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2-1997

The Negotiation Checklist: How To Win The Battle Before It Begins

Tony L. Simons Cornell University, [email protected]

Thomas M. Tripp Washington State University

Follow this and additional works at: https://scholarship.sha.cornell.edu/articles

Part of the Hospitality Administration and Management Commons

Recommended Citation Simons, T., & Tripp, T. T. (1997). The negotiation checklist: How to win the battle before it begins. Cornell Hotel and Restaurant Administration Quarterly, 38(1), 14-23. Retrieved [insert date], from Cornell University, School of Hospitality Administration site: http://scholarship.sha.cornell.edu/articles/671/

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If you have a disability and are having trouble accessing information on this website or need materials in an alternate format, contact [email protected] for assistance. The Negotiation Checklist: How To Win The Battle Before It Begins

Abstract Being well-prepared going into a negotiation is key to being successful when you come out. This negotiation checklist is a tool that can maximize your preparation effectiveness and efficiency.

Keywords negotiation, hiring decisions, BATNA

Disciplines Hospitality Administration and Management

Comments Required Publisher Statement © Cornell University. Reprinted with permission. All rights reserved.

This article or chapter is available at The Scholarly Commons: https://scholarship.sha.cornell.edu/articles/671 The Negotiation Checklist

How to Win the Battle Before It Begins Being well-prepared going into a negotiation is key to being successful when you come out. This negotiation checklist is a tool that can maximize

your preparation effectiveness and efficiency.

by Tony Simons and Thomas M. Tripp

P■ reparation repc increases your chance of success, whether in combat, sports, or negotiations. The well- prepared negotiator knows the play­ ing field and the players, is seldom surprised, and can promptly capital­ ize on opportunities. This article offers a tool for use in effectively

Tony Simons, Ph.D., is an assistant professor of management at the Cornell University School of Hotel Administra­ tion and Thomas M . Tripp, Ph.D., is an assistant professor at Washington State University. The co-authors, who are listed alphabetically, express their thanks to Jeanne Brett for helpful comments on an earlier draft of this manuscript.

© 1997, Cornell University

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Downloaded from cqx.sagepub.com at CORNELL UNIV on May 4, 2015 from the SAGE Social Science Collections. All Rights Reserved. HUMAN RESOURCES negotiating important transactions and disputes. Negotiation Checklist Making deals is a key part of being effective in business. Managers A systematic way to ensure you are well-prepared before your next negotiation. and executives negotiate constantly Vj Item over issues as varied as hiring deci­ accomplished sions and purchases, corporate re­ A. About You source allocations, and labor con­ □ 1. What is your overall goal? tracts. One could argue that the □ 2. What are the issues? American system of government is □ 3. How important is each issue to you? based on an ongoing process of Develop a scoring system for evaluating offers: negotiation, which is sometimes □ (a) List all of the issues of importance from step 2. successful and sometimes not. □ (b) Rank order all of the issues. The “negotiation checklist” that O (c) Assign points to all the issues (assign weighted values based on a total we present in this article is a system­ of 100 points). □ (d) List the range of possible settlements for each issue. Your assessments atic way to make sure you are well- of realistic, low, and high expectations should be grounded in industry prepared before you walk into your norms and your best-case expectation. next negotiation. It is based on □ (e) Assign points to the possible outcomes that you identified for each issue. proven principles of negotiation □ (f) Double-check the accuracy of your scoring system. that are taught at several of North □ (g) Use the scoring system to evaluate any offer that is on the table. America s top business schools. □ 4. What is your “best alternative to negotiated agreement” (batna)? The techniques we describe apply □ 5. What is your resistance point (i.e., the worst agreement you are willing to accept whether you are getting ready for before ending negotiations)? If your batna is vague, consider identifying the a labor negotiation, a negotiation minimum terms you can possibly accept and beyond which you must recess to with a supplier, or a negotiation gather more information. with a customer. This checklist is not a formula for easy success in B. About the Other Side negotiations. Rather, it is a me­ □ 1. How important is each issue to them (plus any new issues they added)? thodical approach that requires sig­ □ 2. What is their best alternative to negotiated agreement? nificant work. The amount of time □ 3. What is their resistance point? and effort you spend answering the □ 4. Based on questions B.1, B.2, and B.3, what is your target? questions should depend on the importance of the negotiation and C. The Situation on the resources you have available. □ 1. What deadlines exist? Who is more impatient? The payoff for your effort emerges □ 2. What fairness norms or reference points apply? from the confidence and informa­ □ 3. What topics or questions do you want to avoid? How will you respond if tion that you gain from preparation. they ask anyway? The Negotiation Checklist D. The Relationship Between the Parties The negotiation checklist (in the □ 1. Will negotiations be repetitive? If so, what are the future consequences of each accompanying box) is a guide for strategy, tactic, or action you are considering? thinking about an important, up­ □ 2. O (a) Can you trust the other party? What do you know about them? coming negotiation. The pages that □ (b) Does the other party trust you? follow describe and explain the □ 3. What do you know of the other party’s styles and tactics? items on the list. 0 4. What are the limits to the other party’s authority? □ 5. Consult in advance with the other party about the agenda. A About You 1. What is your overall goal? Start with the big picture. What basic need will an agreement ad­ dress? Why are you talking to this person or this company? What do you hope to accomplish? Under-

