer I can make. no questions asked. So. (three days later) Vernon: Archie. and I’ll take 48 hours to consider it. but I don’t want to start off in a new job by negotiating with my boss! So. Archie: Thanks. I’ll discuss it with my wife and get back to you in 48 hours. as we agreed. I don’t like negotiating over salary either. 80 50 Practical Negotiation Tactics . I’ll get back to you in three days. and you know my current salary. Conclusion Archie accepted the job offer.

since Sally is going away to college next year. Posturing is indeed “acting. you will probably have to modify some of your positions if you are to reach agreement. I’m the only junior in the crowd. Sally’s Senior Prom is coming up.m. Example 1 Kevin. First. we’re not going to be dating exclusively after this summer. He and his date had decided that as long as they could join their friends for breakfast after the prom. First we’re going to dinner. (Once negotiations get underway. Third. you only have one Senior Prom in your life. and ignore or deny any weaknesses in it. and we’ve made a lot of plans with our friends that I need to talk to you about. look for indications from your opponent as to what he or she believes is their best position. Kevin: Mom and Dad. curfew would be okay. Fourth. you know that Sally is really looking forward to this. His girl friend’s Senior Prom was coming up and Kevin obviously wanted to stay out beyond his usual curfew time of 1:00 a. This is called posturing—presenting your position strongly and completely. then the prom. so the prom is a pretty big deal to both of us. was dating a senior. Kevin had “negotiated” with his parents before. and in a favorable light. but he figured “all night” was relative. Second. we’re all meeting at Donna’s so we can share a limousine.m. Present your position and demands as if yours is the only logical position. so he knew that he would have to sell them very quickly. and it really wouldn’t be fair if I wasn’t able to go along with the rest of the group. 17 years old and a junior in high school. and then to breakfast at “Timothy’s. Exchanging Initial Offers 81 .” but it is also a source of valuable information that can help the negotiations proceed to a successful conclusion. It might be your only opportunity to explain your position without interruption. a 4:00 a.) During the posturing phase.” As you know. He knew his parents would not agree to let him stay out all night.Tactic 20: Posturing You might have to do a little acting at the beginning of the negotiations.

From where we sit. I’ve never missed my curfew. Also. you will have another Senior Prom—yours—so we don’t think you will be “missing” that much if you don’t stay out all night. yes. remember that when you started dating Sally and hanging out with an older crowd. We’ve heard that they allow kids to drink. Donna’s parents are not as strict as they could be when a bunch of you are there. That’s asking us to believe a lot. You make some good points. you and Sally need to call it a night (or really a morning). Things can happen on a night like that that adversely affect you for the rest of your life. However. you have been fairly good about making your curfew—most of the time. happy about your plans to use a limousine so you kids aren’t driving. so there will be plenty of chaperoning. they will be open for the Prom crowd only. Fifth. the limousine will take us back to Donna’s house to spend the night. You realize that this could be as late as 4:00 a. but it should not be oversold. and the crowd we hang with doesn’t either. for sure. we know. 82 50 Practical Negotiation Tactics . Second.Mom: Kevin: Mom: Kevin: Timothy’s usually isn’t open early in the morning. Finally. and we’re just not happy about that.or drug-free. but to use that as a reason to stay overnight doesn’t make sense. We’re just not convinced that your entire group has been alcohol. I think I ought to be able to stay out all night. Sally’s parents trust us and have already said yes to her. And if we don’t spend the night. we told you that we would not be changing our rules to accommodate that older group. Yes. I don’t drink or do drugs. That’s the deal then? Okay. We are. Donna’s parents will be there. And. of course. I believe you can pay a little more and have the limousine bring you both home. but because the owner’s daughter goes to Sally’s school. We think that after the breakfast. which could be dangerous. I know you trust me and that I’ve earned the trust.m. So. we’ll have to get in our car and drive home very early in the morning. this prom is a one-night thing—a dance that is dressier than you’re used to.

Tencro approached the state’s Economic Development Officer. we’d be adding at least 500 new jobs. Tencro has approached the state’s Office for Business Incentives to see what. The assembly plant is out-of-date. and had this conversation: Tencro: We really want to keep our company here and expand it. we’re of course interested in keeping you here. Tencro: Let me just remind you of what our company means to this state. but we’re getting a lot of interest from other states willing to help us relocate. It currently employs 800 people. Sally and Kevin had a wonderful night and were quite happy to have the evening end at 4:00 a. we are one of the largest employers in this county. If we can expand here. EDO: Well. and it will grow—everything from sub-parts manufacturing to the shipping business we generate. other companies have received incentives and Tencro certainly wants all it can get. if anything. but it could easily add another 500 if it had the space on its assembly line. With 800 employees. We need to find out what you’re willing to do to keep us here. regardless of the incentives. The company approached other states to see what incentives they might offer Tencro to locate in their state. Example 2 Tencro Company decided to modernize and expand its business. our Exchanging Initial Offers 83 . the state can do to help the company expand and rebuild. and it does not really need any help. and a new.Conclusion Kevin’s strategy to hit his parents with all of his very good arguments at the outset gave him an advantage. one-floor operation would be very profitable. Nevertheless. The spin-off business from our operations is huge. but was disappointed to learn that they offer very few incentives.m. but there are limited options available. because his parents could not disagree with such wellthought-out ideas. Tencro is not going to leave the state. Also.

and we are willing to offer some training dollars for the new workers. We can’t possibly give it away to other companies coming in behind them. now that the economy has improved. We need a rebate on the local income taxes to help pay off the loan to build our new building. and we’ve had to divert funds from business incentive programs over to basic services. and traffic signals. etc. We do want you to expand your plant. etc. if the new location is at the local industrial park. additional police. Certainly. so we’d have to have it free here. or else it will not be cost-effective for us to stay here. what do you have to have? Tencro: We need a new location—20 acres or so—to build our new plant. And we’ve been offered land practically free in the neighboring state. The industrial park land can’t be “free” because we have agreements with other companies that had to buy the land. That might involve the state building housing for them at a reduced cost and providing them with some retraining. schools. Just increasing the workforce by 500 will pull new people into the community and cause housing costs to rise—something our citizens on fixed incomes are very much against. We need help in the cost of attracting and training the new 500 employees. any plan by the state to build housing that is subsidized by tax dollars will draw a great deal of criticism. We think that we’re the reason XYZ and ABC companies located here and we believe they are likely to leave if we do. We 84 50 Practical Negotiation Tactics . And. moving to a new location will raise a lot of questions from neighbors about the increase in traffic and pollution that might be generated by your plant.employees pump money into the economy by buying houses and cars. we will need the two-lane entrance expanded to four lanes. EDO: Well. while we value your company as a long-time corporate citizen. We need certain incentives. paying taxes. There are more residents in the state demanding more public services: road improvements.. EDO: The state has very limited resources to pay for economic development incentives. Also.

borrowed money for the new building. Tencro bought land in the industrial park. EDO: Get back to us as soon as you can. but for the fact that each party did its homework and was aware of the true facts.agree that the road into the industrial park must be widened and a traffic light installed at our expense. and the state did end up participating in a housing subdivision in order to keep the purchase price down for the new employees. However. we’re just not in a position to offer more than that at this time. and hired 500 new employees. Conclusion The posturing by both sides could have caused the whole negotiation process to bog down. Future negotiations continued. Other than that. Exchanging Initial Offers 85 . Tencro was able to pay off the borrowed money in half the time. the training and the new road improvements were all the incentives offered to Tencro. The new set-up was so profitable. let us go back and take another look at our options. Tencro: Well.

000 two years ago.) To prevent this from happening..Tactic 21: Avoid the “Winner’s Curse” It is often quite difficult to make the first offer.000—what they paid for it. particularly if you don’t know the other party’s “settlement range. think things through before you make or accept the first offer. and that two similar ones on the same street sold for $330. We don’t know how anxious they are to sell or if they know the market. at minimum cost.000 for a house that sold for $185. The worst first offer is the one that is so high or so low that the other party jumps on it immediately—known as the “Winner’s Curse. never give them their asking price. because you have settled quickly. They found one they both like that lists for $325. then $320.000. thus requiring greater concessions on both sides. of course. 2) Start out with an old number. and you cannot withdraw it in good faith.000.000. before someone else does. Their realtor told them that it sold for $290. or 3) Make an unrealistic offer (i. Example 1 Jay and Sue are looking to buy a house in a specific neighborhood because it has a good school system. Let’s low-ball them and offer $290. offer $150. The sellers must be willing to come down a few thousand … Sue: Well. Sue: Let’s offer $325. 86 50 Practical Negotiation Tactics . That’s a fair price. The other party will probably come back with an equally ridiculous offer.000 three years ago).” The perfect first offer. either: 1) Let the other party make the first offer (this means that you will be giving up the chance to focus the negotiations on your figure. and houses in this area sell fast.e.000 this year. Avoid giving away too much at the outset. is the most (or least) the other side will accept. Jay: No.” (You have won a settlement. such as last year’s price.000 and $337. Jay: No. but you feel cursed because you gave away too much. which can be very useful).

Sue: Don’t be crazy. Sue: Then you do it. realizing they offered too much. since they had already bought another house. Exchanging Initial Offers 87 . (Bob and Frank meet privately to discuss the situation.500—half the difference! Sue: Great. The buyers were very motivated to sell. Let’s accept it! Conclusion Jay and Sue avoided the so-called winner’s curse by making a low (but reasonable) first offer. Lyle Foxworthy. and the offer was based on fact: the prior negotiated price. I can’t tell our realtor $290.000 total. was very impressed with their presentation. That’s an insult! Jay: Well. (the next day …) Jay: They made us a counteroffer of $307. Both parties felt that they made a good deal. Lyle: So what’s your price? Bob: Can you tell us what you have budgeted for this project? Lyle: No. then let them make a counteroffer. the company president.000. as Sue had first suggested.) Bob: I’d do it for $3. the sellers obviously would have accepted and Jay and Sue. Give us your lowest price. Frank: Me too. they had offered $325.000 for each of us—$6. as requested by the human resource director. They outlined how they would develop a new employee performance-appraisal system. would have suffered the winner’s curse! Example 2 Bob Myers and Frank Costello made a presentation to the top management of a paint company.000. If. but who knows what they are planning on offering.

Conclusion Bob and Frank avoided the winner’s curse by forcing Lyle to make the first offer.) Lyle: Okay. Lyle: Okay. That is all that’s left in this year’s training budget. They also ended up getting three times ($18. What is it? Lyle: Why don’t you give us a price? Bob: We can’t use our daily rate because it might be too high for this work.000) their minimum price of $6. but we can’t pay more than $18. We’ve waited long enough. but we know you must have an amount budgeted for this and we are willing to do it for that amount. We’ll do the job. Bob: That’s fair.000. and it would not apply. I’m out of time. and you two come highly recommended.000.Bob: Lets make them give us a price! (Bob and Frank return to the meeting room. 88 50 Practical Negotiation Tactics . What’s the cost? Bob: We want the job.

the other party. be prepared to divide an offer into smaller ones to make it appear to be more reasonable to the other party (see Tactic #31: Cut Salami Slices) or offer two or more alternative proposals of equal value to you. is likely to pull away from the table. One or more parts might be acceptable or indicate movement from their previous positions. and do not flatly reject it because it is not your offer. which is often the case. and attorneys use tried and true tactics in giving and receiving offers. in fact. seeing no common ground. but possibly of different values to your opponent. and remain open to offers and options that you did not originally expect (see Tactic #30: Always Leave Room for Dessert). When the other party makes an offer. which would most likely weaken their position (see Tactic #26: Keeping Secrets). labor negotiators. Expect that the “total pie” will be different from what it was at the outset. Experienced negotiators seldom reveal their exact priorities and objectives.Stage 4: Making Counteroffers he heart of the negotiation process is the give-and-take. because if you do not at least appear to be flexible. Skilled negotiators such as salespeople. It has often been said that the key to negotiations is to be flexible (see Tactic #25). In some negotiation situations. Wait to counter (see Tactic #24) because this will give the opponent the sense that you are serious about bargaining. be enlarged (see Tactic #27: Expanding the Pie). Instead. carefully evaluate an opponent’s offer. T Making Counteroffers (The “Give and Take”) 89 . Also. what appears to be an outer limit of the settlement range when the process starts can. Experienced negotiators also know that proposing multiple options (see Tactic #22) and offering a tradeoff (see Tactic #23) are useful when more than one issue or item is to be negotiated. do not dismiss it because it is not all you want. Use a prolonged period of silence (see Tactic #29) to convey something at a strategic moment. This can produce a negotiated solution without giving up your priorities (see Tactic #28: Fixed Alternatives).

Jerry will be here. 19. The week he would be home would be the first week of school for Sydney. He planned on being home for one last week before having to pack up and go back to college. We have four options. and quicker. The effort it takes to come up with multiple options (all of which are acceptable to you) reveals additional ways in which you see yourself “winning” in the negotiations. His brother Sydney. except when you’re negotiating. finished his freshman year of high school at the beginning of June.Tactic 22: Propose Multiple Options The shortest distance between two points is a straight line. Proposing only one solution to a problem. so you can go without me. Example 1 Jerry. The reciprocal opportunity to review and select among options rather than accept one (“take it or leave it”) also gives your opponent a way to win. and that he already made plans to visit with college friends on the East Coast for the two weeks after that. it looks like we can’t really plan a vacation for all four of us. and I try to get to the South Carolina beach for a week in July? Sydney: I’m not going to the beach with my parents! I’ll just stay home. their parents began discussing a family summer vacation. Proposing multiple ways to reach your goal can get you to the same place. Dad: Wait a minute. Here’s the discussion that followed: Mom: Well. 90 50 Practical Negotiation Tactics . gives your opponent little maneuvering room and might even prolong or damage the negotiations. 15. In mid-June. Jerry had already started his summer job. I don’t want to give up on a family vacation that quickly. while it may be your best option. Jerry pointed out that he is expected to work until July 31st. Sydney. Let’s see what we can work out. completed his first year of college and came home for the summer around the middle of May. Option 1: No family vacation. Dad. what say you. Option 2: Mom and I go before Jerry leaves on August 1.

if it’s okay with Jerry. me. Then Jerry joins us until Thursday. Mom: Well. actually. And I miss orientation and start school the next day? Dad: That’s an option. we could return home on Thursday and still get a week’s vacation. but he can discharge employees for poor performance. Conclusion The goal was to have a family vacation. It’s not perfect. but it should work out all right. If we started the vacation on a Thursday. and Sydney go to South Carolina before his school starts. we meet up with him that week for vacation. they were able to make that happen and not interfere with or argue about the merits of each other’s individual goals.Option 3: Mom. so I won’t be able to meet up with you until Sunday. Sydney: Okay. one paralegal. Jerry: My friends and I have plans through Saturday of that week. and Carl). and one secretary in his litigation unit. Bob. By proposing numerous options. Joe has no say in who was hired by the corporate legal office to work in his unit. Example 2 Joe is an attorney whose job responsibilities include managing three other attorneys (Andrea. when we come home. Mom? Mom: Let’s do it. Classes don’t start until Friday. Andrea considers Making Counteroffers (The “Give and Take”) 91 . Sydney: So what you’re suggesting is that the three of us are on vacation from Thursday to Sunday. Sydney: Don’t I start school that week? I don’t want to miss school. Jerry: Okay with me. you have a half-day orientation on Wednesday. Option 4: Jerry doesn’t return home the week between his visit to the Northeast and returning to school.

and I don’t see why we don’t have more independence. The attorney for the other side has agreed to give me the additional time to file it. It was just a comment. we have a very big problem. why don’t you just move me to another unit? I’m certain Bill thinks I do good work and would be happy to have me in his group. you have a job-performance problem. let me say that I’m handling the missed deadline on the pleading. and resents any attempt by Joe to supervise her work. which forced Joe to take action. you can agree to a demotion so that your areas of responsibility are lessened to that of a paralegal. Joe: That’s all well and good. or you can work out a “supervision” agreement with me so that I can better monitor your performance. Before you start. so Joe took a “hands off” approach. Andrea. Joe: That is certainly an option. rather than to put it off on someone else or for some time in the future. 92 50 Practical Negotiation Tactics . Andrea: You didn’t list moving to another unit as an option. To put it as bluntly as I can. however. I thought I had cleared it with you when I told you what I thought they ought to offer and you said that sounded too good to be true. If you don’t like the way I do my job. Joe: Come on. isn’t it? But I don’t think just moving you really solves the problem. I really see your options as follows: You can leave the corporation. We have a formal procedure that you just don’t like to follow. Andrea: We’re hired for our expertise.herself to be a professional. You had no authority to agree to settle the Stites case without clearing it with me. she made a two glaring errors in judgment. but it doesn’t solve the problem—nor is it the only problem. Joe: Andrea. Andrea: Well. In the last month. Andrea: Wait Joe. you know that wasn’t an okay to settle. It is to the corporation’s benefit to address that problem here and now. Her job performance was acceptable.

lets talk to Bill about the move.Joe: That could be an option. rather than my staying here. by Leigh Thompson. or I would advise your next supervisor to put you on a very formal approval program. then it would save face for me if it comes with a move to another unit. Joe: That’s fine with me. the needs of the corporation have to come first. I want to stay with the firm. my goal is the same is yours: to create an environment where you can perform to your full potential. and propose an acceptable alternative. (Adapted from The Mind and The Heart of the Negotiator. in fact. But in fairness to our mutual employer. Andrea: Well. I hope we can work it out. Andrea’s move and subsequent “approval” regime did. It also changed her attitude about being both a professional and a team player in a corporate office. improve her work performance.) Making Counteroffers (The “Give and Take”) 93 . but it would still require some change in the way you work: either a demotion. If that option is okay with you. If you are convinced that I have to undertake an “approval” program. Believe it or not. Conclusion Joe’s willingness to offer more than one solution gave Andrea a way to look at this unfortunate situation as an opportunity.

