2. Introduction
• This core phase of negotiations, extends from the point of the → first offer,
which sets the anchor (→ anchoring) for the negotiations, to the final offer
(→BAFO - Best and final offer), and its acceptance or rejection by the relevant →
decision-maker. This range encompasses the full negotiation, in which the parties
strive for solutions, options, and compromises.
• Win-win negotiators are found in the same places as win-lose and lose-lose
negotiators. They are not any more experienced, and they look about the same
as well.
• The big difference between win-win negotiators and all the others is their
mindset.
• Win-win negotiators understand the five styles of negotiating and are able to
adapt to their counterpart’s style and to the situation.
• They choose to exhibit certain positive behaviours and avoid negative ones. They
are optimistic, open minded, and collaborate with their negotiating partner to
solve their problem together.
3. Two Dimensions that Determine Negotiating
Style
• There are two dimensions that determine negotiating style: assertiveness
and people orientation.
• Assertiveness is the ability to communicate your interests clearly and
directly. It is the ability to stand up for yourself without stepping on
anyone else’s toes.
• Assertive people are able to ask for what they want, say no when they
need to, and state how they feel in any situation. They also accept
standards of fairness and recognise the rights and interests of others.
• People orientation denotes a sensitivity to the needs and feelings of
others. It encompasses empathy, emotional awareness, and ease in social
situations. Those with a high people orientation are generally sociable and
likeable. They are people driven rather than task driven.
4. Negotiation Strategy
• Five broad negotiation strategies, accommodate, collaborate, compromise,
avoid, and compete are described by Lewicki, Hiam and Olander (1996) in
their well known graphic as in next page.
• Negotiators use the figure in the next page to decide which approach is
best. The figure only deals with two dimensions: importance of substantive
outcome (tangible and intangible gains that are at the center of a
negotiation) and importance of relationship.
• These ideas make a useful starting point for considering the whole
negotiation, and each issue within the negotiation. However, in addition to
the relationship and substance, there are many other factors that may
have an impact on choosing the negotiation strategy.
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6. Avoiding
• A person with an avoiding style of negotiating avoids the issues, the
other party, and negotiation situations as much as possible. An
avoiding negotiator
• avoids confrontation, controversy, tense situations
• avoids discussing issues, concerns
• puts off negotiating whenever possible
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7. Accommodating
• The accommodating negotiator is primarily concerned with
preserving his relationship with the other party, even at the expense
of his own substantive interests. An accommodating negotiator:
• focuses on the other party’s concerns more than his own
• helps the other party at his own expense
• tries to win approval by pleasing the other party
• follows the other party’s lead
• emphasises areas of agreement
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8. Competing
• The competing style of negotiating is characterised by an emphasis
on self interest and winning at the other party’s expense. A
competitive negotiator
• uses power to effect a more favourable outcome
• exploits the other party’s weaknesses
• wears the other party down until he gives in
• may use threats, manipulation, dishonesty, and hardball tactics
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9. Compromising
• The compromising style places a premium on fairness and balance,
with each party making some sacrifice to get part of what it wants. A
compromising negotiator
• splits the difference
• believes in quid pro quo, give and take
• seeks a solution in the middle of the range
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10. Collaborating
• Negotiators with a collaborating style seek an optimal outcome by
focusing on mutual interests and trying to satisfy each other’s needs.
A collaborating negotiator
• deals openly and communicates effectively
• builds trust
• listens to the other party
• exchanges ideas and information
• seeks creative solutions
• strives to create value
• sees negotiating as an exercise in joint problem solving
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11. Collaborating Strategy
• Collaborating negotiators, as you have probably concluded, are win-
win negotiators. They work with their counterparts to solve their
problem together by building trust, communicating openly,
identifying interests, and designing options that allow them to create
value for all involved.
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12. Why Bother With The Other Four Styles?
• The collaborating style of negotiating is clearly the win-win approach.
If we are advocating the win-win approach and learning win-win
techniques, why bother with the other four styles? There are a few
reasons.
• While you may be sold on the merits of win-win negotiating, your
counterpart may not see it that way. You will find yourself dealing with
competitive types. You need to recognise that style and know how to protect
yourself.
• Even committed win-win negotiators can use other styles. Sometimes you will
be expected to be competitive, or to compromise. Remember, negotiation is
a game. You need to understand and play by the rules.