February 1997 • 15 Downloaded from cqx.sagepub.com at CORNELL UNIV on May 4, 2015 standing your main goal helps put Also, the more issues you can intro­ all the other aspects of the negotia­ duce, the more likely it becomes tion into perspective. Most people that creative solutions will arise, as begin and end their negotiation those are often built by packaging or planning by determining their over­ trading off multiple issues. Creative all goal. We suggest that it is just the solutions often make it easier to For any issue that is not beginning. discover an agreement that both 2. What are the issues? What parties like. discussed, the parties risk specific issues must be negotiated By adding items to the negotia­ for the final outcome or agreement tions agenda, you increase your to meet your overall goal? For ex­ chance of discovering some issues the possibility of making ample, if the overall goal is to book that you value more than the other a successful convention, what assur­ party, and discovering other issues different assumptions. ances, services, and constraints will that the other party values more be involved? Price may be an obvi­ than you. Trading off such differ­ ous component, but it is worthwhile ently valued issues dramatically in­ to consider other items, too—items creases the value of the agreement to that might make the agreement you without costing the other party. much more attractive both to your­ Moreover, if you know what issues self and to the other side. Delivery the other party highly values that schedules, duration of contract, you value less, you can use those product or service upgrades, cancel­ issues to get concessions on issues lation clauses, contingency plans, that are important to you. transportation services, complimen­ Imagine that you are a food and tary room nights, and many other beverage director of a hotel seeking options all have some value to those a dry-goods supplier and that you negotiating a contract. Such side have written a request for bids from issues may be researched and intro­ potential vendors.You have consid­ duced as part of a food contract, ered your storage capacity and speci­ conference booking, or union con­ fied every-other-week delivery in tract that you are preparing to your request for bids. Now, suppose negotiate. you receive a bid from Alpha Dry Consider also whether any of Goods, which has another customer the issues you have considered in town to whom they deliver once might be broken down into mul­ every three weeks. Alpha’s quote for tiple components or sub-issues. For biweekly delivery might be medio­ the conference-booking negotia­ cre, but it turns out that they could tion, for example, you might nor­ save you substantial money on tri­ mally consider the room-block weekly delivery. They could save guarantee as a single item (i.e., so you so much money, in fact, that you many rooms reserved until such- consider changing your storage ar­ and-such a date). In fact, breaking rangement to accommodate their the room reservations down by per­ every-three-weeks delivery schedule. centages and multiple deadlines If you had been unwilling to negoti­ (e.g., 50 percent by one date, 75 ate the delivery schedule, you might percent by another date) might never have discovered that opportu­ open avenues for mutually beneficial nity. By adding delivery schedule to arrangements. the agenda, you were able to dis­ You should anticipate as many cover an issue that improved the issues as possible for the negotiation. business potential for both parties. In By doing so, you will be better in­ this example, you are able to secure a formed and thus feel comfortable lower overall price in return for a and confident when negotiating. concession on delivery schedule.