They each agreed to list the items they want and then to negotiate whether or not they will be purchased. Wow! We are off to a good start. 94 50 Practical Negotiation Tactics . They both agreed that this is the maximum they will spend on “extras” before moving in. 3) distributive items (those items for which the two parties have exactly opposite interests.) Yes. and finally. These items often involve money). only those with polar-opposite interests that must be divided. then the contractor has lost $500 in revenue. let’s see if there are any items we both want. three strategies are used. Exchange. that’s $9. Let’s agree to those things.500. one person’s gain is another’s loss—zero-sum. It goes like this: Organize the joint list of demands into three categories: 1) compatible items (those items that both parties can quickly agree on because they share the same desired outcome). Let’s see. because it can speed up negotiations and produce a more desirable outcome. thus making it necessary to find a middle ground on each. 2) exchange items (those that can be easily traded off—one item for another item of equal value. we both want the sod. (She looks over the list. With distributive items. Avoid assuming that you both differ on every issue (in which case you might be making unnecessary sacrifices) by first identifying items for which both sides have similar desires. Brooks: Right. the fencing. then those which can be easily traded. They have a fixed amount of money—$14. It is used only when each side has several demands. if a buyer negotiates a $500 reduction of a contractor’s bill. Example 1 Brooks and Maureen Wilson have just finished building a new home.000. For example.Tactic 23: The “Win-Win” Approach (Identify Issues as Compatible. This approach is an important tactic. In essence.). or Distributive) The “win-win” approach to negotiations is a basic tradeoff strategy of seeking maximum gains for both sides. and a home theatre. etc. Maureen: First.

$750 for lighting and $750 in the bank. Can we split it evenly? Brooks: Okay. We have $1.000 $1.000 $2. I’d like to spend some of it on lighting upgrades. Maureen: No. Making Counteroffers (The “Give and Take”) 95 . These are all permanent immediate needs.000 Brooks X X Maureen X “Win-Win” Category Compatible Exchange 2 Trees (3) 3 Berber carpeting 4 Lighting upgrades 5 Third garage 6 Tile entry 7 Designer drapes 8 Deluxe home theatre 9 Extra sidewalk 10 Custom chandelier 11 Whirlpool bath 12 Fencing X X X X X X X X X X X Exchange Compatible X Compatible Exchange Distributive Maureen: Well.500 $2.000 $5.500 $5. I’ll trade your sidewalk and trees for my whirlpool bath.500 left. which takes another $3. that makes sense.000 $500 $1. and we both get things we want.000 $3. which I’d like to keep in the bank.200 $200–$2.500 $500 $1.# 1 Sod Item Cost $1.000! Brooks: Good.

Example 2 Ohio Metals Company and Local 56 of the Primary and Sheet Metal Workers of America-AFL-CIO have had a generally positive labor relationship for over fifty years. even in difficult years.Conclusion By taking the time to list all the items each person wanted and their cost estimates. both sides exchanged lists of initial demands at their first meeting. Profit-Sharing 5. Wage Increase 4. Length of Contract 2. During that time. management and union negotiators found that a “winwin” approach to negotiations worked well. This year. Maureen and Brooks were able to identify those things they both wanted (the compatible items) and then trade some items of equal value (the exchange items). Item Management 3 years None 1% 10% of net For cause only Union 3 years 2% 5% 12% of net For cause only Win-Win Category Compatible Exchange Distributive Exchange Compatible 1. Drug-Testing Program 96 50 Practical Negotiation Tactics . Pension Increase 3. All items to be negotiated and their desired outcome for each item were put in writing for review. finally agreeing to split the difference on the remaining amount (distributive items). The combined lists total thirteen different items: Desired Outcome No.

No Strike/No Lockout 10. At this point. First. Next.Compatible rent provision 15% Exchange 15% No layoff provision $100/month Exchange Exchange Exchange In their second meeting. and the union clothing allowance proposal (#13) for the management funeral leave proposal (#8). (#5) a new drug testing program. Health Insurance Employees pay 20% Continue cur. Next. the management profit sharing plan (#4) was exchanged for the union overtime assignment plan (#7). eleven of the thirteen original issues to be negotiated had been agreed to. and (#9) to continue the often-discussed no strike/no lockout provision.Distributive rent program co-pay Exchange Exchange 7. Job Security 13. Clothing Allowance Based on senior. one Making Counteroffers (The “Give and Take”) 97 . signed. the negotiators agreed that they had compatible positions on three items: (#1) length of contract. Because they held opposite positions on these issues. they accepted the union job security proposal (#12) in exchange for the management subcontracting proposal (#11).6. Paid Funeral Leave 9.Voluntary ity 2 days Continue current provision 10% 10% No provision $50/month 3 days Continue cur. Shift Differential 11. Subcontracting 12. Overtime Assignment 8. and removed from the table. They proceeded to draft the language to settle these issues. This gave members of both sides a sense of accomplishment as they began to discuss the remaining two issues for which they must find a middle ground. they exchanged the economic issues of approximately equal cost: the union pension increase proposal (#2) for the management shift differential (#10). they began to trade off the exchange issues of similar value and nature. Finally.

Second. Conclusion This tactic is simple. They then identify each as compatible. negotiations begin on a positive “win-win” note. The tactic offers several advantages: First. when you exchange items so that each party achieves their desired outcome on one of the two. Both sides first agree that all issues to be discussed will indeed be listed and openly discussed. you can use the process to settle many of the other issues on the table. Sometimes the classic “split-the-difference” method is helpful in locating a middle ground. exchange. when you agree on the items where both parties have similar desired outcomes. but it can be very effective when a negotiation situation involves several issues. Third. These two distributive issues—wages (#1) and health insurance (#6)—were the most challenging to settle. the most difficult issues (often involving price or some other economic measure) can be negotiated because you know that most items have been settled successfully and only a few remain. if both parties start from reasonable positions. 98 50 Practical Negotiation Tactics . A middle ground often must be found on each of these distributive issues if you are to reach an agreement. or distributive so that the negotiations can begin in an organized manner. but a middle ground was eventually found on each and negotiations ended.side’s gain is the other’s loss.

So when’s a good time? Jasper: (without hesitation) No way. and refrigerator. and from a strategic standpoint. and can help you reach your goal. Rob stays busy all day and evening with other activities. The final issue had to do with “lights out” and quiet times for studying. Rob: Making Counteroffers (The “Give and Take”) 99 . and studies late into the night. stereo. Here is how the last issue was handled: Okay. Example 1 Jasper and Rob met when they were assigned to the same dorm room their freshman year in college. you know.Tactic 24: Wait to Counter As the negotiations begin. even if you aren’t going to accept their offer. You can reject the offer and offer a counterproposal after it is obvious that you have taken the time to consider the merits of it. Let me finish. so I can study. and on what would be considered acceptable “sharing” of each other’s junk food supplies. Mutual respect must be part of the negotiation process. This isn’t high school. Waiting a respectful amount of time to counter. A counterproposal delivered too quickly tells the other side that you haven’t or won’t even seriously consider their offer. last item: I’d like it quiet in the room at night. they decided to establish “room rules” so that they would both be comfortable with the room assignment. will make your opponent feel good about the process. Since they didn’t know each other well. I’m not interested in a curfew. Jasper: Finish or not. Rob: Wait a minute. Jasper studies during the day and early evening and likes to stay up very late watching TV and visiting with friends. and looks like you are belittling them. do not offer a counterproposal right away. the location of the TV. so he wants a quiet room late at night. each side is expected to put an offer on the table. It is especially important that you do two things: take your time before rejecting any offer from the other side. They agreed on which part of the room each would have.

Jasper: Midnight. Example 2 ABC Company’s management was being restructured and compressed in order to facilitate its new “just-in-time” manufacturing philosophy.m. and that’s not negotiable.) Listen. Jasper: (without taking a breath) At best. Under ABC ‘s contract with the union. Under the restructuring. c) a formal “meeting” with plant manager if the matter is not resolved in 10 days.m. midnight during the week is the only thing I’ll consider. Neither side anticipates that there would be 100 50 Practical Negotiation Tactics . b) written complaint to a floor manager if the matter is not resolved in 5 days. curfew on TV and other noise every night. and the union foreman would report directly to the plant manager. Failure of both young men to allow one another to have their proposal considered caused the relationship to break down. is all I’ll consider. The union contract required that management renegotiate this change in the grievance procedure with the union. I want a 10:30 p. No agreement was reached. but changed his mind when he saw Jasper’s attitude. Rob: (there is no hesitation in this voice) No. employee grievances had to go through four levels of supervisory review and appeal: a) verbal complaint to the non-union crew leader.Rob: (Rob was about to suggest midnight on Mondays through Thursdays. the positions of non-union crew leader and floor manager would both be eliminated. The appeals procedure would have to be altered to reflect the restructuring. and d) a hearing with company owner if the matter is not resolved in 20 days. and that’s it. Rob: I’m going to look for a new roommate!! Jasper: Fine!! Conclusion It was clear that neither Rob nor Jasper was seriously considering the requests and suggestions of the other person. 10:30 p.

(Note: An attitude change sets in. After initial pleasantries were exchanged. The redraft is simple and straightforward. Union: You obviously didn’t come here to negotiate.) We’re just not happy that you are proposing a Making Counteroffers (The “Give and Take”) 101 . We just cut out two steps. the union arrived at the meeting prepared to support a streamlined process that called for the employee with a grievance to discuss it first with the union foreman. Certainly. The union was prepared to accept the plant manager’s position as final. and everything else stays the same. rather than as a judge on the merits of the grievance. he/she can take the grievance to the plant owner for a hearing. If the union foreman felt that the grievance had merit. Company: Here’s the new draft of the grievance procedure. Union: As you know. We think that this is an opportunity to eliminate some of the adversarial aspects of the grievance procedure. ABC Company’s negotiator explained the management changes soon to be implemented. We’d like you to consider the plant manager’s role as a problem-solver. but to dictate. no one can complain about that. because those management layers are gone. this redraft is a very simple change to the contract.any objection to the change. We’ve got a couple of alternative models for you to consider. An aggrieved employee can make a request for a meeting with the plant manager. our grievances often signal to management that there are real problems on the shop floor. Union: Hold on. and I’m certain your members will be okay with it. rather than go on to appeal it to the company owner. Our guys are prepared to accept a shorter grievance procedure if we can find a way to ensure that you’ll take our grievance issues seriously. the employee and the foreman would meet with the plant manager and attempt to resolve it. Company: (no hesitating) Trust me. We’ve simply eliminated the first two steps. Company: (rather abruptly) Let’s not drag this out. and began the negotiation session concerning the grievance procedure. If in 20 days he/she has not been satisfied. In fact.

Union: We’re very serious. We’ll see you on the picket line. the two parties did meet again. After a cooling off period. Conclusion ABC Company’s failure to take adequate time to consider the union’s offer or even act as if it was considering the offer prolonged the negotiations unnecessarily. 102 50 Practical Negotiation Tactics . and actually accepted a three-step procedure. to prevent any change! Company: (surprised) What? Why would you object to this? Your guys will get a final decision in 20 days.two-step grievance procedure instead of a four-step procedure. This time. the company entertained the ideas the union had tried to propose before. and we’ll strike if we have to. rather than in the 35 days the current system provides. You can’t be serious.

two sisters.Tactic 25: Be Flexible A negotiation begins with both parties having some idea of where they hope to end up. you can adjust your demands or goals to include such new ideas. one sister. They’ve done the research. and we’re really not able to enjoy either one. two brothers. Sue and Bill decided that they had to begin alternating their Thanksgiving Day visits between the two families. Bill. four brothers. Sue’s family (parents. and the baby aren’t coming for Thanksgiving dinner this year—that you’re going to Bill’s parents’ house. Even before the baby’s arrival. Bill’s family won. the Thanksgiving marathon caused problems: They would have to leave Sue’s family’s celebration before the “traditional” after-dinner trivia games (which Sue really enjoyed). established goals. If you are flexible. Bill’s family (parents. and now have a new baby girl. it’s just too much to do both. Next year.m. They flipped a coin to see who “got” them and the new baby this year. Making Counteroffers (The “Give and Take”) 103 . and identified the range of options they feel comfortable with negotiating. and do not dismiss something said by your opponent just because it came from the opponent. successful negotiators remain flexible because new solutions to old problems often surface during a negotiation. Be open minded. Sue: Yes. and ten nieces and nephews) always ate around 5:00 p. Sue’s sister Nancy called her to talk her into coming anyway. Arriving late at Bill’s family gathering caused him to miss the “traditional” pre-dinner pro-football game on TV (which he had grown up believing was the real reason for thanks at Thanksgiving).m. and Sue called her mother to let her know that they would not be coming for Thanksgiving dinner this year. Nancy: Sue. The couple used to have Thanksgiving dinner at both families’ homes. and at least five aunts and uncles) ate around 7:00 p. their spouses. Mom says you. But after the negotiation gets started. we’ll get to our side. Example 1 Sue and Bill have been married four years.

Mom’s very upset. When that goal looked out of reach. Nancy: I’ll let you know. we’ll come to Mom’s. some people have to work on the Friday after Thanksgiving. Sue: I don’t know. the holiday will be over. I bet everyone could make it on Friday. By being flexible. either. and it became the family’s new tradition. There’s nothing “special” about Friday. Bill won the coin toss for this year. Nancy was able to accomplish the real goal of the negotiations—to make sure that the holiday would be celebrated with the whole family present. Isn’t that what Thanksgiving is about—taking a day to give thanks for our blessings with the people we love? We’ll just arrange it so we do it two days in a row! Sue: Well. 104 50 Practical Negotiation Tactics . Nancy: We’d make it special by all of us being together.Nancy: It just won’t be right without you guys. I thought of asking Mom if she could move dinner up to noon or so. Nancy: If we keep the time at 5:00 p. Everyone in Sue’s family liked the idea of celebrating on the Friday after Thanksgiving. Celebrating the next day seems odd. Thanksgiving is Thursday. I know that I would rather not do two Thanksgiving dinners on Thursday.m. Sue: Next year. it’s okay with me if you can sell it to everyone else. I mean. Conclusion Nancy’s goal when she called Sue was to talk her into coming to their Mom’s Thanksgiving Dinner on Thursday. but then I realized that the rest of you already go to your in-laws earlier in the day.. Nancy: What if we did Thanksgiving on Friday? Sue: What? Nobody does Thanksgiving on Friday—that’s un-American! Anyway. So that doesn’t work. she suggested a unique alternative. but she won’t tell you.

but the principal of the fund can’t be touched. Foundation officals: Oh. We only have maybe $2 million a year to put toward this charity. We need the city’s help by allowing us to get the city land donated to us (for free). had been negotiating with a foundation to become its major benefactor for a new building and to supplement the organization’s annual operating budget. and raise the money to pay it back? And can’t the foundation grant you money on an annual basis? Making Counteroffers (The “Give and Take”) 105 . City: Can’t you borrow the money from a bank to build the facility. City officals: We can probably give you the land for free. but we need some assurance that you will be able to build and operate the orphan home at that location. Estimates for building a new orphan home ranged from $12–$15 million. the foundation’s regular annual grants come to roughly half of their available funds. we’re committed in theory. but we can’t fund all of the $12 or $15 million. The foundation has a substantial endowment fund. the interest income of around $6. Kids’ Home and the foundation have decided that a parcel of city-owned land would be ideal as a site for the new building. we hope to break ground early next year for the new orphan home. depending on the cost of the land. a non-profit organization for orphaned children. Unfortunately (for Kids’ Home).000 a year for operations. Kids’ Home is also hoping to get the city to encourage the foundation to commit to full funding of the building project. We’re hoping to get a commitment from them to build and help fund the operations of a new facility. They are meeting with the city to ask that the land be donated by the city for the project. Kids’ Home: As you know. Each year.5 million is available for distribution to numerous charities. Kids’ Home: That’s why we brought the foundation’s officials with us.Example 2 Kids’ Home. Kids’ Home hoped to get $500.

And “donations” aren’t a very safe collateral for any bank that wants to loan us money. it could end up costing double that amount. If we borrowed $15 million at 10% interest. The commitment by the foundation to make the annual bond payment debt backed by the foundation’s endowment fund should be sufficient collateral to get such bonds issued and purchased. but we’re willing to look at it. I’ll contact the state tomorrow. We’re not familiar with that program. 106 50 Practical Negotiation Tactics .Kids’ Home: Borrowing the money gets very expensive. We wouldn’t want to make such a commitment to a bank. We’ve never committed our funds to pay back a bank loan. We’re a nonprofit group. Kids’ Home was able to acquire state-issued no-interest bonds backed by the foundation’s pledge of interest income to build the new orphan home. Why not ask the state to issue no-interest bonds? It can do that for non-profit organizations. Foundation: City: Foundation: Kids’ Home: Conclusion By exploring alternative financing plans suggested by the city. We probably would not be able to participate. and really taxes our ability to raise funds.

The Jones family suspected that the Smiths called the police. and trust can only be established if all parties interact truthfully. and often lasted until 2:00 or 3:00 a. At the same time. The Smiths called the police to complain about a late-night party. It is perfectly acceptable to say that you are not ready to reveal certain things. They asked to meet with the Smiths to talk about these disagreements. the Smiths could count on parking their car directly in front of their house. Smith: We don’t know what you’re talking about. the neighbors began to have problems. each side has to know generally what each other wants to accomplish. you might not want to reveal all of your priorities at first. and we would very much like to talk about how we can resolve these issues. yet not reveal all of your goals and objectives. Successful negotiations depend on trust. Example 1 Soon after the Jones family moved in next door to the Smiths. it is not acceptable to lie. Mr. Making Counteroffers (The “Give and Take”) 107 .Tactic 26: Keep Few Secrets One of the most difficult skills to master in a negotiation is how to be candid. Jones: We’ve obviously gotten off on the wrong foot.m. and often took up all the space along the street in front of the two houses. The Jones’ two younger children—boys in their mid-teens—hit baseballs into the Smiths’ yard and scared the Smiths’ dog. In order for a negotiation to be successful. you should be careful not to misrepresent your position to such an extent that your opponent will feel that you have lied. These parties could get rather loud. The Jones family let their tree branches hang over the Smiths’ back fence and rub against the Smiths’ garage roof. But the Jones clan had four cars altogether. The Jones’ two older children—girls in their early 20’s—often had friends over on Friday and Saturday nights. Before the Jones family moved into the neighborhood. and you probably won’t identify your throwaway items or tell your opponent your bottom-line. Mr. and asked the officers to cite the Jones kids for parking too close to a corner. However.

we thought you might have called the police about our kids’ party and our cars. and was met with the following: Mr. It is really very disturbing. (A week later. we’d like to be able to park our car in front of our house. Smith: No. we have a problem walking long distances in bad weather. they’re hitting baseballs into our yard. Smith: Yes. So. Smith: You know that your boys are causing our dog. Mr. And the music is to be off at midnight. Jones: We’ve already talked to the girls about the parties. fine. I guess. Jones: Okay. Mr. we would like to work out some solution. a lot of problems. but we do know that someone has complained. that wasn’t us. we’re good now? Mr. If you can tell us all the things that we have done or are doing that have caused you to be inconvenienced. Mr. In good weather. Smith: Well. Smith: Well.Mr. they kept it. the next time the boys were out playing and the ball came into the Smiths’ yard. then they’ll need to come in at midnight so that their talking doesn’t disturb you. Jones: I wish you had mentioned that the last time we talked. Mr. Jones came to see what the problem was. if they are outside.) 108 50 Practical Negotiation Tactics . since you’ve asked. Almost every day. Also. and not in the back yard. the late-night parties are a problem. and they won’t be having friends over more than one night a weekend from now on. And we’ll make sure none of our cars are parked in front of your house. I’ll talk to the boys and we’ll make sure they play baseball in the park. Jones: Well. the Jones were visited by a city inspector because of a complaint from the Smiths about the tree branches hanging over the fence and brushing against the garage roof. Is that everything now? Mr. Mr. At our age. yes. In spite of the Smiths’ assurances. Muffin.

