Whether you have attended a KARRASS Negotiation Training Seminar or not, negotiations can get complicated. Understanding the basic negotiating terms and concepts is one way to prepare yourself for negotiations. Dr. Chester L. Karrass began this company to help businesspeople master the strategies, tactics, and psychological insights of negotiating. It's understood, however, that negotiations take place outside of the office, often influencing personal relationships and your everyday life. Browse through our extensive negotiation glossary of terms and definitions to better prepare yourself for the negotiating you will encounter in your day-to-day life.
A concept that is based on psychologist Jerry Harvey’s research. Some people resist conflict at all costs—even if it means a lose-lose outcome for everyone involved. Groups sometimes prefer to maintain the illusion of agreement rather than cast a dissenting voice or an opposing opinion. Personal preferences, interests, and beliefs are often downplayed or buried. The paradox is that negotiators must make differences known to create 'negotiating space.' Negotiating space provides the opportunity for discovery that leads to better, Both-Win® outcomes and longer term agreements.
People need time to accept anything new or different. Resistance to change is universal. When you enter a negotiation do not expect the other side to immediately adjust or accept your position. Both the negotiators and their respective organizations need time to accept the understanding that they may not get exactly what they want. Build acceptance time into your negotiating process.
A formal, agreed-upon list of things to be done during the negotiation. Whoever sets and controls the agenda can many times also control what is discussed during the negotiation.
Formal agreements that address specific issues and obligations but are intended to be replaced by a final agreement because they do not address or resolve all of the issues being negotiated. Often used as an interim agreement to keep the talks moving, and show the resolve and commitment of the parties to continue to work towards full agreement. See 'Pre-Settlement Agreement.'
Generally your first offer in a negotiation. See 'Anchoring.'
Negotiators often try to introduce a reference point, or 'Anchor,' early in a negotiation. This reference point becomes the basis for counter-offers and demands. Setting an anchor point close to your desired outcome sometimes helps modify the expectations of the other party. When an anchor is set, the other party immediately must evaluate how it impacts the probability of achieving their initial goal. Be careful when you select your anchor points and be wary if the person or group you are negotiating with attempts to anchor you. Make your agreement contingent upon the other side agreeing to another, maybe unrelated issue. See 'Linking' and 'Tying A String.'
A negotiator must be realistic, but should be optimistic, regarding what they want to achieve in a negotiation. It helps to have documented evidence that supports your aspiration level. Always set your aspirations high enough to provide you 'room to negotiate.' Begin negotiations with high aspirations. A high aspiration creates a contrast effect so that the other party views any following request that is less extreme to be more reasonable. See 'Rejection/Retreat' Tactic and 'Make An Offer They Must Refuse.'
See 'Target Point' or 'Anchor Point.'
Also referred to as 'Name Dropping.' We do business with a VIP in an important company. Pictures often are displayed of someone shaking hands with important people. This behavior plays upon the human tendency of wanting to do business with people who are well connected. Common sense says that a person should disassociate from those who make it harder to reach an agreement. The tactics of disassociation are as important as those of association. Good planning requires a person to search for the right partners. A good negotiator should ask, 'Will any of my associates make it harder for me to reach a favorable settlement with the other party?' If so, do something about it.
Parties to a negotiation start the process with deep-rooted preconceptions about how they should act towards each other. Emotional and rational attitudes are hard to change and are generally consistent with beliefs, opinions, and biases. A satisfactory negotiation cannot occur until both the parties modify their attitudes sufficiently to engage in the share-bargaining and problem-solving processes encountered in all negotiations.
Set up sellers or buyers to compete against one another. Today many companies use Internet actions.
Authority to make the agreement. The primary question a negotiator needs to ask is, “How much authority do I want in this negotiation?” See 'Limited Authority' and 'Mandated Authority.
A distributive negotiation which generally is both competitive and positional. Many times it involves a single issue like price. One party usually tries to gain advantage over the other to gain the best possible outcome. Bargaining Zone
Best alternative to a negotiated agreement. If the potential outcome of your negotiation only offers a value that is less than your BATNA, there is no point in proceeding with the negotiation. You should proceed with your BATNA.
A seller suggests a superior grade product to test how much money the buyer has to spend.
When offered a price the buyer asks, "What if I double the order?" or, "What if I take all you have?" This sometimes helps identify the seller’s true cost, or the seller’s flexibility in reducing a quoted price.
A negotiator starts a negotiation by using a "big pot" filled with numerous issues—some real and some made of straw. This accomplishes several goals: it tends to reduce the other party’s aspirations; it builds trading room into the negotiation; it demonstrates to others in their own organization that they are good negotiators; and it makes it easier for the other party to sell their own organization on the value of a reduced package. The "big pot" approach gives a negotiator room to negotiate and compromise. In the absence of other concessions, it gives the other party something to take away (i.e. "Look at all the things that I got them to give up").
Black Hat (BH) – tough, unyielding. White Hat (WH) – generous, compromising. Experiments show that negotiations proceeding from BH to WH (e.g. begin with a tough stance, few early concessions, followed by larger concessions) are more effective than negotiations that flow WH to BH (e.g. begin with generous concessions and move to tough, unyielding positions). A BH/WH approach will produce more concessions from the other party because a person who has been dealing with the BH feels relieved to now be dealing with the WH. A WH to BH approach produces the opposite effect and many times leads to deadlock.
Asserting things that are not true. Used like the "Decoy" to test the other party. Business bluffing is part of negotiating. However, standards need to be established that forbid and penalize outright lying, false claims, bribing, stealing secrets, or outright threats. Bluffing, while ethical, involves some risk. The bluffer who is called loses credibility and bluffing sometimes leads to exaggerations and threatens the viability of the negotiation.
Nonverbal cues into the emotional state and feelings of another person.
A buyer says, "I love to purchase your product but have only so much money to spend." The buyer establishes an anchor, but in a friendly way that invites the seller to help solve this "budget" problem. The seller, who usually knows much more about the product than the buyer, then gets involved to see if there are ways the proposed product offering can be modified so it can fit within the required budget. The negotiation moves away from a competitive affair to one of cooperation. The Bogey may not necessarily lead to a lower price for the buyer, but the buyer will be better off by learning a lot more about the product offering and price flexibility than was known before the Bogey.
Using reverse psychology to get someone to agree to move from a firm position. This technique is based upon the human need to assert one’s individual freedom when it is challenged. A negotiator achieves the desired "reaction" from the other party by paraphrasing their negotiating position in a way that makes it sound more extreme than it actually is; then inferring that they do not personally have the power to change their position. This negotiating approach sometimes results in a compromised position. The other party needs to prove they have the power to modify their position and that their position is not "fixed in stone." See "Reactance Technique."
There are generally several dimensions and several issues at play in any negotiation. Wise negotiators explore all the issues and dimensions of a negotiation to find trade-off areas and ways to enhance the ultimate agreement for all parties. Creative trade-offs between the different assets, needs, and preferences each party has are diligently examined to find ways to build new value. When the pie is successfully expanded, both parties leave with new value that was created purely from the process of negotiating. See "Win-Win" and "Expanding the Pie."
A creativity technique generally attributed to Alex Osborn, an advertising executive in the 1950s. The goal of brainstorming is to create a pool of ideas prior to evaluating each idea. Thus the brainstorming process is a synergistic event that avoids the negative impact of critical evaluation until a number of potential solutions have been created by the group. The result is more ideas to choose from and better quality ideas.
One party to a negotiation, who is unwilling to make any but minor changes, starts the negotiation by making a final offer to the other. A take-it-or–leave-it approach.
A temporary withdrawal from a negotiation into a private meeting where a group can discuss sensitive issues, confusing issues, and changes in negotiating strategy/tactics. Sometimes used to "buy time" or to let a heated negotiation "cool down." Also used when new, unexpected information is introduced into a negotiation, and time is needed to evaluate or research the new information.
New people are introduced into the negotiation that then change the rules or modify what has already been agreed to. Can also be used to help break a Deadlock or Impasse.
Changing the benchmarks or specifications that have been used in the negotiation. This sometimes helps bring the parties closer together and can create better outcomes.
Picking only the most profitable or most beneficial components of the negotiation and leaving the others.
When someone gives you a "last and final offer," don’t accept it at face value. Test it. It could be they are simply asking you to play "chicken" to test your resolve. When you are given a last clear chance to take a final offer or risk the consequences, you are in this "chicken" situation. You can usually keep talking. But not always!
Trade-offs that require each group member to offer another member a concession on one issue while receiving a concession from yet another group member on a different issue. See "Reciprocal Logrolling."
Usually a temporary agreement between two or more individuals or groups to help them reach a common goal. Sometimes found in multi-party negotiations to help the coalition gain an advantage.
A psychology theory that says if I like Joe and you like Joe, we are likely to find other things we both like. This principle applies to the attitudes of people towards other persons, objects, or ideas. It also works in reverse. If I like Joe and you don’t like Joe, we will have trouble getting together on other issues.
Negotiations between employers and their unions to determine wages, hours of work, and other conditions of employment. Collective Bargaining usually results in a written employment contract that is put into force for a specific amount of time.
