Ultimatums are very high-profile statements that tend to strike fear into inexperienced negotiators. Terrorists are holding a plane full of hostages and tell negotiators that, unless their demands are met, they will start shooting hostages at noon on the following day. An ultimatum is a powerful pressure point, but it has one major flaw as a gambit: If you say that you are going to shoot the first hostage at noon tomorrow, what had you better be prepared to do at noon tomorrow? That’s right. Shoot the first hostage. Because if 12:01 p.m. rolls around and you haven’t done that, you have just lost all of your power in the negotiation.
The same weakness applies to an ultimatum in a business negotiation. If you tell a supplier ...