Mr. Jones: Sure. Jones: (at the Smiths’ door. the tree was clearly over the fence. have labor unions.S. The union laborers walked off the job on Friday. you’ve said that before. Union officials are afraid that a Japanese company might purchase it. Its local headquarters has a union to handle its international shipping. We would have fixed the tree if you had asked. and too bad for you! Conclusion The disagreements and unpleasantness continued until the Smiths finally sold their house and moved into a condominium. You obviously don’t want to be “good neighbors. Mr. and the deal is close to being final. irate) I can’t believe you people called an inspector on us. Smith: Well. Unless Neno can get the Union members back to work on Monday. Making Counteroffers (The “Give and Take”) 109 . You could have seen that yourself. or European companies do. Neno’s president and the Union representative met to discuss the walkout.” Forget all we’ve agreed to do—we’ll just enjoy the use of our property. but Neno cannot tell the union this. The union knows that the company is up for sale.S. The Jones’ effort to sit down and negotiate the problems with the Smiths were thwarted by the Smiths’ reluctance to put all of their concerns on the table and their failure to admit that they were the ones who made the formal complaints. Japanese companies often do not “recognize” labor unions the same way U. Why didn’t you tell us? We can’t read what’s on your mind! Mr. Neno has been negotiating the sale of its business to a British company. But we didn’t call the inspector. Example 2 Neno Enterprises is a shipping company with extensive global operations. because they didn’t like a grievance decision. although none of the facilities outside the U. the British firm will walk away from the deal. or the deal is off. The British insist that a very strict confidentiality provision be part of the negotiating process.

You don’t want to mess up our negotiations. And one company that is interested has a really good track record on expanding the businesses they buy. But we also need to make it clear that we expect you and whoever might buy your company to take our contract seriously. this is a legal strike under the contract. Anyone who buys the company will have to honor the contract we have. and if the guys are back on Monday. I’m certain that if we can sit down and talk next week. But if your guys are out past Sunday. Neno: Look. If they do come back. Neno: All I’m saying is that there is a difference. Union: We think that the grievance decision affects our wages. Union: What aren’t you telling me? A labor shutdown. Therefore. I’ll forget all about the strike. is still a labor shutdown. Neno: Look. then there’s probably no harm done. It’s not the time to have one. I can’t really be more explicit than that at this time. Our guys are prepared to stay out a lot longer than Monday. Have the guys back on Monday.Neno: You know this is a wildcat strike and that it is in violation of our contract. If everyone is back on Monday. we don’t. do you? Union: No. no harm-no foul. we will resolve it to your satisfaction by the end of the day. I think it already has. I need your guys to come back to work on Monday. maybe by next Friday or the week after that we’ll have our guys back to work. I promise you. whether it’s for one weekend or a week. We can’t put up with the kind of decision we got on our grievance. We’ve not had a labor shutdown in 20 years. it will impact our marketability. the slowdown as a result of no one working Saturday and Sunday won’t be noticeable. so the union won’t be hurt by the buyout. 110 50 Practical Negotiation Tactics . You really don’t want to do that. any interruption in our shipping could affect how these buyers look at our business. I know it’s not news to you that this business is up for sale. If that’s going to have a bad effect on your being able to sell the business. We’ll meet with all of the parties on the grievance first thing Monday. But I have to have everyone back on Monday.

we’ll be back to work on Monday. the union was willing to trust Neno—even though he couldn’t tell them everything. But I need to tell my guys that this is important to them as well. Union: Okay.Union: It’s that important to you? Neno: Yes. while the grievance was being resolved. If I could. Neno’s decision to respect his confidentiality agreement and simply tell the union that he couldn’t disclose all the information. Conclusion On Monday. He told him that it would mean that the union would not only keep its jobs here. but the British firm will allow them to organize at their foreign locations. I can. Can you assure me of that? Neno: Yes. rather than make up reasons. Making Counteroffers (The “Give and Take”) 111 . Union: Okay. I would be more specific. as well. But I can’t. the sale was finalized. and it’s that important to you as well. I’m going to go along with you because you’ve always dealt straight with me. Because the parties had dealt honestly with each other in the past. Neno called the union negotiator in and briefed him on the sale. was the right decision to make.

Tactic 27: Expand the Pie
In some negotiation situations, agreement can be reached by increasing the total pool of resources available to all the parties involved. While this is not practical in every situation, a relatively minor increase in the resources available might allow both parties to reach a solution. Resources should be as broadly defined as possible—money, people, time, etc.—when considering how a “fixed pie” might be expanded.

Example 1
Alexis, age 7, did not want to practice her violin for an hour today, but she promised her parents that she would practice an hour each day if they bought her the instrument. She really wants to visit her friend Michelle and spend the night.

Mother: Alexis, our agreement was one hour a day, every day! Alexis: I know, but if I’m going to play with Michelle, I’ve got to go with her now! She only has two hours before her game and then her mother is taking us shopping. Mother: That’s too bad. Alexis: Can’t I miss one day? Mother: No, you promised to practice every day to learn to play. Alexis: Could I practice two hours tomorrow when I get home? Mother: One in the morning and one at night? Alexis: Yeah. That would be easy. And I would still get in three hours of practice this weekend. Mother: Okay. Then you can go with Michele.

Conclusion
Alexis’s proposal expanded the resource of time to find a solution, and her mother agreed to it because her objective (for her daughter to get in enough practice time) was met.

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Example 2
Supervisor: Peggy and Kim, you’ve both had a great sales month and you both earned that trip to Hawaii, according to the promotion program. The cost to send both of you and your spouses exceeds the budget by $1,200, however, so we’ll need to negotiate something. Peggy: Like what? Supervisor: Well … I could send one couple this year and the other next year, since I’ll have a new travel budget by then. Kim: That doesn’t seem fair. We both earned it this year, and we want to take it this summer! Peggy: That’s right! Supervisor: I’m sorry. We never expected to have six people qualify for the trip this year, and the budget is simply not large enough. Peggy: Well, that is your problem. What other ideas do you have? Supervisor: You can each pay half the cost of the flights. Kim: Why should we pay for part of a bonus we earned? Supervisor: Let me talk to the department head about this … (The next day) Supervisor: I spoke with the department head, who explained that if we keep spending the office-supply budget at the current rate, there should be enough left over for me to transfer some money to the travel account to cover the trip for you and your spouses. Will you both help me control supply expenses? Kim: Sure we will, and thank you for finding a solution so we can all go on the trip! Peggy: Yes, we can keep supply expenses down. Thanks for thinking creatively.

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Conclusion
The supervisor in this situation quickly recognized that no negotiated settlement would satisfy Kim and Peggy. Their morale was important to her, so she sought to “expand the pie.” She did so without increasing the total annual budget, which was why the department head agreed to the one-time budget transfer.

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Tactic 28: Offer Fixed Alternatives
You might be more successful if you present several alternative positions to the other side. One party can present to the second party two or more proposals of equal value to the first party. This gives the second party the option of choosing one of the multiple offers. The second party is more likely to respond positively to this strategy because (1) people generally prefer having more choices; (2) one of the offers might be of greater perceived value to the second party; and (3) most people prefer to have input into a decision—even if it’s only choosing one proposal out of two.

Example 1
Colleen’s fifteen year-old daughter hates cleaning her room. She usually lets it get quite messy, like most teenagers. On Friday afternoon, the following negotiation takes place when Amber arrives home from school: Colleen: Amber, you must clean up your room. We are having an open house on Sunday, and the house will never sell with your room like it is now! Amber: Oh, Mom … Tonight’s the big sleepover at Chelsea’s house and tomorrow (Saturday) I have a basketball game. Colleen: Amber, I’ve been telling you for three days to clean your room! This is it! You are not leaving this house until it’s clean. Amber: That’s not fair! Last Saturday, you said I could go to Chelsea’s sleepover! Colleen: That was before you kept putting off cleaning your room. Amber: All my friends are going … (pause) Colleen: Okay, Amber, here are your choices: One. Clean your room right now and I’ll take you to her house after you finish. Two. Come home tomor-

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but the company president does not share your optimism on this program. Example 2 Roberto: I can’t properly advertise this new program with a $5.000 budget! I need at least $20. I’ll approve $15. Felipe: Sorry. I can accept B. I’ll find a way to do without one part-time person. but no TV or anything until it’s done! (pause) Okay.000 for advertising.000). or we lose a whole year. she chose the one she most preferred. I’ll approve $15.000 for advertising. or C. Conclusion At first. Amber resisted the chore she hated.000 in the budget. Felipe: (Roberto’s supervisor) Sorry.000. and clean it. I’ll do it now. Roberto: But I need to start the direct mail and newspaper ads within two weeks. But when her mother laid out the schedule and gave her alternatives. Roberto: But it will never generate enough interest if no one knows about it. Roberto: Well. (long pause) Felipe: Let me give you three options: A. Use the $5. keeping her Saturday free. I have three hours. but I will cut your staff by one part-time person (or $15.Amber: row before your basketball game. I’m not going back to him again to discuss this program. Take it or leave it. At least this way the program will have a chance to succeed! 116 50 Practical Negotiation Tactics . Three. that is enough time. Felipe: Well. B. but I will cut your travel budget out completely. Clean it after your game. I can’t help.

” He offered Roberto three alternatives of equal cost. thus achieving his goal of not having to ask for a larger budget. Roberto believed. Making Counteroffers (The “Give and Take”) 117 .Conclusion Felipe was willing to think “outside the box. would enable him to adequately promote the program. which was his goal. One alternative.

She was determined to hold her ground for at least a 13% pay increase and a promotion. the promotion had not yet been approved.Tactic 29: Prolonged Silence When negotiations have hit a critical stage. nearing her third year with the company. If his opponent cannot agree to the demand but does not want to end the negotiations. Susan: I hope so. Unfortunately. Susan: Mr. you are a valued employee. Jones: I certainly do. After a few minutes of silence. I very much appreciated the fair job performance review you gave me. Jones. Here’s how the negotiations went. but one side comes back with a non-negotiable demand. This should have resulted in an automatic promotion and a sizable pay increase. But she also knew he would have to be willing to go to bat for her with his superiors if she was to get her advancement. Example 1 Susan. The negotiator for the other side says nothing. he can make an open-ended statement. I am very disappointed in the company’s decision not to promote me and to limit my merit increase to 3%. and 118 50 Practical Negotiation Tactics . Susan knew that she was considered a valued employee and that her boss would want to do the best he could for her. the negotiator who feels the most uncomfortable with the silence will fill the gap and most likely make a concession in order to get the other party to speak. I think you would agree with me that I have performed well above expectations this past year. one of the wisest things you can do is to keep silent—particularly when the parties have met several times and identified many areas of agreement. received a glowing report from her boss on her job performance. inviting a response. and the annual merit raise she was getting from the company was the same 3% other employees were receiving. You know my commitment to this company. I have to tell you that while I appreciate what you have done for me. It was 16% less than she had been led to believe she would be getting.

and sell it to management that way. I really want you to stay with the company. Jones went to management and convinced them that they should give Susan the promotion and the 13% raise. I must ask you to try to get both. Once he acknowledged that both items might be awarded sometime in the future. and I think that I really haven’t been dealt with fairly. I suppose I could get the promotion approved with the proper presentation. if management can see their way to giving you the pay increase now.or three-year period. I would very much appreciate it if you could ask the company to reconsider. the company’s refusal to grant them now was a harder position to support. Susan’s silence prompted Mr. Conclusion Mr. Making Counteroffers (The “Give and Take”) 119 . but I don’t think management will be willing to give you an additional 10% pay raise AND a promotion. Okay? (says nothing) Let me check it out and I’ll get back to you.Jones: Susan: Jones: Susan: Jones: Susan: Jones: Susan: Jones: that I deserve more consideration. Promotions of this type are all but automatic around here. it could help. maybe we can talk about the promotion later in the year. because I feel my future with the company might be at stake here. If there is some flexibility in your request. (says nothing) If I can’t get that pay increase approved right now. and I’m sure management will agree. Well. but a pay increase of that size might be more difficult. (says nothing) Or. Jones to continue to offer solutions. of course I will be glad to do that. I could probably find a way to phase it in over a two.

Mayor) said that she was considering running for office. has colored these negotiations. I don’t think it’s a problem. She has not decided what she’s running for. and were trying to settle on new and expanded areas when one of the elected officials (Ms. Also. the people Madame Mayor currently 120 50 Practical Negotiation Tactics . The parties agreed to continue the previous terms of the agreement. Mr. He decided to push for a simple renewal of the original terms. Town Council Representative: I think you’re wrong. and representatives of the elected officials of the two towns were meeting to renew and possibly expand the agreement. The end of the agreement coincided with the election cycle for the two towns. Town Council Chair). I think you’ll agree with me that the announcement your boss made about maybe running for Town Council Chair has dealt our negotiations to expand the agreement a fatal blow. her plans really don’t have any bearing on these negotiations. Town Council Chair’s representative believed that the ability to expand on the agreement was critically wounded by the uncertainty as to which office the mayor might seek. and until she does. but now they’ve got to ask what Madame Mayor’s motivations are. This is how the negotiations went: Town Council Representative: Well. The mayor. The mayor’s negotiating representative wanted to complete the negotiations on the expanded agreement. The office she was thinking about was the office held by her counterpart in the neighboring community (Mr. by saying that she might run for Chair. The term of the original agreement was nearing its end. My bosses might not have been inclined to expand the agreement anyway. Mayor’s representative: No. but the officials had hoped to complete the negotiations prior to anyone involved announcing for office.Example 2 Two local governments entered into a tax-sharing arrangement in order to provide joint services to citizens in a more efficient manner.

and the agreement was renewed with no new provisions. I think we really have to drop back and just propose a renewal of the tax sharing agreement without adding any new items. Town Council Representative: (silence) Mayor’s representative: I would think that at least the proposals that don’t involve budget changes could be pursued. Town Council Representative: (long silence) Mayor’s representative: (after an uncomfortably long silence) Well.represents have to worry that her desire to switch governments might taint the negotiations. Town Council Representative: (silence) Mayor’s representative: I think it would look very bad for both of us if we spent all of this time negotiating and we don’t end up with anything new. I don’t know what her reaction will be. the Town Council representative’s position prevailed. Mayor’s representative: Well. Making Counteroffers (The “Give and Take”) 121 . the Town Council’s representative left the mayor’s representative with no room to maneuver. I’ll go back and tell Madame Mayor your position. In the end. He either had to end the session or figure out what to say to reengage the other side. Conclusion By remaining silent. I hate not to attempt to add some additional areas to the agreement.

Madeline: Hi.Tactic 30: Always Leave Room for Dessert Negotiating is the art of give-and-take. which an upstream neighbor had built. She discovered that a rock barrier. I have a problem. the brook and rock barrier are on my property. Obviously. The brook 122 50 Practical Negotiation Tactics . Joe. you should always enter the talks with a good idea of what you are willing to agree to. As was sometimes the case in these parts. You will have to remove the rock barrier. had redirected the brook further into her property.” Avoid making that “necessary concession” too narrow: It should be large enough for both of you to step into comfortably. This range for maneuvering is not the same thing as the list of items you make at the outset—it’s the last space separating you and your opponent. You are more likely to be successful if you identify a range of options that fall within your comfort zone than if you have a fixed bottom line with little wiggle room. Having an iron-clad demand probably won’t give you enough room to reach an agreement. the brook was the property line separating her property from a neighboring farm. The reason I built it was so that I could protect my patio. It calls for compromise. Neighbor: Well. She traced the brook back along its course to see why and where it had changed its path. She went to discuss this problem with the upstream neighbor and had every intention of demanding that the barrier be removed immediately. Madeline built a gazebo about 500 yards from the brook. she noticed that the brook came within 100 yards of it. or we will be at an impasse. after the gazebo had been there for about five months. Example 1 Madeline bought an old farmhouse outside of a small town. Madeline. One day. in a small clearing. when one of you might say. Your rock barrier has sent the brook onto my property and it is too close to my gazebo. “I have to have this. The property came with three acres of forest alongside a meandering brook. and began to renovate it as a home and a pottery shop.

