Introduction to the
The Art of Negotiation
Dr. Charles R. (Bob) Greer
Neeley School of Business
Texas Christian University
Learning Points from Used Car
Exercise
Not leaving enough room for concessions
Making concessions too quickly
Inability to deal with extreme offers
Not asking enough questions
Revealing weaknesses
“I need transportation…”
“I like the car…”
Failure to discover the other side’s needs
Failure to use the power of silence
Learning Points from Used Car
Exercise – cont.
Not enough time devoted to preparation
Negotiating against yourself
Failure to establish linkages
Not expanding the bargaining mix
Forgetting your BATNA
“Selling” instead of negotiating
Claims of competing offers (fraud)
Asking, “Is that your final offer?”
Learning Points from Used Car
Exercise – cont.
Failure to use krunches:
“I was looking for a little more…”
“What can you do for me on this?”
“Can you help me out a little on this one?”
“That’s a little high for me.”
“Can you cut me some slack on this?”
“Please help me a little on this one.”
Source: Cooper Management Institute
Negotiation Defined
“Negotiation is a discussion between two
or more people with a goal of reaching
agreement on issues separating the
parties when neither side has the power-or the desire to use its power--to get its
own way.”
Byrne 1987
An Expert Negotiator
An expert negotiator is one who has
committed every conceivable
mistake in the area of negotiations.
Common Negotiation Mistakes
 Failure to negotiate
 Inadequate preparation
 90% of negotiation success comes from
preparation
 Accepting the first offer
 Not leaving enough room for concessions
 Making concessions too quickly
 Failure to consider the other side’s needs
 Negotiating too much – pyrrhic victories
Common Negotiation Mistakes
-- cont.
 Focusing too much on your weaknesses
 Failure to consider intangibles
 Forgetting your best alternative to a
negotiated agreement (BATNA)
 Failure to recognize other side's tactics
 e.g. the good guy - bad guy, exploding offer, 1st
one who accepts, short fuse, “We don’t
negotiate,” etc.
 Failure to ask enough questions
 Failure to use an integrative approach
when appropriate
Common Negotiation Mistakes
-- cont.
 Beginning with a distributive style or hard
ball style
Inadequate face saving opportunities for
the other side
Displaying too much interest:
“You should not convey to an opponent,
either by word or action, that you want
whatever the opponent has.”
John Ilich, professional negotiator
Power Negotiating
Common Negotiation Mistakes
-- cont.
Beginning with a distributive style or hard
ball style
Inadequate face saving opportunities for
the other side
Losing focus on one's original goals
Positional bargaining in win-win situations
Premature commitment with no back door
Absence of linkage
Common Negotiation Mistakes
-- cont.
Failure to limit information:
“Have more than thou showest,
Speak less than thou knowest.”
William Shakespeare, 1564-1616
Common Negotiation Mistakes
-- cont.
Responding with anger:
“…whatever accounts for the person’s
bluster, nothing can be gained by you
reacting in anger…and if it’s a personality
trait you’re dealing with, an emotional
response on your part isn’t going to cure
it…seeing you respond in anger will just
convince him that the tactic is working.”
Fuller, Manager’s Negotiating Answer Book
A Matter of Perspective
“A dog will look up to you,
A cat will look down on you,
But a pig,
A pig will look you in the eye and see an
equal.”
Sir Winston Churchill
Pigs don’t care don’t care about what you
deserve and neither do some at the top of
the food chain. You get what you negotiate
– not what you deserve!
Negotiation Models
Types:
Distributive
Integrative (win-win, principled)
Mixed
Intra-organizational
Tactics & Counter-Tactics
 Exploding offer (variation of vanishing
asset)
 Ask for reasonable time to consider the offer
 Good guy-- bad guy/hard hearted partner
 Assume that there are two bad guys
 Resist the urge to concede too much to the
“good” guy
 Limited authority
 Obtain insights on practices of other side
 “Take me to your leader”
Tactics & Counter-Tactics – cont.
Take It or Leave It
 Don’t “hear” the ultimatum and try to
continue to negotiate
Competing Offers
 Simultaneous offers to two candidates
for one job
 First one to accept gets the job
Tactics & Counter-Tactics – cont.
 Nibble
 Defined: Just before accepting you ask for a
small concession, such as another $500 in
moving expenses, workshop for skill
development, etc.
 Negotiate the nibble…no free lunch.
 Delay and asking for more time
 Generate additional offers for bargaining
power
 Soft krunches
 “Can you help me out on this? I think we’re
really close.”
Silence as a Negotiating Tactic
“Just because the river is quiet
does not mean that the crocodiles
have gone away.”
