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Essentials of Negotiation

Part 03: Negotiation Relationships

Chapter 09: Relationships in Negotiation

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Challenging How Relationships in Negotiation Have Been Studied

Negotiation is studied in two ways.

Live field situations.

Simulated negotiations.

Simulated negotiations dominated research for 50 years.

It is easier to conduct.

Controlled conditions.

Ease of data collection.

Problems with this approach.

Conclusions for complex negotiations come from simple simulations.

Parties have no existing relationship.

Yet, relationships change negotiation dynamics.

Negotiating in relationships takes place over time.

Negotiation is a way to learn and increase interdependence.

Resolution of simple issues has implications for the future.

Issues within relationships can be emotionally hot.

Negotiating within relationships may never end.

The other person may be the focal problem.

Relationship preservation is the goal in some negotiations.

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Negotiations in Communal Sharing Relationships

Parties in a communal-sharing relationship are more cooperative and empathetic.

Relational identity theory holds that defined group members who use negotiation techniques focusing on issues are likely to fail.

It is unclear whether parties in close relationships produce better solutions than other negotiators do.

A long-term study of conflict resolution in marriages provides insights.

Successful couples stay positive and say “yes” often.

They embrace conflict as a way to work through differences.

Good relationships know not only how to fight, but also how to repair a relationship after a fight.

Successful couples stress what they like, value, appreciate, and respect about the other.

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Key Elements in Managing Negotiations within Relationships

A study of work relationships identified eight key dimensions.

Trust, support, affect (emotion), loyalty, accountability, instrumentality, respect, and flexibility.

Some dimensions are critical at the beginning of a relationship.

While others are critical as a relationship matures.

Trust was the most common and important dimension.

Reputations play important roles in shaping relationship development.

Justice was also an important relationship component.

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Reputation

There are several important aspects of reputation.

Reputations are perceived and highly subjective in nature.

It is what others actually think of us that counts.

An individual can have a number of different, even conflicting, reputations.

It is commonly a single, consistent image.

Reputations are shaped by past behavior.

Reputation is influenced by personal characteristics and accomplishments.

Reputations develop over time; once developed, they are hard to change.

Other’s reputations can shape emotional states as well as their expectations.

Negative reputations are difficult to “repair.”

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Trust

One definition of trust is an individual’s belief in and willingness to act on the words, actions, and decisions of another.

Three things contribute to the level of trust one negotiator has for another.

The negotiator’s chronic disposition toward trust—individual differences in personality that make some people more trusting than others.

Situation factors—such as the opportunity for the parties to communicate with each other adequately.

And the history of the relationship between the parties.

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Recent Research on Trust and Negotiation: Individual and Situational Antecedents of Trust in Negotiation

Individual antecedents of trust in negotiation.

People generally start with high levels of trust even without data about the situation or the other party.

Individual motives shape expectations of trust.

Personality differences shape expectations.

Emotions contribute to trust or distrust.

Situational antecedents of trust in negotiation.

The nature of the negotiation process shapes trust expectations.

Face-to-face negotiation encourages greater trust development than online negotiation.

Negotiators who are representing others’ interests tend to be less trusting and less trustworthy than if they are representing their own interests.

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Recent Research on Trust and Negotiation: Negotiation Processes and Outcomes of Trust

Trust and negotiation processes.

The focus on different things is amplified by the type of negotiations the parties expect.

Trust increases “positive” turning points around common interests and decreases “negative” turning points that might deadlock a negotiation around polarization of issues or negative emotions.

Outcomes of trust.

Trust cues cooperative behavior.

Trust enhances the sharing of information, and greater information sharing generally leads to better negotiation outcomes.

Parties who trust tend to communicate by using questions and answers in order to share information and understand the other’s perspective.

Parties who trust less tend to argue for and justify their own preferences and listen less to the other—hence, they are less likely to understand the other’s perspective and more likely to “force” their view on the other party.

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Building Trust at the Negotiation Table

Learn what you can about your counterpart.

Reputational information can be helpful.

Get to know the person before you formally negotiate.

Whether you have dealt with the other before, or not.

Proceed with caution on the other’s trustworthiness.

Use safeguards to protect you against errors in judgment.

Win the other’s trust.

Make the other understand the “cost” of a major concession from you and don’t underestimate the value of a concession on their part.

Listen to and acknowledge the other’s concerns.

Acknowledging emotion may be one of the most important parts of effective listening as a vehicle for building trust.

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Trust Repair

Three major strategies that a trust violator can use to repair trust.

Verbally address intent with apologies, explanations, and accounts.

Apologies should include: an expression of regret, an explanation, an acknowledgement of responsibility, a declaration of repentance, an offer to repair the impact, and a request for forgiveness.