Madeline: Yes. and allow the neighbor to protect his home. I couldn’t have that. Conclusion Madeline’s objective when she met with her neighbor was simple: Have the rock barrier removed. I ask that you allow an expert to suggest the best way to provide for the diversion of the brook to protect your house and my patio. Madeline: But by diverting the brook. restore her property line. This will put these houses right next to me. Making Counteroffers (The “Give and Take”) 123 . Madeline was able to protect her gazebo. What if you removed the barrier for a short time. you have not only threatened my gazebo. and return everything as it was. and allowed me to have a survey done so that my deed can be corrected to describe the “existing brook” boundary line by other landmarks.extended right up to my back door when the rain was heavy. what I need is to protect my property line and my gazebo. Neighbor: I’m sorry. When she found out that this was not going to solve her neighbor’s problem. She left room for a compromise. By expanding the range of options available to resolve the dispute. at least I’ve maintained my property line. but only if I have a clear understanding with you that the barrier will be rebuilt to protect my house. I’ve lost 400 yards of property on my three acres. which enabled her to achieve her goals. she widened her range of options. Then. I can’t have the brook in my house. but you’ve changed the boundary line of my property. Neighbor: I can do both of these things. Also. if the brook is redirected. It might not be necessary to make such a dramatic change. Madeline: Well. I won’t remove the rock barrier. My neighbor on the adjacent farm wants to sell part of his property for a housing development. I understand that. but I don’t know what I can do about it.

the company can make your pensions much better. The airline industry is in a slump. as it has always been. what they really need is for you to cover the costs of dependent coverage.000 to cover the premiums for dependent coverage. Company: This could not come at a worst time for us. However. you are taking a risk on the costs increasing. that would be the minimum increase.Example 2 The contract negotiations between the pilots and the airline had been going pretty well. the discussions of the employee benefits package bogged down on the issue of health insurance costs and pension benefits.000. the airline paid a total of $200. Over the last five years. Pilots: So you are projecting that the increase in dependent coverage premiums will average $200.000. With long-term planning and investments. dependent coverage could cost us $1. But only a few of our people are close to retirement age. Pilots: Look.000 a year over the next five years? Company: Yes. This would be a better benefit in the long run. This is just a cash-flow problem that your members have to understand. 124 50 Practical Negotiation Tactics . and we know that with this new contract term of five years.000. with all wage and operations issues resolved fairly early.000 figure. then the pension benefits overall will increase by $10. The pilots want dependent coverage paid for by the company.000. The company wants to trade paying for dependent coverage for better pension benefits. Over the next five years. The projections for the next five years were that these costs would increase to about $1. and are willing to keep pension benefits the same. As best as we can tell. Everyone was afraid that the dispute would cause an impasse and a possible strike.000. If we invest the $200. and the premiums for health care just keep going up.000. And we cannot afford that $1.000. we know that health insurance premiums might skyrocket.000 (which we reasonably should have expected to pay in premiums) in the pension account now.

can we agree to a year-to-year agreement on dependent coverage. however.000 available. and the pilots knew what to ask for when the contract expired. then those funds will not be available to invest in the pension plan. Conclusion The company was committed to limiting its exposure to $200. the company will not be expected to give us this benefit.Pilots: But you do have the $200. we are. The pilots expanded the range of options. Are you willing to risk not having an opportunity to increase pension benefits? Pilots: Yes. Making Counteroffers (The “Give and Take”) 125 .000? Once the cap is met. Pilots: Since the concern is about agreeing to a 5-year commitment without knowing the increases we might have in health insurance costs. or invest in the pension plan? Company: Yes. by agreeing to let the company cap its exposure for dependent health coverage.000 the first year on the premiums. so the decision to be flexible was a good one. that would be worth it. The $200. if they were that high.000. It initially believed that the only option was to put that money into pension benefits. Company: If the company spends the $200.000 to either pay one year of the premiums. If we can get two or even three years out of the $200. The health insurance market stabilized. Company: Then it’s okay with us. The dependent coverage is more important to us now than the pension benefits.000 actually carried them through four years. with a cap of $200.

” Salesmen use this standard tactic with “big ticket” items: They present the total cost in small enough pieces to sound reasonable to the other party.” and “low monthly rates” are examples of the salami tactic. and compare it to your strategic objective. If you are on the receiving end of such a tactic. but that was several years ago. $45. Saleswoman: With your 740 in trade. Phrases such as “for only pennies a day.000 for a Volvo? I bought the one I’m driving for $19.000 car. it’s a deal? 126 50 Practical Negotiation Tactics . I recall the day you drove it out of here. Example 1 Car buyer: What. Buyer: Yes.500! Saleswoman: Yes. what monthly payment did you have in mind? Buyer: More like $300 per month. do you want to look at something else? Buyer: No. Buyer: Way too much! Saleswoman: Well.… (20 minutes later) Saleswoman: So. be sure to add up the total cost. I guess it would be around $600 per month.” “affordable weekly payments. I just can’t imagine the monthly payment on a $45.Tactic 31: Cut Salami Slices One way to overcome anticipated or exhibited resistance to a proposed cost is to cut it into smaller units or “slices of salami. I love this car. if I can give you this car with a $300 monthly payment. but the Consumer Price Index has not gone up 150%—nor has my paycheck! Saleswoman: So. Saleswoman: I’ll be right back.

But my neighbor pays $39. You can do that. I can afford $6. Example 2 Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Yes.000 price into “slices” the buyer thought reasonable. Instead of a three-year lease. you can get the Disney channel for only $5. but let me see the numbers. Once the buyer volunteered that $300 was an affordable “slice. (looks at the numbers) That looks good.” She decided to cut the $45. as promised.000 down and $300 a month! Conclusion The saleswoman knew the buyer was suffering from “sticker shock.” she had him—she worked around the $300 slices. can’t you? Buyer: Yes. Saleswoman: Simple. and added the trade-in. it will be a five-year lease.00 per month. and payout slices to reach the total price she wanted. Making Counteroffers (The “Give and Take”) 127 .00 per month for your service.99 per month. Great! So. with your car and $6.000 down.00 per month. down payment. Let’s see. do you want HBO? How much? $5. I can’t afford that much. but what else must I buy? Only the basic service for $8.Buyer: I don’t see how you can do that. Sure. I can’t discuss another client’s account. do you want Disney? Yes.

00 per month. Yeah. 2. That’s another $5. But that’s all! Then we’ll hook you up on Monday. 3. and my wife wants the old movies. That’s $5. instead of one total amount. Conclusion The owner thought his neighbor’s service at $39. Disney is for the kids! The sports channels are for me.00 per month was far too much. and probably felt much better about the total negotiated package because it was presented in modest individual slices. I really want the sports channels. Okay.99 per month. The total is $38. but he agreed to six “salami slices” for a total of $38. and SI 1.00. Great. 2? How much? $8.00 a month. 128 50 Practical Negotiation Tactics . we had that before. Thanks.Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: Cable representative: Owner: The Sports Combo–ESPN 1. they asked about the Cartoon Network. What about the music package? Yes. Any other kids’ channels? Yes.00! Why? Because he judged the per-slice price to be reasonable.

and it can destroy your credibility.Stage 5: Applying Pressure P ressure tactics are generally used in situations where one side firmly believes that it holds the upper hand or simply convinces the other side that it does. today. Applying Pressure 129 . For example. pressure tactics should probably be avoided. but it can be used effectively when one party clearly has an edge. Tactic #35 (Applying Excessive Pressure) is a similar tactic that should also be used with caution. it is effective. and the use of humor. however. the traditional car salesperson might tell the buyer. When both sides believe that each has equally strong positions. Some less-obvious and more easily accepted pressure tactics are to use visuals to control the negotiation talks by focusing discussion on subjects that favor your side (Tactic # 34). which can be successful if the opposing team has two or more members who hold different views of an issue. “I can only guarantee this price until 6:00 p. In some cases. Tactic #33 (The Bluff) is a classic pressure tactic. It should be used with caution: It can end negotiations immediately. Tactic #36 (The Element of Surprise) can catch an opponent off-guard and cause stalled negotiations to move forward. angry negotiations. turned off by the tactic. but others will walk out the door. but in tense. an unexpected element of humor can break the tension and encourage a person to calmly get back to the issues. so are you ready to make a deal? This might convince a few buyers. A negotiator who contemplates using pressure tactics must first realize that he/she has increased the probability that negotiations will end without an agreement because the other side objects to the excessive pressure and simply walks away. Other less-obvious pressure tactics include Tactic #37 (Divide and Conquer).m. Humor might not look like pressure.

boat prices have really gone up. We’d hate to give it up. Don: Wow. Such exaggerations are easily revealed or uncovered. Your opponent will consider you untrustworthy and might even be insulted by your attitude. I don’t know. The two couples used the sailboat a lot the first couple of years. Although I do think there ought to be some consideration for the two years you had use of the boat. Chloe and I would like to take the sailboat with us. Lacey and Chloe didn’t know that Don and Abby were. And we don’t want to be unfair. Don and Abby now use it less and less. Lacey: I know. Don: Absolutely. and we need to talk to you about how we can buy you guys out. getting a divorce and each moving away (and would have no more use for the sailboat). in fact. I don’t see how we could buy a boat or even a half-interest in a boat for what we put in on this one. I think Chloe and I would be willing to pay more than just the money you guys put into it.Tactic 32: Don’t Exaggerate It’s always acceptable in negotiations to put your best case forward and present your position vigorously. Example 1 Don and Abby went in on the purchase of a sailboat with their friends Lacey and Chloe. When Lacey found out that his employer was transferring him to another city farther down the coast. I can’t tell you how many times Abby has said how happy she is that we have the sailboat. but Don. and we’ll be moving south in the next month or so. together and separately. Abby really loves that boat. but it is not a good idea to exaggerate what you are offering or what you are giving up. In the last couple of years. It 130 50 Practical Negotiation Tactics . and they will weaken your credibility. big news! I’ve been promoted. Lacey: Don. he and Chloe wanted to buy out Don’s and Abby’s interest. Lacey.

I’m sorry. though it’s not so happy. Conclusion Don got a lot less than he could have from Lacey because he found out that Don exaggerated the importance of giving up the boat. I think it would be fair to pay you and Abby half of what you originally put into the boat for your 50% share. Don and I are getting a divorce. but separately.) Lacey: Don. and I’ll get back to you. the boat has depreciated. I’m surprised by your attitude. (After Lacey and Chloe had a chance to talk. Abby is having this conversation with Chloe) Chloe: Abby. and neither of us put much in for upkeep. (Around the same time. big news!! Don got his promotion.is just about the most important thing we own. he likely would have found himself in a stronger negotiating position. I thought you understood how important this boat is to Abby. Don: Lacey. Let me talk to her. I’ll be glad never to see it again. Applying Pressure 131 . We’ll be leaving here for the Midwest. and we’re moving farther south. Don. I have big news too. Abby told Chloe about the divorce and about how she never wants to see the boat again. Lacey and Don’s negotiations changed considerably. which you would have to share if you want to retain half-ownership. I’ve been thinking. I was afraid something was going on when you all-butstopped joining us on the boat. After all. Lacey: Cut it out. If Don had not exaggerated the importance of the boat and dealt with Lacey honestly. It just reminds me of how happy Don and I used to be. It’s about time now for some major investment. Abby: Well. Abby: That boat. Chloe: Oh.

the company president decided to use the stock price as a negotiating tool during the current union contract talks. in this global market. I’ll be going back to them as soon as next week. I read in the papers every day that the market is still strong. When I go to the bank for the Letter of Credit to keep our cash flow uniform while we switch from one type of production line to the other. I’ll be looking to you to make some major wage concessions on this upcoming contract. the situation in the stock market is not good. and that the economy is strong. Company president: Well. And as you know. but this has been such a crazy situation. I’m telling you the stock price is having a huge impact on us already. our production line changes at least three times a year. I can’t see how today’s numbers really impact the long-term profitability of this company.Example 2 Aimes Manufacturing had experienced major ups and downs in the price of its stock for the last two years. And while these fluctuations have little to do with the health of the company itself. in fact. I’m afraid that with this current information. I think you’ll have to agree with me that wage increases in this next contract will not be available. Telling me there’ll be no wage increase and asking for wage concessions now is a little premature. they will make their decision based on a review of the stock price that day. we will need to make drastic cuts in our operating costs just to survive. I’ll have to show them 132 50 Practical Negotiation Tactics . Union negotiator: The stock price might be down right now. The current stock price is the lowest it has ever been. Here’s how these negotiations went: Company president: Well.

but I checked it out and it’s not totally true. we’d like to reopen talks on next year’s pay increase. no concessions! In fact. They told union officials that it would be very rare for a bank to make its decision solely on stock price. this week’s price would have little or no effect on your ability to get a Letter of Credit from the bank. the union checked into the Letter of Credit transaction with some experts in banking. Conclusion Because the company’s president over-emphasized the impact of the market on the company. okay. When negotiations resumed. they would do a thorough analysis and look at the health of the company over the long haul. Union negotiator: Well. Company president: All right. and I’ll have our people look at it. Applying Pressure 133 . If the stock goes up next week. and the union ended up with a substantial increase in their contract. When the market took a swing up during the negotiations. he lost the trust of the union. If you put it that way.) Union negotiator: I’m sorry. So. but your proposal to cut wages is just not going to fly. Company president: What? I thought you understood that it is essential that we get concessions on this if we want to stay afloat. (In the interim. We think this company is very healthy and can withstand the temporary downturn. Union negotiator: I know that’s what you told me. The union became hardened in its position that the employees needed wage increases in the new contract. Let’s get back together next week. Give me your proposal for wage concessions. the company’s position was weakened even more. here’s what happened.that we’ve cut expenses to counter the losses in the stock market. let’s talk about it.

She knew that if she made such a demand and threatened to leave him unless he made a commitment. Tom: Oh. Example 1 Christy and Tom had been dating for about a year. you will have lost credibility with your opponent. so their “free” time was very limited. are you? Christy: I don’t want to be. I guess I’m just surprised. either. but Christy thought the relationship was heading in that direction. The couple had not discussed marriage. Sara said she saw you at the movies with Charlene yesterday. We don’t have that much free time together. Both of them were still in graduate school and worked full-time. I really hate it that you chose to see the movie with Charlene. and they really have no intentions of doing so. but you always run the risk of having the opposing party call your bluff and end the negotiations without reaching agreement. and she didn’t think Tom had.Tactic 33: Bluff! Bluff with caution. Poker players know all-too-well-that bluffing can be very costly. I called Charlene and she was available. If one party threatens to walk out of the negotiations if a demand isn’t agreed to. There is a chance that the tactic will work and that both sides will agree to the proposal on the table. 134 50 Practical Negotiation Tactics . Christy realized that asking for a commitment from Tom at this stage would be a very serious discussion. This can come back to haunt you. You’re not upset about that. and I really wanted to see the new Lenny Bruce movie. but I really am. Christy thought that their relationship was exclusive: She hadn’t gone out with anyone else. If you subsequently agree to begin talks again. I knew you had a class. Christy was surprised and hurt when a friend of hers mentioned that she had seen Tom at the movies with his former girlfriend. Here’s how the discussion went: Christy: Tom. yeah. Charlene. they are bluffing. it might backfire.

Christy: What I’m saying is that I can’t accept that you are going out with a “friend” who is a woman—not at this stage of our relationship. Tom: Okay. I’m willing to risk losing you. I’m not “dating” anyone else. Tom: You’re serious? It’s that important to you? Christy: Yes. Example 2 Nexon and its union had been negotiating a new contract for the past couple of weeks. if you can’t make that kind of commitment. I just thought of her because I knew you weren’t available. It really wasn’t a “date”—we just saw the same movie together. so he didn’t call her bluff.Tom: She’s a friend who happens to be a girl. Christy would have had to decide whether or not she was indeed bluffing or if she would really end their relationship. Actually. Since he wasn’t sure about that. Applying Pressure 135 . I certainly don’t want to lose you. Going to a movie with one of them to me is the same as going to the movies with one of my male buddies. he had to make a commitment or risk losing her. It’s made me realize that I want us to have an exclusive relationship. The union negotiators. Tom: I have friends of long standing who are women. Christy: I just can’t see it that way. I won’t go out with any woman friend. She convinced Tom that her feelings were strong. Conclusion Tom didn’t want to lose Christy. If that’s not possible. I need to have your commitment that you won’t do that. then I’m afraid I want us to stop seeing each other. He believed she was sincere. If Tom had “called” Christy’s bluff. but very little progress had been made. she paid her own way. and at first he thought she might bluffing. It is.

The union members ended up voting not to strike at this time. decided to threaten to walk out of the negotiations and have the membership vote on a strike unless Nexon made some concessions at the next meeting. If we’re not able to reach agreement on this. then all of our other demands will change. We need an answer today. And I don’t believe you’re going to go call for a strike over this. We’re not going to reach agreement on this at all. Second. we want the part-time workers to apply for and fill fulltime positions as they become available. but the company cannot offer the same benefits to the parttime workers as it offers to the full-time workers.) 136 50 Practical Negotiation Tactics . Union: You don’t seem to understand. it will cost too much. Union: You’re wrong. This is something we just have to have. Here is what happened at the next negotiations session: Nexon: I’m sorry. (The union negotiating team left the bargaining session and called for an emergency meeting with all union members. Many of our union members who are working part-time hope to work full-time. and try and reach agreement on the cost-of-living increase you’re proposing? Union: No. Nexon: I’m just not prepared to give you one. but working without benefits is simply not acceptable. This is a critical issue to us. Nexon: I’m sorry. Why don’t we put this one aside for now. much less today. we’re really prepared to go the distance on this benefits issue.believing that Nexon would not risk a strike. Nexon negotiators did not believe that the workers would actually strike this early in the negotiations. Nexon: We’ve got lots of issues to discuss. First. We need some agreement on this today. Another bargaining session was scheduled. or else we’ll be asking the membership to strike.

Union: Okay, we’ve decided to put aside the part-time benefits issue for now. We’d like to discuss the cost-of-living request today. We’re looking for a 5% increase for all employees—full-time and part-time. Nexon: I’m afraid that a 5% increase is out of the question. Inflation has been very low this year, and we’ve certainly not increased our prices by 5%. We’re only in a position to offer a 2% increase, and we believe your membership will accept that. Union: 2%?? Are you crazy? Our people will never accept that!! They’d sooner strike!! Nexon: Fine. Ask for another strike vote and get back to me. Union: Wait, wait. Let’s be reasonable.

Conclusion
Negotiators for the company knew the threat of a strike was only a bluff, because the union did not have member backing. When they tried to bluff the first time and failed to convince the members to strike, their ability to successfully bluff again was lost. They had a very difficult time in the subsequent negotiations, because Nexon was able to call their bluff numerous times.

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Tactic 34: Control the Forum with Visuals
Some tried-and-true strategies used for meetings and presentations can also be effective during negotiations—particularly those that help you get your points across to the other party. Even the best negotiators have trouble keeping a discussion focused, which is why they make good use of visual aids. In many situations, including negotiation sessions, a person or team is trying to communicate ideas and persuade others to accept their position. Maintaining control of a lengthy discussion and keeping everyone focused on one’s presentation is often difficult, but it is critical to successful communication and persuasion. This control of the “forum” or general discussion, if attempted solely by dialogue or handouts, can be difficult for the best negotiators. Thus, a tactic that will help keep the discussion focused on one’s arguments and presentation can be extremely helpful. An easel and flipchart, a chalkboard, or a PowerPoint presentation can be very effective in controlling a forum. By only showing one part of a presentation at a time, you can focus everybody’s attention on one page of a flipchart or one slide (or even just one line of text). People won’t be able to flip through pages or discuss other parts of a handout (this often occurs when the entire proposal is given out at the start of a session), and the presenter won’t lose the audience’s attention. It is also more difficult for people to go back to earlier parts of the presentation, because the text no longer appears on the screen or flipchart. A negotiator who presents new proposals or information with well-developed visuals can more easily control the forum or focus of the group discussion.