Malay proverb
Expand the Bargaining Mix
Expand your notion of potential means of
need satisfaction
Identify items of high value to you and low
cost to the other side
Include items on which you can make
concessions
Trade timing of funds for magnitude
Consider trade-offs of the present for the
future
Competitive or Distributive
Bargaining
Is based on power or perceived power
Involves distortion of information
Involves screening
Involves obstructive or deceptive tactics
Is necessary for some situations
Is not inherently unethical
Is a win-lose process
Is not oriented toward the other side’s needs
Involves narrowing a bargaining range
Defining the Bargaining Range
Source: Extracted with slight modification from Lewicki, Hiam, and
Olander, Think Before You Speak
1. Define your walkaway point (resistance
point) in advance.
2. Have a good alternative (BATNA).
3. Determine the degree of focus on this deal –
is this relationship only secondary.
4. Get as much information as you can without
giving much (if any) away.
5. Set the opening as high or low as
realistically possible (opening offer).
General Guidelines for Competitive or
Distributive Bargaining
Source: Extracted from Lewicki, Hiam, and Olander, Think Before You Speak
1. Stick to your planned target and walkaway
points.
2. Do not reveal your target point too early.
3. Never reveal your walkaway point.
4. Get the other party to make big
concessions.
5. Keep your concessions few and small.
6. Know the other party’s level of concern for
the outcome and the costs of ending
negotiation.
Elements in Competitive or
Distributive Bargaining
Source: Extracted with slight modification from Lewicki, Hiam, and Olander, Think
Before You Speak
Knowing costs for both sides
Researching the other party
Understanding the role of constituencies
Making concessions
Understanding the pattern of concessions
Using and recognizing commitment
Using and recognizing tactics
Coping with tactics
Discovering Other Side’s Costs,
Strengths, Weaknesses &
Commitment:
Examples:
How long has the property been on the market?
How many cars are on the lot?
How long have the cars been on the lot?
How large is the strike fund?
How large are inventories?
How many unfilled orders are there?
How long does it take to fill orders?
Managing the Other Side’s Perceptions of
Your Costs, Strengths, Weaknesses
& Commitment
Examples:
calculated incompetence
channel everything through one
spokesperson
present a great many items
concede on minor points with fanfare
Managing the Other Side’s Perceptions of
Your Costs, Strengths, Weaknesses &
Commitment -- Cont.
Examples:
blocking
don’t hear a question
misconstrue a question and answer
another
answer with a question
screening
say little
use silence
Contemporary Advice
“Never get angry. Never make a threat.
Reason with people.”
Don Corleone
Community Leader and Negotiator
The Godfather
The Use of Silence as a
Negotiating Tactic
“When things are in turmoil, utilize silence.
Silence is more eloquent than writing, more
forceful than words. It has never betrayed
anyone. If you doubt your own wisdom, remain
silent.”
“In silence, we conceal our own
shortcomings, and hear the mistakes of others.
Even the unwise have been considered wise in
their silence.”
Author Unknown
Expanded Discussion of Tactics &
Counter-Tactics-cont
Competing Offer
Recognize that your competitors can't
pay unreasonable prices
Take It or Leave It
Don't "hear" the ultimatum and continue
negotiating.
Provide the other side an excuse for
graceful retreat/face saving.
Expanded Discussion of Tactics &
Counter-Tactics- cont.
 Extreme Offer or Highball/Lowball
Ask how they came up with that amount.
Remind the other side of the necessity of reaching a
fair deal for both parties.
Resist large concessions when the other side follows
up with a small concession.
Don't reinforce this tactic by giving unwarranted
concessions.
 Time Invested
Recognize your reluctance to walk away after
investing time in negotiations
Expanded Discussion of Tactics &
Counter-Tactics -- cont.
Lack of Interest/Cool and Aloof
Don't be overly swayed by the other side's
identification of faults with product/service.
Threats and Bluffs
In general, short unexaggerated threats are
often more valid.
Generally counterproductive.
Stone Wall/Resort to Company Policy
Discuss the tactic with the other side.
Communicate that your organization also has
policies
Expanded Discussion of Tactics &
Counter-Tactics -- cont.
Delay
Recognize that the weaker party will
often attempt to delay.
Attempt to set deadlines based on
objective events.
Provide information on issues the other
side uses as reasons for delay.
Bargaining Nuggets
Negotiators can gain advantage by viewing
the other side as an individual who has
individual needs -- as opposed to a powerful
powerful organizational monolith.
Negotiators also can gain advantage by
exploiting interdependencies by appealing to
interested constituencies.
Advantage may be lost if attempts to apply
influence through constituents detracts from
the trust established with the other negotiator.
Bargaining Nuggets
Negotiator Interdependencies
Company A
Constituents
Company B
Constituents
Negotiator for
Company A
Negotiator for
Company B