Ethics, Fairness, and Ethics, Fairness, and Trust inTrust in NegotiationsNegotiations

Understanding How Understanding How Ethics and Values ApplyEthics and Values Apply

Negotiation is voluntary process Negotiation is voluntary process dependent upon communication and dependent upon communication and motivationmotivation

The process often involves less than The process often involves less than frank and open communicationfrank and open communication

Need to reconcile deceptive tactics and Need to reconcile deceptive tactics and fair agreementsfair agreements

Need to establish trustNeed to establish trust

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Negotiating SkillsNegotiating Skills Skill 8.1: Identify Skill 8.1: Identify ethical systemsethical systems that that

may guide parties to a negotiationmay guide parties to a negotiation Skill 8.2: Determine the Skill 8.2: Determine the substantive substantive

fairnessfairness of a negotiation of a negotiation Skill 8.3: Ensure the Skill 8.3: Ensure the procedural fairnessprocedural fairness

of a negotiationof a negotiation Skill 8.4: Distinguish between ethical Skill 8.4: Distinguish between ethical

and unethical and unethical concealment behaviorsconcealment behaviors Skill 8.5 Learn to Skill 8.5 Learn to create trustcreate trust in in

negotiationsnegotiations

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Chapter Case: Chapter Case: Withholding InformationWithholding Information

Employer sought concessions from a Employer sought concessions from a union in contract negotiations to curb union in contract negotiations to curb rising health care costsrising health care costs

Union asked employer to switch to Union asked employer to switch to self-insurance to reduce costself-insurance to reduce cost

Employer was already self-insured Employer was already self-insured but did not share that information but did not share that information with the union in case the union with the union in case the union asked for share of savingsasked for share of savings

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EthicsEthics Ethics is the study of moralityEthics is the study of morality Ethical belief system is a basis for Ethical belief system is a basis for

one’s valuesone’s values Values reflect belief about “ends” Values reflect belief about “ends”

and “means” of achieving goalsand “means” of achieving goals Behavioral rules are the accepted Behavioral rules are the accepted

customs, standards, or models for customs, standards, or models for ethical actionsethical actions

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Ethical TheoriesEthical Theories Ethics of purposeEthics of purpose: A good end : A good end

cannot be reached with bad meanscannot be reached with bad means Ethics of principleEthics of principle: “: “Do unto others Do unto others

as you would have them do unto as you would have them do unto you”you”

Ethics of consequenceEthics of consequence: The end : The end justifies the meansjustifies the means

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Tactics for Success:Moral Decision Making

Chapter CaseChapter Case: Should the negotiator : Should the negotiator tell the employees that the tell the employees that the employer is already self-insured?employer is already self-insured?

Ethics of consequenceEthics of consequence: : What benefits will result if he does?What benefits will result if he does? What harm will result if he does not?What harm will result if he does not? Which outcome has the best overall Which outcome has the best overall

consequence?consequence?

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Tactics for Success Tactics for Success (cont’d)(cont’d)

Ethics of principle: Ethics of principle: Are the employees entitled to the Are the employees entitled to the

information?information? Should the employer expect similar treatment Should the employer expect similar treatment

from the other side?from the other side?Ethics of purposeEthics of purpose: : Does withholding the information subvert the Does withholding the information subvert the

negotiation process?negotiation process? If the employees do not have all the If the employees do not have all the

information, can they fairly evaluate the information, can they fairly evaluate the employer’s offer?employer’s offer?

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Rokeach’s Terminal and Instrumental Values

ValuesValues Values can be Values can be self-centeredself-centered, internal , internal

standards accepted for one’s own standards accepted for one’s own behaviorbehavior

Values can be Values can be social-centeredsocial-centered, external , external standards expected for another’s standards expected for another’s behaviorbehavior

Rokeach described end or Rokeach described end or terminalterminal valuesvalues and means or and means or instrumental valuesinstrumental values

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Behavior RulesBehavior Rules Descriptive behavior rules show Descriptive behavior rules show what what

people dopeople do in certain situations in certain situations Injunctive behavior rules show Injunctive behavior rules show what what

people should dopeople should do in certain situations in certain situations Injunctive behavior rules become Injunctive behavior rules become

laws and laws and codes of ethicscodes of ethics

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Substantive FairnessSubstantive Fairness

Seen in distribution of valueSeen in distribution of value ProportionalityProportionality ReciprocityReciprocity ImpartialityImpartiality Parties are heardParties are heard

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Traps to Avoid: Traps to Avoid: Alternatives to LyingAlternatives to Lying

Asked your bottom line, say you’re not Asked your bottom line, say you’re not ready to reveal itready to reveal it

If you claim you “lack authority” then If you claim you “lack authority” then don’t seek authoritydon’t seek authority

Don’t want to volunteer alternatives, ask Don’t want to volunteer alternatives, ask opponent for optionsopponent for options

Only make promises you can keepOnly make promises you can keep Don’t lie about facts, limit discussion to Don’t lie about facts, limit discussion to

opinion of factsopinion of facts

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Procedural FairnessProcedural Fairness Seen in appropriateness of tactics usedSeen in appropriateness of tactics used Functionalist ModelFunctionalist Model

Bargaining is voluntary processBargaining is voluntary process Purpose is to reach valid agreementPurpose is to reach valid agreement Practices that threaten valid agreement Practices that threaten valid agreement

violate purposeviolate purpose Negotiation is also adversarial process in Negotiation is also adversarial process in

which parties use bargaining techniques to which parties use bargaining techniques to gain information and advantagesgain information and advantages

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Procedural Fairness Procedural Fairness (cont’d)(cont’d)

Reciprocity standardReciprocity standard—would you want to be —would you want to be treated in this way?treated in this way?