A culture rooted in social groups where the dominant motivations involve concern for the group and the importance of belonging to the group. More concerned about how actions impact the group than how it impacts themselves. See "Individualistic Culture."
Having a shared enemy or a shared problem can unite people and build trust. Having a common goal or a common problem dilutes the perception that the interests of the parties are completely opposed and helps establish a higher-level relationship between the parties that motivates them to agree rather than disagree.
Used to lower expectations of the other party. "I can get this from your competition for $$$." "If you don’t lower your price I need to go out to bid on this." "Everyone else is offering this option at no extra cost." "This is the last one available for three months, if you don’t want it I know someone who does." Determine if you have real competition or just imaginary competition. Don’t let the party using "competition" generalize with you. Ask for specifics. Do you really have "competition" for your proposal?
Prefers to maximize the difference between their share of the pie and the portion of the pie the other party gets. Prefers to conduct the negotiation with a "Self-Centered" approach, as opposed to "We-Centered," cooperative approach. Uses a distributive approach to the negotiation—how the pie is going to be split. How can I maximize my share of the pie? While every negotiation has a "competitive" component, the more successful negotiators learn how to move from a competitive position into a more collaborative, cooperative posture that provides opportunities for Both-Win® value creation (i.e. create a bigger pie).
Trade-offs made during a negotiation that hopefully bring the parties closer to agreement and help bridge differences. See "Concessions."
Negotiators that use a consistent concession pattern send a signal to the other side and become somewhat predictable. Reduce this risk by varying your concession pattern. Make consistently smaller and smaller concessions as the negotiation progresses. This sends the signal, "I don’t have much more to give." Most successful negotiators are less generous and less predictable in their concessions. Experiments have indicated that negotiators who lack a thoughtful concession strategy tend to concede little during the first half of negotiation but move to large concessions later. As deadlock approaches they sometimes give huge concessions. On the other hand, skilled negotiators plan a concession strategy, have better control, do not panic at deadlocks, and generally achieve better results.
Trade-offs where one party concedes or yields on issues. While it would appear a concession by one party would bring the participants closer to agreement, sometimes a concession can do just the opposite. Developing a concession strategy is an important part of any negotiation. See "Log Rolling."
The winning issues in a majority vote decision will change as a function of the order in which alternatives are proposed. Alternatives that are proposed at later stages in a negotiation are more likely to survive. Skilled negotiators, who are involved in a decision process that is determined by majority vote, will arrange to have their preferred alternatives entered at later stages of the voting process.
Cross-cultural conflicts are often influenced by self-serving, disparaging, and retaliatory actions derived from historical events that have occurred between the parties. Each party has a tendency to choose its own events to justify biased actions taken during the negotiation. At the same time each side to the negotiation will use its bias to exaggerate the differences between the parties, and overestimate the extremity and consistency of the view of the other side.
Discipline yourself not to provide quick responses. When the other side makes a demand or offer, be it acceptable or not, don’t respond to it with a quick "yes" or "no." Just keep quiet and think about it for a while. Better yet, write down a few calculations that only you can see or ask for some time to do a little research. Then when you do provide an answer, be it a "yes" or "no," or anything else, your considered response will give greater weight to your answer. Whatever it is. A considered response gives your answer more credibility and respect. It becomes a stronger "no."
Humans have a fundamental need to be consistent in their beliefs, feelings, and behaviors. To contradict ourselves is a sign of irrationality. This is why skilled negotiators will often try to get verbal commitments from the other party as the negotiation progresses. If a person agrees to something they are motivated to behave in a fashion consistent with this verbal commitment. When negotiating, be careful to what you agree to during the negotiation. It is better to state that your agreement on a particular issue is contingent upon how the parties agree on the other issues. See "Tying A String."
A negotiator starts with a specific style of negotiating such as cooperative, competitive, or individualistic/personal. This style dictates the basis of their negotiating strategy. Research indicates that as a negotiation progresses, people often change their negotiating strategy in response to how the other party is negotiating. Styles tend to converge. When a cooperator negotiates with a competitor, the cooperator is likely to move into competitive mode.
Build "cooling off periods" into a negotiation when emotions and power struggles become apparent. Both parties are better served if each has time to reflect on their own needs, interests, and positions—outside of the negotiating room.
Seeks to obtain equality and to minimize the differences between negotiator’s outcomes.
A negotiator may act crazy or irrationally and make a big scene. Sometimes the other side will give in to their demands simply to get the crazy person to stop doing what they are doing. See "Emotional Outbursts."
Each participant in a negotiation is pre-conditioned by their respective culture. Willingness to take risk varies widely by culture. Where one culture may find it perfectly acceptable to ask for much more than they need (i.e. leave a lot of room to negotiate) another culture reacts to this approach negatively (i.e. they are lying to us, we do not trust them). Some cultures are very individualistic while other cultures are collective or group-oriented. Some cultures prefer a direct negotiating style while others prefer an indirect approach. In some cultures decisions are made by consensus so no single person takes responsibility. A wise negotiator will assemble knowledge and understanding of all the various cultural bias that may be present in a negotiation and prepare accordingly.
Western negotiators (i.e. from Europe or the Americas) generally prefer an organized, point-by-point, issue-by-issue approach to negotiation. Asian cultures (particularly the Chinese) take a more holistic approach to their negotiations—often jumping from one issue to another totally unrelated issue, then back to change a point that everyone had already agreed to, and then off to another issue. This disorderly approach usually confuses an uninformed Western negotiator. It hinders their ability to keep track of where they are in the negotiation and often is perceived as simply a tactic to gain an advantage. In fact this disorder is generally purely culturally based. See "Disorder Tactic."
Understand the influence "Culture" has on your negotiation. This starts with understanding your own culture and how it differs from the culture of the other party. Once you learn the cultural differences, don’t just adapt yourself to the other party’s culture—learn ways to make the most of the differences to craft a more creative agreement.
It sometimes helps to have a "dancer" on your negotiating team. Someone who can say much about very little. A dancer can provide a "smokescreen," divert the other side away from problem issues, or perhaps buy your team some time to regroup or determine a change in strategy.
Uses "Time" as an element to put pressure on the other side. Often as a negotiation moves closer to a "Deadline," concessions and the magnitude of concessions increase. Participants start making riskier, unstudied decisions. Some Deadlines are caused by circumstances (e.g. the last pickup for mail is 4PM, the latest we can wait to start production is tomorrow, the airline flight leaves tonight). Some Deadlines do pose real consequences. Other Deadlines may simply be a tactic to force a decision or deprive you of adequate planning/preparation time. Always ask, "What will happen if we don’t meet the deadline?" "Is the deadline being imposed by my organization or theirs?" "Can I change the deadline if it will help us craft a better agreement?" See "Time Pressures."
Impasse in the negotiation. Both sides lose and must pursue their BATNA. See "Strategic Deadlock" and "Walking Away."
Asserting things that are not true or taking positions or making an offer that is ultimately withdrawn after they have impacted the other side’s position. Used like the "Bluff" to test the other party. It works when you agree to forget about some of your real interests in exchange for the other party forgetting about some of their "decoys" or fictitious interests. See "Straw Issues."
You are provided something you did not agree to (i.e. extra service, extra materials) along with correspondence that makes the assumption that you agree to accept these extras. This places the burden on you to formally reject these "extras." If you fail to take action and accept them, your inaction indicates tacit agreement to the altered agreement.
Buying time to create more pressure on the other side.
This tactic plays upon your ethics, or lack thereof. You may be baited with an agreement that is clearly to your advantage, but contrary to your discussions. The danger lies in you quickly signing the agreement before the other party realizes their error or omission. Later, after performance of the agreement has begun, and you cannot back out, the "mistake" is brought to your attention and corrected.
A surprise treat or concession provided at or near closing the agreement that has no strings attached. The Japanese call these bonuses "delight factors." Wise negotiators save a few items to give away as delight factors. These raise the satisfaction of the other party far more than their cost to you.
You can do this mentally with yourself, but it generally works better if you can enlist the help of another person to play the role of the other side—the person or group you will be negotiating with (i.e. play the role of the Devil). Have your Devil’s Advocate plead the other side’s case; take their anticipated position; use their arguments and objections. You should try to estimate your Devil’s desired outcomes and goals (BATNA). Do this prior to your negotiation. It provides you an "inoculation" in advance of the negotiation and helps assure you appropriate responses and strategies in place. Remember, the other side may be more intent on frustrating your proposal than accommodating it.
Based on a principle of psychophysics where good things lead to saturation and bad things escalate. Your first bite of pizza is the best; as you get full, each bite brings less and less satisfaction. This phenomenon of diminishing marginal utility is also true with money. The utility of money decreases marginally in relation to how the amount grows. We are much happier with our $20,000 raise when our salary of $40,000 rises to $60,000; than our degree of happiness with a $20,000 raise when our $600,000 salary rises to $620,000.
Common sense says that a person should disassociate from those who make it harder to reach an agreement. The tactics of disassociation are as important as those of association. Good planning requires a person to search for the right partners. A good negotiator should ask, "Will any of my associates make it harder for me to reach a favorable settlement with the other party?" If so, do something about it.