Reparations – payment of compensation to the victims for the consequences suffered from the violator.

The amount of money offered is less critical than the offer itself.

Structural solutions – make the effort to create rules, regulations, and procedures to minimize the likelihood of violation in the future.

Rules and procedures can be strengthened by also creating fines and penalties for rule violation.

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Justice

Justice can take several forms.

Distributive justice is about the distribution of outcomes.

Procedural justice is about the process of determining outcomes.

Concerns about procedural fairness arise most when negotiators are judging the behavior of third parties.

Interactional justice is about how parties treat each other in one-to-one relationships.

People have strong expectations about their treatment and when those standards are violated, parties feel unfairly treated.

Systemic justice is about how organizations appear to treat groups of individuals and the norms that develop for how they should be treated.

When groups are discriminated against or disenfranchised, they may think the system is biased.

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Research Conclusions on Justice and Fairness

Involvement in the process of shaping negotiation strategy increases commitment to that strategy and willingness to pursue it.

Procedural justice appears to impact the way negotiators approach the negotiation process.

Negotiators encouraged to think about fairness were more cooperative in distributive negotiations.

Parties who receive offers they perceive as unfair may reject them out of hand, even though the amount offered may be better than their BATNA.

Establishment of some objective standard of fairness has a positive impact on negotiations and satisfaction with the outcome.

Judgments of fairness are subject to cognitive biases.

Egocentric biases vary across cultures.

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Relationships among Reputation, Trust and Justice

Reputations, trust, and justice all interact in shaping expectations of the other’s behavior.

When one party feels the other acted fairly in the past or will act fairly in the future, they are more likely to trust the other.

Conversely, when parties are unfairly treated, they often become angry and retaliate against either the injustice itself or those who are seen as causing it.

Trust, justice, and reputation are all central to relationship negotiations and feed each other.

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Repairing a Relationship

Talk through the following questions to help identify problems and improve a relationship.

What might be causing any present misunderstanding, and what can I do to understand it better?

What might be causing a lack of trust, and what can I do to begin to repair trust that might have been broken?

What might be causing one or both of us to feel coerced, and what can I do to put the focus on persuasion rather than coercion?

What might be causing one or both of us to feel disrespected, and what can I do to demonstrate acceptance and respect?

What might be causing one or both of us to get upset, and what can I do to balance emotion and reason?

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End of Main Content

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Essentials of Negotiation

Part 01: Fundamentals of Negotiation

Chapter 05: Ethics in Negotiation

© McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom.

No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education.

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A Sampling of Ethical Quandaries

You are selling your e-bike to raise money for an upcoming trip overseas.

Is it ethical to say you have another offer, when there is no other offer?

To gain inside knowledge of a competitor’s business, you have a consultant call and ask about problems or threats in the company.

Is this an ethical way to learn about the competitor’s company?

When selling your laptop, you decide not to tell buyers the computer crashes without warning.

Is this ethical? Would you be likely to do this?

You buy a new pair of shoes on sale (no returns) but you make a scene in the store and the manager refunds your money.

Is this ethical? Would you be likely to do this?

© McGraw-Hill Education

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Ethics Defined

Ethics are broadly applied social standards for what is right or wrong in a particular situation, or a process for setting those standards.

Differ from morals, which are individual and personal beliefs.

Choose a course of action on the basis of results, duty, community norms, or personal convictions.

End-result ethics – the rightness of an action is determined by evaluating the pros and cons of its consequences.

Duty ethics – the rightness of an action is determined by an obligation to adhere to principles, laws, and social standards that define what is right and wrong and where the line is.

Social contract ethics – the rightness of an action is based on the customs and norms of a particular community.

Personalistic ethics – the rightness of the action is based on one’s own conscience and moral standards.

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Applying Ethical Reasoning to Negotiation

Using the situation from the start of the chapter involving selling an e-bike and the statement to a prospective buyer about the existance of another potential buyer.

If you believe in end-result ethics, then you might do whatever is necessary to get the best possible outcome (including lie).

If you believe in duty ethics, you might perceive an obligation never to engage in subterfuge and might reject a tactic that involves an outright lie.

In social contract ethics, you base your tactics on appropriate conduct in your community; if others would use deception in a situation like this, you will too.

In personalistic ethics, your conscience decides if your need for cash for your upcoming trip justifies using deceptive or dishonest tactics.

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Ethics v. Prudence v. Practicality v. Legality

Ethical.

Appropriate as determined by some standard of moral conduct.

Prudent.

Wise, based on trying to understand the efficiency of the tactic and the consequences it might have on the relationship with the other.

Practical.

