Negotiating Techniques

8/2/2019 Negotiating Techniques

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IXNEGOTIA TINGTECHNIQUES-ll. , . . . . ,. . . .

~S When we have thoroughly. prepared-when we have probed the: E assumptions existing on alI sides-and, most particularly, when weE - - < have translated our knowledge into an understanding of needs,~ then we have mastered the "pieces" in negotiation. .S 2 How we deploy them. on the board is a matter-of technique-.

E - - < strategy and tactics.~ . Those two words-strategy and tactics-are clearly differentiatedIn definition. In practice,however, it is often hard to tell

: particular move is a bit of strategy or a tactic. In fact, the.strategem" seems to combine the idea of strategy and tactic.So .in.this chapter we win consider strategy. as comprlsinl?tec~lUques used in the actual process of negotiation. and tactics :isdevIcesused to implement the strategy.Many of .life's situations may likenedwhen


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110 TIlE ART OF NEGOTIATINGwhere we go, how fast we go-all are determined by certain definiteconditions: the tempo of the dance music, the partner, the othercouples, our mental state, the presumed mental state of ~he otherpeople, subconscious adherence to traffic rules and regulatIons, andso on. ..Our strategy, for example, may be to circle the outside of the

floor or it may be to penetrate to the center. The tactics we use-aparticular step or change of direction-are governed by that strategyand also by the conditions around us at that moment.The strategies set forth here are all designed to implement theNeed Theory, which we have discussed at some length.In studying the techniques of successful negotiation, we may

think of them as so many tools which we learn to use. The E~-cyclopaedia Britannica defines a tool. as "an implement or app~l-ance used by a worker in the treatment of the substances used Inhis handicraft, whether in the preliminary operations of setting .outand measuring the materials, in reducing his work to the reqUIredform by cutting or otherwise, in gauging it and testing its accuracy,or in duly securing it while thus being treated." .In this definition the phrases "preliminary operations" and "set-

ting out and measuring the materials" are analogous to what we? O in entering upon a negotiation. Our "preliminary operations"Include research, consideration of needs and assumptions, and pastexperiences in the area under survey, We seek to gauge or measurein advance the hopes and goals of our adversary and ourselves; andtheir relationship to the conflict and frustrations of the problembeing negotiated. During the course of the negotiation we employother "tools" to accomplish our aims.. The inexperienced "negotiator's strategy will be limited to a f~simple and o~vious devices. The expert negotiator, however, willemploy a v~nety of means to accomplish .his objectives. Thesemeans Will Involve "when" strategy Or "how and where" strategy.They may involve the use of an agent as welL':Wh~n" strategy essentially involves a proper sense of timing.

It IS easier to use in a negotiation when a new element enters thepicture rather than where all elements are static. But properly ap-plied, it can changea static situation into a dynamic. one. "Howand where" .s~tegy involves the method of application and thearea o~.application,


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112 THE ART OF NEGOTIATINGwithdrawal, reversal, .limits; and feinting. Here are a few examplesof these types of strategy. .

Forbearance ("waiting in haste"). Age is a great teacher of thisstrategy. It is seldom used by the young or the . isecure. Circum-.sta~ces.that warrant this strategy usually have elements that wouldordmanly tempt or provoke one to anger and impetuous action,However, f~rbearance, or the withholding of such action, will-beused when It offersa greater reward. The reverse of forbearance isthe "rashact." Your judgment and values determine whether for.bearance or acting immediately would be warranted.Th.eQuakers furnish an example. When members of a Quakermeetmg find themselves.divided On a question it is customary todeclare a period of SIlence.If the division still persists, the clerk

~~tpones~he qu~stion fo~another ti~e or a later meeting. Thisgo on mdefimtely until the question is resolved Forbearance._~h~ avoi~sa direct conflict and eventually achieves a settlement.f ranklm D. Roosevelt used to tell a story about the Chinese usco fl~rbearance,based OnJour thousand years of civilization. Twocoo res . hwere ar~mg eatedly in the midst of a crowd. A strangeref~ressed SUrpnsethat no blows were being struck His Chinesenend . la i d" .h .exp me, The man who strikes first admits that his ideasave gIVenout."KnOWingwhen t ton i h ThlOS op ISanot er element of forbearance.. e

sahesmhanhmustno.wwhen to stop talking. Theattorney must knoww en e as SUfficientl '. . '.. hibo k 1 Y cross-exammed the WItness Earlier 1 1 1 t ISin: .~~ re ate~ t~e story of the last tenant in the ~ld officebuild-wo~ld ~ netbatio~ was P!obably carried past the point where~tfacto hve h en.Wiseto stop. Benjamin Disraeli recognized thISrw en e said "Next t k .the t . ' 0 nowmg when to seize.an advant.age,mos Important thing' lie .advantage." In re IS to know when to forego anm!~P::.This strategy involves a sudden shift in method,argu-though it p:ach. The change usually is drastic and dramatic, al-be ushe;e:~n byn~t~lw~ys.beso. Sometimes, in fact, the change canof voiceduri s InsIgnIficanta sign as the alteration of the tonenegotiat' un.nga negotia~on. Where you have carried on the entireIon ma calm ev .the point W' .'. en VOICe,ne blowup can pfh",M"'IVPIIVhave ofte~ tr/~t;n Churchill illustrates this when hehended in the ~onri s;t.do~ the strategic truths: Io slmpe anecdotes, and they rank this