• No single style is good enough for all occasions. You will need to be flexible
enough to adopt other styles.
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13. Negotiation Strategy
• The following list of factors is adapted from Lewicki, Hiam and
Olander (1996) as well as Ware (1980). These should be taken into
consideration when choosing strategies. They include psychological,
social, technical, and contextual factors. These additional factors are
flexible and changeable, so reassessing these factors as the
negotiation develops will help you adjust strategies to match the
situation.
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15. Negotiation Strategy
• Another way to choose a strategy is to consider urgency, stakes, and
relationship.
• Urgency refers to the speed with which the organization hopes to
complete the negotiation.
• Stakes refers to the importance of the outcome, for example, high
stakes might mean survival or failure of the organization. Low stakes,
however, means little impact on the organization.
• Relationship refers to the quality of the existing relationship.
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17. Negotiation Strategy Selection
• While collaboration is the ideal, even win-win negotiators need to use
other approaches on occasion.
• While compromise is often used to resolve difficult negotiations, it is
a cop-out. Exhaust all efforts to collaborate on a win-win before
taking the easy way out.
• At the same time, while skill is important, your attitude has a strong
impact on your negotiating results.
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19. Case 1
• SamYeong, Co. and HoPha, Inc. are preparing a joint proposal for a construction project.
SamYeong is an engineering services company with high skills in steel suspension design.
HoPha specializes in installation of complex support systems Both firms are able to
organize the general construction work. There is a large amount of money and potential
profit in the general construction work. These profits will improve the projected profits
of the companies from merely acceptable to a much higher level. The companies do not
have a history of cooperation; however, they need to work together in order to win the
contract for this project – there are no alternative partners. Somehow they will have to
manage an agreement regarding the general construction work. The bid must be
submitted in 12 months.
• Please evaluate the following:
Urgency: _____________________
Stakes: _____________________
Success chance: _____________________
Relationship: _____________________
Strategy: _____________________
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21. Negotiation Tactics
• Negotiation tactics are purposely used or preliminary planned
behavior, directed to achieve the main goals of negotiations.
• They are directed to:
• Reinforce negotiating power
• Gain some initial supremacy in negotiation
• Collect not disclosable information
• Make the other side emotionally disbalanced
• Take control over the negotiation process
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22. Negotiation Tactics
Main negotiation tactics used.
I. To check the opponent resistance point / reservation price/ maximum
price
II. Aggressive
III. To gain positional advantage
IV. To gain quantitative advantage (not equal exchange)
V. To disbalance opponents emotionally
There are separate group of tactics, so called DIRTY or UNFAIR tactics
often used in negotiations as well
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23. Negotiation Tactics
To check the opponent resistance point /reservation price/ maximum price:
1. Small steps – By adding a small improvements (step by step) to the first
offer you are reaching the maximum price of the other side they are
willing to pay
2. Best offer for the budget you have – Offer to disclose your budget/
maximum price: “How much you can spend? We have the most suitable
offer for you”
3. Extreme position (Low ball/High ball) – Initial offer received is done in
the manner and under conditions to be unacceptable for the other side
in order to provoke disclosure of the other side real intentions
(resistance point)
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24. Negotiation Tactics
Aggressive
1. First and Final offer (Ultimatum) – Requirement to accept the first offer
(or second) otherwise negotiations will be stopped
2. Threat of termination – Requirement to accept offer or conditions under
threatening to terminate negotiations
3. “Best” offer (Take it or leave it) – Explicit pressure not to enter into
negotiations. Statement that the best offer is done and there is nothing
more to add to it.
4. Attacks – Attacking you personally or attacking your company or your
country .“Tell me, why I usually enter into some problems when we have
a meeting or I’m coming to your country?”
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25. Negotiation Tactics
To gain positional advantage
1. Hand over (“Hot potato”) – To handover your problem to the other side.
“I have the amount A but would like to have the thing B. Tell me, what I
have to do?”
2. Misleading (Snow ball) – Concentration on some not really important
issues, overloading the opponents with too much information
3. Wrong target – Over evaluation of an argument or issue done on
purpose to gain concession in return. Not important concession is
traded-off after hard bargaining
4. Higher authority – Agreed issues or received offers have to be approved
by the higher management offer is done and there is nothing more to
add to it.
