Dirty tricks persist despite era of win-win relationships
By Staff -- Purchasing, 9/2/1999
Integrated supply relationships and win-win long-term deals might be gaining popularity, but that doesn't mean hard-nosed, adversarial negotiators have suddenly become extinct. As supply managers look to rationalize their supply bases--concentrating dollars with fewer and fewer first-tier suppliers--the risks of locking into long-term deals have never been so high. Buyers who are cognizant of dirty negotiating tactics might be able to avoid costly long-term mistakes. Buyers who employ dirty tactics might damage their firm's ability to establish long-term supply relationships with best available suppliers. Some common dirty tricks to watch out for:- Escalation. The tactic sets you up to think a deal is in the works, wears you down with extra work or delays, then asks you to take less than you originally bargained for. The escalator is counting on you to relent because you've invested work and emotional equity in closing the deal.
- Devil in the details. The ploy is always the same. Hidden in an obscure attachment, specification, or boilerplate documents lies an administrative or technical nightmare. Devils in the details are designed to be overlooked. Only after an agreement is signed and a contract moves toward completion do costly requirements rise out of the shadows.
- Fait accompli (deed is done). The strength of fait accompli is the fact that once a deed is done or an action taken it is difficult to undo. The Jesuit principle, "It is easier to obtain forgiveness than permission," is based on the same concept.
- Figure finaglers. Numbers presented in negotiations are apt to be biased. Even when parties have worked together for a long time, they'll still have different viewpoints. There will be disagreements as to figures, what they should mean, and what kind of future they predict.
- White hat, black hat. A more subtle version of good cop, bad cop. Black hat always says "no", making white hat appear infinitely more reasonable.
- The switch: Where one word makes a big difference. One of the most dangerous assumptions we make is that the agreement we shake hands on is the one that will be written up. A simple one-word switch--for example, use of the word net versus gross--could make a huge difference in the outcome of a contract.
- "Changes are profits in escrow." The tactic is to bid low, win a contract, and then drive up the cost of a deal by encouraging the buyer to make costly changes. A seller's ability to exploit changes increases when a buyer is unclear about the specifications they wish to meet or the scope of work that must be done.
The Karrass Organization presents over 500 Effective Negotiating customized in-plant seminars yearly. Karrass consultants tailor the seminar to meet specific purchasing or sales needs. KARRASS EFFECTIVE NEGOTIATING Seminars are presented regularly in over 65 North American cities, including Canada and Mexico plus another 25 cities worldwide. Also available: Fundamentals of Effective Purchasing, a program presented at public and in-plant sessions nationally. For more information on Karrass books and seminars call 213-951-7500 or visit us at www.karrass.com, or mail us at 8370 Wilshire Blvd., Beverly Hills, CA 90211-2333.
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