A negotiator uses disorder to confuse the other side. This tactic deliberately mixes things up. It can be used to forestall a deadlock; make the other side work harder; force through a last-minute demand; or allow one to retreat from a prior concession. Sometimes it is used just to see how well the other person keeps their wits under pressure. Disorder complicates the negotiation and the person using the disorder tactic hopes to profit from this confusion. Examples: the introduction of new product-price schedules; new quality standards or revised specifications; some services that were bundled are now unbundled; new delivery dates; suddenly apples can’t be compared to apples and cost comparisons become almost impossible to make. See "Cultural Disorder" and "Scrambled Eggs."
Used to refer to a negotiation where the resulting agreement "divides the pie" with each participant taking their share. Since there is a fixed "pie," what one party gets comes at the expense of the other party. In a broader perspective, every negotiation has a distributive component. Negotiations referred to as a "Win-Win Negotiation," "Both-Win® Negotiation," "Value Creation Negotiation," or "Integrative Negotiation," create new value (i.e. a larger pie), but all ultimately end up with a distributive event that determines how the value is shared. Generally it is not 50-50. See "Pie Slicing."
Two quite different meanings. If referring to a multi-party negotiation, one side attempts to get the other side arguing with one another to cause a breakdown in their solidarity. This weakens their power and resolve. If referring to a complex, multi-issue negotiation, it is often helpful to divide up the negotiation into its various components; come to agreement on the simpler issues; and then tackle the tougher issues. This can help pave a way to agreement. During the course of coming to agreement on the simpler issue, relationships improve, and communication-understanding improves. This sets the stage for a more productive process when the tough issues are tackled. See "Fragmentation," "Slicing," and "Salami Tactics."
When a negotiating goal can be tied to an important business principle or practice, it becomes hard to dislodge. This anchors beliefs to values. Like dominoes, if one falls, they all fall. A negotiator may use an equity or fairness approach in their business negotiations. However, fair-minded negotiators are themselves exploited when they encounter competitive opponents unless they also become competitive.
When a negotiator makes an outlandish initial request, they are more likely to secure agreements to subsequent, smaller requests. This is based upon principles of perceptual contrast. If a person lifts a heavy object, sets it down, and then lifts a light object, the person will perceive the light object to be much lighter than it actually is. An irrational negotiator who calms down following a wild display of emotion may get what they want.
Every concession implies a degree of commitment or willingness to stand firm. Using a "doorknob" price tells the other side that they have only two choices: accept the last offer or allow negotiations to break down. In either case the final decision becomes entirely their responsibility. The difficulty with a "doorknob" price is that the other side may not believe it. So how the message is delivered is of utmost importance. See "Take It or Leave It."
A collection of documents, information, and data on a particular person or group. This information is used to gauge probable reactions to proposals put forth in the negotiation. Good negotiators compile a Dossier on the parties they negotiate with. Over time, this Dossier provides valuable information and provides guidance as to the potential behaviors of the negotiators. A good Dossier helps identify pathways that can lead to successful agreements.
Show that you have nothing left to give.
Having a high degree of concern for the interests of others in the negotiation while maintaining a high degree of concern for your own interests.
Not focused on social boundaries. Everyone should be treated equally and status and rank are irrelevant. Self-oriented negotiations use BATNA as major source of power; each negotiator is empowered to resolve conflict themselves. See "Hierarchical Culture."
Traditional negotiating powers such as organizational status, gender, age, race, and type of dress are present in face-to-face negotiations. A power shift occurs when email is used in a negotiation. Most, if not all, of these power elements are eliminated. Power and status differences are minimized and individuals who might have little power in face-to-face negotiations become more powerful in email negotiations because status cues are missing.
Some people try to get what they want by becoming emotional, by embarrassing the other person, or by becoming a nuisance. We tend to become defensive when we encounter such behavior. The best approach to emotional, harassing, bothersome, or embarrassing behavior is to stay in control. Don’t respond by becoming emotional yourself—the negotiation will simply degrade into an argument. People have learned to use emotional outbursts because it has worked for them in the past. Be skeptical; don’t give in quickly; there are a lot of good actors around.
Say you can't afford it, don't have it, have nothing left to give.
Going around the person you are negotiating with to resolve the issue with someone else—generally someone of higher authority.
Each participant shares the negotiation pie based upon the various contributions and inputs they have made to the specific business situation. Those who have contributed more get more. Also known as the "Merit Based Rule."
The more you get the more you require. Puts real pressure on the other side and tests their limits.
Escalation is a very tough negotiating tactic. An agreement is reached between two people who have the apparent authority to make the deal. Then, one says that they need to show the agreement to someone else for "routine" approval. That’s when the first surprise occurs. The higher authority rejects the agreement unless further concessions are made. A renegotiation granting these concessions then follows to settle the almost closed deal. This can go on with multiple levels, where each level of authority demands and wins further concessions to reach final agreement. Each renegotiation "tests" the resolve and the limits of the other party.
Based upon the human need to eliminate or remove an unpleasant stimulus. When a negotiator encounters someone who is openly hostile, negative, or emotional they are prone to make needless concessions just to end the negotiation and get away. This acts to reinforce the negative behavior used by the other party. The other party is conditioned to use this behavior because it works.
Utilizing creative problem-solving techniques to match each party’s needs with the other party’s assets to find unique ways to optimize agreement and create more value for each side. There are generally several dimensions and several issues at play in any negotiation. Wise negotiators explore all the issues and dimensions of a negotiation to find trade-off areas and ways to enhance the ultimate agreement for all parties. Creative trade-offs between the different assets, needs, and preferences each party has are diligently examined to find ways to build new value. When the pie is successfully expanded, both parties leave with new value that was created purely from the process of negotiating. See "Win-Win," "Both-Win®," and "Pie Expansion."
This is a seven point theory developed by Dr. Chester Karrass: 1. Negotiation is not simply a good deal for both parties. While each must gain something, it is improbable that they will gain equally. 2. No two value systems are likely to be the same. People have more or less the same needs, but achieve different degrees of satisfaction from reaching goals. 3. In every negotiation the potential exists for the parties to improve their joint satisfaction at no loss to either. The more intense the search for joint improvement, the more likely people will be to find superior solutions. 4. In every negotiation there is a point reached at which the gains of one party are won at the loss of the other. 5. All transactions are based upon future expectations of satisfaction. No two people are likely to estimate satisfactions in the same way. 6. It is not goods or money or services that people exchange in the process of negotiation, but satisfaction. Material things represent only the more visible aspects of a negotiation. 7. A negotiator can only make assumptions about the other party’s satisfaction, expectations, and goals. An important purpose of negotiation is to test these assumptions. The other side’s real intentions can only be discovered by a process of vigorous probing because they may be only dimly aware of them.
The best defense against an expert is getting your own expert. As Dr. Chester Karrass points out, "For every expert, there is an equal and opposite expert."
Face is the value a person places on his or her public image, reputation, and status relative to other people involved in the negotiation. Direct threats to face in a negotiation include making ultimatums, criticism, challenges, and insults. When negotiating in a group environment (i.e. there is an audience), "saving face" often becomes very important to a negotiator. This can result in the negotiator moving away from any cooperative efforts into competition to protect their position. Often an impasse or lose-lose outcome is the result. Saving face is an important cultural component in many negotiations.
Someone takes a surprise action designed to place them in a favorable negotiating position. The "accomplished fact" affects the final outcome of the negotiation because it alters the balance of power. The strength of Fait Accompli rests in the fact that once a deed is done, it is difficult to undo.
Instead of "falling in love" with a single outcome to a negotiation (i.e. this car is the one I want), it is important to develop several optional outcomes that are acceptable.
Suggest a solution or option to see if the other side "bites." See "Trial Balloon" and "What If?"
There is a fixed amount that must be shared by the parties involved in the negotiation. Whatever one party gets comes at the expense of the other party.
There is a fixed amount that must be shared by the parties involved in the negotiation. Whatever one party gets comes at the expense of the other party.
An emotional, physical, and verbal reaction to an offer, then silence to see how the other side may react and possibly modify their offer. See "Wince."
A negotiator is asked to agree to a small favor or statement. Later the negotiator is asked to commit to a larger request. The probability of them agreeing to the second, larger request increases if they have already established their agreement to the small request. People generally have a need to demonstrate consistent behavior.
Once we form a negative impression of someone, we tend to view everything else about them in a negative fashion. It is hard to recover from a bad first impression. See "Halo Effect."
Breaking down a problem into solvable parts and creating multiple-issue negotiations from what appear to be single-issue negotiations. This process generally leads to better agreements and more creative Both-Win® agreements where new value is created.
If involved in a complex, multi-issue negotiation, it is often helpful to divide up the negotiation into its various components; come to agreement on the simpler issues; and then tackle the tougher issues. This can help pave a way to agreement. During the course of coming to an agreement on the simpler issue, relationships improve, and communication-understanding improves. This sets the stage for a more productive process when the tough issues are tackled. See 'Slicing,' 'Divide and Conquer,' and 'Salami Tactics.'