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In general, the more issues you 3. How important is each relative desirability of resolving the can put on the table (within reason), issue to you? Now that you have issue in that way. Such a table allows the better off you are.1 listed all the different issues that you to assess the value of any pro­ Another reason to consider and might be negotiated, you need to posed agreement by adding up the discuss many issues in a negotiation develop as precise a picture as pos­ points it generates. You can then is that it minimizes the chance of sible of their relative importance. accurately and quickly determine misunderstandings in the final con­ Which issues are most important to which of several complex agree­ tract. For any issue that is not dis­ you and which are not particularly ments you prefer. Moreover, it can cussed, the parties risk the possibility important? Knowing the answer to help you keep the big picture in of making different assumptions. For that question will help you answer mind as you discuss the details example, the “standard frills” that the next: On which issues should of your agreement. We describe accompany a banquet may not be you stand firm and on which issues additional benefits in the next few known by the person purchasing the can you afford to concede? In other pages. banquet. words, what issues might you be The first part of Exhibit 1 (on Once you agree that it’s a good willing to trade away? the next page) shows an example of idea to discuss many issues, how Setting such priorities can be a a scoring system that a conference should you determine how many complex task. To deal with the organizer might use to negotiate and which ones? For starters, check complexity of rating the importance with a hotel representative. In that with your executive committee or of individual issues, we suggest you example, the issues on the negotia­ association members. Draw also on develop a system to keep track of all tion table are the duration of the outside resources. For example, call the issues without losing sight of the room-block reservation, the room some friends and colleagues who big picture. Many different kinds of rate to be charged, the number of have conducted similar negotiations systems are possible. The key re­ complimentary rooms to be pro­ and ask them about what issues they quirement is that you list and pri­ vided, and the late-cancellation put on the table. Library research oritize issues so that no issue is left policy.4 The maximum number of and obtaining experts’ opinions may out when you structure and com­ points possible here is 100. (If the be helpful, too. Lawyers can be a pare potential agreements. The sys­ conference organizer gets 100 per­ marvelous source of ideas about tem you use must allow you to cent of what she wants, then she which issues to place on the table, readily determine how well each gets 100 points; if she gets none of especially for a labor negotiation. Be possible agreement addresses every the issues that are important to her, prepared to include all reasonable issue. We offer one such scoring then she gets 0 points.) The orga­ and relevant issues that are impor­ system for your use, as described nizer has said that keeping the spe­ tant to you, even if they are not below.2 cially priced block of rooms avail­ important to the other party. We suggest developing a table able to last-minute registrants up You can also call the people with that lists every issue in the negotia­ until the week before the confer­ whom you plan to negotiate to ask tion. For each issue the table should ence is very important. Room rate them what issues they expect to list the possible range of settle­ is somewhat less critical, she says, discuss and to share your plans. This ments.3 You will then assign points but is still important. Complimen­ kind of conversation will begin the to each issue to reflect its relative tary rooms and the cancellation negotiation as a cooperative process priority and to every possible settle­ policy are also valued by her, but are and should minimize any delays ment of each issue to reflect the less weighty than are the first two. caused by either negotiator’s needing Note that it is not critical for all the to collect additional information, to 2 Any method that serves as a mnemonic device increments within an issue to be get authority, or to figure out the to track and evaluate multiple issues and deals valued equally. The jump from a may work. The one we describe is one that has value of issues they had not previ­ received much attention in negotiation courses 21-day-out block reservation to a ously considered. As we discuss later, and research. See: D.A. Lax and J.K. Sebenius, 14-day-out reservation, for example, surprise is usually not conducive to The Manager as Negotiator (NewYork: Free Press, is worth 20 points to the conference 1986). effective negotiations. 3 Several negotiation sessions may take place before you can identify all the issues and the 4 Note that we have simplified the issues of 1 There is some risk of overwhelming oneself— range of possible resolutions for those issues. such a negotiation for expository purposes. and one’s negotiation partner—with too many However, we recommend that you list in advance Additional issues might include cancellation issues. We suggest a combination of moderation as many issues as you know about and then clauses, airport transportation, continental break­ in adding issues with an effective system of note­ update the table between negotiation sessions to fasts, function space, additional events or ameni­ taking and organization. include additional issues and settlements. ties, and so on.

