A tactic to expand the scope of a transaction by broadening the total terms that will be quoted. The item to be added-on to the transaction is generally something that has the apperance of being very reasonable, and not likely to be challenged, that incrementally increases the expense of the transaction beyond the cost of the core item originally quoted or offered.
The equivalent to a break or a time-out taken by either party during the course of the negotiation when either side agrees to suspend the current discussion or segment. The pause can be one that is equivalent to a quick side bar just outside the meeting room or one that suspends the negotiations for hours or even days.
"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 to cast a dissenting voice or an opposing opinion. Personal preferences, interests, 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.
Agree In Principal
"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 below.
"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.’"
See Target Point or Anchor Point.
"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 Then Must Refuse."
"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’.
"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 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.
The range of outcomes where agreement is satisfactory to both parties. See ZOPA
Better Product Approach
A seller suggests a superior grade product to test how much money the buyer has to spend.
Big Order Approach
"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 sellers true cost, or the seller’s flexibility in reducing a quoted price."
Big Pot Approach
"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 - White Hat
"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 threaten the viability of the negotiation."
Non verbal 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 that 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."
"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."
Change The Participants
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.
Change The Standards
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.
"A psychology theory that says if I like Joe and you like Joe, we are likely to find other things we both like. This principal 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."
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.
Collectivism Culture Negotiator
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
"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."
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 option this 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
"Negotiators that use a consistent concession pattern sent 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."
"Tradeoffs 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 with 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."
Cooling Off Period
"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 and 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, and 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, and learn ways to make the most of the differences to craft a more creative agreement."
Negotiation Dictionary A to C