Organizing information, facts, issues, and potential outcomes so the negotiator can gain a better perspective of what the negotiation will involve and where boundaries should be established. Using a Framing process helps the negotiator gain a better understanding of the relationships between all the factors likely to emerge in the negotiation and consider a variety of outcomes, contingencies, potential gains, and potential losses prior to beginning the negotiation.
An ethical test. Would you be completely comfortable if your actions and statements during this negotiation were printed in full on the front page of the local newspaper or were reported on the news? See 'Light Of Day Test.'
Using monetary components or percentages instead of real money. Things like price-per-pound, price-per-month/day/hour, 3% per year, man-hours-per-unit, etc. 'Funny Money' is usually given less value than real money. Funny Money can work for you or against you. If you encounter Funny Money in a negotiation, translate for yourself what it means in real money or total cost before you make any decisions. You may find Funny Money useful to modify the other side's viewpoint. 'After all, it's only 2 cents more per hour. That's not much.'
Do unto others as you would have them do unto you. In negotiation it is wise to ask yourself, 'How would I feel if the other party did this to me?' If you conclude that you would not like it, it means the behavior in question may be regarded as unethical.
Two participants play two 'roles' in the negotiation. One plays an aggressive, demanding role; the other a more reasonable, friendly role. Sometimes the 'Bad Cop' does not even have to be present. The 'Bad Cop' could be your supervisor, or someone in authority in a distant office. Be aware of what is happening and realize the 'Good Cop' is not really on your side.
See 'Good Cop – Bad Cop.'
Graduated Reduction In Tension. Based on the reciprocity principle which calls for one party to make a concession and invites the other party to reciprocate by making a concession.
A distributive negotiation where the parties barter about the terms of a business transaction.
Flaws deliberately put into a proposition or presentation which can be easily detected by the other party. Designed to be discovered by one party to direct the discussion away from more vulnerable areas of the negotiation. Used to maintain greater control over the talks. Derived from portrait painter Norman Rockwell’s technique of putting too much hair on someone’s hand. His customers liked to find fault in his painting. The hairy hand would be discovered and he could correct it to make his customer happy. This technique kept them away from wanting numerous other changes to the painting.
Once we decide someone is trustworthy, other qualities about this person are perceived as consistent with this favorable impression. We tend to believe that people we trust and like are also intelligent and capable. See 'Forked-Tail Effect.'
The Japanese pay more attention to long-term relationships than do Western businesspeople. An important part of their decision to do business with someone is whether they will be able to work harmoniously with them in the future. The Japanese have formalized the practice of building harmonious long-term relationships into their business culture. When a transaction is about to close, the Japanese use a technique called 'Seeking Heavenly Approval.' After the facts are in and a written agreement is near, a period of time is set aside for achieving consensus as to whether they want to do business with the other party in the long run. In discussions marked by long periods of silence, members of the executive group reach mutual inner understanding and consensus. The Japanese call this moment of harmonious accord 'KAN.' Having sought and achieved 'heavenly approval,' they have given themselves a final chance to evaluate whether the agreement will satisfy their needs and give them peace of mind in the future.
Status and rank are important. Social power is not easily changed. Conflict is less frequent between members of different social ranks. Conflict is more likely to be handled in deference to a superior, rather than a direct confrontation and negotiation between social equals. See 'Egalitarianism Culture.'
Start high with your demands to set the other side’s expectations. Sellers often start high knowing they can reduce the price.
Negotiators are generally better off if they don’t have full authority. There is greater negotiating strength in not having authority than in having it. Unfortunately, for many our egos get in the way. People like to demonstrate how much authority they have; it’s a sense of pride. Negotiating this can diminish your effectiveness as a negotiator. See 'Limiting Your Authority Technique.'
A seller finds out what a buyer is willing to pay by offering something that is not available. Then they switch to what is available at a higher price.
When offered a price the buyer asks, 'What if I double the order?' or, “What if I take all you have?” This sometimes helps identify the seller's true cost, or the seller’s flexibility in reducing a quoted price.
One negotiator proposes a possible concession tied to the other side’s concession. If they succeed in getting the other side to concede, they then negotiate from this lower plateau.
An argument where no agreement is possible. A deadlock. All progress is stopped.
In a multi-party negotiation, persuade one person at a time. Then use them as advocates to persuade the remaining people.
When attempts to solve a problem, or come to an agreement, have failed, it is often productive to set the work aside for a while to pursue other activities. Sometimes subconscious processes will help the participants come up with new ideas and solutions. Patience and thoughtful reflection are two powerful tools when negotiating.
Prefers to maximize his or her own gain and has little or no concern for how much the other person is getting. Wants to save face and regard themselves as independent, free agents. See 'Collectivism Culture.'
Win-Win, Both-Win® Agreements that create new value for all parties to the negotiation.
Generally a more complex negotiation that involves multiple issues and multiple parties. A process that focuses on integrating the interests of all parties in a collaborative way to create new value for all participants. Ongoing relationships are an important factor vs. the one-time event found in simple haggling or bargaining. See 'Interest Based Negotiating.'
Interests are generally considered the motivating factors and underlying reasons a negotiator takes a certain 'position.' A negotiator’s position may be reflected by a combination of factors: economic issues, control issues, security issues, need for recognition, ego, desires, fears, goals. All of these factors influence the negotiating process and the positions each negotiator takes. Interest Based Negotiating is generally a more complex negotiation that involves multiple issues and multiple parties. This is a process that focuses on integrating the interests of all parties in a collaborative way to create new value for all participants. Ongoing relationships are an important factor vs. the one-time event found in simple haggling or bargaining. See 'Integrative Negotiating.'
Make an exchange during the negotiation that will not get into the final agreement.
This technique seeks to tie existing and future contracts into the content of ongoing negotiations. In a large organization, two buyers can deal with the same supplier without knowing it. If negotiations can be made to intersect, the leverage of one may extend to the other.
How do you negotiate with an elephant? Very carefully. Intimidation can take many forms: physical appearance (mean, tall, big, unfriendly); environmental (fatigue and discomfort); use of outside experts or legal authorities; use of hostages (resources, issues, people); status (bring in the CEO, president, a senior manager); threats. Recognize these intimidation techniques for what they are—negotiating tactics. Respond accordingly. Don’t simply reciprocate with intimidation of your own, negotiate. See 'Emotional Outbursts.'
The introduction of surprise issues, tangential to the negotiation, can act as a smokescreen and slow down a negotiation. They often provide one side to the negotiation more time to reconsider their position prior to making a final agreement.
A viewpoint, idea, matter, problem, topic, or concern that is to be discussed, disputed, decided, exchanged, traded, agreed to, or resolved.
The best defense against an expert is getting your own expert. "For every expert, there is an equal and opposite expert."
The less a seller tells the buyer about their costs, the better off they are. The more the buyer knows about the seller’s costs and profits, the better their negotiating position. With respect to cost data, what is good for one is generally bad for the other. Sellers should start their negotiation on the basis that cost and pricing methods are nobody’s business but their own. A buyer is well advised to insist that part of the price paid is access to full cost and production visibility. They have the right to know what they are buying and why the price is right. See "Price Breakdowns."
"You've got to do better than that." This puts pressure on the other party without elaborating on "how much better." Often this tactic is used by a participant to test the limits of the other party.
When someone gives you a "last and final offer," don’t accept it at face value. Test it. It could be they are simply asking you to play "chicken" to test your resolve. When you are given a last clear chance to take a final offer or risk the consequences, you are in this "chicken" situation. You can usually keep talking. But not always!
Let the other side "discover" secret information that will change their perceptions or expectations. For some reason humans trust what we learn about the other party by coincidence more than what the other party actually is telling us about themselves. See "Planted Information."
The bottom of the range of acceptable outcomes is called your Least Acceptable Result. The highest point in the whole range of potential outcomes at which you expect to meet all of your goals is called your Maximum Supportable Position. See "Settlement Range."
People prefer to make their lives easier. There is nothing new or brilliant about this least effort principle, but it is quite useful in a negotiating context. People would rather say "yes" to a possible deal than complicate their lives by negotiating longer for a better deal. Buyers don’t really want to look for new sources if they can find reasons to stay with old sources. Neither party to a negotiation wants to endure the stress of further negotiation or the work it takes to start over again with someone else. What’s really important is the party that is willing to go beyond "least effort" gains significant negotiating power.
Both Buyers and Sellers often ask for more than they need. Their intention is to lower the expectations of the other party and gain a concession at the start of the negotiation without having to make a concession in return. Opening offers should always be justified with reasons and/or documentation. This initiates the dialogue of the negotiation that is essential to a satisfactory outcome. Don’t be ridiculous—see "Extreme Offers." Understand that there are many cultural aspects to this issue. The cultural background of each participant often dictates how extreme opening offers are. Learn to adjust your negotiations accordingly.
A negotiation where the settlement is less optimal for both parties. Both parties fail to discover and maximize opportunities to capitalize on common interests. A Lose-Lose negotiation.
A negotiator suspects the other negotiator is lying and retaliates with lies of their own. A negative use of "Quid-Pro-Quo."