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26. Negotiation Tactics
To gain positional advantage (cont.)
5. Good cop/ Bad cop – Deal with more sympathetic opponent while
the other is absent or excluded from negotiations
6. Reluctance – Showing to the opponents that you are not interested
or indifferent to negotiated subject
7. The Squeeze – Telling the other side that he or she has to do better
in order to make the other side to give concessions without getting
something back. “Seems to be that you are not eager to work on it.
We’ve done a number of concessions and waiting for your adequate
move”
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27. Negotiation Tactics
To gain quantitative advantage (not equal exchange):
1. Split the difference – The split difference between initial proposals “has to be
approved” by one side’s higher authority. You set and split the lower
difference again.
2. Demand for reciprocity – Requirement to reciprocate by giving a concession or
offer to not important concessions made or offer given by the requesting side
3. Additional requirements – Not important requirements and arguments are
exchanged for an important concessions. “If you can ‘t deliver the goods in 2
weeks than we need additional discount of 2% to cover our stock management
costs”
4. Narrowing – Starting from easy to agree issues and narrowing the
disagreement to the most important one. “If we did all these, can’t we agree
on this one?”
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28. Negotiation Tactics
To disbalance opponents emotionally
1. Lost concentration (“Bus station”) – Permanently changing the
environment trough the course of negotiations: changing negotiating
team members, inviting numerous experts, changing meeting
places/rooms, stopping – starting negotiations because of different
“technical” reasons etc.
2. Overreaction – Not adequate emotional reaction to offers, concessions
or arguments of opponents. “ You have to imagine me saying it to my
boss. How I should explain such your offer to him?”
3. Clarification – Permanently asking for clarification or additional
substantiation of position/argument/offer in order to minimize
opponent explanatory power and increase the chance of his mistakes
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29. Negotiation Tactics
To disbalance opponents emotionally (cont.)
4. Bad conditions – Disadvantageous seating arrangements (uncomfortable
chairs, opposite the windows etc.), very early/late meetings,
noisy/disturbing environment etc.
5. Changing the agenda – Skipping some issues, jumping back and forth
through agenda of the meeting, including not agreed points to the
agenda
6. Overload – Overloading the other side with unnecessary, not important
information,(statistics, reports, presentations, site visits etc.) or hide
piece of important information in disproportional amount of non
important one. Send information on Friday afternoon requiring an
answer on Monday morning etc.
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30. Unfair or ‘’dirty’’ tactics in negotiations
Misleading/lying :
1. Wrong information/facts: “This car belonged to an old lady who
kept it all the time in her garage. It’s almost brand new...’’
2. Limited authority: “Last time we agreed on the issue but our boss
does not want to give in on this question..’’
3. Too easy to be true: Your opponents taking the obligations too easy
(they even do not plan to fulfill their duties ) and require a real
concessions from you in return
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31. Unfair or ‘’dirty’’ tactics in negotiations
Psychological pressure:
1. Stress full environment: Uncomfortable chairs, small and noisy room, too
dark or blinded by the light etc.
2. Personal attacks, embarrassment, remarks: Remarks : ‘’please speak
louder, we can’t catch a thing…’’, ‘’your documents submitted were a
mess..’’, ‘’ information was outdated and unprofessionally prepared.’’
‘’bad hotel reserved…’’ etc’. ,
3. Threatening: ‘’We tell about it to your boss, shareholders, clients,
journalists’’, ‘’We will go to your competitors, main rivals etc.’’
4. Corruption: Usually the weakest member of your team, who has some
‘’history’’ or relations with your opponents, receives“ an interesting offer
‘’
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32. Unfair or ‘’dirty’’ tactics in negotiations
Positional pressure:
1. Refusal to negotiate: For subjective reasons, like not met dates for drafts
or samples submission etc., your opponents are refusing to start
negotiations
2. ‘’Spiraling’’ – the same requirements again “Sorry, we agreed last time,
but we can’t accept it in full. This time because of...’’
3. Playing with time: “Only when you meet these conditions, we are able to
go further..’’