NEGOTIATING TECHNIQUES

my mind. One of them is the celebrated tale of the man who gavepowder to the bear. He mixed the powder with the greatest care,making sure that not only the ingredients but the proportions wereabsolutely correct. He rolled it up in a large paper spill, and wasabout to blow it down the bear's throat, but the bear blew first."Fait accompli ("Now what can you do?"). , This is a riskystrategy but it is often a temptation to use it. Itdemands that youact, achieve your goal against the opposition,. and ~hen.see whatthe other side will do about it. Those who employ this strategy

must make an appraisal of the consequences in case it sh~uld.proveto be a failure. An illustration of the unsuccessful application ofthis strategy was the attack by England, France, and Israel u~onEgypt during the Suez crisis. They acted without prior con.sultahO?with the United States and hoped to present the world WItha [aiiaccompli. The United States intervened, however, and forced themto abandon the attack and to withdraw. '

Bland withdrawal ("Who, me?"). An example of this strategyis the person who is caught red-handed bu~ who t~rns and says,"Who, me?" The following illustration, while not directly relatedto negotiation, is in essence similar to maneuvers that are fre~uen~ly ~encountered at the bargaining table. During the 1964 Presldenba11campaign, the press would attack Senator Goldwater .for somestatement he was alleged to have made. But Goldw~ter wou~dsa~that he had been misquoted, or that he nev~r had said anythmg 0the kind or that what he was accused of saymg had been taken outof cont;xt which altered the meaning altogether. However, thevery frequ~ncy of hIS use.of this strategy made it ~neffective~o allbut his most ardent admirers. The newspapers Just couldn t bewrong al l the time-or so a majority ofthe voters thought.A more successful approach is recorded in Boswell's Ltfe ofhi di ti hadamuel Johnson: A lady once asked him how IS IC onaryCome to define the word "pastern" incorrectly as the knee of ahorse. Instead of making an elaborate defense, Johnso~ at onceanswered "Ignorance Madam pure-ignorance." By refusing to de-fend an ~bvious error: he disa~ed his opponent and preserved thereputation of his dictionary as a.whole.' . .Apparent withdrawal ("the man who wasn't the~e':)..This stra-

t~gyis made up of a mixture of forb~arance, self-discipline, an~o:bttle deception. The aim istoconvmc.ey~ur opponent that}withdtawn,. but withouthis knowing .It, you


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114 .trol of the sit~ation. I used this strategy with a certain degree ofsuccess in litigation involving the Rent Commission of the C.ity ofNew York. The Rent Commission.had determined that a heanng bescheduled at a time that was arbitrary and would prove detrimentalto my client. The New York Supreme Court agreed that the sch~d-uling of the proposed hearing would be detrimental. However, 10-stead of granting an injunction, which had been requested, theCourt merely suggested to the Rent Commission that it shouldpostpone the hearing. In spite of the request of the Court, the Rent. Commission went ahead with the hearing. I attended this hearing,but before it began, I had the official 'stenographer take down .astatement for the record: "I warn everyone in attendance that thishearing is being held against the wishes of the Supreme Court; .1will see to it that the Court is so informed and I will follow thismatter through to its normal consequences. Moreover, I will notbe a party to this hearing at this time." Having made this state-ment, I stalked out of me room. My withdrawal apparently wascomplete. However, unknown to, the hearing officer of the Rent, Commission, an .associate of .rnine, remained in the hearing room.Seated with a group of witnesses that had been called, he was pre-pared to take over in the event that the Rent Commission chose togo ahead with the hearing. This strategy, fortunately, was effective.The person in charge of the hearing was unsure of how to proceed.He called the Rent Commissioner for advice and was told to ad-joumthe bearing. Thereafter the Commissioner was persuaded.

, that landlords are members of t he community, and important ones,, and that no one can be victimized without harm to everybody.