An ethical test. Would you be completely comfortable if your actions and statements during this negotiation were printed in full on the front page of the local newspaper or were reported on the news? See "Front Page Test."
Negotiators often find it useful to limit their own authority. This provides opportunities for a negotiator to gather information, test the other side’s positions, and explore potential concessions prior to being pressured into making a decision. See "Mandated Authority."
Limits can involve time, money, authority, capacity, or expertise. "I can’t agree to anything longer than 90 days." "We only have $$$ to spend." (See "Bogey.") "I don’t have the authority to sign this." Limits provide opportunities for discovery. Options that might be available considering your limits. Limits can be real or imaginary.
Make your agreement contingent upon the other side agreeing to another, maybe unrelated issue. See "Asking in Return" and "Tying A String."
Don’t dwell on your own poor negotiating position—your pressures. Remind yourself that the other side also has pressures. Turn your attention to their pressures, not yours.
When negotiators offer trade-offs or concessions to capitalize on different magnititudes of preference. You prefer an office with windows; the other person prefers a large office. So you take the small corner office with windows and the other person takes the large center office with no windows. See "Circular Logrolling" and "Reciprocal Logrolling."
A negotiation where the settlement is less optimal for both parties. Both parties fail to discover and maximize opportunities to capitalize on common interests.
Buyers often start demanding low prices, or stating that they only have this to spend, just to test the flexibility of a seller and to set the seller’s expectations.
Some sellers are experts in hiding things. This maneuver starts by offering products or services at a very low price relative to competition. Once they gain agreement with the pricing parameters, the person low-balling will reveal hidden costs and state that these are not part of the deal.
A negotiator needs to be aware of signs of deliberate lying. It helps to evaluate the other side by asking a few discovery questions where you already know the answers. You can learn a lot by their reaction to these probes and the accuracy of their responses.
A negotiator starts off the negotiation by asking for a very large concession or favor from the other party—one that the other party is almost certain to refuse. When the request is refused, the negotiator makes a much smaller request, which was the option they wanted all along. Begin negotiations with high aspirations. A high aspiration creates a contrast effect so that the other party views any following request that is less extreme to be more reasonable. See "Aspiration Level" and "Rejection/Retreat Tactic."
Claiming that final approval can only be provided by a higher authority. Having "Mandated Authority" can be useful when there is a great deal of risk in the negotiation and you may discover reasons to try to delay or slow down the negotiation process. See "Limiting Your Authority."
The highest point in the whole range of potential outcomes at which you expect to meet all of your goals. The bottom of the range of acceptable outcomes is called your Least Acceptable Result. See "Settlement Range."
Each participant shares the negotiation pie based upon the various contributions and inputs they have made to the specific business situation. Those who have contributed more get more. Also known as the "Equity Rule."
Messages can be sent in a variety of ways and, if not careful, can lead to message distortion. Message tuning refers to modifying the message for each specific recipient to best suit the new recipient.
We tend to like people whom we perceive to be similar to ourselves. Negotiators are more likely to make concessions with people they know and like. Some negotiators get positive results by purposely making themselves "similar" to the other party: body posture, mood, verbal style, and dress. See "Similarity Attraction Effect."
The person with final authority disappears just as the parties reach agreement. Nothing can be done until he or she returns, and nobody is quite sure when that will be. The side that uses the "missing person" maneuver is buying time to see if they can get a better deal from someone else before they finalize the agreement. Meanwhile you wait for the missing person to return.
The other party will frame their appeal as being the "fair" or "right" way. When you disagree you run the risk of being "unfair" or "wrong."
A negotiation that involves more than two individuals.
Also referred to as "Association." We do business with a VIP in an important company. Pictures often are displayed of them shaking hands with important people. Plays upon the human tendency of wanting to do business with people who are well connected.
The distribution determined by the negotiation should be proportional to the needs of each negotiator.
The most a buyer is willing to pay is less than the least the seller will accept. There is no "overlap" of acceptable outcomes. Each party’s BATNA provides a better result than reaching agreement. See "Positive Bargaining Zone."
To confer, bargain, discuss, or exchange issues or matters with another with a view to make arrangements, settle differences, resolve problems, or reach agreement on any subject of common concern.
Bringing new information, new benchmarks, or new specifications into the negotiation—can sometimes help bring the parties closer together and can create better outcomes.
The introduction of a new issue that has not been discussed. Sometimes used to throw the other side off balance.
New people are introduced into the negotiation that then change the rules or modify what has already been agreed to. Can also be used to help break a Deadlock or Impasse.
Ask for one last small concession just before signing. There is a strong desire by the other party to grant this final concession just to get the agreement finalized. Nibbling also happens after agreement has been reached. New issues come up, changes are needed, and new people become involved. Each provides an opportunity for someone to "nibble" on the agreement.
Asking for "just one more thing" after both parties are presumed to be in agreement. See "Nibbling."
Refusing to make a decision or come to an agreement because you are not allowed to. When you limit your own authority you gain flexibility in the negotiating process.
Much research has been done that demonstrates that nonverbal communication may be more significant than verbal communication. In one study, 35% of the message in conversations was conveyed by the spoken word while the other 65% was communicated nonverbally. In the Albert Mehrabian study, conducted at UCLA, the breakdown was as follows: 7% of the meaning is derived from the words spoken; 38% from tone of voice, loudness, and other aspects of how things are said; and 55% from facial expressions and body language. There is much debate on this subject and the percentages, but most agree that how things are said is often more important than what is said.
A negotiator starts off the negotiation by asking for a very large concession or favor from the other party—one that the other party is almost certain to refuse. When the request is refused, the negotiator makes a much smaller request, which was the option they wanted all along. Begin negotiations with high aspirations. A high aspiration creates a contrast effect so that the other party views any following request that is less extreme to be more reasonable. See "Aspiration Level" and "Rejection/Retreat Tactic."
Seldom is there a negotiation where only two parties influence the outcome. Each participant in a negotiation has a host of "organizational" stakeholders who, while not physically at the negotiating table, impact the outcome of the negotiation. They include work associates, executives, managers, the finance and legal departments, engineers, manufacturing, etc. etc. etc. Anyone that is impacted by the results of the negotiation is a stakeholder that must be considered. A skilled negotiator will address the organizational needs and organizational pressures on both sides of the negotiation. They impact the outcome of the negotiation and have a large part to play on the long-term success of any agreements.
Provide the other side with too much information or make too many requests.
It is a mistake to negotiate issues one at a time or focus your negotiation on a single issue. There are generally several dimensions and several issues at play in any negotiation. Wise negotiators explore all the issues and dimensions of a negotiation to find trade-off areas and ways to enhance the ultimate agreement for all parties. Creative trade-offs between the different assets, needs, and preferences each party has are diligently examined to find ways to build new value.
Insert items/issues that are relatively unimportant to you into the negotiation and treat them as "essential." Use these items as trade-off concessions to gain agreement on items you really do value. See "Straw Issues."
It is a mistake to negotiate issues one at a time or focus your negotiation on a single issue. There are generally several dimensions and several issues at play in any negotiation. Wise negotiators explore all the issues and dimensions of a negotiation to find trade-off areas and ways to enhance the ultimate agreement for all parties. Creative trade-offs between the different assets, needs, and preferences each party has are diligently examined to find ways to build new value.
When a negotiator makes an outlandish initial request, they are more likely to secure agreement to a subsequent, smaller request. This is based upon principles of perceptual contrast. If a person lifts a heavy object, sets it down, and then lifts a light object, the person will perceive the light object to be much lighter than it actually is. An irrational negotiator who calms down following a wild display of emotion may get what they want. See "Door-In-The-Face Technique."
Negotiators often approach a negotiation with their focus on dollars, goods, or services—the tangible aspects of the bargain. Good negotiators realize there are intangible factors, personal in nature, that also impact a negotiation. These personal factors are sometimes hard to identify, unless your relationship with the other party is very good. You will have a more productive negotiation if you invest some time to get to know the other person better and understand some of their personal motivations.
There are generally several dimensions and several issues at play in any negotiation. Wise negotiators explore all the issues and dimensions of a negotiation to find trade-off areas and ways to enhance the ultimate agreement for all parties. Creative trade-offs between the different assets, needs, and preferences each party has are diligently examined to find ways to build new value. When the pie is successfully expanded, both parties leave with new value that was created purely from the process of negotiating.
Used to refer to a negotiation where the resulting agreement "divides the pie" with each participant taking their share. Since there is a fixed "pie" what one party gets comes at the expense of the other party. In a broader perspective, every negotiation has a distributive component. Negotiations referred to as a "Win-Win Negotiation," "Both-Win® Negotiation," "Value Creation Negotiation," or "Integrative Negotiation," all create new value (i.e. a larger pie), but each ultimately ends up with a distributive event that determines how the pie is sliced. Generally it is not 50-50. See "Distributive Negotiating."
