William goldman


*97 4. Boulwarism, or “Take It Or Leave It”



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*97 4. Boulwarism, or “Take It Or Leave It”

The “take-it-or-leave-it” approach to bargaining undoubtedly goes back to antiquity, but seems to have been refined to an unprecedented degree by Lemuel R. Boulware, head of labor relations for General Electric from the late 1940s through the late 1960s.384 Prior to each labor negotiation, Boulware would meticulously research the company’s productivity, the cost of living, and other financial factors and then would enter each negotiation with a fixed-and what he believed, fair-offer to the union. Thereafter, Boulware would invite the union to examine his analysis, but would not budge from this number unless his facts and figures were shown to be incorrect. This take-it-or-leave-it approach worked for nearly twenty years until G.E.’s thirteen unions joined forces and undertook a long and costly strike against the practice.385 Simultaneously, they filed a complaint with the National Labor Relations Board alleging that Boulware’s approach constituted a failure to bargain in good faith and obtained a ruling that this approach violated the National Labor Relations Act.386

What made Boulwarism unique compared to many other take-it-or-leave-it negotiations is that Boulware opened the bargaining with the “final” offer. Although the unions put up with this approach for many years, ultimately it led to intense labor strife. The reason, we suspect, was that the approach appeared to be arrogant and demeaning. Most people have a need to play a role in the final outcome of a deal.387 Boulware’s approach rendered them almost irrelevant-not a helpful feeling for one side to be left with when bargaining. In contrast to Boulware’s approach, one who gently unveils a “take-it-or-leave-it” offer near the end of the negotiation after extensive back-and-forth discussion may not trigger a negative reaction. Instead, *98 this approach signals to the other side that one has approached the walkaway point.388

To counter a “take-it-or-leave-it” approach, one needs first to probe the underlying assumptions of the party who has made such a statement to see whether such assumptions can be disproved. Demonstrating the fallacies underlying an offer can open the negotiation to further bargaining. One should also assess the commitment that the other side has made to a take-it-or-leave-it approach. In some cases, this is merely a power ploy that can be ignored or rejected out of hand. If the other side seems emotionally committed to the approach at the moment, calling a halt to the proceedings may permit both sides to return at a later date and re-commence negotiations. Further, depending on the circumstances, one might appeal to the other side’s sense of fairness, asking how a deal can ever be struck if one side becomes or remains intransigent. Finally, if the other side refuses to budge, one needs to consider in as calm a fashion as possible, whether accepting the offer is better than walking away. If this negotiation is the beginning of a long-term relationship, one needs to assess the precedential value of agreeing to this type of offer. It may be that one simply does not want to encourage the other side to assume that such tactics will work in future dealings, so one may reject a deal that otherwise appears acceptable.

5. Limited Authority

Those who bargain with “limited” authority present a power paradox. That is, the less authority they carry in bargaining, the greater their power actually may be.389 Limited authority negotiators cannot make concessions, thereby forcing the other side to accept deals to which they might not otherwise agree. We have all encountered the *99 sales clerk or company representative who is fully authorized to refuse every alternative we might offer, but who has no power to grant even reasonable requests for contractual adjustments. In effect, these low-level personnel carry substantial power-the ability to say no.

Automobile sales representatives sometimes practice a particularly toxic and unethical form of the limited authority ploy known as “low-balling.”390 Under this approach, the salesperson reaches the best deal that he or she can with a customer. The salesperson then indicates that the manager must approve the deal. Of course, the manager rejects it, insisting that the customer must pay more. In the meantime, the customer, encouraged by the salesperson, has become emotionally committed to the purchase. If so, the salesperson may be able to lead the customer to pay hundreds or thousands of dollars more to buy the car. What makes the ploy so effective is that the customer never blames the salesperson for the deal’s rejection. The salesperson plays the customer’s friend, which permits the salesperson to gain the customer’s trust and perhaps discover the customer’s walkaway point, thereby exploiting the deal for every last dollar.391

We recommend several responses to these “limited authority” ploys. In some cases, a useful reaction is to request a meeting with the individual who has been identified as having the authority to reach an agreement on the terms that one seeks.392 In cases where one suspects that the other side truly has adequate authority, one might simply continue negotiating as though the other person had adequate authority, all the while insisting that one retains the right to modify one’s own offer so long as the other side has not committed to the deal.393 The key to most authority issues is to avoid becoming either legally or psychologically committed while the other side remains free to reject or modify the deal.

A final word of advice: negotiators who face bargaining with high power opponents should seriously consider entering the talks with *100 some limits on their own authority. This will give them time to ponder offers made by the other side and may well moderate the heavy pressures exerted by the other side to reach an agreement.394

6. Artificial and Actual Deadlines

Time limits in negotiation can arise in a number of ways. The parties can set them or an outside authority can do so.395 Time limits may be explicit or implicit, and they may be flexible or rigid. A solid body of research confirms that deadlines often play a significant role in leading parties to agreements.396 Deadlines increase the likelihood of favorable deals because, as time grows short, “bargaining aspirations, demands, and the amount of bluffing that occurs” diminish substantially.397

Depending on how a deadline has been set and by whom, weak parties in negotiations may either benefit or suffer. If one faces a party with superior bargaining power who has set a deadline on a “take-it-or-leave-it” basis, one might be forced to agree to terms that might have been avoided if more bargaining time been available. On the other hand, if the benefits of an agreement substantially outweigh the benefits of the powerful party’s BATNA (or if the costs of no agreement appear particularly large), the powerful party may be especially accommodating when faced with an unavoidable deadline.