Rever~a1 ('~Y~~ can go forward, backward"). In this strategy,you act 10opposition to what may be considered to be the populartrend o~ goal. Bernard Baruch once said that people who makemoney 10 the stock market are those who are the first in and thefirst .ou.t. ~Y this he meant that you should buy when everyone waspes~ImlStic and sell when the prevailing atmosphere was optimistic.ThlS. strate?r may sound easy to execute, but in reality it is ex-C~d1OgIy difficult. Were it not so, we could all immediately becomench and powerful.Gertrude ~tein reversed a popular concept about Wall. Streetwhen she said that the money remains the same, it is merely the

pockets that change.New methods of communication have caused a reverse in many

TIIE ART OF NEGOTIATING NEGOTIATING TECHNIQUEStraditional negotiating roles. I once had ocAcasiont~ accloemIpaansle~. tri . to the mazon Jung .coffee purchaser on a buying np fm ti ti for the coffee. Heif he had any special method 0 ne~o ia mg much Ilaughed and said: "I no longer negotIate. I atmttn?bledshI 'nOWthema-1 d "The most remo ehave to pay." He exp ame , . The et the latestzon that gather coffee have shortw~e ~dlOS. The~ ~hen add theprices from the New York Coffee xc ange., h d tell thecost of transportation; allow a .,~mall handling c arge, anbuyer which price he ~ust pay. d W II the left.wing AmericanIn the days f0110WI~g W ~rl a~ ork 'olitics. The ALP hadLabor Party was promI~ent 10 New. Brobkl state senator, andformed an extreme aversion t~ a certain t d~ candidate in thed id d " fte " him They en ere ,hhad eCI e. to go ~ .' ~ .: d' the e was a possibility t atDemocratic primary m hIS~IS~tt anin co~trol of the Democraticthey might not only beat him, u ga

party in that district. . d d accept the endorse-The senator refused to knuckle ~ err:~em was to prevent thement of the American Labor Party. , I~P ~ALP from "making an example" of hIm. t tegy of reversal. They \The senator and his staff decided on a ~ ra Labor Party in that

would make a bid to take over the ~enc~n Squads of work-district by entering a candidate in t~el: P~~r~;~ere accumulateders went out, and in two days eno~g ~:n the truce flag went u~.to make an ALP primary fight feaSIble. fi ht the state senator IfThe American Labor Party a~reed. not tO~e strategy worked per-he would withdraw from their. pnmary.. fectly.. . ") The French have becomeLimits ("This is the absolute end. . method Restricted. . limi t as a strategtc .famous for using the ti~e. lml. u will not negotiate on moreagenda is also a form of limit; that IS,yo I . one particular man-than one subject or you will negotiate onlY muse of this strategy;. ti are a so anero Restrictions on commumca on r ou restrict the com-you will deal only through your ~g~nt, 0 Ymunication coming out of a n~gotiation. treme we have what isWh h i earned to an ex 'f . ageen this approac IS ib in Central A nca eng~nown as the "silent barter.~' ~ome:e ~~ desiring an ~xchange

10 a unique form of negotiatIon..


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116dd TIlE ART OF NEGOTIATINGa ed to. In the event th t . " .doesn't show up to d b ~ no ad~ltions are made, the first tribeFeinting ("10 k 0 usI~ess agam , .o to the nght go t th I ft" "apparent move in one di ..' 0 e e ). TIllS Involvesangoal Or object It ca IIrec.tIOnto divert attention from the realyour opponent a falsn .a so In~olve a situation in which you ziveo kn I e ImpressIOnthat h o-r ow edge than you reall yo~ ave more informationCessfullyused in cri . I . Y possess. TIllS strategy has' been sue-t t I I rnma trials The d i t ..~ e the court all of th .' .ISnet attorney is duty boundhIS possession. He rna e Info~abon and facts that he has in

dence that may be peJ not WIthhold from the court any e v i -help the prosecution H n~nt to the case, even though it may notb y defense Counsel~a e I e : not a~wa~sdo this. Feinting strategy~u~el is in Possession~f "alI'~~~ d~stnct attorney to believe thatIStrict attorney rna . feel ~ m!onnation and.rtherefore, therather than continu{ to wi~~ ~~lIgah.on now to tell the court allToday, because of th 0 pertInent facts.etnmental d " ~ e Speed of comm . .I eCISloncan b .t umcanon, a prepared gov-=d by ."a ~liable sourc~"~sted ~y feinting. The decision is r e -e. ThISgives the govern a trial balloon before it is actually:~ r~sponseSthat might o:ent an OPportu~ity to test the. differ-strat ymade. Then if oppos'tiur when and If such a decision is501 ~gy to counteractadve~ on - develops, it can either develop au on to the problem. .. e responses or decide upon a new"H

~ow.\Nt) W llE 1u :" SSome of the . .l1L\TECYParticipatio pnnCIpal form, of "hdomiz i n, a ssO Cia tio n, d isa sso ' . ow and where" strategy areP~ r~ndom s am ple s alam ~tlon. crossroads, blanket, ran-

tri Patlon ("We a 'fri I,bracketings ve to enlis re ends") I .directl 0 t!he aid of other a .' ~ this fonn of strategy youWarsa~ p::~dlrect1y. Internati~nr::esl;~our ~haIf, to act eitherprobably as . are good examplesof th~ lances lIke NATO or theThis inc1udslst}he other with his . I~f~nn. Each participant willmaritime Iabes me too," strat~ m hVlduaIly different strategy.August 28 1o~r:~tions field.A s ~ su~ ~ has been used in theits contra;t th 5. Almost every [M ' ~d In the New Y ork T im es,delineate is I t t If.something better a~timeJ Union has a clause inadded to th ~ er g ranted to another ~n v . :hat the contract termse rst Contract/' The yo unIOn,It will be automaticallyImes stated that "this is one of

NEGOTIATING TECHNIQUES 11 7the chief reasons why the Merchant Marine strike went through its73 rd day without a settlement." It would appear that this strategyof the union backfired. .