One party tells the other that, for planning purposes, "just give me a rough idea of what this will cost." They emphasize that the estimate need not be exact. "Don’t worry, we won’t hold you to it but we must have some idea of what we are getting into." Trying to be helpful, you fall into the trap. Instead of being careful in your calculations, you make a quick estimate, generally on the low side because that is what they think they want to hear. Then, later when a formal quote is requested, you suddenly realize that the "planning purpose" number has become an anchor point in the negotiation. Recognize that a "planning purpose estimate" is likely to be more binding than it looks.
Let the other side "discover" secret information that will change their perceptions or expectations. For some reason humans trust what we learn about the other party by coincidence more than what the other party actually is telling us about themselves. See "Leaked Information."
Showing emotion provides information to the other side regarding your feelings regarding issues and can weaken your negotiating position. Maintain self control and resist the display of any emotion.
A viewpoint or need that is defended by a negotiator.
The most a buyer is willing to pay is greater than the least the seller will accept. This "overlap" becomes the positive bargaining zone where agreement is possible because each party can achieve a result that is better than their BATNA. See "Negative Bargaining Zone."
Information regarding yourself and the other party(s) provide power to a negotiator. Collect and assemble information based upon what you know about each party’s BATNA, positions, interests, needs, priorities, and key facts.
Knowledge regarding yourself and the other party(s) provide power to a negotiator. Collect and assemble information based upon what you know about each party’s BATNA, positions, interests, needs, priorities, and key facts. The more you know about the other person’s costs, organization, business standing, and product the better you can negotiate. The more you know about the negotiating process the more power you have.
Support your negotiating position with verifiable information, documents, policies, regulations, and standard terms and conditions. This is a source of negotiating power and tends to hypnotize the other party into compliance. If you find legitimacy being used against you, test it. These things are more negotiable than they appear to be.
See "Power of Legitimacy."
If you have something printed (i.e. price sheet, purchasing policy, employment policy, discount policy, rental documents, regulations, legislation, etc.) it appears to be more legitimate than if you only talk about the policy. This gives you more negotiating power. See "Power of Legitimacy."
Humans cherish security. We have a desire to avoid risk wherever possible. A negotiator who is willing to accept a greater burden of uncertainty with respect to reward or punishment enhances their negotiating power.
People talk too much. The less the other person knows about you, the better off you are. The more you know about them, the stronger your bargaining power. What you say and what you show may be used against you if it reveals your weaknesses. How much you choose to reveal is a matter of business judgment. Less is better than more in most cases.
Time and patience are sources of negotiating power. The party most constrained by time limits provides their opponent with a base of strength. The party most willing to work hard gains power.
Information given to another party that tends to modify their expectations prior to entering the actual negotiation. A salesperson sends a news report on price increases to pre-condition a buyer. The buyer, having read the news report, prepares themselves for a big jump in price. The buyer is relieved to see only a minor price increase. "It could have been a lot worse.”
Formal agreements that address specific issues and obligations, but are intended to be replaced by a final agreement because they do not address or resolve all of the issues being negotiated. Often used as an interim agreement to keep the talks moving, and show the resolve and commitment of the parties to continue to work towards full agreement. See "Agree in Principle."
People are generally predictable animals. For most of us there is a very good chance we will do tomorrow what we did yesterday. Look at a person’s history. When negotiating with someone, a careful study of their habits, temperament, opinions, and values will reveal useful patterns. The personality traits of a person tend to guide their behavior. People react to frustration and stress in recognizable patterns. Some behave with patience, humor, and creativity. Others are defensive and unrealistic and make excuses, bury facts, forget, blame others, become hostile, withdraw, or become emotional under stress. If we know what they did yesterday, we can make good assumptions about the defense they will use tomorrow. Values do not change from day-to-day. A person with a reputation for taking risks will be predisposed in that direction in the future. A person who places great value on status will go on searching for status. People act in accordance with what they believe to be in their own self-interest. They generally believe their behavior to be rational and wish to protect their self-image. As an outsider, you may think certain people wrong, but recognize that their behavior makes sense from their viewpoint. Ask questions, listen, speak rarely, observe, and be nonjudgmental. If you have the patience to listen, they will reveal their self-image to you. In negotiating knowledge is power.
Sellers should never give price breakdowns. Buyers should always try to get price breakdowns. The less a seller tells the buyer about their costs the better off they are. The more the buyer knows about the seller’s costs and profits, the better their negotiating position. With respect to cost data, what is good for one is generally bad for the other. Sellers should start their negotiation on the basis that cost and pricing methods are nobody’s business but their own. A buyer is well advised to insist that part of the price paid is access to full cost and production visibility. They have the right to know what they are buying and why the price is right.
See "Reciprocity Principle."
A principled negotiation is an interest-based approach to negotiation that focuses primarily on conflict management and conflict resolution, and hopefully leads to a mutually shared outcome. This approach is primarily used by mediation practitioners and academics, although some attempt to apply this approach to commercial or business negotiations.
The pursuit of individual self-interest leads to collective disaster.
In every negotiation the potential exists for the parties to improve their joint satisfaction at no loss to either. The more intense the search for joint improvement, the more likely people will be to find superior solutions. This process of joint improvement is called problem-solving bargaining.
One party to a negotiation declares that certain issues are sacred and are not negotiable. If the issues really are not sacred, but are only positioned as such for strategic purposes, these issues are called pseudo-sacred issues.
A Chinese term that means "goodwill." A person accumulates Quanxi by networking with people, doing favors for associates, and performing well in their business relationships. Quanxi can be thought of as a "savings account of goodwill" accumulated from all of your business relationships. When a favor or introduction is needed, you can spend some of your Quanxi to accomplish what you need. Quanxi is a valuable asset that needs to be protected.
Tit-for-Tat. A negative use of Quid-Pro-Quo is when a negotiator suspects the other negotiator is lying and retaliates with their own lies.
Ask for a concession just before signing. See "Nibble."
A negotiator may act crazy or irrationally and make a big scene. Sometimes the other side will give in to their demands simply to get the crazy person to stop doing what they are doing. See "Emotional Outbursts."
When the parties to a negotiation establish a climate of trust, mutual understanding, and friendship. With rapport generally comes a willingness to share information. Via this information-sharing process more creative agreements are developed.
Once the other party establishes an offer, or anchor point, it is wise to immediately make a counter-offer. This minimizes the importance of the initial anchor point. This also signals your desire to negotiate in that you do not accept the initial offer. Do not adjust your BATNA or target based on this initial anchor. Instead focus on what information you have that might shed light on the other party’s BATNA or desired target.
Using reverse psychology to get someone to agree to move from a firm position. This technique is based upon the human need to assert one’s individual freedom when it is challenged. A negotiator achieves the desired "reaction" from the other party by paraphrasing their negotiating position in a way that makes it sound more extreme than it actually is; then inferring that they do not personally have the power to change their position. This negotiating approach sometimes results in a compromised position. The other party needs to prove they have the power to modify their position and that their position is not "fixed in stone." See "Boomerang Effect."
Two parties to a negotiation exchanging concessions. See "Circular Logrolling."
Making similar or like exchanges of information, concessions, introductions, money, or something else of value that are given by one party to another party. Think of: "Tit-for-Tat," or "You scratch my back and I’ll scratch your back," "I did this for you now you owe me." In general we feel obligated to return in kind what others have offered or given to us.
A deliberate attempt to change a negotiating point, divert an argument, mislead the other side, or leave a false trail.
Negotiators can use reinforcement to shape the behavior of the party they are negotiating with. Reinforce behavior immediately after it occurs—don’t delay reinforcement. Withhold reinforcement from any behavior you do not want the other side to use—just don’t respond. Forms of social reinforcement are simple, nonverbal gestures such as nodding, smiling, and eye contact. More direct reinforcements are statements such as: "I like that." "This could work." "That is interesting."
A negotiator starts off the negotiation by asking for a very large concession or favor from the other party—one that the other party is almost certain to refuse. When the request is refused, the negotiator makes a much smaller request, which was the option they wanted all along. Begin negotiations with high aspirations. A high aspiration creates a contrast effect so that the other party views any following request that is less extreme to be more reasonable. See "Aspiration Level" and "Make An Offer They Must Refuse."
Once agreement has been reached, time, performance, and environment become critical components impacting the agreement. Negotiators must continually review agreements in light of what has happened since the agreement was struck. As time passes, performance progresses, and the environment in which the agreement was originally made changes, so should the agreement. This is the time to renegotiate the agreement to bring it back into balance with the original intent.
The price that is the least favorable point at which one will accept a negotiated agreement. For a seller it is the least amount they would be willing to accept. For a buyer it is the maximum amount they would be willing to pay. Also known as the "walk away" point in the negotiation.
The final agreement will fall somewhere between each party’s reservation point. See "ZOPA."
Set up sellers or buyers to compete against one another. In a reverse auction most participants can see the latest price they need to beat. Today many companies use Internet-based reverse auctions.
In negotiation it is wise to ask yourself, "How would I feel if the other party did this to me?" If you conclude that you would not like it, it means the behavior in question may be regarded as unethical.