Example 1
Dinnertime at the Gronefeld house was usually loud and chaotic. The parents and six children had dinner together most evenings, but it was understandably hectic; multiple conversations were going on at the same time. One night, Aime (age fourteen) tried to present an argument about allowances and the division of chores among the children. Constant interruptions from other children and a general inability of all eight people to follow one dialogue simply caused her to give up her

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idea. The next night, however, Aime came prepared with a piece of construction paper and a gavel she had removed from a plaque in her father’s office. On the construction paper were three columns: Person; Chores; Allowance. The written specifics were covered up with pieces of construction paper. After everyone took their seats at the dinner table, she banged the table with the gavel until all were silent. “I have a proposal for a new division of chores and new allowances,” she began. “Please let me explain this one person at a time, so we can agree on that person’s chores and allowance, and then move on to the next person.” Aime now had everyone’s full attention, because they were curious about what was covered up on the chart. Aime had sucessfully focused everyones attention on her chart. The parents, impressed by her work and specific proposals, agreed to her suggestions with only one change. Person Chores Allowance

Conclusion
Aime realized that she would never achieve her goal unless she could command everyone’s attention and focus the dinner-table talk on her concerns. She was able to control the dinner forum with a gavel and a chart. The key to her success was that she unveiled only one line at a time, thus focusing the discussion and reaching agreement on each child. This stopped the confusion.

Example 2
A committee of three members of a governing board of twelve people is responsible for developing and presenting the annual budget recommendation for

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the organization. A majority of the board members must vote for the proposed budget for it to become effective. Past committee meetings dealing with the proposed budget have been chaotic, long, and usually heated. The typical format for the meeting is for the chair to hand out a copy of the entire proposed budget at the start of the meeting, quickly provide an overview, field questions, and then try to negotiate for the seven needed votes for passage. Steve, one of the budget committee members, has decided to try a new approach: focusing discussion on one budget at a time to prevent people from discussing several items at once. Steve: Ladies and gentlemen, to help us review this budget proposal in an organized fashion, I have outlined it on the pages of this flipchart. Each section of the budget appears on a single page. I’ll go through it one page at a time. Please ask questions only on that section or page. This will keep all of us discussing the same budget issue. Agreed? Board chair: Does everyone agree to this proposed budget-review process? All in favor say agree, opposed no. Seeing no opposition, it passes. Steve: Let’s begin with the capital budget for the Fifth Ward … Allan: Steve, I have a question about this year’s budget for health insurance … Steve: That’s Section 7 on page 7 of the flipchart. Allan, please hold your question until we get there. We will review and discuss all of these items one at a time, in the order they appear on the chart.

Conclusion
Although several sections of the budget proposal sparked spirited debate, Steve was able to control the discussion and focus the meeting on one issue at a time by effectively using a visual aid. The meeting was much shorter, more productive, and less acrimonious than in prior years.

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The same kind of thing happened a couple of years before that: In the middle of August. Many companies sell “tune ups” and routine seasonal checks to keep their people busy all year. his air-conditioning unit went out. and was forced to pay whatever they demanded. while the other is not—that is. It is sometimes referred to as “pressure bargaining. On the other hand. such as the advantage of time. Unions can strike at any time to achieve their goals if they have some leverage. Example 2 Let’s face it: Sometimes one party holds all the cards. He was at the mercy of the company that could install an appropriate unit the fastest. there were times when there was no pressure and no emergency. They are more flexible on price and service when they know the consumer is not under any pressure to buy the service being offered. If the employer is a shipping and express mail company.Tactic 35: Apply Pressure (when you have the leverage) Analyzing a situation and applying pressure in order to achieve your goals when you have leverage over the other party is a commonly used tactic in negotiations. he was able to successfully bargain for other services. The owners of professional sports Applying Pressure 141 . when one side has “leverage” over the other.” Example 1 We have all been at the mercy of someone who uses pressure bargaining. Since the heating and air conditioning company held no leverage over him. It’s easy to prediet the outcome in collective bargaining talks if one side is clearly in a very favorable position. its union has the advantage in the weeks just before Christmas. Try bargaining with a plumber! This homeowner. the guy was in no position to dicker over the price of the repair. for example. because this is the busiest time for that industry. once had to call a plumber in for emergency repairs. Since his toilet had overflowed and water was continuing to run all over the floor. not blessed with many household repair skills.

it is the union’s turn to hold firm on its demand). The employees had no power to resist the demands of the employer. If you have a special skill that an employer needs and few others have that skill. he didn’t have to be flexible because the employees believed that they had no alternatives. etc. If so. A note of caution: Circumstances in one round of negotiations might give one side an advantage. Conclusion “Pressure bargaining” is a way to achieve objectives that are greater than what is deserved or desired by the other side. Other employers find themselves in situations that actually reverse the leverage (when. however. Employers who refuse to give in on issues of high importance to employees and exert pressure on unions to accept their terms. unemployment is low and jobs are plentiful.teams are generally more vulnerable to pressure from the players’ union several days before the season begins. When the employer proposed adding duties to the job classifications. but they are less willing to negotiate several months ahead. consider whether or not the two parties will likely meet again in the future to negotiate. for example. What goes around comes around. but before you choose such a tactic. there are likely to be long-term repercussions. will what goes around come around? 142 50 Practical Negotiation Tactics . either individually or through collective bargaining.) The leverage of supply is also very powerful: If a jeweler has an exclusive contract to sell a ring everyone wants. then you are in a position where you can set reasonable demands on wages. and other undesired outcomes. This gives it the upper hand in negotiating with employees. Many labor contracts were agreed to when unemployment and inflation were high and employees felt pressured to accept the demands of the employer. benefits. low employee motivation. despite strong resistance. if the unemployment rate is high and jobs are few. (Team owners are notoriously unpredictable. can suffer repercussions in the form of sabotage. the employer has the advantage: a supply of jobs. On the other hand. When one side places undue pressure on the other side. she has leverage and can more likely hold firm on her price.

and Susie hid them under the seat. Just because you saw it first doesn’t make it yours. you have it this part of the trip. Andrea: Okay. (Their dad pulls to the side of the road and turns to face them in the back seat. but use this tactic judiciously. and I can’t stand it. the argument is over the doll’s shoes. Why? A sudden surprise can disrupt the dynamics of a negotiation. the girls had been fussy. the little girls began to fight over the doll. because you will probably only get to use it once. Susie: Okay. The doll can be shared.) Dad: Stop it right now. and here’s how the “negotiations” went: Dad: You two stop fighting. Andrea. Consider making a suggestion or a proposal that completely surprises your opponent. Andrea had taken them off the doll. Just share the doll. Susie: The doll belongs to both of us. and Susie. Mom said so. I took it out of the box. Tell Susie to let me have it. the fighting starts up again. They stopped for lunch at a fast-food restaurant and shared a children’s meal that came with a small doll. Andrea: The doll is mine. Almost from the beginning of the three-hour drive. You’re driving me nuts. (In a few minutes. Example 1 A father and his two daughters were on their way to visit the grandparents. you have it when we drive home. We’ve got a long ride ahead of us. About an hour into the drive. Their dad tried to reason with them.) Applying Pressure 143 .Tactic 36: Surprise! Never underestimate the power of surprise—particularly when things have bogged down and both sides are simply repeating their positions without making any headway. This time. I can’t drive if you keep this up.

Dolly doesn’t need shoes on in the car. The defendants contended that the auditor’s actions were politically motivated.Andrea: Give me the shoes back. He initiated the litigation against the local school board members and several banks that invested the money for the board. The auditor’s job was to make sure that tax dollars collected for the local education system were appropriately handled. Dad tried correcting them a few more times. Dolly has to have her shoes. Daddy said I got the doll on the way to Grandma’s house. (They continued to argue and whine and pinch each other. The local newspaper was prepared to urge the auditor to end the litigation. The tactic was so successful. Conclusion Dad’s use of a “surprise” tactic was extreme. they didn’t say another word. so it was worth the risk. and I hope I can convince you of that. The litigation itself had been going on for more than three years. that they never fought over a toy in the back seat of the car again!! Example 2 The editor of a local newspaper was planning on writing an editorial critical of a locally elected auditor who had filed a very nasty lawsuit. but nothing else up to that point was working. to no avail. he slowed down.) Dad: Now there’s no more fighting over the doll. Susie: Daddy didn’t say anything about the shoes. He grabbed it and threw it out the window. charging that they breached their duty in their handling these funds. The auditor asked to meet with the editor to explain his position. I want the shoes. Here’s how the meeting went: Auditor: I appreciate a chance to talk to you about this litigation. I think I have acted properly. 144 50 Practical Negotiation Tactics . and that they had invested and spent the tax dollars wisely. at great expense to the auditor’s office and the school board. She can have them later. Both Andrea and Susie were so shocked by their dad’s action. in fact. Finally. and reached back for the doll.

the bank would not have done that had we not proven our case. Editor: Well. this case needs to be dropped. Editor: (surprised) Really? They settled? This is public information? Auditor: Yes. Editor: Well. The auditor successfully used the element of surprise in announcing the settlement and thus changed the direction of the editorial. From what I can see. Conclusion The editor wrote an editorial urging a resolution for the good of the community.Editor: I’m certainly willing to listen. They are very persuasive that this is just a political battle. Here are the papers. This morning. but recommended that the parties reach a settlement. and it is costing your office money and good will. I guess we’re finished here. That’s really the reason this has gone on so long. Auditor: Well. one of the banks settled with my office. rather than drop the case. as a matter of fact. Thank you for coming in. The school board members make a very good argument that their practices regarding how the funds were expended are not just adequate. Obviously. We believe the other defendants will soon follow suit. Your reporters will probably want to follow up on it. and a significant amount of money will go toward the tax fund. They’ve been making that same argument from the beginning. but I have to warn you that from what I’ve seen and heard so far. but actually superior to some other entities you supervise. My frustration is that they have refused to provide our office with sufficient information to back up their contention that what they are doing is best for the schools. I think I have something here that will convince you otherwise. perhaps you should just cut your losses—and just drop the suit. Auditor: I appreciate their arguments. Applying Pressure 145 . I really think the community would be better off. there’s just nothing to back up your allegations.

they’ll be mobile! The last thing I want is for them to be out cruising around. especially Kevin. I know we’ll all enjoy it. Kevin: I don’t really care about a pool table. If the negotiating team sitting across the table from you seems to be divided on a subject or one of the team members seems to be more sympathetic to your arguments. Example 1 Tina’s husband Mike wants to buy a pool table for their family room. Tina and their son Kevin are against the idea. although getting your license and getting a pool table are connected. Tina: I’m really against this pool table idea. Kevin is against it because he is turning 16 years-old soon. I can remember spending hours playing with my friends and family when I was growing up. Tina is against it because she doesn’t think it will be used that much and it will take up a majority of the floor space in the family room. and a car is more important to him than a pool table. try to focus on that subject or address that member directly to get them to be more amenable to your proposal. Mike: I know. I’d 146 50 Practical Negotiation Tactics . you might be able to dilute their power by identifying their different interests and addressing them separately. I want to talk about a car! Mike: It’s really not one or the other. Tina: What do you mean? Mike: When Kevin and his friends get their licenses. If the other side involves more than one person.Tactic 37: Divide and Conquer Certain negotiations lend themselves to a divide-and-conquer tactic. Kevin: So am I. night after night. Dad. Mike knows he needs to get either his wife or his son on his side. but I think it will get a lot of use.

Kevin. only Kevin did. received it without comment. Conclusion Mike found an argument that divided Tina and Kevin. don’t you think you guys would use it? Kevin: I guess so. Wylma: Tom. Tom. But I’m not going to hang out here all the time. Mike: I really do. A pool table could attract them here. What happened? Applying Pressure 147 . then maybe it’s not such a bad idea. some. Wylma was surprised the next day when Tom started the meeting off with an out-and-out rejection of the wage offer and made a demand for a wage increase of four times the company’s offer. Here’s how the negotiations went. They bought the pool table. the chief negotiator for the company. And I really do need a car! Tina: Do you really think the guys would use it? I would rather have them here than out getting into trouble. she joined his side of the debate. Example 2 Negotiations on a new union contract seemed to be going quite smoothly. has just presented the company’s initial wage offer. I’m surprised. and Kevin and his friends use it often. A number of contract changes have already been worked out and Wylma.like them to hang out here more. Once Mike convinced Tina of the idea’s merits. I thought we were making real progress. Tina: Well. who was studying the company’s financial records for the team) became uncomfortable when he heard Tom’s demand. the head of the union negotiating team. Instead of both opposing the idea. She noticed that Jim (another member of the union’s negotiating team.

I think you need to rethink your demand. these are our actual accounting figures.Tom: Wylma: Nothing happened. But Tom. Right. Do you think this is reasonable? Jim: (looking uncomfortable) Well. Tom: We don’t think so. you’ve heard our demand.) Wylma: Now Tom. Wylma: Let’s take a break. you certainly are aware of our financial situation. Your demand is totally unreasonable. forcing them to reconsider their demand. these are accurate. Wylma distributed copies of financial data that showed the company’s current condition. Wylma: Tom. Tom had reduced his wage demand significantly. When the negotiations began again. Wylma: Jim. Conclusion Wylma’s appeal to Jim’s knowledge of the actual financial situation of the company worked to divide the union’s negotiating team. but he added some workplace changes that Wylma was comfortable negotiating. (When they resumed. Jim? Jim: Yes. as Jim can point out to you. Let’s start again tomorrow morning. 148 50 Practical Negotiation Tactics . you’ve seen our sales projections and production costs. This is just what we think is fair.

so what’s the point? I don’t need another tie! Madison: It’s not the gift. When are you going to grow up? Madison: (very emotional) I can’t believe you can say that to me! Christmas should mean something! Cory: It’s just silly for adults to exchange presents. so you can find a way to quickly neutralize it. I want to say something. When all of their children were small. get over it. I know that you all think I’m silly about wanting to exchange Christmas presents among the adults. but it should never be at anybody’s personal expense. Tempers flare and people say things they shouldn’t out of anger or frustration. Madison: Okay. the oldest and youngest Jones children. so pressure grew to draw names and exchange gifts. but the thought that matters. Humor often works to break the tension of the room. It was a tradition in the Jones family to spend Thanksgiving dinner arguing about how the family wanted to celebrate Christmas. Cory: Madison.Tactic 38: Break the Tension Tension is inevitable in most negotiations. some of the siblings decided they liked giving presents to one another. Sometimes the argument got heated. Example 1 The four Jones kids grew up. and it makes me very sad. Applying Pressure 149 . We can’t afford to buy each other things we really need. Ever since Mom and Dad died. I don’t feel Christmas in the way I used to. and had children. but it is really important to me. Stay alert and watch for clues that a negotiation is about to get out of hand. it was easy to agree on just giving presents to the children. You are almost 40 years old. but as the children grew up and had families of their own. married. especially between Madison and Cory. That will just make a bad situation worse.

Cory:

You can say that, but everyone is disappointed when they receive a cheap gift, even if they won’t admit it! Madison: Why are you being so stubborn? You’re just ruining everything! Cory: (also emotional) Look, if you have to receive presents in order to feel that it’s Christmas, we can all just give you presents! Madison: (without hesitation) Okay! I can live with that!! (Everyone laughs.)

Conclusion
Madison’s quip diffused the emotions of the parties. Cory, while very angry, was surprised by Madison’s answer, and was able to laugh. With that, other family members joined in the discussion and they agreed that those who wanted to participate in the gift exchange would. Those who didn’t, wouldn’t.

Example 2
Jay believed that the new home-theater system he bought was a lemon, but he had very little success in getting the salesman to take responsibility. The salesman agreed to have every complaint looked at by a service technician, but the technician always gave the system a clean bill of health, which infuriated Jay. Jay finally asked for a meeting with the store’s owner, fully intending to leave the meeting with a full refund. Jay: Mr. Owner, I’m very serious when I say that I will not keep this system. It is a lemon, and you know it. Either the sound or the DVD or the picture is always off. Owner: Now Jay, there are some problems with the system, but nothing we can’t fix. Let me turn it over to my best technician, and he’ll be right over to fix it. Jay: We’ve been down that road already. The system has been on the blink 20 out of the last 30 days.

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Owner: You’ve had a loaner TV/VCR while yours was being worked on. We’ll be happy to loan you one again whenever you need it. Jay: (becoming annoyed) That’s not the point. I bought a new home theater system and I want to use it! I’m very frustrated by your attitude. Temporary fixes aren’t good enough. Owner: Well, we are attempting to fix the system. You’re the only person who’s had this kind of trouble with one of our new ones. Maybe you’re just having “buyer’s remorse” and really don’t want the system anymore! Jay: (very irate) I can’t believe you said that! This system is a lemon, and you’re trying to blame me! What a crock! What kind of business are you running here? You’re a bunch of crooks. Owner: (now also irate) Just hold on there! I run a respectable business, and I resent your attitude. We’ve bent over backwards to check out each of your complaints, none of which were found to be major defects—just things that needed adjustments. Jay: (very angry) That’s not true. The surround-sound speakers never work at the same time. You don’t call that a major defect? Owner: (realizing he needed to break the tension) Well, my 30-year old Sony TV only has one 3” speaker, but I still watch it. Jay: (pausing and calming down) Yes, my first TV was a Sony. Owner: Look, I’m sorry we’re at this point. Let me take this to my top technician and your salesman, and we’ll fix it. Give me one day. Jay: Okay, but just one day!

Conclusion
The owner used a joke to interrupt the angry negotiations that were going nowhere. He exchanged Jay’s surround-sound system for another new model. The system Jay rejected was sold as a “used” one and never came back in for repairs. Jay’s new system worked fine, and he ended up becoming a repeat customer.