One of the most effective “deadline” ploys that we have encountered arises when one of the parties has scheduled a flight home at a specific time. If the other side knows this, he or she may focus endlessly on minor details and then, at the penultimate moment, make a marginally reasonable offer heavily stacked in his or her favor. One who faces this tactic may have concluded that no deal was possible. Realizing that a deal might be struck after all, but facing a need to race to the airport, one may have little choice but to make a number of substantial concessions that he or she otherwise would not have *101 made.398 If one knows of the other side’s use of deadlines with airlines, one should consider making a reservation for a later flight without informing the other side. If the ploy is attempted, one can then indicate one’s willingness to stay and continue negotiating.

There are numerous other examples of using deadlines to enhance power. One of the most effective instances occurred during the negotiations between the United States and the North Vietnamese during the War in Vietnam. Under marching orders from President Lyndon Johnson to secure an immediate peace accord, Ambassador Averell Harriman rented a suite at the Ritz Hotel in Paris on a week-to-week basis. In contrast, Vietnamese negotiator Xuan Thuy, in a deliberately public manner, secured a two-and-one-half year lease on a villa in the French countryside. The message was clear: the Vietnamese had all the time in the world to bargain and took advantage of the election pressures that weighed heavily on the U.S. negotiators.399

Negotiating under a deadline requires skill, persistence, patience, and brinkmanship to be successful. Because deadlines can help as well as hurt weaker negotiators, we cannot offer a “one remedy fits all” suggestion. When facing deadlines, one needs constantly to weigh the benefits of agreeing versus not agreeing. One particularly needs to monitor the other side to see how much harm they will suffer, or how much benefit they will receive, from the deadline. Those who suspect that the other side is playing the deadline game, need to call the opponent on the tactic and indicate that one’s flexibility will lessen as the time approaches.

7. Other Power Ploys and General Responses

We note the existence of numerous other power ploys-some with delightfully exotic names such as the “Nibble,”400 the “Salami,”401 the “Krunch,”402 “Brer Rabbit,”403 the“Bogey,”404 the “Flinch,”405 the *102 “Puppy Dog,”406 the “Belly-Up,”407 and so on. All seek in some fashion, with varying degrees of dishonesty, to mislead or disorient unprepared negotiators into one-sided agreements in the ploy-user’s favor.

It is not possible-nor is it necessary in our view-to devise specific counterploys to the entire multitude of tricks and tactics that an opponent might attempt to perpetrate in a negotiation. Instead, we offer several general thoughts to consider when powerful opponents use annoying or unethical tactics:408

*103 Negotiate about the negotiation: Try to agree on how the negotiation will be conducted.409 For example, the parties might agree that only one person at a time will be permitted to get angry or that no personal attacks will be permitted.

Ignore the ploy: Recognizing that an opponent is engaged in a negotiation “trick” is often sufficient to render it ineffective. One can then simply take quiet steps to deflect whatever the ploy is.

Call the ploy: Sometimes it is useful to call one’s opponent on the ploy as a way of showing that one recognizes the trick and will not be either intimidated or taken in by it.

Halt the negotiation: Sometimes one should simply leave the room when a ploy is being attempted as a way of stopping it. It is very hard for an adversary to act outrageously in an empty room.

In all negotiations, one needs to be on guard to the possible use of ploys. On the other hand, not every slight or act that annoys is deliberate on the other side’s part. Before responding, one needs to be certain that an act truly is a ploy. We believe that far too much time is spent devising or worrying about negotiation ploys. We reiterate: carefully prepared negotiators will rarely suffer from the other side’s tricks.

J. Involve Mediators to Balance Power Differentials

Mediation is “facilitated negotiation.”410 In mediation, the parties retain the right to make their own decisions, but look to a mediator to help move the disputants to agreement through a process of prodding and cajolery. Although mediation occupies a central role in various “alternative dispute resolution” commentaries,411 our focus lies in its ability to moderate power disparities in negotiations. Given that the parties typically are not bound to anything proposed in a mediation, one might assume that power shifts are unlikely to occur in this process. Once a party, however, has agreed to participate in a mediation, he or she has ceded power to the process and to the mediator. As one experienced mediator argues, “the mediator . . . has the *104 most power in the room,”412 and can use this power to move the parties to work out an agreement. The ways a mediator exercises power include:413

creating the ground rules

choosing the topic for discussion

deciding who may speak

controlling the length of time each party may speak

determining which party may present a proposal to the other

interpreting what each party has said

ending the negotiation, and

writing down the agreed-to proposal

Because mediators control much of the process and can comment on each party’s position, they are particularly well placed to discourage raw power plays, emotional outbursts, and deceptive ploys. This serves to equalize the parties’ power.414 In addition, mediators often can often help weaker parties understand the power they actually possess, thereby enhancing their leverage in the negotiation.415 While this may not make the parties’ power equal, it can shift it significantly in the weaker party’s favor. Effective mediation can also help a weaker party become more realistic about what he or she seeks in a negotiation. This is typically done through a series of hypothetical questions such as “what if,” “what about,” “do you think,” and “why do you believe.”416 These questions help parties rise above the emotions of the moment and to see the consequences of unduly stubborn positions.

