Negotiation Skills: At Pimco, a Successful Threat and an Uncertain Payoff

In business negotiations, threats can be fraught with risk. There is the risk that a threat will escalate conflict. There is the risk that a threat will motivate a desire for revenge. And then there is the risk that your threat will work perfectly, but you’ll be unprepared for the aftermath.

That last scenario may describe what happened recently when a number of executives and investment officers at Pimco Investment Management threatened to quit unless Bill Gross, the firm’s co-founder and manager of its flagship Total Return Fund, was fired.