4. Unreal demands: Opponent’s position is based on the terms you
objectively can’t meet: ‘’If you can not do it in red color, we sent you the
sample, We can not pay this price..’’. You required to make more
concessions because you are ‘’failing to meet the agreed contract terms‘’
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33. Ways to Defend
1. Ignore them – Ignore the pressure, don’t play according to their ‘’rude’’
tactics
2. Acknowledgement – In a friendly manner, without any signs of anger
inform your opponents that you understand their applied tactics
3. Request to stop – Make a firm and short statement asking opponents to
stop their tactics. Explain that it is counter productive and they will be
responsible for the failure of the negotiations and future of the mutual
business relations
4. Termination of the negotiations – The most extreme way if others are
used. In a calm manner inform the opponents that due to their
destructive behaviour and attitude you terminate the meeting. Stay
constructive and short, reconfirming that what’s happening is their fault
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36. Anchoring effect
• The anchoring effect is explained by Lax and Sebenius (2006) in 3D Negotiating,
pp. 187–190. They found that experienced professionals receiving the same
information, except for price, would suggest prices close to the first offer from
the other party, even if their previous price info was very different. Therefore,
Lax and Sebenius conclude that the first party to suggest a price gains an
advantage.
• The authors also say that the price proposed must seem reasonable to the other
parties because an excessive price would make the proposer seem foolish.
Additionally, providing a clear compact reason for the price at the time you
propose it may strengthen the anchoring effect.
• Practical conclusion: try to be the first party to propose a price, however the
price should not be outrageous and should include some reason or explanation.
• Lax and Sebenius (2006, p. 187) say, “…make an offer just above the most they’d
be willing to pay”. Then, you can move down without losing much of the
potential total value.
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38. Utilizing Your Interest Map
• Use your Interest Map as a guide throughout the negotiation process;
it should tell you what kinds of information you need to get from
others in order to reach a wise agreement.
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39. Interest Map Strategies and Tactics
• While it is up to you to decide whether to include the physical Interest
Map among your papers during the negotiation process, keep the
questions it raises in mind as your negotiation goes forward, whether you
have it with you or not.
• Do a reality check on the assumptions you have made about the various
stakeholders.
• Use your Interest Map questions to develop a better sense of what kind of priority
each negotiator places on his or her various interests.
• Figure out whether the connections among interests you assumed during the
creation of your Interest Map will, in fact, lead to an agreement that responds to the
interests and priorities of stakeholders.
• Remember, if one or more of your pre-negotiation assumptions fails the reality test,
it does not mean everything you have considered is wrong.
• When another party comes up with what appears to be a surprise— or what they
think may surprise you—check whether your Interest Map has prepared you for that
specific possibility or whether it can give you hints on how to respond.
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40. Currencies
• Make a list of everything you have that your counterpart might want.
These items are called currencies. Of course, the best known currency is
money.
• There is also the product or service the money is being exchanged for. But
there are many other currencies, including method of payment, delivery
schedule, other terms and conditions, brand and reputation, allocation of
risk, timing, emotional needs, perceptions, and anything else of value.
• Note that it isn’t just about price.
• A currency is anything of value. Currencies may be tangible or intangible.
Money is only one of many currencies. A win-win negotiator always looks
beyond price.
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41. Options
• An option is a possible solution to a negotiation. It is one of a range of
possible sets of currencies.
• The solution to the negotiation puzzle — whether we are better off
than we would have been without negotiating — is a function of the
choices available to us, that is, our options. The more options we
have, and the better they are, the greater the likelihood that one will
be a win-win.
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42. Creating options from currencies
• To prepare well for a negotiation, you must first understand what you
really want.
• Next, try to anticipate what your counterpart wants. You may never
be sure of what he wants, but with a little foresight and research you
can get a pretty good idea.
• Finally, combine these currencies into a range of packages, or
options. The more interests and options you have on the table, the
greater the chance of a win-win agreement.
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43. Creating options from currencies
• By focusing on options that promote interests rather than positions,
we can create more value for each side. Each party may offer certain
currencies to induce the other party. Recall that an option is one of a
range of possible sets of currencies.
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44. Bargaining
• Your reputation, both personal and professional, must be taken into
account when you decide how hard to push and whether you have to
negotiate over everything. You need to determine when negotiation is
likely to yield a better result. If you are shopping at a garage sale or in
some other place where haggling is expected by buyers and sellers, it is
foolish not to attempt to walk away with a better deal. In business, pay
close attention to the tolerance level of your negotiation counterparts.