Universality standardUniversality standard—would you advise —would you advise others to behave this way?others to behave this way?

Publicity standardPublicity standard—would you like to see the —would you like to see the actions in the press?actions in the press?

Trusted friend standardTrusted friend standard—would you tell your —would you tell your friend of your actions?friend of your actions?

Legacy standardLegacy standard—do you want to be —do you want to be remembered for acting in this way?remembered for acting in this way?

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Appropriate TacticsAppropriate Tactics Gain information about opponent by Gain information about opponent by

asking friends, associates, and contactsasking friends, associates, and contacts Make an unrealistically high opening Make an unrealistically high opening

demand demand Hide your real bottom line Hide your real bottom line Give false impression you aren’t in a Give false impression you aren’t in a

hurry to pressure your opponent hurry to pressure your opponent

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Inappropriate TacticsInappropriate Tactics Misrepresent factual information or Misrepresent factual information or

nature of negotiations to improve one’s nature of negotiations to improve one’s position or because your opponent did position or because your opponent did

Falsely threaten or promise things with Falsely threaten or promise things with no ability to deliver no ability to deliver

Bypass your opponent’s negotiator to Bypass your opponent’s negotiator to undermine opponent’s positionundermine opponent’s position

Gain confidential information by bribery Gain confidential information by bribery

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Unethical Negotiating Unethical Negotiating GambitsGambits

The DecoyThe Decoy The Red HerringThe Red Herring The Deliberate MistakeThe Deliberate Mistake EscalationEscalation Planted InformationPlanted Information Never-Ending NegotiationNever-Ending Negotiation

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TrustTrust Essential factor in negotiationEssential factor in negotiation Enables cooperative behavior Enables cooperative behavior Reduces harmful conflictReduces harmful conflict Facilitates workFacilitates work Involves some riskInvolves some risk Requires interdependent relationshipRequires interdependent relationship

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Five Bases of TrustFive Bases of Trust Deterrence-based trust – imposed penaltiesDeterrence-based trust – imposed penalties Self-interest trust – mutually advantageousSelf-interest trust – mutually advantageous Relational trust – reliability in past Relational trust – reliability in past

performanceperformance Identity-based trust – “us” cultureIdentity-based trust – “us” culture Institutional-based trust – imposed by the Institutional-based trust – imposed by the

situationsituation

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Levels of Trust

Trust and DistrustTrust and Distrust Business relationships are multifacetedBusiness relationships are multifaceted Parties can trust and distrust at the Parties can trust and distrust at the

same timesame time Trust can range from high to low Trust can range from high to low

depending on relationshipdepending on relationship Distrust can range from high to low Distrust can range from high to low

depending on relationshipdepending on relationship

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HIGH TRUST

Interdependency Joint goalsReason to be confident Little reason to be wary

Multifaceted and reciprocal relationshipSeparate and shared goalsMany areas for confidenceMany reasons to be wary

LOW TRUST

Limited interactions No reason for confidence No reason to be wary

Monitoring or compelling each other’s behavior No reason for confidence Ample reason to be wary

LOW DISTRUST HIGH DISTRUST

High/Low Trust and High/Low Distrust

Establishing TrustEstablishing Trust Assess the situationAssess the situation

• Are there incentives for parties to Are there incentives for parties to deceive one another?deceive one another?

• Are there time constraints?Are there time constraints?• How well do you know the other party?How well do you know the other party?• How does the other party see you?How does the other party see you?• Are there common interests to build Are there common interests to build

trust upon?trust upon?

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Establishing Trust Establishing Trust (cont’d)(cont’d)

Build mutual trustBuild mutual trust• Use norm of reciprocityUse norm of reciprocity• Display trust in the other personDisplay trust in the other person• Demonstrate trustworthiness Demonstrate trustworthiness by following through on a promiseby following through on a promise• Recognize mutual interestsRecognize mutual interests• Guard your reputation for Guard your reputation for

trustworthinesstrustworthiness

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Tactics for Success:Tactics for Success:How to Build Trust in a NegotiationHow to Build Trust in a Negotiation

Speak their language by active listeningSpeak their language by active listening Manage your reputation by dealing with Manage your reputation by dealing with

parties honestly                 parties honestly                 Recognize your interdependency because Recognize your interdependency because

negotiating is a voluntary exercisenegotiating is a voluntary exercise Make a unilateral concession    Make a unilateral concession    Label your concessions Label your concessions Explain reasons for your demandsExplain reasons for your demands

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