Also sometimes referred to as the "salami-slice strategy." Much like the "Divide and Conquer" process. Uses threats and alliances to overcome opposition. Using this tactic, an aggressive negotiator can eventually politically dominate the entire negotiation, piece by piece. In this fashion, the "salami" is taken in "slices" until the other side realizes (too late) that it is gone in its entirety. In political negotiations it includes the creation of several factions within the opposing political party and then dismantling that party from the inside, without causing the "sliced" sides to protest. In business negotiations this tactic is used to present problems or solutions in pieces so it is hard for the other side to get the big picture. See "Scrambled Eggs."
Face is the value a person places on his or her public image, reputation, and status relative to other people involved in the negotiation. Direct threats to face in a negotiation include making ultimatums, criticism, challenges, and insults. When negotiating in a group environment (i.e. there is an audience), "saving face" often becomes very important to a negotiator. This can result in the negotiator moving away from any cooperative efforts into competition to protect their position. Often an impasse or lose-lose outcome is the result. Saving face is an important cultural component in many negotiations.
Small talk, the development of personal, social connections unrelated to the negotiation. This results in better rapport, trust, and friendship with the other person. Non-task related contact with others involved in the negotiation helps establish stronger relationships which in turn has a positive effect on the negotiation process and builds a foundation for future negotiations. Research shows that schmoozing results in more profitable business as compared to deals when people simply get down to business. Parties are less likely to reach an impasse, more alternatives are created, and the parties become more optimistic about future work together. Schmoozing is a wise investment in the relationship that can pay off big.
In business negotiations this tactic is used to present problems or solutions in pieces so it is hard for the other side to get the big picture. See "Salami Tactics."
The space between the buyer’s estimate of the seller’s minimum and the seller’s estimate of the buyer’s maximum. See "BATNA."
All negotiations reach a point where the gains of one party are won at the loss of the other. This rationing process is called share bargaining.
Having a shared enemy or a shared problem can unite people and build trust. Having a common goal or a common problem dilutes the perception that the interests of the parties are completely opposed and helps establish a higher-level relationship between the parties that motivates them to agree rather than disagree.
This is someone who works for one side of the negotiation and is used to artificially stimulate interest, support a price, create competition, to test a low offer, or to demonstrate demand and interest. The other side is not aware of the Shill’s function and they use this false information and observations of the Shill’s actions to modify their negotiating approach.
When you make an offer, take a position, express an opinion, or ask for something the next thing you should do is "Shut Up." It is human nature to expect a reaction, but if the other party remains silent, there is a tendency to offer more information, make a concession, or fill in the void the silence makes by talking more. This permits the silent participant to discover more information, and understand more of the other party's negotiating strategy or negotiating parameters without revealing information regarding their position.
Sometimes side deals can increase the size of the pie for negotiators. Multi-party, multi-issue negotiations provide opportunities for side deals between various participants that act to create new value or resolve issues that pose threats to the main agreement.
We all like responses (either verbal or non-verbal) when we make an offer. When we take a position, express an opinion, or ask for something we expect a reaction. If the other party remains silent, there is a tendency to offer more information, make a concession, or fill in the void the silence makes by talking more. This permits the silent participant to discover more information, and understand more of the other party's negotiating strategy or negotiating parameters without revealing information regarding their position.
We tend to like people whom we perceive to be similar to ourselves. Negotiators are more likely to make concessions with people they know and like. Some negotiators get positive results by purposely making themselves "similar" to the other party: body posture, mood, verbal style, and dress. See "Mirror and Match Technique."
This term originated from analysis of negotiations conducted via email. There is a tendency for people involved in email negotiations to attribute sinister (evil) motives to people whom they have not formed any social relationships. Participants in email negotiations are more likely to suspect the other person of lying or deceiving them, relative to negotiations that are conducted face-to-face where some degree of trust can be developed. This is why Schmoozing is important when one is conducting an email-based negotiation. Attempt to form some social connections as a way to overcome this sinister attribution bias that may be impacting your e-negotiation.
Used for complex, multi-issue negotiations, it is often helpful to divide up the negotiation into its various components; come to agreement on the simpler issues; and then tackle the tougher issues. This can help pave a way to agreement. During the course of coming to agreement on the simpler issue, relationships improve, and communication-understanding improves. This sets the stage for a more productive process when the tough issues are tackled. See "Fragmentation," "Divide And Conquer," and "Salami Tactics."
Schmoozing, the development of personal, social connections unrelated to the negotiation. This results in better rapport, trust, and friendship with the other person. Non-task related contact with others involved in the negotiation helps establish stronger relationships which in turn has a positive effect on the negotiation process and builds a foundation for future negotiations. Research shows that schmoozing results in more profitable business as compared to deals when people simply get down to business. Parties are less likely to reach an impasse, more alternatives are created, and the parties become more optimistic about future work together. Schmoozing is a wise investment in the relationship that can pay off big.
Used to change the subject, cloud an issue, or delay a decision. A new person may be temporarily introduced into the negotiation. A new issue is brought up that must be investigated. Suddenly the scope of issues is expanded to include broader issues. Significant new information is introduced that must be analyzed.
The more opposing parties develop intersecting spheres of mutual interest and interdependence, the more bargaining power they are likely to exert. The range of possible outcomes where both parties are satisfied with the agreement. This generally is the overlap area between each party’s acceptable low and high range. It also encompasses interdependency created by personal relationships and shared respect—a blending of personal and business relationships. See "Bargaining Zone" and "ZOPA."
To put a positive "spin" on your communications with another party by aligning the topic being discussed with the other party’s particular interests or needs.
Offer to agree on a halfway position. Make equal concessions to settle the difference.
Adopting a negative, demanding emotional style of negotiating. Using hostility and threats to demonstrate an unwillingness to move away from a stated position. A negotiator often is compelled to concede or give in just to stop an irritating squeaky wheel. It’s just not worth it to hold their position.
Sometimes walking out or forcing an impasse (deadlock) can be done for strategic purposes. When used as a strategy to test the other side's resolve, or to buy yourself more time, it is important to plan in advance how you will reopen the negotiation at a later date.
Imbed items or issues that are relatively unimportant to you into the negotiation and treat them as "essential." Use these items as trade-off concessions to gain agreement on items you really do value. Asserting things that are not true or taking positions or making an offer that is ultimately withdrawn after the introduction of the issue has impacted the other side’s position. Used like the "Bluff" to test the other party. It works when you agree to forget about some of your real interests in exchange for the other party forgetting about some of their "straw issues" or fictitious interests. See "Decoys."
Economic principles assert only future costs and benefits should be used to make decisions. Every negotiator should be aware that humans tend to remember past costs that have been spent or invested. This history and memory creates a bias and influences behaviors during a negotiation.
The introduction of surprise issues, tangential to the negotiation, can act as a smokescreen and slow down a negotiation. They often provide one side to the negotiation more time to reconsider their position prior to making a final agreement.
One party to a negotiation adds items to a negotiated package or deal to enhance satisfaction of the other party. Sometimes used as a "deal closer" (e.g. and we will toss this in at no charge). See "That’s Not All Technique."
Gives the other party only two options—accept this or end the negotiation. This is a very tough negotiating tactic and often leads to resentment and hostility. This approach certainly removes any opportunity for Both-Win® value creation. When confronted with a Take-It-Or-Leave-It, a good negotiator will ask for consideration. This tests the resolve of the party and explores opportunities to move away from this firm position. Techniques such as—"What if?" "Would you consider?" "How much better?" "It shouldn’t apply in this case." "Who can change the policy?"—often open a pathway into a more productive negotiation. See "Doorknob Price."
See "Aspiration Point."
Separate the person from the problem. Task conflicts are depersonalized. The analysis and problem-solving process aimed at a task can enhance relationships and lead to better solutions. On the other hand, personal conflict often threatens relationships as individuals become defensive and resentful. Creativity is stymied when personal conflict is present.
One party to a negotiation adds items to a negotiated package or deal to enhance satisfaction of the other party. Sometimes used as a "deal closer" (e.g. we will toss this in at no charge). See "Sweetening the Deal."
You've got to do better than that. See "Krunch."
Threatens extreme action if the other side does not agree. Threat is implicit in every negotiation, whether it is expressed openly or not. There is always a possibility of deadlock and if talks fail both parties expect to lose something. Threats also create hostility and may have unexpected consequences. If you are going to use a threat, take the following precautions: 1. Threats have to be credible. The other party must believe that the threat will be carried out. If you threaten but fail to follow through, you lose credibility and authority. A threat is likely to be believed if the threatening party has made good on previous threats. 2. Threats need to be proportional to the problem at hand. If you want a small concession, don’t make a big threat. 3. Before threatening, be sure you have the resources to follow through and make sure your organization is willing to back you in taking the necessary action. 4. Threats may win momentary concessions, but they leave a residue of anger. The threatened party may get revenge later. 5. Threats can break up long-term partnerships or create distrust between parties that have spent years building a relationship. 6. Threats have a way of getting out of control and sometimes have have consequences that the person delivering the threat may not intended.
There is a tendency to focus on your own time pressures rather than on the pressures the other side also has. It could be that you have common time pressures, or that your time pressure is actually transferred to the other side because if you don’t come to agreement before time is up, they also lose out on the opportunity to make a deal. Be careful as the deadline approaches. Negotiators tend to make more concessions and bigger concession the closer the deadline. If you find time pressures working against you, find out what can be done to relieve the time pressure. Many time pressures are self-imposed. See "Deadlines."