Association. This technique is used extensively in the advertisingfield.Testimonials assert that a famous person uses and endorses acert~in c~garette,soap, hairdressing, or some other product. Thesetestimonials associate the product with the rich, important, power-f~l personages who endorse it. Many people identify themselvesWIththese personalities and begin to use the product.Many businessmen who feel that they would be too sophisti-cated to be influenced by this advertising tactic fail to realize it isrelated to the business device of electing famous military, scientific,or political figures to the board of directors of corporations. TheCorporation is now supposed to benefit from the "halo" effect ofthese famous people.

. D i sa s so c ia ti on ("Who is your friend?"). Obviously this strategyIS the reverse of association. A product, or more frequently acause, is discredited by showing that unsavory characters are con-~ected with it. This is afonn of strategy that is often used in poli-ticsby both the extreme Left and the extreme Right. Itcalls the at-tention of the general public to the kind of people who are associ- ~ated with a particular movement, cause, or proposal. It is hoped ,that the assumed reputation of the people connected with the .~movement will steer the public in the opposite direction, awayhom the associationCrossroads ("inte~ect, entwine, and entangle"). In t~is fo.nnof strategy you may introduce several matters int? the dISCUSSIonso that you can make concessions on one and gam on the other.Minor issues,however, should be handled carefully, I f you take to.omuch time with them the other side will start fighting back as Ifthey.were large issues. Then as the opponent givesin, he do~ it ":pecting a concession on a major issue. Italso covers the slt~ationwhere you bring forces, arguments, .or pressures of some kind tobe.a~on a particular object of the negotiation. This corresponds to amlhtary tactic in which machine guns are placed so as to create ade~astating cross fire and cover an area more .thoroughly. In ~hess,thISapproach is used where pressure from many pieces ISapplIed toone of the opponent's pieces or spaces.Blanket ("shotgun"). The aim of this strategy is to coverlarge a field as possible. It iswell illustrated b y . the story of a young


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11 8 11 9betting the fa~orites. At the same time they were upsetting theodds by wagenng on the poorer horses in the race.M~anwh.ile, other associates were making huge b.~ts on thefavontes with the off-track bookies. The favorite won, at track oddsapproacring 1,000 to 1.The bookies who did not go out of business"were forced to payoff at that price ..After this the bookies changed their strategy to prevent a recur-rence of this maneuver. Nevertheless, the same trickwas worked inGreat Britain in 1964 at it greyhound track. The mastenuind, agambler named John Turner, lined up his men in front of thewindows, a la Baron Long. They manipulated the odds oil therace so that the payoff onthe winning combination was 9,875 to 1-The bookmakers, who operate legally in Great Britai~, went tocourt-but in 196 5 a high court judge found nothing illegal in thestrategem. The judge described it as a battle of wits in which Mr.Turner had come out on top. Obviously even bookies who do notlearn from the past are doomed to repeat it.There was once a particular type of con man known as the'.'~urphy man." The Murphy man used the strategy of random-i zmg. In the 1920'S, the name and game originated in the area westof Times Square known as Hell's Kitchen. This section was heavilypopulated by Irish immigrants. The technique of th~ con man ~ast~ approach a stranger in the area, offering, for a pnce, to obtam agirl for him. I~f the victim gave him some mone~, the con. manwould then take him to a tenement house and mstruct hIm to"ring Mrs. Murphy's doorbell," the odds being that there was .aMurphy somewhere in the building. You will note today that thIScon game is still in existence. The names may have changed butthe game is the same. .Random sample ("fibbers can figure"). This involVes picking. asample and assuming that the sample that has been chosen wIllrepresent the whole. Political parties use this quite freq~en~ly toshow the. general public that a survey they have taken m~lcat~sthat their candidate will be the winner. The deception conSISts rnplan~i~g the people who take the survey in carefully selected areas.Statistics presented in negotiations are often. based on' ran.domsamples and must be closely .scrutinized. How to detect blas~dsamples, deceptive averages, and other irregularities is set. forth InHow to Lie with Statistics by Darrell Huff and Ge lS .There is the story of the traveler

THE ART OF NEGOTIATINGman who, whenever he went to th . .to a young lady He ld h e movies, picked out a seat nextfriend, on hearin'g thI'swoU'd te h~ suggest that she kiss him. His