Applying Pressure

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Stage 6: Making Progress
aking and reviewing proposals and counter proposals will not always close the gap between the two parties’ positions and gain a settlement. Progress might be made, however, by invoking a certain tactic at a critical time, particularly Tactic #39 (Compromise). Often believed to be the key to successful negotiations, compromise is not giving in; instead, it is the ability of a negotiator to prepare a settlement that represents some concessions on the part of each side, but that will also help gain a proposal that is acceptable to both parties. Other key tactics that can move the negotiations to a settlement include the presence or use of an unexpected friendly personality to disarm an opponent (Tactic #40: Be Friendly!) Bringing to the table a person who is highly respected by the opposing team is a good move; such an individual might be able to gain their confidence and support your position (Tactic #44: Make Use of a Positive ‘Halo Effect’). One tactic that never fails is the classic Split and Choose (Tactic #42), which goes like this: One side divides the item into two parts, and the other side gets to choose which part they prefer. Parents have used this tactic to divide the last piece of pie or cake between two kids for decades! Additional key methods that move things along include the chilling effect of one party unexpectedly tape-recording meetings (Tactic #41) or presenting facts (Tactic #45) that unexpectedly support their position. Experienced negotiators also achieve progress by asking probing questions (Tactic #46), which can reveal or point out flaws in their opponent’s position or by using a period of prolonged silence right after a heated exchange. Experienced negotiators often achieve a final gain in a settlement by nickel and diming (Tactic #43) over small items.

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One day. was ready to color. Julie wanted to play “dress-up.” Can I color now? You said we would color later. they would have to play ball with older children. however. who was outside with older children. C. and that doesn’t happen without compromise.” but she needed Dara to play with her. not the Prince.” Dara. Then we can color. I want to play “Prince and Princess. The day-care worker wanted to take them outside for a while so that he could visit with his friend. (In a successful negotiation. how about going out to the yard for a while? You can swing or play ball. the individual might be afraid that the exchange isn’t equitable). Isn’t it “later” yet? Right now would be a good time to go outside. C. Example 1 Julie and Dara both attend a local preschool. I want to play “Princess” and I want Dara to be the “Prince. At some point. If I can be the Princess. the exchange will be between things of equal value.: Julie: Dara: Mr. each side must decide whether or not one more compromise will produce an agreement that they will later regret. it is better not to compromise. It is the give-andtake of a negotiation: one party agrees to give up one of its demands in exchange for something of value from the other party.: Julie: Dara: Julie: Girls. 154 50 Practical Negotiation Tactics . but since the other children in their room were not there. Dara. Okay. Both of the little girls liked to play ball when they were outside. If there is resistance to compromise. When that point is reached. don’t you want to play? We could color before your mom comes.Tactic 39: Compromise Negotiations are successful when all parties walk away with an agreement they are satisfied with. they were the last children left in the playroom for the remaining two hours of the day. or maybe tomorrow. Mr.

They were also concerned that teenagers would congregate outside the theater at all hours and there would be more litter and trash around the mall’s parking lot. Mr. C. the parking lot will start to look trashy. When his variance application was made public. We don’t want to go outside. The existing parking lot didn’t meet the current parking standards for that size theater. neighbors became concerned about the changes to the mall. wouldn’t you like to go outside first? After you swing for a while or play ball.” No. They did all the compromising they were willing to do. and they still had time to color. The owner and a small group of neighbors met to talk about these problems. Example 2 The owner of a small strip mall in the heart of a residential neighborhood was planning to add a small movie theater to the other businesses in the mall. failed to offer the children something that was as important as the plans they had made. however. According to the city’s zoning laws. C. and teenagers attracted by Making Progress 155 . you can come back in and play “Prince and Princess. there will be an overall increase in traffic coming through the neighborhood and vehicles will be turning into and leaving the parking lot. They were worried about the increase in traffic through their neighborhood and the possibility that the few scarce on-street parking spaces would be used by theater patrons. We want to play dress-up and then color. The neighbors: The neighborhood has four concerns: Theater patrons will be taking up scarce on-street parking spaces. the owner had to supply additional parking.Mr. The owner decided to try for a variance. or apply for a variance.: Julie: Hey. Conclusion The children stayed inside and played dress-up.

I could put a privacy fence along the east and west—at the backs of your yards. So. We’d like you to prohibit cars from entering or leaving from the south lot. Owner: You know that there’s always plenty of parking in the south end of the mall’s parking lot. I’m certain the lot will accommodate the theater crowd without increasing the parking on your neighborhood streets. even though I’m not adding any parking. and we’d like to keep it that way. We hope you’re right. the closest parking to it is along Elm Street. Right now. The neighbors: Owner: 156 50 Practical Negotiation Tactics . the north lot is used more. Many of our homes back up to that lot. if I agree to move the theater entrance to the south side. driveways on the south side of the mall are along the east and west side of the parking lot. but it’s not ever full. We’d really like to block off that cut-through and have the theater face the south. The fence would shield neighbors from the lights from the vehicles and block the walking access through the alley. I’m afraid. as you said. only when that lot is full would cars come around the mall and park on the south side. And. not having direct access to the south lot from the street would be unworkable. with your plans to put the entrance of the theater on the east side of the mall. All a patron has to do is park on Elm and walk beside Joe’s yard through the small alley there. the south parking lot has not been used much. You could have all of the traffic enter from the north lot. In fact. With the Comedy Club and the grocery store on that end. We’re just not convinced. Not having in and out traffic to the south of the mall is just not very practical.the theater will start to hang around and maybe wander around our yards at night. and break in his door. Right now. What if I changed the entrance to the middle of the lot? That way. lights in and out at night can be very annoying.

If the fence was set back the width of a driveway onto your property. Now you’re talking about considerable expense. Conclusion Both sides had to give up something on certain items in order to reach agreement. but the privacy fence has to be landscaped so that it doesn’t look like a ghetto wall. And a year after the theater opened. add a new entrance into the south lot. and make sure the parking lot is kept clean. put a privacy fence along both the east and west sides of the south lot. set back a driveway width. The compromises were what everybody could live with. Making Progress 157 . the neighbors reported that they were very happy with the way it all worked out. then will you agree not to push for increased private security? Yes. But you’re going to have to have some kind of security as well. there could still be access from the street to our garages—just not to the main parking area. The fences created a buffer from the lights and noise. The fence would help with the vehicle lights and buffer this noise from the kids who hang around. however. Teens can form into gangs if left unwatched. If I agree to move the theater entrance to the south.The neighbors: Owner: The neighbors: Owner: But we use those side drives to get to our garages. and they discouraged patrons from parking on neighborhood streets. Agreed.

thinking that you will be just as easy to work with on the sticky issues. just forget it. Lonely. and that as angry as they were. I’m Joan. and what kind of complaints might have already been made. they had gotten nowhere.m. Joan decided to at least try and talk to the neighbor. She didn’t believe her neighbors ought to complain about the barking.. professional.Tactic 40: Be Friendly Being polite. Take advantage of any confusion about your friendliness to try to get them to agree to some of the easier things you have to work out. She learned that everyone in the neighborhood had complained at least once. The dog was Mrs. respectful. Joan was already pretty tired. and started to get upset. but be friendly. They might even start to underestimate your negotiating skills. because you are the one to set the tone for agreement. and sleeping at night was already a difficult proposition! When the neighbor’s dog began to bark at 3:00 a. Mrs. so her neighbor’s barking dog came as an unpleasant surprise. If your opponent is aggressive or angry.m. Joan: Hi. and because she was hard of hearing. and I just moved in next door. and didn’t stop until 6:00 a. She sought advice from the family on the other side of the neighbor with the barking dog to see whether this 3:00 a. Mrs. incident was usual or unusual. Lonely’s only companionship. your friendliness might disarm and relax them to the point where they begin to talk about their priorities and objectives. Lonely: If you’re here to complain about my Rocky.m. Example 1 Joan was new to the neighborhood. but going out of your way to be friendly is an especially helpful tactic. she just didn’t think it was a serious problem. Present your position forcefully. Close your windows at night and don’t listen. and pleasant always enhances one’s ability to reach an agreement. Your opponent might give in readily. 158 50 Practical Negotiation Tactics . Joan had a new baby. This gives you an advantage.

then. Making Progress 159 . Lonely: Joan: No. I’ve only got my Social Security. is a really sweet dog. Lonely: Joan: Mrs. though. Lonely again. Well. When he does. How long have you had him? Almost eight years now. I need to get the baby home. He’s been keeping me up at night. it’s probably because they just haven’t had the time to get to know him. I’ll see you.) Hi. My friend wouldn’t charge anything for talking to us about Rocky and maybe giving us some advice. Why. I just wanted to come by and introduce myself. Here’s my little angel. not at all. and I’d like to have him stop by and look at Rocky—would that be okay with you? Well. I guess so. No. but she took her baby and went to visit Mrs. (Joan’s sleep was disturbed by another night of barking. Who. I sure hope he starts sleeping through the night soon. no. Mikey. Lonely: Joan: Mrs. I might have to talk to you about Rocky. I know that some of these people around here don’t like him. Lonely: Joan: Mrs. Maybe I could come back tomorrow and bring him? Oh. too. isn’t he cute! He’s a handful. by the way.Joan: Mrs. I stopped by and visited with him over the fence this morning. Well. I’d like to introduce you to my new baby. Lonely: Joan: Mrs. I guess that would be okay. Do you think his age has contributed to some of that? You know. The barking at night has been mentioned to me. sure. He’s a real comfort to me. don’t worry about that. I can’t pay for something like that. I’ve got a friend who is a veterinarian.

They anticipated that it would be an unpleasant meeting. and Mrs. Company ZZZ: (surprised) Well. Company ZZZ was not able to meet with local elected officials regarding the status of their operations before the press reported the layoffs and the uncertain future for the 150 white-collar employees. 160 50 Practical Negotiation Tactics . Example 2 Company ZZZ planned to close its manufacturing plant and lay off 300 union employees. Lonely didn’t have to pay for the medicine she could not afford. its 150 management and sales employees could continue to work in Happy City. he prescribed medicine that gave Rocky a more regular sleep schedule. Joan took up contributions from the neighbors. Here’s how the meeting went: Company ZZZ: We’re very sorry. U. overseeing a factory in Mexico and selling products in the states. of course.. It’s very difficult to make a move of this type without having it leak out. Company ZZZ. Under its new corporate structure. Lonely and Rocky. recognizing that the layoffs would be an issue in upcoming local elections. that the press got hold of the story of our company’s activities before we could call you to let you know. you would have. the mayor called and asked for a meeting with Company ZZZ officials. that’s very understanding of you. Mayor: (very friendly) I understand how these things happen. When he heard the news on the radio. Hearing about this from the press obviously puts you in a very embarrassing situation. agreed to meet with the mayor.S.Conclusion Joan’s friendly approach enabled her to understand Mrs. After Joan’s veterinarian friend visited with Mrs.A. The barking all but stopped. Lonely’s needs and arrive at a workable solution to the problem. I think that if you could have let me know ahead of time.

We recognize that your new corporate owner is a large company located in Malaysia. Mayor: Please let me know as soon as you can. the 150 management/sales jobs did end up moving to Mexico. because I’d hate for us not to make an appropriate pitch to them. I am certain that you would like that kind of “good” publicity coming quickly after the recent bad publicity. or would we need to involve the Malaysia group? Company ZZZ: Certainly. You’ve been very understanding about this. It’s possible that some of the 300 laid-off employees will find work at this new endeavor. Mayor: Great! Let me know when we can talk again. Unfortunately.Mayor: I wanted to meet with you so we can take the necessary steps to keep the 150 jobs here. By the way. Making Progress 161 . The mayor was able to broker a deal for the “disadvantaged business” to buy the plant and convert it to a different widget maker. and the mayor was reelected. We just haven’t heard anything yet. Many laid-off employees did indeed find new jobs at the plant. the city has a potential buyer for your plant building. Conclusion The mayor’s strategy was to disarm the company with his friendly attitude and in return get a favorable response to his proposal to buy the property in question. The buyer is a “disadvantaged business” we have been working with for some time. This strategy worked. Company ZZZ: I’m not sure what to tell you on that. and I want them to know that. so we need to understand how we can affect their decision on keeping an office here. I think I can prevail upon the Malaysia group to let us handle the disposal of the property in such a way as to repair some of the damage our layoffs have created. They need a really good deal on the plant price. Would you be in a position to talk to me about such a deal.

but Susan had only $20. and Alexis. who was disappointed to hear that she might propose such a deal. thus becoming a source of embarrassment. had $40. South Carolina. Alexis knew this was not fair. She agreed that her proposal was not fair and that she had tried to take advantage of her younger sister. Susan wanted to negotiate with Alexis to “pool” their money so they could buy something together. Susan repeated her demand. the accused. the younger sister.00 to spend. are talking about a possible settlement of the issue. Alexis. Somehow. the investigator. The two sisters had saved up a little money so that they could buy souvenirs. this time in front of a hidden recorder. threats. Alexis agreed. They might worry that the tapes will be made public or given to others. were on vacation with their parents in Myrtle Beach. 162 50 Practical Negotiation Tactics . Susan understood the impact a tape recording can have when it reveals a lie. Jones’s supervisor.00. Conclusion For the first time in her life. Susan denied it. She borrowed a tape recorder so she could ask her father if this was a fair deal. Fred Adams. He asked his elder daughter about the arrangement. until Susan said they would evenly split what they bought. Michael Wood. age 14. age 15.Tactic 41: Record the Meeting The climate of a negotiation session can be “chilled” in an instant if one side unexpectedly brings a tape recorder to the table. or used to pressure the other side to agree to certain demands. Example 1 Susan. or simply “bad faith” methods have been used by the other party. Example 2 Three men were meeting to discuss a charge of sexual harassment that had been made against Stuart Jones. and Jones. The effect on the other party might be even more substantial if lies. Then he played the tape. Alexis then played the tape for her father.

Making Progress 163 . stares. (a long pause) I want to see my lawyer. Jones. And you did not threaten her job if she did not. So you refuse to repeat the answers you just gave us? Yes. I simply asked her to make copies for me as quickly as possible. Jones suddenly realized that his strategy would not work. Mr. Stuart. Starr. you are aware that the next step in this process is to ask witnesses to come forth. he also lost his negotiating position. Ruiz and Ms. Appleton both claim they saw the incident and will testify. I’ve brought a tape recorder with me. And please describe your general manner. and gestures did not have a single hint of sexual implication or innuendo? None at all. So. to quote you. You never touched any part of her body? Not even accidentally? No. exactly what you said to Ms. But by refusing to repeat his answers. I think I can write my recommendation. Your request. He failed to think about what might be the next step. and now I’ll ask you to repeat your answers—on tape. Conclusion Jones had knowingly lied when he denied the charges. Well. When Adams set the tape recorder on the table and revealed that he had witnesses. No one could have possibly misunderstood your intentions? No reasonable person.Adams: Jones: Wood: Jones: Wood: Jones: Wood: Jones: Wood: Jones: Adams: Jones: Adams: Jones: Adams: Tell me again.” meaning something other than copies? No. “Do what I want. Mr.

Example 1 Maria (age 8) and Roberto (age 6) are arguing over who should get the jumbo-size Snickers candy bar their father brought home. Roberto will get to choose which half he wants. with the remaining part going to the person who did the dividing. Their dad instructed them to share the candy bar. which certainly is large enough (he naively thought) for two young children to easily share. Realizing the potential of getting the “smaller half. Maria: Roberto: Maria: Father: Father: We can’t share it! It’s in one piece! I’ll eat half and give you the rest. take this knife and slice the Snickers into two halves.… No way! Haven’t you two heard of ‘split and choose’? It’s a fair way to divide things.Tactic 42: Split and Choose When two parties both desire something that can be shared or divided between them. the classic “split and choose” tactic might be the best way to settle the issue. Many of us learned this one from our parents: After two people agree to the strategy. so I’ve got to cut it into two equal pieces or else he will choose the bigger one? Exactly. What is it? Maria: Father: 164 50 Practical Negotiation Tactics . because you did the cutting. of course.” the divider. one person is given the task of dividing the object(s) into two parts. Maria. Maria and Roberto: No. is usually careful about dividing the object into two equal parts. Oh. The second person then chooses which of the two parts they will receive.

The problem is that one of us will get four lakefront lots and the other will only get three lots. Clarence and Archie. jointly purchased fourteen acres of lakefront property several years ago. They have a recent appraisal that values the property at $150. even children. Clarence: Right. Then I will choose which parcel I want. but is not sure how to arrive at a fair split.000. so we should be able to divide the property fairly. I propose that you divide the fourteen acres into two parcels that you believe are about equally desirable: one parcel with three lakefront lots and the other with four lakefront lots. but the appraiser pointed out that the seven one-acre lakefront lots are considerably more valuable than the other seven lots. Making Progress 165 . both parties. Clarence agrees to divide it. Archie: I really don’t care either. The remaining lots should be distributed between the two parcels to make each parcel as equal in value as possible. quickly recognize the fairness of the divideand-choose method. Deal? Clarence: Sure. Archie: Here is the map. There is only one place for an access road that must serve all lots. and wants to divide it into two separate parcels. That makes them more desirable. Archie: That’s true. that sounds fair. according to county deed restrictions. I don’t really care which lakefront lots I keep.Conclusion When two people desire the same object and it is something that can be divided in some way. Give me the map and a pencil. Example 2 Two friends and business partners. Clarence: But some of the lots away from the lake have been partially cleared and are flatter than others. Archie is ready to build a retirement home on the property. Lots must be at least one acre to be developed. They all have a great view and are equally desirable to build on.

and both men were happy with the arrangement. Archie chose the parcel with the three lakefront lots.Conclusion Clarence divided the fourteen acres into one parcel with three lakefront lots and six other lots. and the second parcel with four lakefront lots and one other lot. Which would you have chosen? 166 50 Practical Negotiation Tactics .

he also set up all of the furniture in a second-floor bedroom. Her husband Jason. delivery was limited to a small geographical area. supposedly the bargainer in the household. miles from their home. is expected to dicker over the price. His tactic was to throw in a “nickel” in order to make lots of “dollars. “Okay. However. Brenda did her part when she said.” Under store policy. Conclusion The amount the couple spent was fairly large.” Many people have witnessed or used this effective negotiating tactic. attach legs. Example 2 An experienced and skillful union organizer liked to tack on a tiny less-significant item each time a company and its union negotiated on a large and Making Progress 167 . because a “nickel” item has been added to negotiations about a much more significant item costing “dollars. we’ll take the suite if you’ll throw in free delivery and set up the furniture. With a great deal of effort. so the salesperson delivered the suite himself. What started out as a single issue is now a combination of a major issue and a much smaller issue. and the delivery carrier doesn’t set up mirrors. etc.” thus extending the scope of the negotiations. The suite they liked best was already at the lowest price in town (the retailer was having a real sale).Tactic 43: Nickel and Diming Insisting on the addition of a small item (a “nickel or dime” item) as an inducement to help settle a more-important item being negotiated can change the negotiations in a significant way. Example 1 Brenda Davis is always thinking about the repairs that might be required on an item. They recently purchased a new bedroom suite after they carefully priced comparable furniture all over town. Jason was having a hard time getting the salesman to lower the price.

it can be a dealbreaker. “Okay. so be prepared to withdraw the nickel and dime item at the hint of trouble.important item.” Conclusion The nickel and diming tactic is a classic negotiation tactic used successfully in a variety of situations. If used correctly—at the very end of a negotiation—the tactic can usually provide a small gain. In one case. At the end of negotiations. the two sides had been engaged in considerable bargaining over an improved medical insurance plan (“Health Plan A”) costing hundreds of thousands of dollars. 168 50 Practical Negotiation Tactics . This experienced bargainer said. we’ll agree to Health Plan A with another ½ cent on the pension fund.” The company negotiator yielded to this small-potatoes counteroffer in order to win agreement on the health plan. If one party misjudges the situation. one member of the management team commented on the move: “This guy has nickeled and dimed us a total of thirteen times—and for a lot of money! Next time we can’t give in on those small add-ons.

and performance evaluations for people to come across as likeable. Donna: Okay. People tend to make an effort to put their best foot forward. Kathy: I suggest we take turns choosing which of these things we want. trustworthy. You can go first. Kathy: Not if you accept your logic! (Pause) Donna: You’re not being fair… Making Progress 169 . Donna: I’ll take the bar with stools. I’ll take the color TV. Kathy: Well you took the bar and four stools as one item! Donna: They are part of one set. Kathy: Then I’ll take the couch and love seat.Tactic 44: Make Use of a Positive “Halo Effect” It is common in interviews. Kathy: But they are a matched set.” Having a member of a negotiating team whom the other side thinks can do no wrong might prove to be advantageous. Donna: They match. Example 1 Donna: Mom said to take what we want from the old house and toss out the rest. Donna: No way! These are the last two pieces of furniture. Kathy: I’ll take the pool table. decision-making meetings. and all the rest is small junk. This creates what is called a “halo effect. or knowledgeable. but they are two pieces of furniture. thus creating the impression in others that the good qualities they see are present all the time.

