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A to Z of Negotiation: U is for Ultimatums

We have all been in negotiations where an ultimatum has been put on the table – “This is my final offer, take it or leave it!”

Ultimatums are generally issued to bring the negotiation to a close or to signal power, but are they something we should use? And if our counterpart puts an ultimatum on the table, how should we respond?

What’s the problem with an ultimatum?

It is not uncommon for some of my clients in mediations to start with an ultimatum. “I’m not walking out of here with a cent less than $x” or “If they think I’m going to pay them a cent then we’re all wasting out time.” Parties often come in to the negotiation thinking that this tough stance will scare the other party and help to get a better outcome for themselves.

The main difficulty this is that it sets up another key interest in the negotiation – Ego. Once a negotiator issues an ultimatum, they now have an interest in saving face and not being seen to back down.

In reality, most ultimatums are not issued as serious threats. They are a tactic rather than an indication that the party will walk away from the negotiation if their demand is not met. However, once the ultimatum is issued, how can the party walk away from it without looking like they have caved in? Now they are locked into a position which is not helpful to them but they can’t move without looking weak.

So, how do I respond to an ultimatum?

Like with many unhelpful things in life, we can choose to ignore an ultimatum. If the ultimatum is real, you can rest assured, it will be repeated over and over again and you will have another chance to respond. If it is not real, by responding to it, you give it more strength than it deserves.

Ignore it

Assume that you repeat the ultimatum or ask the other party to clarify it. They now have a clear signal that you have heard the ultimatum and in increased interest in not backing down. By moving the conversation on without acknowledging the ultimatum, we take some of its power away.

Reframe it

If ignoring the ultimatum is not possible - perhaps it’s been repeated a couple of times - you may need to reframe it in a way which creates space for the other person to back down without losing face. For example, you might respond with “I understand that based on where things are at the moment, it would be difficult for you to agree to less than that today.”. This statement does two things. Firstly, it reframes an absolute no to a mere difficulty – it would be hard but not impossible. Secondly, it suggests that the no is only valid at a point in time and may change.

Should I issue an ultimatum?

There is always a choice to issue an ultimatum and there may be times when doing so may be helpful to you. Perhaps some show of power is needed to get the negotiation moving. While I rarely advise that you never do something, I will recommend that you ask the following questions before issuing an ultimatum:

  • Am I prepared for the fact that they may take the ultimatum seriously and close down the negotiation? If they do this, am I prepared for the consequences. If this is a dispute situation, perhaps I’ll find myself out of negotiations and into a costly legal dispute.

  • How will I back down from the ultimatum without losing face? If I back down on this, will they believe me on other areas of the negotiation or just assume I am playing hardball.

  • What will be the impact on our negotiation relationship?

I hope you found this article helpful. Please add your thoughts in the comments or this will be the last article I ever write! (Just joking!)

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