William goldman

*73 • Answer part of the question now, and offer the rest if progress is made in the negotiation.294

• Explain why you will not answer the question.295

• Negotiate the circumstances under which you will answer the question.296

• Occasionally, simply remain silent.297

In addition, to our suggested responses, Professor Charles Craver has developed a similar list of ways to avoid answering questions that we draw to the reader’s attention:298

• Simply ignore the intrusive question.

• Answer the beneficial part of compound questions.299

• Over- or under-answer the question.

• Misconstrue the question and answer the reframed inquiry.300

• Answer the opponent’s question with a question.301

• Rule the question out of bounds.302

*74 Craver’s suggestions strike us as particularly useful when a negotiation has taken a negative turn, and one is trying to avoid an aggressive questioner. Parties engaged in information exchange must always keep in mind, however, that the more antagonistically one engages in and responds to questioning, the less likely the atmosphere will be favorable for effective bargaining. The critical part to remember is that unless the parties reveal useful information to one another, they are not likely to develop collaborative solutions to bargaining problems.

4. “First Offer” and Concession Strategy

Negotiation experts worry about who makes the first offer and what the first offer should be. Most declare that the astute negotiator should never make the first offer.303 Those who make the first offer, the experts argue, too often make themselves vulnerable by demonstrating ignorance,304 by making offers meant to be rejected that instead are immediately accepted,305 by seeking unduly modest *75 agreements,306 or, conversely, by demanding insultingly large amounts.307 The risks, the experts allege, are simply too great.308

Although we agree that the pitfalls of making first offers are many-leading us to prefer not to do so as a general rule-we can see counter-arguments that return us to our universal rule of “it depends.” In some instances, one can gain an advantage by making the first offer. Going first permits one to seize the initiative and to set the range for bargaining,309 especially for deals where there are few “market” indicators.310

Regardless of which side makes the first offer, there is virtual unanimity among the experts regarding the size of one’s opening offer: it should be as high (or as low) as reasonably possible.311 Doing *76 so avoids leaving any bargaining surplus on the table312 and capitalizes on findings from psychology. Researchers in that field have identified what they call an “anchoring” effect that works in favor of those who make aggressive opening demands.313 That is, individuals will look to the offers made by the other side in determining their aspirations and bargaining range. A strong opening position by one side may well move the other to moderate its expectations, to the benefit of the aggressive opener. Of course, this may not always occur. If the other side has a clear sense of what a reasonable offer should be, an extreme offer may simply convince them that the other party is unreasonable or bluffing, and provide no clear advantage.314

Once the parties have declared their opening offers, assuming that each remains willing to deal, they then must begin making concessions to reach an agreement. Again, there is virtual unanimity among the experts regarding how this should proceed. Concessions, they insist, should be made grudgingly and with increasing resistance. This strategy reflects another psychological insight: negotiators value what they painfully extract from an opponent more than what they easily acquire.315 Accordingly, however little one values a *77 concession granted to the other side, one should always treat each bit of ground relinquished as though it were valuable, and painfully released.

Moreover, we recommend a specific approach to making concessions. To the extent possible, one should not simply concede points with little said about the reasons why. One should give substantive reasons for shifting position, perhaps also seeking concessions from the other side while doing so. For example, “Yes, I’m willing to drop the asking price for the house by $5,000 given that you’ve already arranged financing for the purchase. But, I’m going to have to take the washer and dryer with me because of the lower purchase price.” Giving reasons for making concessions helps one avoid a “free-fall” in which one’s adversary, without offering anything in return, insists that one keep sweetening the deal.316 When one has given a reason, one can respond that the conditions that permitted the previous concession no longer exist, and therefore he or she has no basis for improving the offer.

V. Bargaining With More Powerful Parties: Specific Approaches

We now turn to specific advice for those facing opponents with greater power. As a starting point, we stress several thoughts about this negotiation challenge. First, our suggestions cannot change certain features of the bargaining landscape. Although taking particular steps, such as acquiring greater information, can enhance one’s *78 leverage in a given situation, there are usually aspects of the underlying power differential that remain fixed.317 This means that even when optimizing opportunities in a negotiation, one may still end up with an agreement that tilts substantially in the other side’s favor when substantial power disparities exist. A “weak” agreement may be the best obtainable option under this circumstances-perhaps better than no agreement. This result does not necessarily mean that one is a poor negotiator. Conversely, merely because one is able to force a one-sided deal on a relatively weaker party does not mean that one is a good negotiator. What matters in these situations is whether one has achieved the optimal agreement under the circumstances.

Moreover, our suggestions do not guarantee a “happy” ending to most negotiations. In fact, paradoxically, they may lead to less contentment than not following them. For instance, we advise negotiators to raise their aspirations, which is an approach that may produce fewer joyous bargaining moments, but better overall deals. In this sense, happiness will depend more on achieving one’s goals than on attaining a particular objective outcome.

