Negotiation Tactic #39 – Take It or Leave It

Summary: Sending the message that if the counterpart doesn’t agree to the offer, the negotiation is finished.

An effective tactic used by negotiators is saying, “This is our best and final offer. Take It or Leave It.” This tactic, which is commonly used by labor unions, is designed to discourage additional negotiation. Making a fixed offer sends the message that if the counterpart does not agree, there will be no further discussion. A real test of egos ensues when a counterpart replies, “We’ll leave it. We are walking out of the negotiations.”

Example

The mechanics at a major airline have gone without a contract for several years because the mechanics’ union and management have not been able to agree on salary. Finally the union demands a salary package and says, “That is our best offer. Take It or Leave It.”

Counter

One effective counter to Take It or Leave It is Deflecting an Answer with a Great Question. In the example above, management might ask, “What will happen if we do not get this dispute resolved?” This tactic is designed to force the union negotiators to face the consequences of management’s walking out of the negotiation. A second option might be to use the tactic of Calling Your Bluff. Management could walk out or tell the union leaders, “Okay then, you might as well leave now.” The effectiveness of this tactic depends on which side is least committed to the relationship.

Another possible counter is Asking an Open-Ended Question to verify the validity of the union’s threat. For example, the airline negotiator might ask, “If you strike, what action do you think the federal government will take?” Finally, management could simply ignore the union’s Take It or Leave It tactic and continue negotiating. This is probably the best approach when the goal is to build a win-win relationship based on trust.

Have you used or encountered this tactic in your negotiations? If so, how’d it go?