February 1997 • 17 Downloaded from cqx.sagepub.com at CORNELL UNIV on May 4, 2015 Exhibit 1 Creating a scoring system Exhibit explanation: Develop a scoring system for evaluating offers. To construct your own scoring system, we recommend that you use The example shown is a scoring system such as a the following steps. conference organizer might use. (a) List all issues of importance for the negotiation, from step 2 in the checklist. Maximum value: 40 points (b) Rank order all the issues according to their value to you. Which is the most important? Next? Last? Rooms reserved until 7 days before conference 40 pts Rooms reserved until 10 days before conference 37 pts (c) Assign points to the issues. The highest ranked issue gets the Rooms reserved until 14 days before conference 35 pts most points and the lowest ranked issue gets the least points. Rooms reserved until 21 days before conference 15 pts The sum of maximum points across all issues should be 100. Rooms reserved until 30 days before conference 5pts The purpose of this step is to improve upon the simple rank Rooms reserved until 31 or more days before conference 0 pts ordering in step (b) by reflecting the size of the difference be­ tween adjacently ranked issues (i.e., how much more important the first issue is than the second, the second issue than the third, and so forth). At 40 points, room-block reservation is Maximum value: 25 points worth almost twice as much as the next-most-important issue, room rate. The number of complimentary rooms and room- $95 per person single, $70 per person double 25 pts cancellation policy are slightly less important than room rate. $105 per person single, $80 per person double 20 pts $115 per person single, $90 per person double 15 pts (d) List the range of possible settlements for each issue. Identify $125 per person single, $100 per person double 10 pts these ranges using industry or local norms or your best assess­ $135 per person single, $100 per person double 5 pts ments of realistic, high, and low expectations. It may be the $145 per person single, $110 per person double 0 pts case that the longest block-reservation policy in the industry is 30 days. This figure establishes a realistic low boundary. Since a seven-day-out guarantee for a block reservation is possible ■ ; A but rare, it establishes a challenging high boundary to which Maximum Value: 20 points one can aspire. 3 room nights per 100 booked 20 pts (e) Assign points to the possible outcomes that you identified for 2 room nights per 100 booked 15 pts each issue. Give the maximum number of points to your pre­ 1 room night per 75 booked 10 pts ferred settlement for that issue, and assign zero points to any 1 room night per 100 booked 5 pts settlement that is least acceptable. Now rank and assign points 1 room night per 150 booked 0 pts to the possible settlements in between the best and the worst. Consider that the point values might increase dramatically between certain adjacent pairs of settlements in the range, or might just barely increase. The most important thing to remem­ Maximum value: 15 points ber about assigning points is that the assignment should reflect what is important to you. No penalty up to 14 days before conference 15 pts No penalty up to 18 days before conference 9 pts (f) Double-check your scoring system. In completing steps (a) No penalty up to 22 days before conference 3 pts through (e) you undoubtedly will make a few capricious choices No penalty up to 26 days before conference 0 pts based on “gut feeling.” For example, you may be so focused on the room-block issue that the points assigned to the other issues could be changed by five points either way without affecting your stance. The point is to make sure your scoring system accu­ rately reflects the important issues and highlights the critical plateaus. To check your numbers, compose three to five com­ pletely different hypothetical agreements. Each agreement should emphasize different issues. For example, one agreement might offer a cheap room rate but a short no-penalty cancellation period, while another agreement offers high room rates but a long no-penalty cancellation period. Compare the different agreements on the basis of points and intuitive value. The pro­ spective agreement that has the best “gut feel” should also have the most points. If not, you need to tinker with the values you assigned in steps (a) through (e) or reconsider your priorities. (g) Use the scoring system to assess any offer that is on the table. You should work toward obtaining the highest-scoring agree­ ment that the other party allows.

