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Hard Bargaining End Games

July 29, 2013 at 2:13 PM

The tactics described below are those most often used in the later and whether it is better to settle as proposed or abandon the negotiations.

last phases of negotiations. Like the previously mentioned tactics, I do

not necessarily advocate their use. Use should be determined by ethical considerations and personal style. Having an awareness of the tactics, however, enables defence against their use.

1. Boulwarism/take it or leave it offers/final offers

Boulwarism takes its name from Lemuel Boulware, a former vice president of General Electric Limited. In union negotiations, he would make a first and only offer and refuse to budge from it. This tactic prevents any meaningful negotiations taking place following the offer being made. The other party is simply given the option of either accepting or declining the offer. No further offer will be made and counter offers will not be entertained.

The tactic can be used at any stage in negotiations, including at the very commencement before discussion has occurred. More commonly, non-negotiable offers are preceded by other offers. They are a means by which the tactical party signals to the other party that it is neither willing nor able to compromise further. It serves to place pressure on the other party by forcing that party to decide

The risk of Boulwarism and final offers is that if they are declined, they will bring the negotiations to an immediate close without settlement. Unbeknownst to both parties, a settlement in their joint interests might have been achieved had the negotiations continued. The tactical party's credibility is threatened if for any reason they continue the negotiations.

2. Sudden change

This tactic serves to put the targeted party off balance and ill prepared to respond. The tactical party takes the negotiations in a sudden, unexpected, and entirely different direction to that in which they were heading. For example:

"I no longer want reinstatement; I want damages instead."
"I have changed my mind; I don't want the house but shares in the business."

When the change of direction comes late in the negotiations, the exhausted and exasperated targeted party who is anxious to settle, may be inclined to accept a

settlement proposal, if only to avoid seemingly endless and erratic negotiations.

3. Shifting levels

This tactic is a little akin to the previous one. The tactical party alters the scope or significance of the negotiations, whether by way of increase or decrease, in order to undermine the basis on which the targeted party has been negotiating and to change its expectations. For example:

"The outcome must now apply to all branches throughout the country, and so your arguments about local conditions are no longer relevant."

"We are no longer prepared to consider the national position and so you should revise your proposals to apply to the local area only."

"Our CEO will no longer be the negotiator; his administrative assistant will take over."

"We are bringing head office into the negotiations."

Suddenly, the targeted parties are about to get much more, or much less, than they were bargaining for, and so their previous arguments no longer apply. They are forced to re-evaluate their case with little time or ability to do so.

4. Nibble/late hit/add-on

This tactic is used just when settlement appears imminent, in order to extract a further gain. The tactical party makes a last-minute new demand. Usually, it is of a modest nature. For example:

"There is just one more thing: although we are still prepared to accept your offer of $400,000, we insist that you meet the $2,000 travel costs which we incurred coming to the mediation."

The targeted party may be loathe to reject such a demand despite it being irritating and unreasonable out of fear that an otherwise good settlement might be jeopardised. It may appear churlish to reject such a demand. The tactical party achieves the pleasure of a little icing on the settlement cake.

5. Backtracking/unravelling

The user of this tactic is bound to be unpopular, but that may not matter. The tactical party threatens to renege on agreement reached earlier in the negotiations, or may actually do so. For example:

"Despite what we agreed to earlier, we are no longer prepared to compensate for that item."

"If you persist in demanding that, we will go back on our agreement to meet those expenses."

The targeted party will be annoyed and frustrated by this about face. But the tactical party is unconcerned. It knows it has disrupted the targeted party's negotiation plan and left it wondering what concessions it must now make to reach agreement with an apparently difficult, erratic, and unreliable opposite party.

6. Low-balling

This well-recognised tactic is closely related to the previously mentioned one.
It involves the tactical party inducing the targeted party into a deal by offering favourable terms, and then just before the deal is clinched changing those terms under some pretext to less favourable ones. By that time, the targeted party is psychologically committed to the deal and agrees to the less favourable terms. The tactical party intends from the outset to reduce the attractiveness of the original offer. For example:

"I'm sorry, but I overlooked adding GST to my original figure."

"Unfortunately, the manager does not agree with the trade-in figure I offered on your old car and so the balance payable for the new car will be a little higher than I previously mentioned."

7. Setting a deadline

Here, the tactical party declares that it is no longer able or prepared to continue the negotiations beyond a specified period. It serves to place pressure on the targeted party to agree to the terms proposed by the targeted party, rather
than risk the negotiations coming to a premature end without settlement. The shorter the notice, the greater the pressure:

"I'm sorry, but I am suddenly feeling unwell, and so if we are not finished in the next 30 minutes, I am afraid that I will have to depart."

"I should have mentioned this earlier, but I have a plane to catch in two hours."

The tactic may also be used in a less devious way to hurry along a party who is indecisive, unrealistic, or stubborn:

"Look, this is not a complicated matter, it should have been settled well before now, and so, unless it is settled within the next hour, we are departing."

8. Stalling

This tactic is the opposite of the previously mentioned one, but likewise utilises time pressure to achieve a favourable settlement. The tactical party knows
that for some reason the targeted party wants to conclude the negotiations
by a certain time. Therefore, the tactical party deliberately draws out the discussions, forcing the targeted party into making hurried decisions which
are more likely to be concessional as a result. Typical reasons that the targeted party might want to conclude the negotiations include needing to catch a flight, pick up children, remove a car from a car park, have a drink, have a cigarette, or get to another engagement. In more protracted negotiations, longer-term deadlines can be exploited. The tactical party may stall in the awareness, for example, that the targeted party wants the matter resolved before announcing his or her candidacy in upcoming elections, or before the AGM, or by the end of the tax year, or before departing on a long overseas holiday.

9. Perseveration

Perseveration is insistent and excessive repetition, manifesting an inability
to alter a viewpoint or stance. The tactical party becomes a veritable broken record, unable to be lodged from its groove. This characteristic may be adopted by the tactical party to frustrate the targeted party and bring it to the realisation that the targeted party is impervious to its arguments, leaving it with no option but to concede. For example:

"For the hundredth time, that is not an option."

"We know that you are sick of hearing us saying this, but we are not going to stop saying it."

As the negotiations linger on, the targeted party becomes worn out by its ability to make progress against such repetition and inflexibility, and reluctantly changes its position in favour of the tactical party.

10. Walkout

I leave this, the most dramatic end game, to the last. Here, the tactical party abruptly and angrily terminates the negotiations, or at least threatens to do so. It is a way of signifying to the targeted party that it has done all humanly possible to reach an agreement, unlike the targeted party which it blames
for the breakdown in the negotiations. Whether the walkout is contrived or not, the message to the targeted party is that if it wants the negotiations to continue, it will have to urgently and radically reappraise its position. The risk is of course that the targeted party will allow the walkout to continue, which would leave the tactical party in a difficult position, should it in fact want the negotiations to continue. Despite risk, the tactic can be a game changer.

Nigel Dunlop is a barrister and mediator at William Martin Chambers in Auckland. For the other articles in this series, see "Hard bargaining tactics and how to avoid them", NZLawyer, issue 128, 22 January 2010, "More hard bargaining tactics", NZLawyer, issue 188, 13 July 2012, "Yet more hard bargaining tactics", issue 189, NZLawyer, 27 July 2012, and "Still more hard bargaining tactics", NZLawyer, issue 195, 19 October 2012. These articles can be found at www.nigeldunlop.co.nz or Archives at www.nzlawyermagazine.co.nz.

 

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Category: Negotiation