• They may shy away from dealing with you in the future if you keep pushing
for more, just as being overly positional can be a turn-off in a negotiation.
Understanding your BATNA gives you a sense of the value of turning a
transaction into a bargaining session. Sometimes you discover good
reasons to look for something in return for your inconvenience.
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45. If ... Then ...
• We must consider the form our bargaining will take.
• When we present a take-it-or-leave-it position, the only way we can
back away from that positional approach is to lose face.
• Presenting an offer with an incentive is far more likely to bring
negotiators to an agreement with which each party feels
comfortable.
• After listening carefully to the information presented by our counter-
parts and developing a better informed sense of their interests and
priorities, we are better able to make offers that should be appealing
to them.
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46. If ... Then ...
• Presenting an offer as an If ... Then ... proposal gives your counterpart
a chance to see how her reward is linked to your achievement of your
objective. Making the trading process transparent can increase the
parties’ confidence in the value of the deal as well as the
dependability of each other.
• Characterizing elements of the negotiation process as tradeoffs can
make the purpose of the activity clearer. When you use the If . . .
Then . . . approach, there is clear communication between the
parties; everyone is on the same page, at least for that element of the
negotiation.
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47. Expectations and Concessions
• Expectation – What you anticipate gaining by undertaking
negotiation. Your expectations should be aggressive, but realistic and
not positional. When you are negotiating a sale of your company’s
products, your expectations may include what you hope to achieve
regarding price, quantity ,specifications, and delivery.
• Concession – Something you have indicated you want but which you
agree to forego or give up in order to reach agreement. Concessions
should not be against your fundamental interest. In understanding
that negotiation is a give-and-take process, you need to consider
what you are prepared to give in order to achieve particular gains.
Thus, if speedy delivery is your most critical interest, you may need to
concede on price and pay a little extra.
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48. Expectations and Concessions
• When you develop your expectations, plan ahead for what you are
willing to concede or trade away in order to serve your interests.
• Concessions that are planned ahead of time are far less painful than
concessions you yield under pressure.
• If your agreement is the result of your concession to pressure, or if
your counterpart only agrees as a result of concession to your
pressure, the agreement will lack the fundamental mutuality
necessary to say a negotiation was successful.
• Unwanted concessions lead to unenforceable agreements.
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49. Concessions
• Concessions are defined as giving any or all of a currency.
• Key considerations in making concessions:
• What will the other party infer from my concession?
• When should I make a concession?
• How much (or what size) of a concession should I make?
• What is the cost/value ratio of the concession?
• What can I receive for making the concession?
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50. Concessions
• Strategies for making concessions:
• Always get something in return: if done for goodwill, acknowledge
it.
• Look for elegant concessions that are low cost/high value.
• Agonize where appropriate.
• Use your settlement range as maneuvering room.
• Make it and move on—concession timing is important.
• Watch your pattern of concessions—if you progressively increase
the size, the other party may try to prolong the negotiation.
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51. Currencies and Concessions
• Because negotiation is a process of exchange, the give-and-take of
currencies is essential to negotiating. We define currencies as tangible or
intangible resources that are perceived to have value by the receiving
party.
• After the underlying needs of both parties have been identified, the next
step is to search for and exchange currencies that will satisfy these needs.
• When assessing the potential value of a currency, keep in mind that
currencies tend to have value in proportion to how well they satisfy the
needs of the other party. The best possible outcome is to identify
currencies that are perceived to have high value to the receiving party yet
are of little or no cost to the providing party.
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52. Types of Currencies
• Prime currency: The central focus of the negotiation, usually money
in the form of price, rate, or discounts. In most instances, the prime
currency is the key component of the Opening Position.
• Alternative currencies: Things that one party has that might meet the
needs of the other party. Often, alternative currencies can close the
gap when two parties are far apart on prime currency. These can take
many forms, as we see later.
• Elegant currencies: Things that are of high value to the receiver but
that are low cost to the provider.
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53. Categories of Currencies in Negotiation
• Financial: Even though money is considered prime, there are many ways
other than price/rate to directly contribute to the bottom line in a
negotiation such as volume discounts, lower rates with a longer term
contract, extended payment terms, leasing options, or rent-to-own. When
dealing with employees, financial currencies can include salary, bonus,
overtime, budget discretion, commissions, tuition reimbursement,
vacation time, conferences, or professional meetings.