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organizer, while the four-day jump topic of pre-negotiation meetings qualitatively different from the deal from 14 days to 10 days is worth that will improve your chances of under negotiation or because it in­ only two points. Such a difference in pleasing the people you represent. volves risk or uncertainty, you value carries an important message. 4. What is your batna? Before should nevertheless assign it a rough The organizer is saying that it is very you begin a negotiation, you need to score for comparison purposes. important to have at least a 14-day- have a backup plan in case you fail 5. What is your resistance out block reservation, and that any to reach an agreement with the point? Your resistance point is the improvement over that would be other party. Negotiation scholars worst agreement you are willing to nice but is not critical. refer to this backup plan as the Best accept before ending negotiations Constructing a detailed and accu­ Alternative to Negotiated Agree­ and resorting to your b a t n a . The rate scoring system can mean con­ ment, or b a t n a , for short. Are you, resistance point is the point at which siderable work (see the second col­ for instance, negotiating with the you decide to walk away from the umn of Exhibit 1). However, the only supplier in town, or do you table for good, and the b a t n a is task can be worth the effort for sev­ already have several attractive bids in where you’re headed when you take eral reasons. First, it allows you to your pocket? Alternatives make all that walk. compare any package of settlements the difference. You should choose your resis­ that may make up an agreement. Each sides b a t n a is a key factor tance point based primarily on how With large numbers of issues, it in determining negotiation power. good your b a t n a is. If your b a t n a is quickly becomes difficult to com­ The better your b a t n a , the better an great, you shouldn’t accept anything pare different packages without offer the other party must make to less than a great offer; if your b a t n a some kind of scoring system. interest you in reaching an agree­ is poor, you may have to be willing Second, having a scoring system ment. Your b a t n a —what you get if to accept a meager final offer. Don’t can keep you analytically focused you leave the table without an forget to factor into your resistance while keeping your emotions in agreement—determines your will­ point the switching cost and the risk check. If you force yourself to evalu­ ingness to accept an impasse, which of the unknown that you would be ate each proposal using a predeter­ in turn tells you how hard you can taking if your b a t n a involves chang­ mined scoring system, you are less press for a favorable agreement. You ing suppliers. likely to lose sight of your original can negotiate hard for a job if you To illustrate the effect of switch­ interests during the heat of the ac­ already have a few offers in your ing costs, put yourself in the “buy­ tual negotiations. Resist the tempta­ pocket. The better your b a t n a , the ing” position of the conference or­ tion to revise your scoring system in more you can demand. ganizer described in Exhibit 1. mid-negotiation.5 Having a clear b a t n a helps pro­ Suppose the hotel you used last year Third, a scoring system is a useful tect you from accepting a deal that has already offered to book your communication tool that gives you a you would be better off not taking. conference for $100 a night single format for soliciting detailed infor­ Often people get caught up in the occupancy, with a 10-day-out block- mation about the priorities and negotiation process and accept a reservation clause. If another hotel goals of your boss, your company, or contract they should have rejected. wants your business, you need to your constituency. Building an accu­ Knowing your b a t n a can keep you determine your b a t n a and decide rate scoring system can become the from accepting an agreement that the margin by which the new hotel would make you worse off than you must beat the existing agreement— 5 In the interest of maintaining your original were before you started negotiating. say, five dollars a night—to justify goals, do not adjust your scoring system while in Having identified your b a t n a , the risk of switching. Conversely, if the middle of a discussion with the other party. During negotiations you may hear things that calculate its value based on the scor­ you are the hotel sales representative suggest your original preferences and priorities ing system you developed for step 3. in this deal, you have to determine may be in error. Such new information might be That is, if the other party were to the risks you accept for this new valid, or it might simply be the other negotiator’s effort to mislead you. There is a bad way and a make an offer that was identical to business—namely, that the associa­ good way to deal with the uncertainty such your b a t n a , how many points would tion might fail to deliver the prom­ rhetoric may cause you. The bad way is to lose that offer achieve under your scoring ised room-nights and the opportu­ confidence in the accuracy of your scoring system, throw it out, and continue to negotiate. system? Use that score as a reference nity cost of displacing any existing The good way is to take a break and verify the point to identify those agreements business.Your b a t n a as a hotel sales information as both true and relevant to your that are worth less to you than your representative is the probability of preferences. If it is, during that break adjust your BATNA. scoring system to reflect the new information your booking the rooms that the and restart negotiations with the new scoring Even if it is difficult to assign a conference would otherwise occupy system. score to your b a t n a because it is at a given rate, adjusted by the effort

February 1997 • 19 Downloaded from cqx.sagepub.com at CORNELL UNIV on May 4, 2015 (labor and expenses) it will take to location, but you are not sure ex­ book them. actly how much more your mem­ The resistance point is meant to bership will accept. You know that encompass all the issues at the same members will balk at an exorbitant time rather than each issue indepen­ room rate. Your b a t n a is to stay at dently. If you set a resistance point the same hotel as last year and face You must be willing for each issue under consideration, an uncertain amount of members’ you sacrifice your strategic flexibil­ disappointment. To deal with this to live with all the ity. Your b a t n a might include a uncertainty, you can set a “tripwire.” room rate of, say, $100 a night. If If you are comfortable signing a you set a resistance point for room contract that entails a $10-a-night proposals you offer. rate, rather than for the agreement as increase, but if you are unable to a whole, then you might walk away secure a rate that low or better, the from what is, in fact, an attractive tripwire tells you that you should offer—for example, a $105 per night check with your membership before rate that includes more amenities you make a commitment. You have, and a better booking policy than in effect, built a “safety zone” around your b a t n a . So there should be just an uncertain b a t n a . one resistance point and not a col­ lection of them. The resistance point B. About the Other Side should be set just slightly better than Good negotiators seek to under­ your b a t n a . Numerically, it will be stand the other party’s needs and the sum of the points from your limits almost as well as they know scoring system that represent your their own. Such negotiators might minimum requirements for all the be able to accomplish this under­ issues being negotiated. standing before the negotiations Being aware of the resistance begin, or early in the negotiation point is useful in negotiations. It process. Obviously, the final agree­ converts a good b a t n a into a pow­ ment will reflect not only your own erful negotiating stance. Unless you preferences and b a t n a , but the other have previously decided how far you party’s as well. Thus, it is useful to can be pushed, you are vulnerable to ask the same questions about the being pushed below your b a t n a , and other party as you ask about thereby may accept an agreement yourself. that is worse for you than no agree­ 1. How important is each ment at all. The more precise your issue to them (plus any new resistance point, the better. issues they added)? Consider and It may seem awkward to apply a attempt to estimate the other party’s precise resistance point, particularly priorities. What tradeoffs can you if your b a t n a is vague or not strong. offer that enhance the agreement’s In such circumstances, you might value for both sides, or that might be consider setting a “tripwire” or a neutral for the other side but a boon temporary resistance point. Set it for you? If your counterpart had a slightly above your actual resistance scoring system like yours, what do point; the tripwire then gives you you think it would look like? Call the chance to suspend negotiations people who might have information for further consultation with your or insight into the other party’s pri­ team. For example, imagine that you orities. Build a scoring system like are booking the conference as dis­ your own that estimates their priori­ cussed earlier. Your members have ties, and use it to design some po­ expressed a slight preference for tential tradeoffs. exploring new places, and so you are As the negotiation proceeds, try negotiating with a new hotel. You to test, correct, and complete your are willing to pay more for a new picture of the other party’s scoring