Further, everyone approaches negotiation with a unique personal style, which he or she must strive to understand and master.318 To be an effective bargainer, one must work within one’s given personality and negotiation style.319 But, one must be careful not to make hasty or unduly pessimistic judgments about style and one’s ability to improve it. Aside from the fact that negotiators sometimes do not truly understand how others perceive them, they also do not always realize the capacity that they have for improvement. It is possible for those who believe themselves timid to become more assertive and for those who view themselves as aggressive to become more sensitive.320

Finally, we note that there is no omniscient scorekeeper who will blow a whistle when one has underperformed or ring a bell when one *79 has done well. Once a deal has been struck, asking the other side whether we have extracted all of the concessions they were prepared to give is unlikely to trigger a full and honest response. In short, one has to operate somewhat blindly in the real world when it comes to assessing success or failure.321

With these caveats in mind, we now turn to a set of suggestions for negotiators facing more powerful opponents.

A. Determine Whether the Other Side Really is More Powerful

Determining one’s power in a negotiation requires more than a simple calculation and comparison of each party’s individual power. Power depends on a complex interplay of the parties’ perceptions about what each can do to or for-or without-each other. Accordingly, one always needs to assess how much each side needs or fears the other, and what each side’s alternatives are to striking a deal.

How does one make this determination? As a starting point, one must set aside any tendency to translate his or her anxiety about negotiating into an unproven assumption that the other side carries greater power.322 Moreover, even if the other side is powerful, we must still decide whether the opponent has power over us. To make this judgment, one must ask the following questions:

• What is it that I want and need from the other side?

• What negative action can the other side take against me if no agreement is reached?

• What alternatives do I have to entering into this agreement?

Asking these questions helps avoid the natural, but misguided, approach of simply assessing the other side’s power in the abstract. The fact that the other side is rich, handsome, and famous has little relevance to a power determination where we hold something that they desperately want, and they have little that we desire. But, there is more. Equally important, but often overlooked by nervous bargainers, is an assessment of the other side’s dependence on us.323 Accordingly, one needs to question further:

*80 • How badly does the other side want or need something that I have?

• What negative action can I take against the other side if no agreement is reached?

• What alternatives does the other side have to reaching an agreement with me?

One who has calmly and realistically addressed these questions will have a far better sense of the underlying power dynamic in a negotiation than one who merely looks to how powerful an opponent is in the abstract. In some cases, having undertaken such an analysis, one may conclude that one’s power with respect to the upcoming transaction is greater than previously estimated.324

B. Determine Whether Adversaries Understand and Will Use Their Power

Given what we believe to be a negotiator’s natural tendency to assume that the other side has superior power in a given situation, negotiators should look to whether their opponent has entered into the bargaining in an extremely fearful or awed manner. This possibility seems so far-fetched to some bargainers that they miss obvious signs of their opponents’ anxiety or misread them as indicators of hostility. At such moments, opportunities for gain will be missed if one fails to assess the other side’s perception of the power dynamics accurately. What is critical is not just a reading of the opponent’s power in a given negotiation, but also of his or her perception of the power dynamic.

Similarly, if the other party, although aware of his or her power, is nonetheless unwilling to use it, then the opponent lacks effective power. Effective power requires the realistic likelihood that some sort of forcing action will be taken if necessary. For example, during World War II, German General Dietrich von Cholitz, commandant of occupied Paris, received a direct order from Adolf Hitler to burn the *81 city and to blow up all of its bridges. Mindful of Paris’ grandeur and of the inevitability of Germany’s defeat, von Cholitz refused and evacuated his troops, leaving the city intact. Lacking the will to destroy the city, von Cholitz had only the option of retreat.325 In short, if one wishes to make an accurate assessment of the power dynamics of a negotiation, he or she must determine both the other side’s leverage and the opponent’s willingness to use it.

C. Use Opening Moves to Set the Tone and to Deflect Power Ploys

First impressions matter. Research suggests that parties typically establish the entire tone of a negotiation through the first array of moves and gestures.326 This so-called “primacy effect”327 means that negotiators concerned about a power imbalance in an impending deal need to be particularly concerned about how they come across to the other side. If they demonstrate nervousness, tentativeness, or hesitation in their introduction or if their voice trembles328 and they cannot give proper eye contact,329 their opponents may seize upon their perceived weakness and seek to exploit it. Accordingly, one needs to prepare physically and psychologically for making an appropriate first impression.330 The trick, if one exists, is not so much to *82 look intimidating as it is to appear thoroughly comfortable in the negotiation setting.

