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Vern Edwards

Negotiation Skills and Tactics

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Some of you will remember the thread in which our resident agent provocateur, Pepe the Frog, posted many controversial comments about negotiation ethics and tactics. (Said with affection, Pepe.)

Well, I was wandering about in a bookstore yesterday (a Barnes and Noble in southern California) when my eyes fell on the following title: Kissinger the Negotiator: Lessons from Dealmaking at the Highest Level, by Sevenius, Burns, and Mnookin (Harper 2018). Dust jacket blurb:

"In this groundbreaking, definitive guide to the art of negotiation, three Harvard professors---all experienced negotiators---offer a comprehensive examination of one of the most successful dealmakers of all time."

I bought it, of course.

While the book is about diplomatic negotiations, at least some of its points and tactics ought to be applicable or adaptable to contract negotiations. In any case, it appears that it will be a fascinating read. You might want to take a browse in a bookstore near you.

 

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dEcEpTiOn: the boogieman that makes all the church ladies squeal and faint

Do you think Henry "Realpolitik" Kissinger used deception in negotiation? Do you think a car salesman does? Do you think a car buyer does?

Do you think either side of a federal contracts negotiation does? (Oh, no! Never! There's no gambling in these casinos!)

Let's get this party started again! Come back, church ladies! PepeTheFrog wants to hear some virtue-signalling! Show us how naive you are, how morally upright you want others to consider you to be (which is deception), and how little you've thought or read about human psychology, evolution, and language itself!

deceive: cause (someone) to believe something that is not true, typically in order to gain some personal advantage...give a mistaken impression

Say it with me now: "Deception is a fundamental part of negotiation!"

Examples:

Bluffing: deception

Anchoring or setting expectations high (or low): deception

Low-balling: deception 

Keeping your cards close to your chest: deception

Sharing certain information, but not other information, to influence the other side into thinking you're "worse off" than you are: deception

Saying, "I can't take that deal" or "My boss will kill me if I..." or "I can't make a profit at that number": often deception

Not divulging your entire negotiation position (who would do that, unless you're in a supreme position?): deception, because whether you admit it to yourself or not you cause the other side to believe something that is not true to gain a negotiation advantage...you give a mistaken impression, not the full picture

 

For PepeTheFrog's big-brained frogs only:

Which has a higher cost to produce, truth or lies? 

How does science work? Do we learn about the natural world from justification, or from falsification? 

Do we apply the scientific method to all forms of communication? Do we apply it to speech or writing in negotiation? 

Do we warranty all of our communications? Do we warranty all of our communications in negotiations?

What do you think transactional and M&A attorneys are paid to do? What does "due diligence" mean in the world of M&A? 

Did humans evolve language and communication to tell the truth only, or is it also a mechanism to make deception easier?

Do all societies, cultures, civilizations, people value truth-telling equally? Does extension of trust beyond kin-groups play a role in levels of commercial prosperity? 

Are there different group evolutionary strategies for different groups of humans? Could some groups rely more on cooperation and truth-telling than others? Could some groups rely more on predation and deception than others?

 

 

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Interesting topic, but if one takes PepetheFrog's post literally, every negotiation has deception, and I don't think this is bad.  A negotiation is undertaken so that each side gets the best deal they can.  I am not going to lay all my cards on the table at the start of negotiation, and I don't consider this deception.  To me, deception is if I say I am going to use a certain grade of product and know I am going to use a lessor grade.  Deception is to out and out lie like "Of course I can meet that deadline" when you know you can't.

Saying things like "My boss will kill me if I go any lower" is a way of finessing the deal.  Everyone knows it is part of the game and I don't think of this as a deception.  Keeping my cards close to the chest is not deception, it is a business practice.  Am I going to say that it costs me $10 to make the part but I am selling it for $50?  Of course not (unless I am dealing under TINA).  The buyer should try and get a fair and reasonable price, but it is not my job as the seller to do his homework for him/her.

If I make a product that costs me $1 but I can sell it to you for $30 and you will save $100 per unit manufactured, isn't that worth it?

So, I will employ a certain amount of deception in my negotiations based on the criteria mentioned above, but I do not lie or misinform the other person.  There are many "tricks" we employ to try and get the advantage on our opponent during a negotiation, and this is part of the game. As long as your deception is not one of materially misrepresenting the quality of the product, the delivery date, or the workings of the product, almost all else if permitted in negotiations.

As to Henry Kissinger, I remember reading that the Vietnamese negotiations thought little of the American negotiators.  One commented that when they came to Paris for negotiations, the Americans rented hotel rooms by the week.  The Vietnamese  rented a villa by the year.  They were ready to outwait the Americans and win knowing Americans do not like long negotiations and will eventually give in to make the deal at any cost (sort of like Obama and the Iranians).  In the end, I think the Vietnamese got the best of us (my opinion).

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“Am I going to say that it costs me $10 to make the part but I am selling it for $50?  Of course not (unless I am dealing under TINA).  The buyer should try and get a fair and reasonable price, but it is not my job as the seller to do his homework for him/her.”

If you lie about the cost of the part, it is a false statement, may be a false claim, may be fraudulent. It doesn’t matter whether or not you are dealing under “the law formerly known as TINA”. 

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