A final proposal that is delivered as not negotiable, often referred to as "Best and final," or "Take it or leave it."
An ultimatum typically follows a series of offers, and is always the last offer, often with a short deadline for response.
Expect this tactic to be used as part of one of these Negotiation Strategies (competitive, collaborative, avoidance, accommodation, compromise) and in these stages of the Negotiation Process (Preparation, Exchange, Bargain, Conclude, Execution).
Negotiation Strategies: Competitive and Compromise
Negotiation Stage: Conclude
Don't Use Ultimatums in Collaborative Negotiations
An ultimatum is by its nature confrontational, not collaborative, and not open to creative solutions. At most a collaborative negotiator will gracefully explain that the interests apparently are not aligned and decide not to reach agreement, with the hope that the other side will reconsider their interests and adjust their position.
Defend Against Ultimatums
You can't prevent an ultimatum but you have several defenses.
Your first defense against an ultimatum is BNP: 16 Use the Power of the Negotiator's Probe. Ask open-ended questions to determine if the ultimatum is real, or a Bluff.
If the ultimatum is real and is below your LAA (Least Acceptable Agreement), you have already determined that you are better off without an agreement. If the ultimatum is at or above your LAA, and you prefer to reach agreement rather than deadlock, counter with a "Yes, if….", or try for a Nibble.
- If the ultimatum is real and not a Bluff, Nibbling may very well take this last offer off the table.