,sal to im "I . .ace slapped quite a few tim " ' imagine that you get yourdo, but I also get an awfull tes'f The ~o~ng man replied, "Yes, IThere is a cert . . 0 0 good kissing."men." They are . am group o~ businessmen who are called "dealth m a sense busmess b

ke .e buyer and seller or th 1 ro ers, trymg to bring togetherniques are used by the 0 er e e.ments required. Different tech-more sagacIOus H .man uses the "shot " . owever,. the ordmary dealquences, he brings togugenthmethod. Without regard to the conse-tw f h er as many peo 1 . .00 t em may match d . p. e as posslble"hopmg thatI myself prefer the" .ft ,? P an permit h im to make a commissionRa . . n e method. .

ndomlzmg ("outbluff' bmake use of the law of h mg y chance"). In this strategy youa game. For example ~ ~n~e~o defeat the "bluffing advantaie" inof "guessing which hand \h eco~e. q~it~,proficient in the gamef~oled my Son over and ove: cOl.n IS m. Bf sleight of hand Ihigh percentage of wr . agam. He continually made a very~esses on the law of onhg guesses .. Then he decided to base h{shIS choi ,. c ance He tos d hiice. When he did thi h' se IS own coin to decideof th ti IS e gu d riusin e nmes, over a long period of uess nght at least 50 per centg the law of chance . g ~sses and tosses. Randomizing,useless ' Improved Ius score by k' bl ffiTher . rna ang my u ng

ere will al bbell-sha d ways e those fortunatprob,bfu cu,,:e-,who can deal wi e pco~lc:-the clappers intbef

ty to nng the bell '0 th statistics and the laws ofamous gambl . . ne suchth A

er m the 19 20'S B' person was Baron Long ae gua cr' aron Lo . d '"buildin "a rente race track in Mexic ng rna e his big killing atHB 'ld~' o. He used the maneuver ofUl ing" 1 1make ca s for a system of b . .thrs pay at track odds Th ettmg m which off-track book-on e total . e track ddthe off-track amo~nt wagered at the 0 s are, of course, based

themselves bookies pay at track od~;ack on each horse. "'hentaxes. the percentage taken off bv tthey are able to keep forT

. he track for expenses ando make his killi . .. .that the a' ff ng Baron Long had .than the ~sr on the fastest horses-the to n~ .the-track odds so

1.' involved. To do this h favontes __was far greaterme up at th t IS e had 1e rack betting wind' a arge group of associates. . '. ows.The k . ._ - .i.,} ept thepubhcfroI11

NEGOTIATING TECHNIQUES


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120THE ART OF NEGOTIATING

airplane because he heard b .Discussing his fear with a ~~t people ca~~n.g bombs on planes."What is the probabili a nend, a ~tahshclan, he asked him,I might take?" The ~ .o~ a bomb ~eIng on the same plane thatthing like r: s~a~lsbclan figured It out and came up with some-1 elm 10million Th t Isaid "Wh t ' h . e rave er thought- a while and then," a IS t e rob b T ' ,plane?" The st ti ti P a 1ity ~f two bombs being on the sameConcerned T h : ISI~la;'l~vor~ed It out and replied, "I wouldn't beyour lifeti~e "lro a II ity IS so remote, it could never happen' instatistician a;ked ~~ar hater t~e traveler met the statistician and theall over. Now I'm :, l~:hmgs were going. "Oh, I've been flyingbomb aboard th I ger concerned about someone bringing ame." ' e pane that. I'm on. I always carry a bomb withDifficult as it rna be t b .owe part of their y I 0 eheve, a story has it that the Beatles

The late Brian E ~r'y shc~sS to the strategy of random sample,tentiallong befor~St~m, t etr mana?er, recognized the group's po~BeatIes' initial pop I e .~neral pu?hc knew of their existence. Therecords did not shou an was hmlted to the Liverpool area. Their, Brian Epstein de"':dU~On the overall hit charts. "-mto the various to CI e . to ~hange all of this. He sent his agents. wnSIn EngI d hcompded. Within an were the record charts wereBeatIe records (whi~hc~nc~~trated period of time they bought upThe Beatles' popularityPs ~~nthen resold in his own record shops).races. One result of thi ra mg Z?omed-and they were off to thebala ' ISstrategy IS th t B' .nee ItS books fo a ntam has been helped toIn the fall of 196; : h ear~r ~o. .low ebb, certain backers en reSIdent Johnson's popularity was at a "

were restricted to area harranged for polls to be taken The polIsF th s w ere ] h . .ur ermore, they pitted hi 0 nson was likely to be very strong.The res.ults were then pubI~~ against not too strong opponents.populanty, The research. fi IC1Ze?as an upturn in the President'sbackers of the polls had rm s ~nvolved were chagrined but theSa la . (" aCComplIshed ' h '. nn .degreewise") .Thi w, at they had set out to do.bit b bi IS strate .1\1 ' ~ It, so that you eventu II gy, Involves. taking somethingiiatyas Rakosi, Gene""l S a yget'possession of the entire piece,Party . .' ' c o , ecreta f, IScredIted with havi . ry 0 the Hungarian CommunistI . , avmg gIVen thi . ' .exp amed the 'salami" . , , IS techmqueits name-Rakosi"'Vb operatIon thOen you want to get hold of 0 IS ~oUa~oratorsas follows:


