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Yet More Hard Bargaining Tactics

July 29, 2013 at 1:54 PM

By Nigel Dunlop, barrister, William Martin Chambers, Auckland

The two previous articles in this series have each described 10 hard-nosed negotiation tactics ("Hard bargaining tactics...and how to deal with them" NZLawyer, issue 128, 22 January 2010, and "More hard bargaining tactics", NZLawyer, issue 188, 13 July 2012).

The further 10 tactics described in this article are all designed to unsettle the opposition and to undermine their confidence. Most parties at the commencement of negotiations exhibit the psychological phenomenon of judgemental overconfidence, by which they have greater faith in the strength of their own arguments than is objectively justified. This undeserved optimism is an impediment to settlement, unless challenged (for a summary of the effect of human traits on negotiation see "If only humans were rational", NZLawyer extra, edition 1, 7 May 2010). The tactics described below assist with that challenge. As with my previous articles, I limit myself to describing the tactics, rather than advocating their use. Use should be determined by considerations of ethics and personal style. Even if not used by a negotiator, awareness of them is a prerequisite to defence against their use.

1. Playing on fears

Psychological research shows that, in negotiation, people are more concerned about avoiding loss than achieving gain. They not so much want a good outcome, as to escape a bad outcome. This means that fear of possible adverse outcomes is an important driver in negotiation decision making. A party's optimism that their arguments will prevail may therefore be countered by playing on the fears they inevitably harbour about possible negative outcomes. Accordingly, the tactical party should listen for, elicit, or guess at the fears of the other party, and then dwell on them.

❯ "You face the risk of disastrous bankruptcy."

❯ "You are in danger of losing your home."

❯ "Your future employment prospects will be permanently damaged."

❯ "Your reputation will suffer."

❯ "Your shareholders will disapprove."

2. Playing on assumptions

Parties in negotiation sometimes make incorrect assumptions which play into the hands of the opposing parties. Rather than disabuse the mistaken parties, tactical parties allow the assumptions to continue. More than that, they capitalise on them.

For example, a tenant negotiating the renewal of a lease might disclose that it believes the landlord is readily able to obtain replacement tenants, which is not in fact the case. The tactical landlord responds: "That is something you are well advised to take into account." The landlord has avoided lying to the tenant, but subtly implied that the belief is true.

There are two key ways for parties to avoid being subjected to this tactic. The first is to identify and question their assumptions. "We are assuming that it will be easy for the landlord to replace us, but is that in fact the case?" The second is, of course, to avoid knowingly or unwittingly disclosing those assumptions to the other party.

3. Induced competiveness

This tactic is often referred to as "whipsaw". It involves the tactical party introducing, or threatening to introduce, additional players into the negotiations, which might imperil the interests of the targeted party. This puts pressure on the targeted party to accept terms favourable to the tactical party in order to avoid being usurped by others.

This tactic is beloved of vendors: "You had better quickly agree to our sale price, because there are plenty of other interested buyers waiting in the wings."

One response to such a tactic is to ask for verification of the identity of the purported competitors.

4. False scarcity

There is a well-understood relationship between availability and price. The harder something is to obtain, the more we want it, and hence the more we are prepared to pay for it.

Therefore, this tactic involves the assertion or insinuation by the tactical party that a deal should be struck on the terms proposed by the tactical party, otherwise the goods, services, or other benefits under negotiation may no longer be available in the future.

This tactic may be powerfully combined with all three tactics referred to above. For example, a purchaser of products fears loss of supply, something which is suspected by the vendor. Further, the purchaser has let slip that it wrongly assumes the vendor has only limited supplies available. The vendor's line is therefore: "It would be prudent for you to secure this purchase now on our terms because the entry of other purchasers into the market may present difficulties for you." Without making an explicitly false statement, the vendor has sent the message, albeit a false one, that unless the purchaser moves quickly, other purchasers may take up all the available supply.

5. Status and stature

Parties can be daunted, if not intimidated, by opposing parties who possess superior status and stature. The 'inferior' party may give unjustified credence to the utterances of the 'superior' party, and be loathe to challenge them. Examples are a junior lawyer negotiating with a senior lawyer, a party negotiating with an important public figure, or a party engaging the services of a renowned 'expert'.