• People: This may include loan of staff, consulting services, your own
willingness to participate and work side by side with the other party,
dedicated personnel, technical assistance in implementation,
administration, or help with regulators.
• Facilities: You may own a facility, co-locate equipment, host a test or
demonstration site, or agree to serve as a storage facility or parts depot.
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54. Categories of Currencies in Negotiation
• Equipment: Equip facilities through purchasing, borrowing in the start-up
phase, providing a replacement if equipment can’t be repaired in a timely
fashion or extra equipment during peak periods.
• Priorities: This may include a willingness to accelerate installation, swap a
deadline or priority with someone else, or longer term contracts.
• Information: This may consist of sharing your expertise, industry
knowledge, technical consultation, access to specific data and information,
referrals, and serving as a reference.
• Recognition and rewards: This may include formal awards, willingness to
give credit or acknowledgment, “favored vendor” status, partnering of
customer and supplier, joint advertising, praise about an employee given
to his or her manager, presenting at professional conferences, or exposure
to other industry people.
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55. Categories of Currencies in Negotiation
• Proprietary agreements: This may consist of special rights or
privileges, first access to new technology, copyrights, geographic
exclusives, or “last look” in contract bidding, “right of first refusal.”
• Mitigation of risks: Parties may need to minimize or eliminate risk
(real or perceived by the other party) and discuss price escalators,
warranties, guarantees, indemnification for loss, and upgrades to
eliminate risk of obsolescence.
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56. Compromise
• Compromise is a basic negotiation process in which both parties give up
something that they want in order to get something else they want more.
• When the negotiation is about a single type of bargaining chip or very
small range of issues, compromise may yield a mutually acceptable result.
On the other hand, when the negotiation is complex, with multiple assets,
interests, or parties, compromise may be extraordinarily difficult. Before
compromising, examine your BATNA and determine whether reaching
agreement is more important than interests that must be given away in
order to reach a compromise.
• Let’s say you are offering to sell a used bicycle for $20 and I would like to
buy it for $10. Price is the only issue dividing us from making the deal. If
each of us agrees to compromise on a price of $15—effectively splitting
the difference—we are likely to have a deal.
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57. Ways of Negotiating a Compromise
• There are two principal ways to negotiate a compromise. The first is
for the parties to go back and forth with offers and concessions until
they meet somewhere in the middle. This usually takes place around
a single issue, such as the price of an item. For example, Juan and
Antonia want to buy a house that is on the market for $200,000.
However, they do not want to pay that much, so they make an offer
of $160,000. Bob, the seller, does not want to go that low, but does
want to sell the house soon, so he offers to sell for $180,000. Juan
and Antonia accept the deal and the house is sold. In this case, Juan
and Antonia paid $20,000 more than they wanted to and Bob sold for
$20,000 less, but the house was exchanged, which was the main goal
of both parties.
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58. Ways of Negotiating a Compromise
• When there are multiple issues to be negotiated, then parties may make
additional concessions. The basic idea is that each party gives up something that
the other party values but that they themselves do not care about.
• For example, Juan and Antonia want to move into the new house in one month,
but Bob was planning to stay for three months. Moving in sooner means a lot to
Juan and Antonia because they are currently staying in a motel suite that is too
small and is costing a lot of money. Leaving the house sooner is not really a
problem for Bob, but would force him to work hard to get out faster. For that he
wants to be compensated. The agreed price of the house is $180,000, but Juan
and Antonia offer $185,000 if they can move in eight weeks earlier. Moving in
faster is of value to them but not to Bob. By offering to pay $5,000 more than the
agreed price of the home, Juan and Antonia create an incentive for Bob to move
out quickly, because doing so is now a valuable proposition for him.
• This is an example of trading value in a compromise situation.
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59. Collaboration and Multitasking
• You will do better in the give-and-take of negotiation if your
expectations are aimed high enough to give you room for
concessions.
• The object of interest-based negotiation is to collaborate to serve the
parties’ interests rather than to compromise just to make a deal.
• Try not to fall into the trap of thinking that negotiation is about one
issue at a time; the interrelationship among issues and strategies
needs to be considered throughout the negotiation process. If
multitasking is difficult, take time-outs to give yourself a chance to
analyze what’s going on and what you would like to change.