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12.2. THE ART OF NEGOTIATINGhelp the matter in report for satisfaction sake. Use also suchpersons as affect the business wherein they are employed; fOTthat quickeneth much; and such as are fit for the matter; asbold men for expostulation, fair-spoken men for persuasion,crafty men for inquiry and observation, forward and absurdmen fOTbusiness that doth not well bear out itself. Use alsosuch as have been lucky, and prevailed before in thingswherein you have employed them; for that breeds coniidence..and they will strive to maintain their prescription.Here is an instance in which the role of an agent was playedwith good results.A conference had been arranged between my client and his ad-ve_rsary.His attorney and I were also to be present. My cli~ntfal~ed.to show up at the appointed time. After waiting for himquite a while, I suggested that we begiit the negotiation. A s ourt : t lk went on, I found that I was being singularly successful in get-ting the. opposition to make commitments; but every time theyasked me f?r ~ commitmeqt, I would say, "Well, I'm sorry, but Ionly have hmlted authority." By serving in the role of an agent, I~ecuredmany concessions for my client without committing himm any way.T?e tech~ique.of giving the negotiating agent only limited au-thonty Ortying him down to specific instructions beyond which hedare not com it hi If ... rm nnse has proved extremely advantageous illma~y cases.T?e. opposing party, realizing that the agent is boundto :1Veup ~ohISmstructions, is more restrained in his demands.. n ~ertam cases the agent may have an additional individual~ncentiveto secure a favorable settlement. For example when anmsurance company '.1 .dent .... represents a defendant in an automobi e aCCI-I hcase,It.ISac~ng as an agent on behalf of the defenda..nt. Ita so as an Incentive to t th be ' b eit "IIhge . e st possible settlement ecaus.I tWlh ~thveo pay for any damages awarded to the plaintiff, to-ge er WI court costs. . . .Sometim it i .di .. es 1 IS JU ClOUS to delegate all authority to an agent.Busmessmen do this wh th I . fid Iityb ds Sh en e y p ace their employees under e I/n d f thuld any case of theft or dishonesty' arise they arere-ieve ate task of prosecuting or condoning the crime..They do

~~ hav~th~ a~thority to ad: because they have placed or delegatedau onty m the hands of the,insprancecompany .Thisar-

. NEGOTIATING TECHNIQUEShavi take many troublesomerangement saves them from avmg 0 m h degree ofdecisions One man I know achieves almost t e same f. .. II-without the expense 0P rotection and avoids mvolvement as we . f iob toH . ery applicant or a Ibonding his einployees. e reqUires .ev h sim I files awayfillout the regular bonding form, which he. t e~ t~/impressionwithout taking out a bond. The employee ISun er ittin a dis-that he has been bonded and is deterred fromcomrm Iafnst thehonest act by the thought that he would ~henhbe u~hatim thanbonding company, which would be a lot ars er WI

the employer is likely to be. ., wn cause it alsoAlthough an agent is often desirablein o~e~ or lh'the ad-followsthat in negotiations it is best to avoid ea ~ng.W lI A corol-ibl d I ith the pnnClpa. .versary'sagent. If at all POSSIe,. ea WI tually dealinglary to this is, Never take for granted that you are acwith the principal or even the proper party.. 0 givesa bizarre. A pertinent case, w~ich ?ccurred. some time a~, client's fatherIllustration of the mam pomtand Its coroll~:;. fier the Unitedhad vanished for approximately six ~o: c~a~ce that a relativeStatesenteredW orld War II. Itwas on y Y ok for a con-discoveredthat the father had been working aJ :e~~einstallations~tructionfinn that had a contract to do sl~~:d ~inguist,it seemedIn Iran. Since the father was an accomp ISstrange that he should take a job as a cook. t me and said thatSome years later my client related the sl~o~t~e proceeds of anhe had been trying unsuccessfully to co eci f the constructioninsurance policy provided for all empl?yee:h~ case for my client

finn. The attorney who h?d been .h~ndlI~g f ther's conduct. Oneheard many different s~on~ explaining ~eefa~herwas working forthat seemed most convmcmg was t~a~ t to Iran to ascertain whatthe ass and was sent on a secret mission . btained the in-. b d r Havmg 0was go~ngon along the RUSSian ,or . \ 1 Therefore, he started afonnation, he wanted to get home qU.lcl h ed and was placedfight with a superior. He was sum~anly S }~C ar~omewhere in theon a steamer sailing to the Umted ta nnk by aGennan sub-Atlantic,the steam.er was torpedoed and suhn. written s.tatements. . From t elr ,~.. ftmanne. There were a few survIVOrs: . floating on a ra .. . f h s last\seen hIt was ascertamed that the at er wa f several years,were enougThese circumstances, plus the passage 0H er the. dad owev,to establish the fact that he was, e ., me .thatfinn for whom he worked told the atto Y


