Page 206 - DMGT519_Conflict Management and Negotiation Skills

Conflict Management and Negotiation Skills

Notes

Notes Tactics for Success

“Silence Is Golden”
When negotiations reach a critical point— such as when one party makes a verbal attack,
refuses to make any concessions, or threatens to walk out—one tactic that might turn the
tide is silence. A negotiator who says nothing in response to a verbal attack, unreasonable
demand, or threat does, in fact, send a clear signal to the other party. Often, after a few
minutes of silence, the negotiator who caused the breakdown will feel uncomfortable and
make a conciliatory statement or concession in order to get the other party to continue to
negotiate. If not, the silent party has not lost anything, and most likely will have
communicated his or her displeasure with the actions of the other side. Experienced
negotiators have learned that “silence is golden” when applied in appropriate situations.
To state example, the buyer might have responded with: “Would you prefer to end this
discussion and bring the other party to the table to negotiate a deal?” The question would
have reframed the discussion to focus on the issue at hand.

9.10 Final Negotiated Price

At some point in the negotiation process, the parties involved believe they are close to a
settlement. Before making a declaration such as “Well, I guess we’re done” or “I think we have
a deal,” an experienced negotiator will consider a few critical points.
First, although price was the major issue being negotiated, ask if it is really the only issue. For
example, a homeowner and home repair contractor agree on a price for siding installation, and
they sign a standard form stating the price and a brief description of the work to be done.
However, after the work is finished, the homeowner refuses to pay the contractor, perhaps
because he is unhappy with the work, or it was completed later than they expected, or perhaps
just because the homeowner thinks he can get away with not paying. If other issues had been
negotiated as well—such as exactly how it will be determined when the work is finished (does
the contractor or homeowner alone decide?), what interest the contractor is entitled to collect if
payment is late, and who pays legal fees if the case goes to court—then both parties would be
better served. A contract that specifies these issues in addition to the price can be critical to
preventing common disputes, which arise in about 12% of all home repair contracts, according
to the National Association of Remodeling Industry. In most simple distributive bargaining
situations, shaking hands and exchanging a product for cash is all there is to it. However, if an
immediate exchange of cash for goods is not possible, the bargainers should consider the classic
economic principle of “the time value of money.” This basic concept has caused many deals to
sour after an agreement is reached. Thus a second point to consider is the need for a contingency
contract. A contingency contract is an agreement that specifies how a future event will change
specific issues contained in the contract. If such a future issue cannot be foreseen, a contingency
contract can allow the parties to reach agreement on all other issues, and then provide for
exactly how the terms will be finalized once the future event is known.

Contingency contracts are commonplace in business, but they can also be useful in personal
negotiations among family, friends, or neighbors. For example, three adult children over a
period of several months distributed all of the property, household, and personal items in the
estate of their late parents. As their parents wished, the process had gone smoothly and without
any serious disagreements. Only the disposition of their parents’ home of 40 years remained to
be negotiated. The parents’ will specified that all estate items were to be divided equally, thus

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