Kathy: Donna: Kathy: Donna: Kathy: Kathy: Donna: Kathy: Donna: Kathy: You’re not! (Pause) Well. the team representing the city management found itself unable to convince the union negotiators that their newly proposed staffing plan would provide adequate personnel for each firehouse. Let’s call Johnny Ryan. I want the love seat. Good idea. What for? Tell him the situation. and ask him if the couch and chair should be one item or two. The union negotiators. Johnny had the “halo” of an honest person. I trust his judgment. what can we do? Give me the couch and love seat! No. (Pause) We’ve got to settle this today and get this stuff moved. Conclusion Kathy and Donna needed an arbitrator to settle their disagreement. with a record of labor involvement that included three recent strikes. and if the bar and stools should be one item or two. He’s our cousin. He might or might not have also been a good arbitrator. and he has always struck me as an honest person. Example 2 During a heated labor negotiation. I want the stools. but Kathy and Donna assumed that one positive quality (honesty) would carry over to other areas. 170 50 Practical Negotiation Tactics .

simply did not trust the management team. They might have stretched his halo farther than his expertise and experience warranted. without any reservations. During the break. when negotiations again stalled on a retirement plan issue. thus bringing the negotiations to a conclusion. the consultant did not speak. Boston went to the negotiation table with the management team. the former union president. Boston was widely known as a totally honest man who speaks his mind. and that he did. but the power of the so-called halo effect was great. Conclusion The union leaders gave Boston a great deal of respect (even in areas such as budgeting and actuarial tables) because of his former position. He solemnly told the union negotiators that he had been hired to review it. The union accepted the proposal. Making Progress 171 . He said he believed that it would work as presented by management. On Monday. as a consultant to review their proposal. This time. the city management again hired Boston. but his mere presence caused the union leaders to accept a management point as valid. The teams took a weekend break from the stalled negotiations. Two weeks later. the management team hired Sam Boston. even if the proposal appeared to be valid.

How can you say that? We went to the county courthouse and looked up the real estate transactions for all the houses in this neighborhood that were sold over the past two years. the other party will ignore or refuse to believe the information.000. Sometimes.500. We love your house. but we feel that it’s a fair offer. and $237. What? That’s $35. but you’ve priced it way too high. I’ll get back to you. has owned the house for 24 years and is downsizing to a condo.000 under the listing price! We realize that. They believe it is overpriced. The owner. $229. $235. but the key is to gather facts that you might need—not just the facts that you will need. Here’s a list of the five that are about the same size as yours.000. Sam Jones: Sam Jones: 172 50 Practical Negotiation Tactics . Being able to present them at the most appropriate and critical times has made the difference in countless negotiation situations. and we are countering with an offer of $250. $237. but the right facts presented at the right time can chill or astound and completely turn things around. This offer is for more money than any four-bedroom houses on this neighborhood list. Henry Lopez: Sam Jones: Maria Lopez: Sam Jones: Maria Lopez: We love the house and have made a written offer of $240.000.000.Tactic 45: Use Facts Fact-gathering must be part of the preparations for every negotiations session. Sam Jones. They sold for: $225.000.000.000. Example 1 Henry and Maria Lopez are interested in a house that lists for $275. (Next day) We’ve reviewed the records you’ve produced.

The facts presented by Henry and Maria Lopez caused Jones to re-counter their asking and likely sale price. Supervisor: Well.600 unless the company president approves. and we know that only this model will meet our needs. Conclusion Hatfield had anticipated what his supervisor’s position would be.400 each. and wisely chose exactly when to present them in order to make his point. I asked for a list of all new PCs bought this year. He found facts that supported his position.000. Order the new computers. Hatfield: My staff has done a lot of research. That’s the bottom price. and did his homework. let’s not worry about it. No one can go over $1. We’ve talked with purchasing and we have the authority to buy seven for $2. You can’t pay more than $1. if other departments have ignored the policy.Henry Lopez: Sam Jones: Henry Lopez: Sam Jones: Let us discuss this for a minute. The last 20 were over $2. I’ll get called on the carpet. I’ll be… Okay. Well… We have a written counter of $245. Making Progress 173 . who was not particularly knoledgeable about real estate. We accept. Conclusion The Joneses had based their asking price on the advice of a friend.000 each. Example 2 Supervisor: You know the policy. Supervisor: If I okay this purchase order. Hatfield: While I was at purchasing. Here it is.600 for a computer.

I can’t check out these four books? Jenny (Librarian): That’s the policy. I can do that within the rules. I’m sure you would not. Maureen: So you trust me with the books. but you don’t want to jeopardize your job? Jenny: Yes. I want two of these. But I can’t break the limit rule—it is an absolute rule here. Maureen. but I don’t set the policy and I can’t make exceptions. Maureen: Well. some people would have forty or fifty books out at the same time. I trust you. If you trust me. Maureen: Well. Would I do that? Jenny: Maureen. reveal misperceptions or lack of knowledge about positions that can be corrected. The effective use of probing questions can help achieve a favorable settlement. A maximum of three books can be checked out to a person at any one time. and two are for my husband. and help you point out inconsistencies in a position that might “lead” the other side to change theirs. and they would all be unavailable to others. can you check out two on a card for him? Jenny: Well. Maureen: The policy limits a person to only take out three books at the same time? Jenny: Yes. 174 50 Practical Negotiation Tactics . yes. They can help you identify or better understand what the other side really wants. Otherwise. you know me. Example 1 Maureen: What.Tactic 46: Ask Probing Questions Ask probing questions and follow-up questions.

(Next day) Do you have the policy about giving out product sales information? No. Sue. What’s the policy number or date of approval? I don’t know. Babu. we can’t do that. Can you get me the number? Sure. are you sure I can’t get your information technology people to give us direct information on product sales? No. Brooks. Security? Right. and they don’t even have a use for the sales data. If that data ended up in the wrong hands. Mary. Who does have access clearance? Mike. it could kill us. Why? Some policy? Yes. Mary and Kenzie? They are 2-3 pay grades below us. But this forces us to make decisions without complete information! Yes. They say it’s a security issue. but it’s because you don’t have access clearance.Conclusion Maureen used probing questions to uncover a way to solve her problem and make it easy for Jenny to stay within the library rules. and Kenzie. Making Progress 175 . Example 2 Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark: Jack: Mark. I couldn’t find anyone who knew it. Jay.

Once he discovered that employees in lower pay grades had access clearance.… (Next day) Mark: The vice president said you can have access if you sign a security card like everyone else who has access clearance. When can I get the data? Mark: Today. 176 50 Practical Negotiation Tactics . I’ll get it for you ASAP. I’ll sign now.” He intended to do this until he hit a dead-end or was able to find a solution to his problem.P. Jack: Here. that’s been the policy since I’ve been here. Jack: Can you ask your V.Mark: Well. Conclusion Jack continued to probe by asking why and who in order to find out more about “the policy. Jack was able to receive clearance as well. if we can have access? Mark: I guess so. His probing questions turned up a critical fact.

They bring it out when a dispute arises. days. Other final-agreement tactics include Tactic #47 (Giving Premature Congratulations) to make the other side feel good about having achieved an agreement (while you spring another condition on them). this process can easily result in a final settlement. which is used only when a negotiator is prepared to end negotiations without an agreement and you want the other party to make a final concession to reach a settlement.Stage 7: Reaching Agreement he final stage! It might come minutes. and the child learns an important lesson about life. and the classic Walk Away (Tactic #48). If friends or neighbors need to settle something but prefer to avoid the negotiation process. When multiple issues are at stake and most have been agreed upon during negotiations. If both parties desire a settlement but cannot seem to reach it through the usual give-and-take process. or even months after the first offer is presented. this tactic can produce an agreement. how solid an agreement can it be? Even parents negotiating chores and other aspects of life with their teenagers have found it useful to have their children write down and sign the list. hours. If people are not willing to take even a few minutes to write down the terms that have been agreed upon and sign the paper. Tactic #49 (Final-Offer Arbitration) should bring about a settlement. When two parties believe they have an oral agreement. Tactic #50 should always be used right away: Commit the Offer to Paper! Even small issues negotiated among friends can cause problems if people rely on memory and assume that both parties have “heard” the exact same conditions. T Reaching Agreement 177 . the two parties agree to let a third party render a decision on unresolved issues and agree to accept the arbitrator’s decision as final and binding. In this process.

Weeks of stressful meetings cause both sides at the bargaining table to look forward to its conclusion. one exhausted negotiator saw that his team was equally weary and 178 50 Practical Negotiation Tactics . “I’m thinking of agreeing to your plans for vacation. D. Let’s do go to Virginia Beach and Washington D.C. she continued to speak: “…as long as you agree to drive us to visit my mother on her birthday. The bargainer skillfully 1) begins the congratulation sentence “I agree…”. Example 2 Negotiations can take a long time and incorporate many issues. off-again discussions. Nancy brought up the subject of vacation again after dinner.…” Larry was very pleased that his wife was agreeing to the idea he had been trying to sell. She said.” Conclusion The husband was so excited about visiting Washington. but his wife Nancy likes to stay put and relax. 2) allows the other side to feel the release that comes with completing the bargain. His wife had carefully planned her exact “premature” vacation agreement. They both have stressful jobs and look forward to their annual vacation together.Tactic 47: The Premature Congratulation This tactic draws its strength from timing. After days and weeks of on-again. 3) and adds one last key demand to the congratulation sentence. Example 1 Many husbands and wives have different ideas about how they’ll spend their vacation. and Virginia Beach —his plan—that he let the euphoria of the moment cause him to agree to a trip he dreaded and in fact had successfully avoided all year.C. Near the end of a particularly anxious bargaining session when there was little time left to negotiate. Larry Snyder gets bored staying in any one place for many days. As he hugged her.

we held firm on this and did not discuss the probation issue and many other “dead” issues for days. We all knew that it could come down to agreement or strike. and rested. we made some small concessions on financial matters. but we agree to everything in your final proposal…” Members of my team shouted hooray. The celebration had begun. Ted said. “…as long as you give us a 45-day probation period. I felt the tension in the room. However. but acceptable. It took only a few minutes of caucusing for my team to convince me that a 45-day probation was costly. It was so close. In our last offer. as the negotiator came closer. One of the best pieces of negotiation advice is to remain fresh. because it makes you pretty vulnerable. “It was hard for us. There were grins and handshakes coming from the other side. Reaching Agreement 179 . The old agreement specified a 30-day period. One operating issue involved the probation period for new employees. but the other side continued to ask for 60 days. When the chief negotiator emerged with his team and headed toward my team. My team was afraid we would not even come to an agreement. Most people didn’t notice that the negotiators had not finished their hand shake… Ted: Then Ted continued his sentence with. he turned on a large warm smile and extended his hand to shake. symbolizing that he was agreeing to the entire final offer.almost willing to accept any deal.) Here’s what happened: Bob: I knew that the other side was similarly harried. fit.” Bob: Ted timed this perfectly. and this skillful negotiator let them feel the happiness and security one feels when the fear vanishes. Therefore. My team had convinced me that doubling the time frame would create a real problem on the shop floor. but held firm on remaining operating principles. (This is a bad position to be in. but also that they sensed the weariness of my team.

The negotiator makes a big show of agreeing and allows the other side to bask in the glory of a deal completed. 180 50 Practical Negotiation Tactics . However. knowing that it will probably be agreed to in order to continue in the euphoria of the moment. the negotiator skillfully finishes his words of congratulations by inserting one last key demand.Conclusion This “premature congratulation” tactic can only be used successfully at the very end of an unsure and shaky negotiation.

or go after you and perhaps make a new concession in order to get you back to the table. the following exchange occurs. but my Avalon is a good car. all from Sue Wilson. I don’t want to negotiate. You had time to assess my car. The next morning. and he can simply buy it when the lease expires. right? Jay: Yes. if I roll over the lease to a Highlander. Sue: I remember you. too. Sue: Well. You bought your wife a new van just last year. and the lease on my Avalon is about to expire. but his Avalon has been a good car. He really likes it. Jay. (Vahaly drives the new Highlander home. Sue: Let me get you the keys so you can take this one home overnight to see how you like it.) Jay: Sue. Your opponent will have to either let you go and run the risk that things are really over. but I thought I might want to try a new Highlander. Jay. what can you do on a 36-month lease? Reaching Agreement 181 . a veteran salesperson. My name is Jay Vahaly. how did you like it? Jay: Okay.Tactic 48: Walk Away Walking away from the table in the middle of negotiations is a risky tactic that should only be used when you know you have a good alternative to what is on the table AND you believe that the other party will think that you really are serious about quitting for good. I’ve worked with you before. here are your keys. Whether you are really bluffing or you are serious. Example 1 Jay Vahaly has purchased three new Toyotas from Pembroke Toyota over the past twelve years. He stopped by Pembroke one day to look at the new models. Jay: Hi. be sure you think this through beforehand. I like it.

They’ve talked about retiring in recent months. Sue called him as soon as he walked in the door and offered another $50 break on the lease. That was the figure he was looking for. These Highlanders are hot items! Jay: Well. but 182 50 Practical Negotiation Tactics . (Jay got in his car and drove home. Jay: I guess I’ll go to Dixie Toyota and see what they will do for me. Example 2 Larry and Judy Bizannes own the Bizannes Music Mart. you can turn in the Avalon and get the Highlander for only $249 dollars more per month. Sue: I’ll try. Let me try again. He effectively used the walk-away tactic to let Sue know that he was firm on the price. Jay accepted. Jay—wait. Jay: What? I was thinking the lease payment would be. He was prepared to keep his Avalon if the lease was even $1 more than his limit. a successful musical instrument sales and rental store. Jay. they came down to $199 more on a thirty-six month lease. Sue: Sorry. I thought I’d get a fair deal. Jay. (15 minutes later) Sue: Well. I’m disappointed. Please go back and work out a lower lease payment.Sue: Give me a few minutes and I’ll find out … (20 minutes later) Sue: Well.) Conclusion Jay knew his BATNA (best alternative to a negotiated agreement): to go somewhere else if the deal isn’t good enough. $100 more. at most. (He walks away) Sue: No.

they were prepared to accept $5. go back to your office. One day.both of them love their store. (Judy and Larry walk into the back room and close the door. You rejected it.5 million. which the Bizannes accept. Michael Roberts. Michael: Good morning.5 million. Michael: I have a check right here for 4. Michael: Well. and I only need your building to own it. a local developer. visited their store. How’s business? Larry: Great! I’m surprised to see you again. and I’m not interested in less.5 million for the building. come out here! (Judy comes out from the back room. Two months later. Judy: Larry. with a certified check. and we gave you our price. you’ve already told us that. and he is offering us $4. today.5 million. What do you think? Judy: Larry. after no contact from Larry or Judy. Larry: Yes.) Larry: Michael is here again. but their continued walkout convinced Michael that they would hold firm. In reality. Michael calls on them again with a check for $5. let’s eat lunch.) Conclusion Larry and Judy used the walk-away tactic and stayed away for two months in order to convince Michael that they were firm on their price. our accountant said it’s worth $6 million. I still want to develop this block.0 million. Larry: Michael. He met with Bizannes twice before. Larry. Larry: Judy. Reaching Agreement 183 . Larry. so why are you here? Michael: I’ve discussed it with my partners. and I’m prepared to offer you $4.

In mediation. That was the deal. Jenny told them to sell it. One day Lynne dropped by for a visit and the discussion turned to the old Singer. I offered it to you for nothing.000. 184 50 Practical Negotiation Tactics . Lynne responded that this was their intention. We have a few dollars invested in parts and we had fun working on it. the mediator works with both sides to resolve certain issues but has no authority to make binding decisions. Both involve the use of third parties who are objective. the arbitrator is given the authority to make the parties comply with the final and binding decision. Lynne: No. But he isn’t allowed to try to find a “middle ground”—just to choose one position or the other. which she has kept in a barn for over ten years. Jenny: No. In most arbitrations. Jenny told Lynne she could take the old Singer that she has no interest in (and doubts that it is worth restoring). both sides have agreed in writing to accept the arbitrator’s decision. each party submits their final offer on each unresolved issue (usually in writing) and the arbitrator chooses one as the final settlement as it has been submitted (no changes or compromises). and would be able to restore hers as well. In final offer arbitration. Lynne: No! I suggest that we each write down our position and let Dad choose one of the two as the final decision. The following discussion occurs: Jenny: The old machine wasn’t worth $50 when you took it. In arbitration. Lynne and Gary bring the restored Singer to Jenny’s house.000. Six months later.Tactic 49: Final-Offer Arbitration Mediation and arbitration are two well-known ways of resolving sticky disputes. Keep the $1. Jenny has an antique Singer sewing machine. I won’t take it. Each party wants their offer chosen. Example 1 Jenny and Lynne are sisters. Let’s split the money. but they wanted to give Jenny $500 for her “share” of the machine. so they generally give up some ground and try to make the offer appear as fair and reasonable as possible. They inform her that they put the machine on e-Bay and have an offer of $1. Lynne told Jenny that she and her husband Gary have restored two other Singers. which is generally voluntary.