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60. Walking Away
Robert Rubin, former U.S. Secretary of the Treasury and co-chairman of
Goldman Sachs:
“When others sense your willingness to walk away, your hand is
strengthened ... Sometimes you are better off not getting to yes.”
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63. Walking away
• Psychologically, it may be difficult to walk away from a negotiation.
You have invested time, effort, money and psychic energy, and you
don’t want all of that to be for nothing.
• You may feel that your constituents are counting on you to reach an
agreement, and they would be disappointed if you came back
without one.
• You may feel pressure from the other party to ‘do your part’ to make
the deal happen. You may even look at your bottom line and decide
that it was too unrealistic after all, and accept a proposal you should
rule out.
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64. Walking away
• One can walk away if necessary. Negotiation is a voluntary process. No deal at all
is better than a bad deal.
• Focus on your interests! Remember that whatever resources you have invested
are sunk costs and are irrelevant in evaluating whether an agreement makes
sense at this time. Your constituents may be expecting an agreement, but after
the fog clears they will be more disappointed with a bad one than none at all.
The approval of your counterpart is not a valid consideration, so do not feel
pressure to conclude an agreement just for his sake. Your bottom line may offer
some protection against accepting a bad deal, but it may be too rigid in light of
new information and currencies that come up during the course of the
negotiation.
• Do not use any of these factors to determine whether to conclude an agreement.
The only thing to consider is your Plan B. Compare the best option on the table
with your Plan B and decide which serves your interests better.
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67. Dealing with an impasse
• You will frequently reach a point in a negotiation where you get stuck.
Neither side wants to budge, progress is halted, and frustration mounts.
You may wonder whether you will ever reach agreement. What can you do
when you reach an impasse? Here are some suggestions:
• Most progress in a negotiation usually occurs in the final stages. Recognise
that an impasse is common and does not signal failure. Accept it as a hurdle
that can and will be overcome.
• Focus on your interests, and help your counterpart focus on his. It is natural
to get distracted by minor issues in the heat of bargaining. Refocusing on
interests and priorities can get the negotiation back on track.
• Look for creative ways to add value. Explore options that have been
overlooked. As a negotiation proceeds you learn new information, which that
can lead you to other possible solutions.
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68. Dealing with an impasse
• Offer to grant a small concession, but demand one in return. A small
movement can get things rolling again.
• Focus the negotiation on smaller or easier items. As you reach agreement
on some minor points, you build momentum that can carry you forward.
• Change the dynamics of the negotiation. A change in players and
personalities can jumpstart a stalled negotiation.
• You might also change the environment. Different surroundings can
change the atmosphere and put you back on track.
• Take a time out. Review your strategy and allow emotions to cool down.
Sometimes taking a break to relax and clear your head can work wonders.
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69. Dealing with an impasse
• Agree to impose a period of silence. This is not the same as taking a break. Everyone
stays in the room, they just don’t say a word for five or ten minutes. During this time all
kinds of thoughts creep into our minds, causing both sides to moderate their
expectations.
• You could also impose a deadline. In many negotiations most of the progress is made in
the final stages, as the deadline approaches. Sometimes, time pressure is just the kick in
the pants the parties need to get things moving again.
• Ask your counterpart for his agreement. Sometimes it is just as simple as asking. If he
says “yes,” great! If he says “no,“ ask “why not?” Listen carefully to his answer, address
his concerns, and set forth the remaining steps needed to conclude an agreement.
• If things seem hopeless, consider bringing in an impartial third party. More often than
not, a good mediator can help the parties reach an agreement.
• Finally, be prepared to walk away if necessary. Just be sure you are not bluffing, and
that you have somewhere to walk away to. This takes guts, but it may apply pressure on
the other side to be more flexible.
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71. Shutdown Moves
• In his 2010 book Negotiauctions, G. Subramanian of Harvard Business
School describes shutdown moves as a way to prevent the other
side(s) from finding better deals with competitors.
• Subramanian also points out that timing is important – shutdown
moves must appear when the other side is close to accepting and
delay would result in their reconsideration of alternatives.
• Wade (2006) provides a list that includes deadlock breaking moves as
well those designed to finish a negotiation.
• Selected shutdown moves from Subramanian and Wade are in the
table in the next slide.
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