Accordingly, one of the most difficult negotiations that one faces may be convincing a more powerful party to agree to have a dispute mediated in the first place.417 To do this successfully, one should seek to persuade the other side that mediation is sought for grounds *105 other than evening out the power disparities. For example, one might argue that a mediator could add useful expertise in an area or that a mediator might expedite the process. Or, if negotiations to date have proceeded in a contentious manner, one might persuade the other side that a mediator will help reduce the level of acrimony in the process.

K. Form an Alliance Against the More Powerful Party

The adage that there is strength in numbers holds particularly true for negotiations. One way to equalize or exceed the power of a stronger party is to form an alliance with others who share an interest in working against the stronger party.418 This principle extends from those who are friendly allies through those who dislike a common enemy only slightly more than they dislike one another.419

Organizing a coalition against a common adversary requires careful planning and openness, particularly if one is seeking allies from unlikely sources. For example, one may ask what the American Paper Institute, National Coffee Association, Milk Industry Foundation and American Council on Education ever had in common. The answer in this case is: opposition to “sewer user charges.” At one time, all of these groups objected to the industrial cost recovery provisions of the Federal Water Pollution Control Act. Acting jointly, they *106 worked effectively to oppose the federal government’s method of imposing charges.420 In similar fashion, we suggest that those who face a powerful adversary in an upcoming negotiation consider whether it would be useful to organize a coalition against the other side. In particular, one needs to consider approaching even those with whom one does not have a good relationship if they might be inclined to put aside their hostility in the interest of facing a common enemy.

There is a step short of coalition building that one should consider in negotiating with a powerful opponent. Sometimes it helps to organize a team of negotiators or, at a minimum, to have a friend or colleague attend the negotiation as a source of advice and as an extra set of eyes and ears. In addition to providing valuable emotional support, teams can bring a measure of objectivity and fresh ideas to the negotiation.421 Research suggests that teams produce better agreements, not so much because of the extra threat of power that they bring to the table, but rather because team members can identify overlooked ways of expanding the total value of the deal to both sides.422

L. Appeal to a Powerful Adversary’s Sense of Justice and Fairness

People do not operate exclusively on the basis of economic efficiency, notwithstanding the economic models that would suggest otherwise.423 Nor do most people act exclusively on the basis of pure, *107 brutal power. To the contrary, most individuals carry internal values, standards, and norms that govern how they interact with others and which limit their willingness to take advantage of particular situations.424

As we earlier discussed, moral power can function as effectively in negotiation settings as other, rawer forms of power.425 The fact that one has the ability to overwhelm the other side does not automatically mean that one will do so. Appeals to fairness and justice can operate powerfully under the proper circumstances.426 In fact, we suspect that most negotiations involve elements of moral appeals to a greater or lesser extent.

In some cases, virtually an entire claim rests upon a moral foundation. For example, fifty years after the end of World War II, a number of Nazi-era slave laborers have pressed claims for compensation against the corporations (or their successor entities) that “employed” them during the war. Given the passage of time, one might *108 consider these demands legally dubious, but the horror of the practice, as well as the moral stigma that companies would suffer from rejecting the claims, has led a group of roughly sixty-five companies to contribute to a 10 billion mark ($5.19 billion) fund to compensate the laborers.427

M. Use Weakness as a Source of Strength

Few things better illustrate the situational nature of power than the point that weakness can sometimes be a source of power. Weakness provides substantial leverage in several situations. First, a weak party with little or nothing to lose can bring a powerful weapon-indifference-to bear. For example, an indigent debtor faced with demands for payment by a creditor may convince the creditor to accept a settlement of pennies on the dollar by convincing the creditor that the debtor is “judgment proof,” i.e., the debtor has few assets against which the creditor could execute a judgment. Second, the plight of a weaker party may trigger feelings of sympathy and concern in the stronger party. This may lead the stronger party to forbear from taking action against the weaker person.428 We offer a somewhat unusual example to illustrate this point. In 1944, his health rapidly failing, President Franklin Roosevelt implored his daughter Anna to arrange a rendezvous with Lucy Mercer Rutherford, his lover from thirty years before. Although undoubtedly capable of thwarting a reunion and inclined to do so because of loyalty to her mother, Anna, upon reflection, eventually agreed to help. Why? As described by historian Doris Kearns Goodwin:

Anna knew that her father’s strength was failing and she understood how important it would be for him to enjoy some evenings that were, as she put it, “light-hearted and gay, affording a few hours of much needed relaxation.” If seeing Lucy again provided the inspiration he needed to assuage his loneliness and
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