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124 THE ART OF NEGOTIATINGcharged him prior to his death and therefore were no longer re-sponsible. The lawyer pointed out that the man might ha~e beena government agent. In answer the construction firm said thatthis was all the more reason for not paying any claim. Three yearsof threats, claims, and lawsuits were unproductive. This was.thesituation when I was introduced into the picture, being retainedand substituted as attorney. ' ,_After an initial investigation, it was determined that the con-struction firm had worked in Iran under a cost-plus governmentcontract. If the firm could be made to pay any money, they w?uldbe reimbursed by the federal government. Therefore, I determmedthat my approach would be to circumvent the construction firmand go directly to the government agency that had employed thefirm. I presented my claim there.The government agency10 which the claim was made was re-ceptive. Within one week after Ihad exhibited all the necessarydrn:umentation a.nd evidence, the U.S. government paid 0e fullclaim. I never,did find out if the man was or was not WIth theOSS. However, it is my firm belief that the father was indeed one- of those heroic men who had sacrificed both their identities andtheirlives duringW orld War II.The lesson to be learned from this case is always to deal with theman who signs the checks. ' ,In~ernationalcorporations now use bicultural people as a ~ ofmediator or agent. Such companies are now familiar with the kindsof c~ltural conflicts they meet when they set up operations in a

f~reigncountry. For example, in India a local executive will tend tohue p~pl: exclusively from his particular area. Since emplotment IS priceless to the Indian, this sort of regional nepotism IShard to combat. The local man is constantly beset by' his r:ploy~;-,-who are also his neighbors. They feed him the "inSIdestory about the "others." '. Bicultural managers, who have been born in India but havel ived abroad, are better able to copewith this situation. They have~ broader perspec~v: and can be trusted by all parties. Thus theyInte~re~ th.econflicting parties to each other.Life, In Its capriciousness, can bestow the role of mediator' onone who was p~eviouslyuninvolved. During the great blackout ofthe easternUmt~d States in I96s,young boys in midtownYork were permitted full authority all traffic when

NEGOTIATING TECHNIQUES . . d began to help out.jumped into the snarled mtersectIOns an ,STRATEGY AT WORK . d F d J es vice-president for en-Now lees rejoin our fnen re;:: tme has come for Fredgineering and design at,Mantee, Inc. pe ~er the sales vice-presi-to sit down across the table from Lee ar , f th "500" Jonesk r to the problem 0 e ...dent, and wor out an a~swe id but they are the negotiatingand Parker are accompamed by ar es-parries. . itea bit of homeworkto, As' we have seen, Fred Jones hasdone qUi ith a restatement ofget ready for the negotiation. He opens up WIhis department's position. th t were exchanged be-"Lee, I've gone back over the me:nos ~te clear.We specifiedfore the' 500' went on the market. Its all q th n 1300per hour.. ttberunatmore a , d.that the eqUIpment was no 0 t being observe, ISThere's -rro doubt that this condItIOn IS nothere?" he i~cesof paper too. I"Fred," Parker replies, "I'~e gone over: riat waswhat yousaiddidn't have to-I remember It all verywei. d it you fellowswere. A s I understan 1, .-but that was some time ago. . it You felt that m a.. k th chine to ImprovC'I., ."continmng to wor on e rna . much higher capaCity.reasonable period we could SpeCifya h that would be. An,ddid 't sav w en '"Sure," says Jones, "but we 1 n f J h matter is that the 5 00the time hasn't come yet. The fact 0 t e. at more than 1, 300t d Pin servIce, 't toocannot be guaranteed to s an u . tomers to run I. 1 ouramng ensunrts. And your peop e are enc ~-fast.." , .' ' We don't offera guaran-uOh, we're not encouragmg them, Fret " tomer what the rec-tee. -Our men have instructions to ten t e CUSomrnended output should be." . 1 1 s I do that, unless theJones leans back. "But you know as ~e f~n is not going to bething is controlled> such a reeommen a 1made very strongly." . ' 1 .. that my salesmen mis-Parker frowns. "If you are Imp }'lng f " .::represerrtFhe '500: you'd better have proOtty good proofNow it happens that Jones has some prcould produce at this time. Instead he ~~esuipment that4'Don't you think it's dangerous to se eqb . ' W 'tthat hurt ourreak down in, operation? on .sa l es?Y>

he


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TlIE ART OF Nf.GOTL\TING"Look," Parker replies. "We're most concerned about the com-

pany's reputation. But we can't control what customers do aftert?ey have the stuff. And, let's face it-you guys are always conservative about these things. Remember the battles we had over thatother new line two years ago? The customers had to prove to u sthat it could handle a variety of jobs. Your department was the~st ~o admit it. If the sales force hadn't pushed it, we'd still b ekiddmg around with the project." .Jones can't deny that-nor does he intend to. "That doesn't proveanything about the '500.' ""Well, Fred, maybe this does." Parker shoves a fat folder across

the table. "Those are all letters from customers. They're all run-ning the '500' at high speeds-and having no trouble at all. Lookat them."But Jones doesn't look. "All unsolicited testimonials?""What does 'unsolicited' mean? Sure, when this thing came ~p,

Our men went and checked with their customers on how the eqUIP-m~~t was being. used. But nobody twisted any arms."