Outbursts often throw the other side off balance. See "Emotional Outbursts."
Making similar or like exchanges of information, concessions, introductions, money, or something else of value that are given by one party to another party. Think of: "You scratch my back and I’ll scratch your back," "I did this for you now you owe me." See "Reciprocity" and "Quid-Pro-Quo."
The total cost approach is a powerful negotiating tool for any seller under price pressure. Use the total cost approach to defend a firm price. If price appears to be the sticking point, do what Albert Einstein suggested when he said, "No problem can be solved at its own level." Direct your negotiation towards total cost instead of price. The price of what is being sold is only one component in the total cost of ownership. The process of identifying all of the components that go into "total cost" provides a fertile environment for relationships to build between the negotiators and for each side to uncover potential Both-Win® opportunities that are not focused on the single issue of price.
One party concedes or yields on issues. While it would appear a concession by one party would bring the participants closer to agreement, sometimes a concession can do just the opposite. Developing a concession strategy is an important part of any negotiation. See "Concessions" and "Log Rolling."
Suggest a solution or option to see if the other side "bites." Exploring potential opportunities or alternatives. See "What If?" and "Fishing."
Determining if a person is lying by asking a variety of questions, all designed to validate the same information or fact. When inconsistencies surface you can infer the person is lying. Liars find it very hard to remain perfectly consistent in all aspects of a lie.
A tendency for negotiators in multi-issue negotiations to underestimate the number of options that are available. See "Brainstorming."
Make your agreement contingent upon the other side agreeing to another, maybe unrelated issue. See "Ask for Something in Return" and "Linking."
Requires a group’s decision to be unanimous—as opposed to a majority vote decision. Unanimity forces a group to consider a broader range of alternatives to expand the pie and create mutually beneficial trade-offs and assure the interests of all group members are satisfied. Studies indicate that groups operating under a unanimity rule reach more efficient outcomes than groups operating under majority rule.
One reason some negotiations fail is because they get stuck on a single issue. Having flexibility to remove a troublesome issue from a negotiation can pave the way to agreement.
Letting individuals express their frustrations, disappointment, anger, or feelings regarding an issue or event helps relieve tension in a negotiation and helps create a bridge to agreement. When a negotiation becomes heated, allow time for participants to vent. This often helps get a negotiation back on track.
Sometimes walking out or forcing an impasse (deadlock) can be done for strategic purposes. When used as a strategy to test the other side’s resolve, or to buy yourself more time, it is important to plan in advance how you will reopen the negotiation at a later date.
When negotiators walk away from the negotiation by rejecting all terms offered, even though the offered terms are better than their BATNA. This often happens due to emotions, ego, or sometimes, just a bad calculation.
People don’t like to waste their energy. Once they have worked on something, they want the effort to pay off. The more work they have done in a negotiation, the more they want agreement. Once a negotiator has invested a great deal of time, effort, emotional equity, and money in a negotiation, the more desperate they are to close a deal.
Suggest a solution or option to see how the other side responds. Exploring potential opportunities or alternatives. This technique is a way to get information from the other party that ordinarily might not be given. Good "What If?" questions provide insights into the other party’s business practices and motivations. These questions can open up new avenues of thought for both parties and create opportunities for agreement. See "Trial Balloon" and "Fishing."
There are generally several dimensions and several issues at play in any negotiation. Wise negotiators explore all the issues and dimensions of a negotiation to find trade-off areas and ways to enhance the ultimate agreement for all parties. Creative trade-offs between the different assets, needs, and preferences each party has are diligently examined to find ways to build new value. When the pie is successfully expanded, both parties leave with new value that was created purely from the process of negotiating. See "Both-Win®" and "Expanding the Pie."
An emotional, physical, and verbal reaction to an offer, then silence to see how the other side may modify their offer. See "Flinch."
This feeling of remorse occurs when a negotiator sets their target or aspiration (goal or objective) too low at the start of the negotiation and the other party immediately agrees. Rather than being satisfied with the outcome of the negotiation, the remorseful negotiator feels: "I could have done better"; "I left money on the table."
Persistent wooing pays off in negotiations—provided it is done without conveying a sense of desperation. People prefer to do business with others who demonstrate that they want and appreciate the business. Tell the other party again and again how much you want to please them. Tell them how much you want to do business with them and how it will benefit them. Quantify the benefits for them. Woo them. Tell them why their decision to do business with you will be a wise one. Address their interests, not yours.
A buyer finds out what a seller will take by offering to consider a somewhat lower quality item, and then tries to buy the higher quality item for the lower price.
Part of planning your negotiation strategy. Worth analysis is different than cost analysis. In worth analysis, all economic and psychological factors are considered. Worth is the power to satisfy wants. Its value depends upon what is considered useful or desirable to a person in a particular situation. Cost is only one of the many elements that are considered in assigning worth. If a special component is required to keep a manufacturing line running, and a one-day delay costs $2,000, a buyer is justified in paying up to, but not more than, $2,000 for the component if the buyer can save a single day of operations. It makes no difference if the part costs $300 or $1.
Suggest a solution or option to see how the other side responds. Exploring potential opportunities or alternatives. This technique is a way to get information from the other party that ordinarily might not be given. Good "Would You Consider?" questions provide insights into the other party’s business practices and motivations. These questions can open up new avenues of thought for both parties and create opportunities for agreement. See "Trial Balloon" and "Fishing."
Puts pressure on the other party without elaborating on "how much better." Often this tactic is used by a participant to test the limits of the other party. This tactic is also known as the "Krunch."
Zone Of Possible Agreement describes the range of possible outcomes where both parties are satisfied with the agreement. This generally is the overlap area between each party’s acceptable low and high range. See "Spheres of Mutual Interest" and "Interdependence."
THE PROGRAM WAS GREAT! MY SEMINAR LEADER AND THE STRUCTURE OF THE COURSE KEPT ME CONSTANTLY STIMULATED. I NOW AM BETTER PREPARED TO GO INTO AN IMPORTANT NEGOTIATION MEETING AND STAY IN CONTROL, WHILE FINISHING THE MEETING SATISFIED.
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CASE MANAGER at THE JACKSON LABORATORY
IF YOU HAVE THE TRAINING BUDGET AND TWO DAYS TO SPARE, YOU'LL STRUGGLE TO FIND A PROGRAM MORE FAR-REACHING, ON-POINT, AND INSTANTLY IMPLEMENTABLE.
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BUSINESS DEVELOPMENT MANAGER at THE M.K. MORSE COMPANY
EXCELLENT COURSE, BRINGS MORE CONFIDENCE IN MY ABILITY TO NEGOTIATE. I THINK THIS COURSE IS A MUST FOR ALL EMPLOYEES WHO DEAL WITH CUSTOMERS.
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CHIEF ENGINEERING MANAGER at EXXONMOBIL
THIS WAS VERY EFFECTIVE WITH A STRONG FOCUS ON BOTH-WIN NEGOTIATING.
Kathleen L.
SENIOR ANALYST at BLUE CROSS/BLUE SHIELD OF MICHIGAN
THE KARRASS CLASS WAS THE SINGLE BEST TRAINING CLASS/SEMINAR I HAVE EVER ATTENDED. EVERY TIME WE DID AN EXERCISE IT TAUGHT YOU WHAT TO DO DIFFERENTLY NEXT TIME. THANKS.
Kim C.
PROCUREMENT at AMERICAN EXPRESS
THIS PROGRAM HAS GREATLY INCREASED MY CONFIDENCE AND ABILITY TO NEGOTIATE FOR MYSELF AS WELL AS MY COMPANY.
LaDonna E.
SENIOR STRATEGIC BUYER at HALLMARK
THE NEGOTIATING CLASS WAS VERY INFORMATIVE. THE INSTRUCTOR PROVIDED AN INSPIRATIONAL MESSAGE THAT CAN BE APPLIED TO EVERYDAY LIFE.
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INTERNATIONAL SOURCING at FMC TECHNOLOGIES
WE NEGOTIATE EVERY DAY OF OUR LIVES, BOTH PERSONALLY AND PROFESSIONALLY. THIS COURSE DEFINES THE PROCESS AND PROVIDES TECHNIQUES TO ACHIEVE SUCCESSFUL RESULTS.
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VICE PRESIDENT at GE
PRIOR TO THIS CLASS I FELT AS THOUGH I WAS GETTING EATEN ALIVE BY INTERNAL NEGOTIATIONS WITH SALES REPS. NOW I FEEL PREPARED TO CHALLENGE WHAT THEY ARE SAYING AND BET TO THEIR REAL NEEDS.
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PLANNER at HONEYWELL
MANY PEOPLE FAIL TO ACHIEVE THEIR POTENTIAL BECAUSE THEY DON’T SEE THE OPPORTUNITIES TO NEGOTIATE A WIN/WIN AGREEMENT WITH THEIR COLLEAGUES. THIS CLASS IS AN EYE OPENER TO THIS DYNAMIC..
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