My troops are getting restless. They should get the other $950. Example 2 Ralph: Well. after six weeks of negotiating. (One week later) I think Jenny’s position is the most reasonable. I’ll buy that.m. first on the health insurance co-pay. As a brief explanation. we are down to only three unresolved items. based Reaching Agreement 185 . binding decision on the three items. At best. Any increase in value was due to the work of Gary and Lynne. Their father found Jenny’s position to be the most reasonable. on Friday. Tina: Yes. since he could only choose one offer. Then we both submit our final offers to Judge Ryan within 48 hours.m. Tina: Good. I can’t see any way to reach an agreement. Tina. Ralph: I know. so I am invoking the finaloffer arbitration ground rule we have in place.” Lynne proposed a 50-50 split. Conclusion Jenny’s final position was that she receive $50—the maximum possible value of an old “junker.Jenny: Dad: Okay. Ralph: Right! (Friday at 3:00 p.) Judge Ryan: Here is my written. The union’s position could have run into millions of dollars. he did not need to “haggle” with them. but we’ve made no movement on any of them since we started. I have chosen management’s offer to keep it as it is under the current contract. the old machine was only worth $50 when Lynne hauled it away. and meet back here in 72 hours—3:00 p.

At least we both saved time. It will only cost $120. and stress. Ralph.000—less than 1 percent of the total package. Conclusion The final-offer arbitration process enabled the parties to gain a fast. I have chosen the union’s final offer. money. and an item that large should have been negotiated at the table. I’m not happy with your decisions. Now let’s get a signed contract. and peacefully finalize a contract that contained several important gains for both sides. nor why their method was superior.Ralph: Tina: on last year’s data. Second. I have chosen management’s offer because the union did not justify why the past practice should be changed. 186 50 Practical Negotiation Tactics . reasonable resolution to their last three unresolved issues. on the clothing allowance. Finally. No increase has been given for six years. I’m sure you realize that we could have taken six more weeks to reach the same point. Well. but we agreed to this process. on the merit pool distribution method issue.

Bill and Paulette fell in love with the house. Obviously. however. We’d like to make you an offer of $150. they looked at this particular house on their own. and decided to stop by to see if they liked the house. At the very least. Bill: Reaching Agreement 187 . They finally looked at a house they really liked. we won’t be involving our real estate agent. If we shake hands on it right now.Tactic 50: Commit the Offer to Paper You can often control the progress and direction of a negotiation by writing down the agreements or understandings as they are being reached. and while Bill and Paulette had been using an agent to help locate houses. all the usual stuff in a sale. and one of the other couples looked very interested. The owners were selling the house without a real estate agent.000. seeing the agreement in writing will force both sides to acknowledge what has been said and agreed to in the negotiations.000. The goal of recording the precise details is to either avoid any misunderstandings or address them before the talks conclude. not the furniture. During a discussion. Bill: Bill: Can we talk to you a minute? What’s your asking price? And that includes the appliances in the kitchen? And all of the drapes and blinds? Okay. Bill pulled the seller aside. and felt that they would have to work fast to make an offer before someone else did. Example 1 Bill and Paulette had been house-hunting for some time. They saw the “For Sale” and “Open House” signs. The party who writes down what has been agreed upon right away might have some advantage in precisely wording the agreement to that party’s advantage. everyone is busy grappling with the details of the negotiations. Seller: Yes. Seller: We’re asking $152. They were not the only couple to come to the open house.

all window blinds and drapes. he listed an attached hutch in the kitchen. In her complaint.000. look this over. When he had the chance to put the deal in writing. The supervisor pointed out that he had a staff of 20 or so women. The employer’s affirmative action officer looked into the charges and determined that 188 50 Practical Negotiation Tactics . but I’d like to make sure there are no misunderstandings. (The seller recorded the offer of $150. and the garbage disposal. real. Example 2 Monica brought a sex discrimination charge against her employer. Sign here.000. Let me just get the standard “offer of sale” form and fill out what I hear you saying. It worked. Conclusion The seller had always intended to leave the garbage disposal. that’s what I meant. she said that her supervisor had repeatedly asked her out. the house is yours. In the section for fixtures and miscellaneous items to be left on the property. I think we can work something out. since he probably would have missed them) Yes.) Seller: So. and the two area rugs. then we have a deal. in fact. and when she refused.000 and added the additional items to “sweeten the pot” and give Bill and Paulette a deal they couldn’t refuse. The supervisor assured the employer that there was no basis for her complaint.Seller: Just a minute. he listed the stove. the hutch. Seller: Okay. he left the price at $150. a public agency. If it’s what you meant. and had been prepared to drop his price to $145. the refrigerator. and that no one would ever say that he was guilty of any type of sexual harassment or sexual discrimination. and the two area rugs were specifically included. he began to have “problems” with her job performance. and two area rugs. Under the section for appliances to be left on the property. Bill: (pleasantly surprised to learn that the garbage disposal. the hutch. and that the problems with her job performance were.

my client is supposed to formally withdraw the complaint rather than just settle it. He offered to send settlement agreement papers to her.there was little basis for the complaint. He’s happy to prove that in court. Monica had. and must agree not to tell anyone about the $100. Monica’s lawyer (She): Employer’s lawyer (He): She: I was surprised by your settlement documents. Look. and expensive matter. I’m He: She: He: Reaching Agreement 189 .000. then Monica had to acknowledge that the supervisor did nothing wrong. But the employer doesn’t want to go through the expense and publicity of a trial. You’re just trying to make it seem as if your supervisor did nothing wrong. by this time.000. The supervisor insisted that if the employer felt he had to settle. even though we’re certain we would prevail. but it’s not standard when a complaint is formally withdrawn. but said that fighting the charges would be a long. The employer’s lawyer told Monica’s lawyer that the employer was ready to settle the deal for the $100.000. Why’s that? Well. drawn-out.000. And the confidentiality clause is standard. you didn’t mention in the agreement that in exchange for the $100. the supervisor says he did nothing wrong and that Monica just misinterpreted what he said. It might be standard when there’s a settlement. even though you are paying Monica because we can prove he did do something wrong. Withdrawing. She thinks the withdrawals and the secret settlement will be seen as some kind of admission on her part that she shouldn’t have brought the claim.000 without actually having to prove anything. settling—What difference does it make to her? She’s getting her $100. found a new job and wanted compensation for “embarrassment” and lost wages in the amount of $100.

It would have been a better strategy in this situation to raise the issue of withdrawing the complaint during the actual negotiations.000. Conclusion The decision by the employer’s lawyer to send a written agreement that did not reflect the actual agreement of the parties caused the negotiations to resume.000 and the conditions of the offer. but word did get out that a public agency paid $200. Monica accepted the $200.000.000 just to get the employee to “withdraw” the complaint.000 when all that was asked for was $100. I’ll take your offer back to her and let you know. 190 50 Practical Negotiation Tactics . to his disadvantage. but that’s under the same conditions—the claim must be formally withdrawn and Monica can never reveal the amount of the settlement.She: authorized to pay $200. There was a confidentiality agreement. It was made clear that the employer had paid the additional $100.

One way to help the parties abide by an agreement is to put it into written form. commitment. of course. As these examples of personal and business negotiations show. Putting the Agreement in Writing 191 . “Oh. Unfortunately. However. Reaching an agreement is the first step. “That may be what I said. most certainly needs to be in written form. A union contract. but some of the decisions were put off for a couple of months. I thought you said something else. If the agreement reached at the time had been put into writing with all three sisters signing it. Think of how often you have said to someone. even an informal agreement benefits from some type of written documentation. A Communication Hearing is not necessarily the same as listening. then the parties have to abide by the agreement. In Tactic #17 (Package Items). but it was not what I meant. a written document is hardly necessary. operating under an agreement after it has been reached can be even more difficult. When two friends agree on what movie to see. The degree of detail and formality of a written document will. when they engage in honest “give and take” negotiations. and contract. Certainly someone has said to you. Putting an agreement into writing serves three purposes: communication.SECTION IV: PUTTING THE AGREEMENT IN WRITING s you can see. talking is not always the same thing as communicating. however. rather than attack each other.” Clear communication is essential if you want to reach an agreement and have it abided by. it would have been easier to resume negotiations at a later date.” By the same token. reaching an agreement is sometimes a long and difficult process. depend on the kind of negotiations in which you are involved. the three sisters reached an amiable agreement. it is much more effective in the long run when the parties enter into “win-win” agreements. and when they agree to solve problems together.

sounds. the message being conveyed and received might be understood differently. or movements. His mom could more easily enforce the agreement if she had it in writing. When you create a written record of the details of an agreement. In Tactic #4 (Use Objective Criteria).944. Oftentimes just seeing the agreement in black and white conveys its import as well as or better than hearing about it. sounds. The sender wishes to convey an idea. he can be reminded of the details because it’s all there in black and white. Negotiations are often necessary because there was a “misunderstanding” that could have been avoided if the parties had put their agreement in writing. that is. Larry wouldn’t have had to argue over a bill for the plumbing work his cousin Will did if he had asked for Will’s estimate before accepting his offer to help. pictures. seek information. Who isn’t excited about buying a brand new SUV or truck? Until.” In Tactic #14 (Don’t Always Hide Your Weaknesses). the price is spelled out in the loan document as “twenty-two thousand. The receiver has to decode the message being sent by trying to understand and interpret the words. And because the sender and the receiver are two unique individuals. a couple of months away. pictures. If Jason fails to live up to his side of the deal. 192 50 Practical Negotiation Tactics . or movements being used by the sender.Communication is a process that involves a sender and a receiver. Jason agreed to change his study habits if he couldn’t pull his grades up by the end of the semester. When communication is limited to the spoken word only. the opportunity for the sender and the receiver to misinterpret is greater than if the communication is first spoken and then written. Commitment Reducing an agreement to writing often forces both sides to truly commit to the agreement. nine hundred and forty-four dollars—$22. or express a thought or emotion through words. Writing an agreement down gives the parties an opportunity to use more-specific or precise language and eliminate some of the emotion that might have accompanied the negotiations. you have created something tangible that can be referred to in the future when memories become fuzzy.

Contract Finally. dating it. WHAT? The written document should clearly describe the item(s) covered by the agreement. If you have agreed to pay someone to house-sit while your family is on vacation. Both parties must receive a benefit or something they personally consider of value. details such as what fixtures stay or what appliances go can be easily overlooked. You can informally enforce an agreement just by showing the individual(s) the signed copy as a reminder of the substance of the agreement and their commitment to it. However. When you are ready to commit yourself in writing. how many. leading to misunderstandings and contract disputes. or it isn’t an agreement—it’s merely the conveying of a gift. You can do this more formally by taking them to court (perhaps as a last resort). Failure to do so can lead to big problems. In either case. and dated agreement. and how much. before the trip. One party wishes to buy what the other wishes to sell. pulling an agreement in writing. have your spouse also agree to the details of the agreement. your plants die because the house-sitter wasn’t told to water them. which. and so on in standard contract form. as many people learn when they purchase a home. WHO? Provide of the full names the parties necessary to the agreement. one party will work if the other party pays for the work. the real estate contract includes information about the buyer and seller. in writing. which kind of. Putting the Agreement in Writing 193 . signed. Generally. and getting all the parties to sign it usually creates an enforceable contract. Carefully and completely describe the subject matter of the agreement. Here’s what we mean. protect yourself by having a written. one party will change behavior in exchange for something of value from the party who wants the behavior changed. and put that information into the document. where. ask yourself the basic questions of who. the address and description of the real property. WHY? The “why” of an agreement is generally the explanation of the mutual obligations or advantages the agreement represents—the reason why the parties began negotiating in the first place. Your spouse will share some responsibility for failing to make that duty clear in the agreement if. say. what. when. why.

The remaining questions fill in the details of the agreement. The more-specific and clear these details are. the better. how much or how many. It gives the parties an opportunity to really buy into the deal. 194 50 Practical Negotiation Tactics . which one or which kind of. dating it. Putting an agreement in writing. and having all parties sign it ensures that the parties have. depending upon the deal: when or where. agreed to the same thing. in fact. if that becomes necessary). And it can create a tangible reminder of the deal (or an enforceable agreement.

Personal Negotiations Negotiation situation: Parties involved: Issue: Tactics that might be helpful. and how they can be used: Exercise Forms Putting the Agreement in Writing 195 .

Business Negotiations Negotiation situation: Parties involved: Issue: Tactics that might be helpful. and how they can be used: 196 50 Practical Negotiation Tactics .

________________ 10.Name of Negotiation Tactic 1. ________________ 6. ________________ 8. ________________ 3. ________________ 7. ________________ 4. ________________ 9. ________________ 5. ________________ 2. ________________ Tactic# How will I use this tactic? (Application) _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ Notes Putting the Agreement in Writing 197 .

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and C. Patton. Roger. 2001. Roger. Practice. W. Heavrin. R. Gotbaum. 1987. Inc.REFERENCES Carrell. and J. Prospect Heights. Calif. Upper Saddle River. M.: Waveland Press. Sharpe. The Relaxation and Stress Reduction Workbook.E. Domenici. LittleJohn. E. Los Altos. Getting to Yes: Negotiating Agreement Without Giving In. 1996. New York: Penguin Books. Minton. R. 1991. Saunders. New York: M. Inc. 7th ed. New York: Penguin Books. Calif. Negotiation Skills. J. W. Gavin. D. and J.: New Harbinger Publications. Inc. M. Fisher. and B. R. Ill. Fisher. 1997. Inc. Cleary. The Negotiation Handbook. Getting Together: Building Relationships As We Negotiate. 2nd ed. Negotiating in the Real World. 1991.. and S. 1988. K. New Jersey: Prentice-Hall. Herb. Inc. Lewicki. and M. Upper Saddle River. Irwin. The Negotiator’s Handbook.: Crisp Publications. 2001. New York: Basil Blackwell. 1999. University of Missouri: Columbia Press. Clark. New Jersey: Prentice-Hall. Brown. Pocket Negotiator. 1989. Eshelman. Inc. 1988. Inc. Mediation. 2004. McKay. You Can Negotiate Anything. References 199 . 1980.. Maddux. Victor. Kennedy. Fuller. and S. Patrick J. M. 2nd ed. Successful Negotiation: Effective “Win-Win” Strategies and Tactics. New York: Bantam Books. George. The Essentials of Negotiation. Fiske. and Law. Ury. Cohen. Chicago: Richard D. C. Oakland. New York: Simon and Schuster. Labor Relations and Collective Bargaining: Cases. David.

1991. Sharpe. Upper Saddle River. 1998. J. Thompson. Lexington. C. G.negotiationsources. Raiffa. The Art and Science of Negotiation. www. Stulberg. Howard. 1996. L. Raiffa. Weeks. Inc. 1994.org 200 50 Practical Negotiation Tactics . R. Inc. The Mind and Heart of a Negotiator. 1987. 1999. George. Massachusetts: PON Books. Inc. Massachusetts: Harvard University Press. 2001. Massachusetts: D. 1982. New York: M. New Jersey: PrenticeHall. 1981. The Eight Essential Steps to Conflict Resolution.Nierenberg. New York: Simon and Schuster. Cambridge.E. Shell. New York: Penguin Putnam. Labor Relations in a Global Economy. Tsogas. Lectures on Negotiation Analysis. Taking Charge/Managing Conflict. The Art of Negotiating. Bargaining for Advantage. New York: Bantam Books. B. Cambridge. Ury. New York: Viking Press. Heath and Company. William. Getting Past No: Negotiating with Difficult People. Howard. Dudley. Inc. Gerald I.

she has helped negotiate a number of major agreements such as a multi-million dollar property exchange that relocated major industries and railroads from the City’s downtown wharf resulting in the development of both an award winning public About the Authors 201 . has practiced law for 28 years primarily in the public sector as an attorney for local government in her hometown of Louisville Kentucky. and MBA and B. and the University of Louisville. Dr. Carrell is Dean of the College of Business at Northern Kentucky University. Business Forum. he was elected to the City of Louisville Board of Aldermen for five terms.D. in Economics from the University of Louisville. In addition to negotiating numerous litigation settlements and contracts. Personnel. M Christina Heavrin J.A. Bakersfield. The Personnel Administrator. Morehead State University. and negotiations.ABOUT THE AUTHORS ichael R. The Journal of Accountancy Training. In addition. During his academic career he has received awards for both outstanding research and teaching. Labor Law Journal. He received his doctorate from the University of Kentucky. Carrell has held academic positions at California State University. and Public Personnel Management. Human Resource Management. Personnel Journal. These positions enabled him to build a sizable management consulting practice while teaching at the University of Louisville. The Academy of Management Review. Most of his professional career has been spent in the Louisville area and has included positions as a personnel director and labor negotiator. which is located in the greater Cincinnati area. The University of Nebraska-Omaha. organizational behavior. and served as President of the Board and Mayor Pro-tem for three terms. HR Magazine. He has authored over 50 scholarly works in some of the leading management and human resource journals including The Academy of Management Journal. Carrell are in the fields of collective bargaining and labor relations. Organizational Behavior and Human Performance. Books published by Dr. Marshall University.

a tax sharing agreement between the City of Louisville and Jefferson County that enabled the two governments to share revenue of over two hundred million dollars and to combine their economic development programs. 202 50 Practical Negotiation Tactics . Ms. Heavrin is serving as Special Counsel to the first Mayor of the Metro Government where her duties include negotiating initial labor agreements between the Metro Government and its unionized employees. an agreement between the State of Kentucky. Jefferson County. a multi-million dollar expansion of Waterfront Park that included a major environmental clean up and the construction of a Minor League Baseball stadium in downtown Louisville. Recently voters approved the merger of the City of Louisville and Jefferson County Governments. the City and a for-profit hospital for guaranteed indigent health care services for city residents.park and a successful industrial park in the City’s enterprise zone.