This tactic involves a party deliberately putting together a negotiation team which will inculcate a sense of inferiority in the other party. The tactical party then reacts with surprise and irritation to any suggestion that the other party is not respecting its higher status.

6. Association

Many human behavioural traits apparent in negotiation are irrational, but nonetheless influence outcomes. The power of association is such an example. We have the tendency to attribute to people the qualities and characteristics of those with whom they are associated. This tactic exploits that trait.

The tactic comprises a party declaring an association with an authoritative or well-known person in order to bolster their case. They name- drop in order to take on the persona of that person. This is in effect the previously mentioned tactic by proxy.

❯ "Justice Smith is a very good friend of mine."

❯ "One of my colleagues wrote the textbook."

❯ "I was chatting with your board chair the other day."

❯ "I will be having dinner with the Prime Minister tomorrow."

❯ "I met Prince William last year."

7. Flirtatiousness

A key principle of persuasion is the tendency for people to agree with those that they like. The tactic of flirtatiousness exploits this principle, not to mention baser instincts.

The tactic comprises subtle sexual suggestiveness, serving to disarm the targeted person, and to render them malleable to persuasion.

The tactic addresses the problem of reactive devaluation. This is a psychological trait by which people tend as a matter of course to ignore or dismiss the arguments of their opponents. This innate suspicion is difficult to maintain when the opponent appears to be a sensual admirer. It may be difficult for the targeted person to realise he or she is being targeted. This may be due to flattery meeting vanity. It may also be due to the fact that the targeted person has not met the tactician before, and hence has difficulty in spotting the absence of sincerity.

8. Sudden mood change

Throughout negotiations, parties endeavour to get the measure of one another in order to predict and persuade. The tactic of sudden mood change serves to undermine the confidence of the targeted party that they have correctly understood the tactical party. This uncertainty as to what the tactical party is thinking makes it more difficult to negotiate against them. Typically, the tactic involves the tactical party abruptly and unexpectedly changing from a friendly and light-hearted demeanour to one of anger and aggression. Such changes are disturbing to the targeted parties, who are left wondering what they have done to cause the upset. The targeted party will usually seek to appease. The tactical party makes it clear that appeasement can only be achieved by the targeted party making bargaining concessions.

9. Topping every point

An important component of successful negotiation advocacy is maintaining the appearance of superior bargaining strength at all times. To this end, the targeted parties should be kept on the back foot and not permitted the benefit of making good points. They are thereby prevented from finding their stride and developing the confidence to drive home hard bargains. One way of achieving this is to nullify any strong point made by the opposition by bettering it, such as party B does:

❯ A: "There is good High Court authority to support our case." B: "There is good Court of Appeal authority to support ours."

❯ A: "If this goes to trial, we propose calling the New Zealand expert on the issue." B: "We will call the best international expert."

❯ A: "A hearing would take up to three days." B: "Wrong. It would take at least five."

❯ A: "We will call four witnesses to verify the point." B: "We will call double that number to refute it."

10. Dismissal

Parties in negotiation are encouraged when the other parties appear to acknowledge or agree with what they are maintaining. Such positive feedback lifts morale and hence determination to strike a hard bargain. A tactical party, such as B below, avoids this phenomenon by being unremittingly negative towards anything the targeted party does or says. It immediately and cursorily dismisses the targeted party's assertions and offers.

❯ A: "Tests would not have identified the problem." B: "That's ridiculous."

❯ A: "We will concede that the quality was substandard." B: "That's no concession at all, it was a simple fact."

❯ A: "We have a strong case." B: "Nonsense."

❯ A: "We offer $500,000." B: "That's not even worth considering."

This tactic is best used against a party who enters the negotiation with the unrealistic expectation that the tactical party will readily succumb to their arguments. It should not be used against a party who is a poor or reluctant negotiator, because it runs the risk that they will abandon the negotiations in the belief that settlement cannot be achieved.

Nigel Dunlop is an Auckland barrister who has mediated over 500 disputes of all descriptions throughout New Zealand, involving more than 2,500 hours of mediation, achieving a documented 93 per cent settlement rate. To download PDFs of "Hard bargaining tactics...and how to deal with them", "More hard bargaining tactics", and "If only humans were rational", go to Articles and Presentations at www.nigeldunlop.co.nz.

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Category: Negotiation