The_Essential_Manager_s_Handbook

404 / CONDUCTING NEGOTIATIONS

Making offers and

counteroffers

Knowing when to go first

Some experts suggest that you should

not make the first offer and should

always allow your counterpart to go first.

Skilled negotiators, however, question

the conventional “never open” rule. They

choose to tailor their approach to each

negotiation. How should you decide

whether to go first or second? You should

present your offer first when you are

confident in the thoroughness of your

due diligence and also when you suspect

that your counterpart is ill-informed.

By going first, you will “anchor,” or set

a benchmark, that will be used as a

reference point for the counteroffer.

If you are not fully informed, do not go

first. Consider the other party’s first

offer, do not respond to it, and do your

due diligence. In some cases, two

negotiators are equally skilled and

well informed and neither wishes to

go first. Such cases often require the

involvement of a trusted third party to

act as a neutral go-between and get

the negotiations started.

Before you go into a negotiation, it is vital to plan your

opening move. Do you open negotiations and make the first

offer or do you wait and allow the other party to go first?

Make sure that you have an opening offer in mind, and plan

how you will respond to your counterpart’s offers.

POSSIBLE RESPONSES TO TOUGH OPENING OFFERS

It is easy to be thrown if the other party’s opening offer is extremely low.

Effective negotiators make sure that they are not startled by a tough first

offer, and avoid making a quick, emotional reaction. It is vital that a low

opening offer does not become a benchmark for the negotiation. Possible

responses to low offers include rejecting the offer as unreasonable;

asking the other party to revise the offer; or asking questions and probing

the other party for justifications for the toughness of the offer.

In focus

You should present your offer

first when you are confident

in the thoroughness of your

due diligence

US_404-405_Making_offers_counteroffers.indd 404 30/05/16 3:07 pm