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system. Try to fill out your under­ have considered his or her resistance you should know what is the least standing of what that scoring system point. We have found, though, that it favorable agreement that you will might look like if one existed. is wise to assume the other party is accept, and you have estimated the Gather more information during the well prepared. If you know the other other side’s least favorable, acceptable negotiations by asking direct ques­ party’s resistance point, as noted agreement. Now consider the most tions about priorities, and also by above, you can push for an agree­ favorable agreement for you. This is judging the other negotiators re­ ment that barely exceeds it. This your upper limit—the top of your sponses to your different offers and kind of low-ball deal is often better range. If you focus primarily on proposed tradeoffs. for you than an “equitable” deal, your resistance point, which is the You might also want to probe though not always. bottom of your range, you are un­ whether there are any issues about If you are the type of negotiator likely to secure an agreement that is which the other side will completely who prefers amiable negotiation far superior to that resistance point. refuse to negotiate. Such a refusal tactics over low-balling, then you To properly set your target, you might simply be a ploy, or it might still may want to know the other must consider the bargaining zone, be a genuine constraint on the way side’s resistance point for two rea­ and to do that you have to sum up it does business. sons. First, the other party may try the other side’s situation. The bar­ 2. What is the other side’s to low-ball you. Knowing its resis­ gaining zone is the range between batna? What are your counterpart’s tance point will give you the infor­ the two parties’ resistance points, alternatives to doing business with mation and confidence to counter a comprising the range of mutually you? How much do you think she low-ball tactic. Second, many nego­ acceptable agreements. or he values those alternatives? How tiators consider a fair deal to be one badly does this company want to do that falls halfway between the two C. The Situation business with you? Realize that the parties’ resistance points. To find the By this point you have drawn up a other party will probably accept an halfway point, you need to know fairly accurate picture of the issues agreement only if it improves on her both resistance points. Since experi­ and the priorities that constitute the or his BATNA. enced negotiators consider their negotiations. Here are some addi­ The other side’s b a t n a contains true resistance point to be confiden­ tional contextual factors to consider key information about how far you tial information, you will most likely to help you maximize your advan­ can push those negotiators before have to make a best-guess about tages and minimize your risk of they walk away. If you are selling, the how far you can push the other making mistakes. buyers’ b a t n a should determine the party before seriously risking im­ 1. What deadlines exist? Who maximum price they would be will­ passe or generating ill will. is more impatient? The negotia­ ing to pay for your services or prod­ Openly asking for the other tor who feels a greater sense of ur­ uct. If you are buying, it should de­ party’s resistance point carries risks. gency will often make rapid conces­ termine the lowest price at which The other party might lie and there­ sions in an effort to secure a deal they will sell. If you are booking a after be forced to take an uncom­ quickly. Many Western cultures have hotel conference in Hawaii in De­ promising stance to avoid disclosing a quick-paced approach to negotia­ cember, the hotel representative, that misrepresentation. Or, if the tions. When paired with negotiators who has a waiting list of customers, other party honestly reveals his or from cultures that negotiate deliber­ has a much stronger b a t n a than the her resistance point to you, that ately (e.g., Japan, India), quick nego­ same representative has in July. If negotiator may expect you to reveal tiators risk getting unfavorable you are absolutely certain of the your resistance point, too. At this agreements. A good way to slow other side’s b a t n a , and if you pro­ point, you have two choices. One, down your pace is to avoid negotiat­ pose an agreement that is just a little you reveal your resistance point and ing under a close deadline. Flexibil­ more attractive than the other side’s open yourself to being low-balled ity with regard to time can be a b a t n a , then those negotiators might or, at best, to being offered an agree­ negotiating strength. accept your proposal. ment that reaches no farther than 2. What fairness norms or 3. What is the other side’s the halfway point between the two reference points apply? Negotia­ resistance point, if any? Given resistance points. Two, if you don’t tions often involve a discussion of your assessment of the other party’s reveal your resistance point, you may what might constitute a “fair deal.” b a t n a , you can estimate the least violate the norm of reciprocity. In fact, some experts recommend favorable deal for which the other 4. What is your target? You setthe approach of always negotiating party might settle. We say “might” your target based on what you know over the “principle” or standard that because the other party may not about the other side. By this point, you will use to assess fairness before