Deciding on the proper tone of a first meeting is critical. If one wishes to have the bargaining proceed in a cooperative manner, one needs at the outset to take steps to set a mood of trust and collaboration; if one wishes to use a “power-dominant” approach, one needs to set that tone at the earliest stage of the interaction.331 Different openings will depend on the setting in which one wishes the negotiating to proceed.332 Regardless of the mood one selects, however, one must generally attempt to appear strong and confident. This does not mean that one needs to attack or display hostility. It does mean that one should present a demeanor indicating that one is prepared for all eventualities and able to cope easily with the pressures of the bargaining.333

Most experts counsel that one of the first goals of impression management is creating trust between the parties. Trust is essential for effective negotiation in all settings, even those involving elements of competition and aggression.334 Although trust more often than not arises when positive feelings exist between parties, liking someone is not the same as trusting that person.335 Trust involves more. Trust means that one is willing to become vulnerable to action by the other side. As Professor Thompson points out, trust generally arises when *83 the parties risk exploitation by each other, not when they remain isolated and protected.336 Accordingly, to trust the other party, one must believe that the opponent will not take advantage when one’s guard is dropped.337

How is trust established? Available research indicates that negotiators tend to approach those whom they do not know (or know about) warily. Until given evidence that the other side can be trusted, many will not risk making themselves vulnerable.338 This suggests a cautious strategy involving a high degree of reciprocity-one trusts on small matters and looks to see whether the other side takes advantage of one’s vulnerability. One then sees whether the other side will take a similar trust-creating step. In this way the bonds of respect and support grow.339

Suppose, instead of seeking to create trust, the other side appears to want to establish his or her dominance through threats and demands? We believe that this is the point where an appropriate response can make or break the negotiation. First, one needs to be certain that an opponent truly intends a power play. In some cases, our anxieties can lead us to conclude that we have been attacked when the other side simply wishes to make a point or ask a question. For example, consider the statement, “We don’t seem to be getting anywhere. Let me make a suggestion.” Depending on the circumstances and context of this statement, one might be justified in concluding that the other side is attempting to seize control of the situation or that he or she is simply trying to be helpful. It is critical to understand which approach is contemplated.

Second, assuming that a power play is at hand, one needs to suppress any immediate reaction to respond in kind, to submit, or to *84 abandon the negotiation. Instead, according to Professor Ury, without showing fear or acting defeated,340 one needs to respond in as positive a manner as possible to advance the negotiation rather than to derail it.341 Because power is so much a matter of perception, one must show confidence even if one does not feel it.

Third, one needs to reveal one’s own power in careful fashion to demonstrate that a pure power approach to resolving the issues will be costly for both sides. Merely because the other side carries a power advantage rarely means that one is completely without power.342 As we shall discuss, one often has more leverage than might be initially thought.

D. Use Information Strategically to Increase Power

We reiterate that information is crucial to the bargaining process. More so than any other power source, information provides the greatest opportunity to shift the dynamics of a negotiation. Properly gathered information permits negotiators to discern their opponents’ weaknesses, vulnerabilities, likes, dislikes, strategies, and aspirations. This permits negotiators to meet the other side’s needs effectively, and to anticipate and block power plays by the other side. Accordingly, one facing a more powerful opponent needs to devote extraordinary effort prior to the day of bargaining to acquire information that might enhance his or her leverage.343 For example, consider the impact of careful preparation in a negotiation between a South African coal company and Nippon Steel Company, as reported by one of the coal company executives:

We arrived at the venue well prepared (we thought) and soon got down to business, quoting our price, which we knew was cheaper than anything else in the world. Then the dreaded words from Mr. Shibuya that I’ll remember until my retirement . . . . “Please, Mr. Smith, explain to us how you worked out your *85 price, because we also worked out your price for you and get a different figure . . . . Shibuya then commenced to put an impressive document on the table: on that they had detailed figures of SATS tariffs, on tonnage, on insurance, on the cost of our administration. What audacity! Yet they were right: on closer inspection we could not fault them on a single point. Their figures were even more recent than ours. They had better information on our own product than we ourselves! How on earth do you counter this across a table?344

What makes this example so illustrative of the strategic use of information is that, prior to entering the negotiation, the South African coal company appeared to enjoy a substantial power advantage, given that it could offer Nippon Steel the lowest price of coal obtainable in the world. Notwithstanding that, Nippon Steel, invoking its research results, seized the power advantage.

Assuming that one has done sufficient homework and acquired critical information, one needs to ponder carefully how to put such information to use. One of the most effective approaches is to test the other side’s trustworthiness. For example, prior to the Cuban missile crisis in 1962, President John Kennedy met with Soviet Foreign Minister Andrei Gromyko. Prior to the meeting, Kennedy had obtained Air Force photographs of Russian missiles in Cuba. At the meeting, Gromyko repeated his country’s insistence that they would never introduce offensive weapons into Cuba. With clear evidence to the contrary, Kennedy concluded that the Russians had acted duplicitously and, several days later, imposed a United States’ “quarantine” on the introduction of offensive weapons into Cuba.345

In other instances, one needs to share information openly and immediately, especially at a point where one has learned of the other side’s needs and interests. In such cases, revealing that one can meet those needs will hasten the development of an excellent deal. For example, if a real estate agent who has unsuccessfully sought waterfront property for a couple determines that they seek such property only for the view (as opposed to recreational use), the agent might be able to sell them a lot that overlooks a lake but does not actually abut the water.