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20 MAR 2017 RESEARCH & IDEAS
9/6/2004 WHY COMPANIES ARE
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You can use deadlines to your strategic advantage in negotiationsbut so
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can your opponent. Here's how to make the most of time pressure. From
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Negotiation.
15 MAR 2017 LESSONS FROM THE
CLASSROOM
by Don A. Moore MORE THAN 900
In the summer of 1998, National Basketball Association (NBA) team EXAMPLES OF HOW
owners and players were at loggerheads over their new contract. At CLIMATE CHANGE
midnight on June 30, the owners declared a lockout, halting preparations AFFECTS BUSINESS
for the start of the 1998-99 NBA season. The players and owners
negotiated for six long months, during which time the two sides collectively 13 MAR 2017 RESEARCH & IDEAS
Despite the proven effectiveness of deadlines, they remain one of the most
misunderstood negotiation strategies. Many negotiators hesitate to place a
deadline on their talks. After all, having a deadline reduces your freedom
and puts pressure on you to reach an agreement quickly. In my research,
when I ask people to predict the effect of deadlines on negotiations, even
experienced negotiators predict that the presence of a shared deadline will
hurt them by forcing them to concede more quickly than they would like,
thereby helping their opponents.
While there is some truth to these assumptions, it's also true that deadlines
increase pressure on the other party to reach an agreement. This article
explains why this fact should change the way you look at deadlines and
advises you on whether to reveal your deadlines to the other party.
Negotiators who recognize that Cohen may well have been nervous
deadlines affect everyone equally about what his boss would have said if
can use them to defuse costly he had left Japan without an
stalling tactics. agreement. Of course, it's also true
that Cohen's negotiating partners
could not have claimed victory if he had left the country without a deal.
That's the key to deadlines: When the negotiation is over for one side, it's
over for the other side, too. In his article "The High Cost of Close Focus" in
our July 2004 issue of Negotiation, Max Bazerman showed how an overly
narrow focus can harm negotiators at the bargaining table. People routinely
make the mistake of focusing on how a deadline will affect them while
failing to appreciate how the same circumstance will affect others. (See the
sidebar "Short-Sighted Confidence.")
Negotiators who recognize that deadlines affect everyone equally can use
them to defuse costly stalling tactics. For example, car salespeople
sometimes try to draw out price negotiations, hoping the amount of time
you've invested will increase your commitment to making the deal. To
defuse this strategy, try beginning your negotiation for a new car by
informing the salesperson that you have only an hour to make a possible
deal.
On one of my first business trips to China, I had a meeting with the head of
a factory to work out a large purchase. I arrived at 9:00 a.m. This guy was
stubborn as hell, and we spent seven hours haggling. At a few minutes
before 5:00, he started making concessions, and we were able to sign the
deal. I turned to my interpreter and asked why we couldn't have closed the
deal at 9:30 rather than at 5:00. He told me that the official had no
incentive to wrap up earlier in the day, but now he wanted to go home. The
next time I visited that factory, I scheduled our meeting for 4:00, and
things went fast and easy. Now when I walk into any negotiation, I
announce that I have another appointment in, say, one hour. If that hour
comes and goes and I feel it's to my benefit to stay, I ask to borrow a
phone, call my secretary, and tell her to rebook my "other appointment."
This only adds to my power in the negotiation because the other party sees
it as an act of good faith, even as a concession.
Because deadlines put pressure on everyone, they can get talks moving
again. Don't be afraid to set deadlines and commit to them.
In fact, this strategy puts youthe negotiator with a deadlinein the worst
position possible! I've found in my research that negotiators who hide their
deadlines dramatically increase the risk of an impasse. Knowledge of your
deadline compels you to accelerate your concessions. Meanwhile, believing
there's still plenty of time to talk, your counterpart will be content to hold
out and wait for you to concede first. Her stalling increases the odds that
you'll fail to reach agreement before time runs out. If you do come to an
agreement before the deadline, your outcome is likely to be highly
disadvantageous because you gave up so much in your secret race for a
deal.
When negotiators tell their opponents about an existing final deadline, they
get better deals. Why? First, because both sides are more likely to work
toward an agreement before the deadline passes, you reduce your risk of
walking away with nothing. Second, when an opponent knows about your
deadline, he'll make concessions much more quickly. The NBA owners'
January 7 deadline would have been useless if they had kept it secret; the
players' union would have kept negotiating past the deadline.
It's wise to tell your fellow negotiators about your deadlines. This advice
holds true even when you have little power and are desperate to make a
deal. A "one-sided" deadline will only put more pressure on you to concede
quickly.
Reproduced with permission from "Deadline Pressure: Use It to Your Advantage," Negotiation, Vol.
7, No. 8, August 2004.
Don A. Moore is an assistant professor at Carnegie Mellon University's Tepper School of Business.
He received his PhD in organizational behavior from Northwestern University. He can be reached at
negotiation@hbsp.harvard.edu
Short-Sighted Confidence
by Don A. Moore
Reproduced with permission from "Deadline Pressure: Use It to Your Advantage," Negotiation, Vol.
7, No. 8, August 2004.
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