February 1997 • 21 Downloaded from cqx.sagepub.com at CORNELL UNIV on May 4, 2015 getting down to details and num­ 3. What topics or questions For Further Reading bers. The abstract discussion may be do you want to avoid? How will Some of the ideas and material for this less threatening or emotionally you respond if the other side paper were compiled from the following charged than the details, and may asks anyway? You might find your­ sources, among others.— IS . and T.M.T. result in a more cooperative tone self in a position where there is H. Cohen, You Can Negotiate Anything and outcome for the negotiation. something that you do not want the (Secaucus, NJ: Lyle Stuart, 1980). Recognize, however, that there other negotiator to know. Your R. Fisher and W. Ury, Getting to Yes: are many valid ways to determine b a t n a may be weak, for instance. Negotiating Agreement Without fairness, and each negotiator will Good negotiators plan in advance Giving In (New York: Penguin often choose the fairness norm how to respond to questions they do Books, 1981, 1991). that most favors his or her position. not want to answer. Prepare an an­ D.A. Lax and J.K. Sebenius, The Both parties know that the other is swer that is in no way dishonest but Manager as Negotiator (New York: Free Press, 1986). doing this; just the same, each party does not expose your weaknesses. R.J. Lewiciki, J.A. Litterer, D.M expects the other to justify an offer Preparation means rehearsing your Saunders, and J.W. Minton, as fair by showing how an offer answer until you can deliver it Negotiation: Readings, Exercises, complies with some fairness norm. smoothly, just as if you were practic­ and Cases (Homewood, IL: Irwin, Because offers that are unaccompa­ ing for a play. If you do not pre­ 1993). nied by a fairness argument will pare and practice your answers to M.A. Neale and M.H. Bazerman, rarely be accepted, you should con­ dreaded questions, then you risk an Cognition and Rationality in Negotiation (New York: Free sider alternative norms of fairness awkward pause or gesture that will Press, 1991). for each negotiation. Ask yourself, tip off the other negotiator to a H. Raiffa, The Art and Science of Which ones justify your demands potential weakness. Awkward ges­ Negotiation (Cambridge: Harvard and which ones defeat them? Which tures might even cause the other University Press, 1982). ones best reflect your conscience? party to believe you are lying when An associate of one of the au­ you are not. We suggest preparation thors, for example, faced a salary so that you avoid looking like a liar negotiation upon considering a new when you tell the truth but choose job. The potential employer stated not to reveal confidential informa­ an intent to pay “market value” and tion. If there are things you do not thought it fair to define market want to discuss, prepare your deflec­ value as the salary that other starting tions in advance and polish them local faculty members were paid. until they are seamless. The job seeker, on the other hand, judged that as unfair and argued that D. The Relationship Between the Parties market value should be defined as 1. Are the negotiations part the salary paid to starting manage­ of a continuing series? If so, ment-faculty members at compa­ what are the future conse­ rable nationally ranked universities. quences of each strategy, tactic, The candidate thereby successfully or action you are considering? redefined “market value” by describ­ Consider whether you expect or ing the salaries drawn by other want to continue a business relation­ graduates of his program who took ship with the party across the table. management-faculty jobs. Since the If the answer is yes, then you prob­ employer had already agreed to pay ably want to be careful about using market value, the employer found negotiation tactics that the other itself making concessions to do the side might perceive as bullying, in­ fair thing of acting consistently with sulting, or manipulative. Extracting its own stated principles. those last few additional concessions That example shows how a nego­ out of the other party is usually not tiation often hinges on a discussion worth the loss of goodwill. of fairness. Prepare for each negotia­ The fact that you plan to do busi­ tion by considering alternative ness with the other party in the norms of fairness. future offers a few freedoms as well

