Well, the way I see it, such a negotiating tactic is no-lose. If your existing company isn't willing to dig deep to retain you, then you take the job. If they are, you get everything you had previously negotiated with the business, plus a raise.

It has worked for me on two different occasions, but you are correct in that it relies on a management structure that understands the value of its people.

The reason why I don't job hop isn't because I feel like a slave to the company I work for, it's because I have squeezed them to keep me. I have a personal relationship with the people above me, so it's a lot easier to negotiate because they have seen the quality of my work. At a new company, you are an unknown, so the employer/employee relationship is a lot more hostile.