Any comp~lDts in this file? Any letters from people who h a v ehad trouble With the equipmenP""No." .Now.Jones leans forward. "What would you say if Iold yOUw e

had qui te a few complaints from customers that show the equip-ment ca~'tbe operated at those speeds?" '.thParkers eyes,narrow. "I'd say you had gone behind the back ofIfe sales department and loused up customer relations to get the~.d roungoout of your w_ayto solicit complaints, that's what yOU eomg. 0you have letfers like that?"thJonesAnshakeshis head no. "But y~u'll admit we could have gottenem. d whet} you id th . r t b ?Yon i .. CODSIer at-what's this file of yours WO .O~~~\~vent out and coll~ted the positives." .' ,ca f tharker chuckles disarmingly. "Fred Ifigured you'd takere 0 e negatives OK, th ' h toomuch. Hut let me h' =.e~doIiements aren't wortTake a look t th s ow you somethmg that is worth a great deal.'soo' but forathe :~t~igures. a~d projections-not only fo_rtheF e d Y , line, This IS the lifeblood of our bUSIness,11 ou can t possibly wa t . . '. . h tis rki thi n us to discontInue a campaIgn t aw:?t ~it~t';;~ ~e chasmpanyan't permit it, the stockholdersace. 1 ar er . played his hole card. Itooks an

NEGOTIATINGTECHNIQUESBut Jones is ready to play his hol~ card. This ,is t~e res~lt of alhl. d a solution m which eac.hispreparation. He IS rea y to propose ,

side can emerge a winner. .' mJones says "We don't want to ask you to dIscontinue a ~ t', . B . f u fellows are not IUSpaign which is working well. ut 0 course yo b t thelooking for the quick buck. You're as concerned as ;:e are a ou

long-term needs of our customers and of Mantee. .Parker nods. "Sure we are." .' wa"Both of us are trying to contribute to that In our dIfferen,tth ys.

J th If n cooperate WI oneWe develop products. Y ou se~l ,;m. we caanother, we each do a better Job. .' eans we sellParker looks cautious "If cooperatmg WIth you m d. d 't '.how we can 0wi th one hand tied behind our back-Ion seethat." h 's what Ipropose, Lee."It doesn't mean that at all. Now .. , ere be limited to..tth t customersFirst of all we will no longer mSIS a . that you, he ' 'I stead we propose1,300 units per minute on t e 5 00. n f' . oo-but that wetell customers-it's absolutely guaranteed or 1,3feel it's capable of a much higher rate."Parker is listening carefully. IIth facts. And tell themJones continu.es. "Give your customers a rte. price breaks. If' 1 1 . them ce amthat if they cooperate, we WI give to give USinforma

t?ey run the machine at high spee~s-~nd t~~~e adiscount. My d~.tion about i~ perfo-mance-we Will give lacement equipment 15partment wil l undertake to make sure rep so he won't be'. . that category,qUIckly available to any customer m ,inconvenienced by a breakdown. . . nd feed it back"Your salesmen can collect the in,forma~odn-abt that we can-. th I don t ou dto my engineers. Working toge er, d hat we had hope .very quickly-improve the '500' even beyon w

See how it works?" . loudy but I get ther Parker says, "Well, some of the details are c ,general picture." . is able to get maxi-Jones goes on. "The participatin~ ~ustome.rk He gets a break inm~mvalue out' of the '500' -":with ~Immu:~~he knowS the com-pnce , And there is another mtangtble be . its research and de-pany is taking his reactions intoaccount In ,~1 . h th t is there?ve opment. Nothing wrong WIt a ,Parker warily shakes his he~d, nO'>d tages are obvious."What's in it for us in DeSIgn? The a van


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uS THE ART OF NEGOTIATINGprotect the reputation of our product. At the same time we get fast,practical information from the firing line-and this is the lifebloodof our effort."And what are the. advantages to you and your salesmen? You'reable to continue to stress a product advantage. You can be com-pletely frank with your customers-in a way that no competitorhas ever been. Your men work closely with the customer, buildingup valuable relationships. You participate in the design and produc-tion functions, which are most important to you. And you con-tribute to' an overall. solution which will enhance our reputationthroughout the industry. How does it sound to you, Lee?"Parker sits quietly. "There's a hell of a lot there," he says.."Let's.go through itagain."The meeting takes an hour more-but the solution is essentiallythe way Jones outlined it.I.t is an example of the art of negotiation carried into practicalaction.

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