22 HOTEL AND RESTAURANT ADMINISTRATION QUARTERLY

Downloaded from cqx.sagepub.com at CORNELL UNIV on May 4, 2015 HUMAN RESOURCES as restrictions. The trust and good­ information about interests and negotiate plays the role of “wanting” will that you develop in the current priorities. to meet all your needs, but “de­ deal may have a payoff for next time. 3. What do you know of the mands” are being made by someone Also, if you can safely assume that other party’s styles and tactics? who is higher up and usually absent the other party wants a relationship Different negotiators have different from the actual negotiation (e.g., the with you, then you can worry less personal or cultural preferences. You sales manager). One response to this about their negotiating in bad faith. are likely to secure the best deal and approach is to take a break to reas­ Trust facilitates successful negotia­ have the most positive interaction if sess the other side s stance compared tions much more than does you learn about their style in ad­ to your tripwire. Another is to insist paranoia. vance and try to accommodate it. on speaking directly with the final 2. Can you trust the other We have observed three types of decision-maker. party? What do you know about negotiators. One type prefers to ease 4. What are the limits to the them? Call around to inquire how into the issue at hand after some other party’s authority? Establish this company conducts negotiation. personal contact. Once that negotia­ early the level of authority held by How much you trust the other party tor is at ease with you as a person, your counterpart. Most negotiators, will influence your negotiation style. she or he will be comfortable re­ unless they are the CEOs of their To find the tradeoffs and creative vealing information afterward. companies, are authorized to negoti­ solutions that ensure that everyone Another type of negotiator pre­ ate only certain specified issues and gets a fair deal, you have to share fers a direct approach and eschews within certain ranges. Determine information about your needs and disclosure and creative problem­ whether you are negotiating with priorities. Unfortunately, though, solving. Such a negotiator requires the right person, or whether far sharing your information makes a competitive approach to the more latitude in generating resolu­ you vulnerable to an unscrupulous interaction. tions might be available if you nego­ negotiator across the table. Untrust­ The third type of negotiator en­ tiated with someone else. worthy opponents can ascertain ters the process having carefully 5. Consult in advance with your priorities before you know computed and decided what is the the other party about the theirs and use this knowledge to best deal—and makes that offer up­ agenda. As we stated earlier, con­ gain maximum concessions from front and announces that it is non­ sider calling the other party before­ you. They might also lie about their negotiable. Having already made up hand to share what issues you plan own priorities. his or her mind about what the to discuss and to ask what issues the The extent to which you trust agreement must be, this negotiator other party might raise. In general, the other party should determine will likely become impatient and holding back information is your approach to sharing and col­ annoyed at any attempt at give-and- counter-productive and introducing lecting information. A series of small take. If you know that the person unexpected issues generally delays information “trades” is a good way you face prefers to do business this the proceedings. to build mutual trust without open­ way, recognize that it is probably not Although good negotiators often ing either side to exploitation. A a ploy. Simply assess the offer to see get creative in their approach to the second approach to gathering data if it beats your b a t n a . If it does, take issues, this creativity must be well- when you do not trust or know the it. If it does not, then politely refuse. grounded in an understanding of the other party well is to offer multiple Some negotiators use either of issues and of both parties’priorities. proposals and see which ones the two common gambits. One is to A well-prepared negotiator has con­ other side prefers. Be careful in this return from a break with a request sidered these factors in depth, and approach, however, as you must be for just one more concession that has also considered the past and willing to live with all the proposals can seal the deal. This tactic, known future context of the business rela­ you offer. It is considered a breach of as “taking a second bite of the tionship between the parties. It has faith if you propose an offer (for any apple,” is common among car deal­ been said that no plan survives con­ reason) but have no intention of ers. The appropriate response is to tact with the enemy—but it remains carrying through with the deal even suggest that if the other party would true that the shrewd general will if the other party says okay. like to reopen negotiations, you are have memorized the terrain and If you already know and trust the willing to reopen them, too—but on analyzed the strengths and weak­ other party, your task is much easier. all the issues, not just one. nesses of both sides before an en­ In such cases negotiations can in­ “Good cop, bad cop” is a tactic gagement. Fortune favors the pre­ volve an extensive exchange of whereby the person with whom you pared mind. CQ

February 1997 • 23 Downloaded from cqx.sagepub.com at CORNELL UNIV on May 4, 2015