What a negotiator can actually make happen in a given situation.

Legal.

What the law defines as acceptable practice.

© McGraw-Hill Education

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Figure 5.1: Analytical Process for the Resolution of Moral Problems

This model presents a helpful way to think about what it means to comprehend and analyze an ethical dilemma.

Access the text alternative for this image.

Source: La Rue T. Hosmer, The Ethics of Management, 4th ed. (New York: McGraw-Hill/Irwin, 2003).

© McGraw-Hill Education

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Ethical Conduct in Negotiation

Why do some negotiators use unethical tactics?

The first answer – immoral – may be too simplistic.

People regard other people’s unsavory behavior as due to personality and attribute their own behavior to factors in the social environment.

A negotiator might consider an opponent’s use of an ethically questionable tactic as unprincipled.

In contrast, if the negotiator uses the same tactic themselves, they tend to say they have a good reason for deviating from principles, this one time.

The following section discusses negotiation tactics that bring issues of ethicality into play.

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Ethically Ambiguous Tactics and Truth

Ethically ambiguous tactics may or may not be improper, depending on an individual’s ethical reasoning and circumstances.

Questions about truth telling are clear, but not the answers.

How do you define truth? How do you define deviations from the truth?

Effective agreements depend on sharing accurate information but negotiators want to disclose little about their positions.

The dilemma of trust is that a negotiator who believes everything the other says can be manipulated by dishonesty.

The dilemma of honesty is that a negotiator who tells the other party all their requirements will never do better than their walkaway point.

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Table 5.2: Categories of Marginally Ethical Negotiating Tactics

CategoryExample
Traditional competitive bargainingNot disclosing your walkaway; making an inflated opening offer
Emotional manipulationFaking anger, fear, disappointment; faking elation, satisfaction
MisrepresentationDistorting information or negotiation events in describing them to others
Misrepresentation to opponent’s networksCorrupting your opponent’s reputation with their peers
Inappropriate information gatheringBribery, infiltration, spying, etc.
BluffingInsincere threats or promises

Sources: Adapted from Robert J. Robinson, Roy J. Lewicki, and Eileen M. Donahue, “Extending and Testing a Five Factor Model of Ethical and Unethical Bargaining Tactics: The SINS Scale,” Journal of Organizational Behavior 21 (2000), pp. 649–64; and Ingrid S. Fulmer, Bruce Barry, and D. Adam Long, “Lying and Smiling: Informational and Emotional Deception in negotiation,” Journal of Business Ethics 88 (2009), pp. 691–709.

© McGraw-Hill Education

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Is It Acceptable to Use Ethically Ambiguous Tactics?

There are tacitly agreed-on rules of the game in negotiation.

Some minor forms of untruths may be seen as ethically acceptable and within the rules.

In contrast, outright deception is generally seen as outside the rules.

The authors offer some caution.

Statements are based on large groups of people and do not indicate or predict any individual negotiator’s use of such tactics.

Observations are based on what people said they would do, rather than what they actually did.

By reporting the results, the authors do not endorse the use of marginally ethical tactics.

This is a Western view of negotiation, not true for other cultures – “let the buyer beware” at all times.

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Deception by Omission versus Commission

The use of deceptive tactics can be active or passive.

For example, misrepresenting your interest on a common-value issue in order to obtain a future concession from the other party.

Negotiators use two forms of deception in misrepresenting the common-value issue:

Misrepresentation by omission – failing to disclose information that would benefit the other party.

Misrepresentation by commission – actually lying about the issue.

A student role-play study involving the sale of a car with a defective transmission revealed the following insight.

Students could lie by omission or commission.

Far more students were willing to lie by omission.

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Figure 5.2: A Simple Model of Deception in Negotiation

Access the text alternative for this image.

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Motives for Using Deceptive Tactics

Negotiators use ethically ambiguous tactics to increase their power.

Whoever has better information “wins” the negotiation.

This view assumes that the information is accurate and truthful.

Questioning the other’s truthfulness may insult them and investigating their truthfulness consumes time and energy.

If deception is a way to gain power, then are negotiators in a position of weakness more likely to be tempted to engage in deception?

A negotiator’s motivation affects their tendency to use deception.

They may use it to achieve their goals.

They may use it to avoid being exploited.

Individual differences of personality or culture affect its use.

Negotiators rationalize deception in anticipation of the other’s conduct.

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Consequences of Unethical Conduct

Effectiveness.

Deceptive tactics are effective in certain circumstances.

Consequences occur whether the tactic worked or not.

Reactions of others.

“Targets” are typically angry and now mistrust you.

They may seek revenge.

For serious and personal deception, the relationship suffers.

Damage to your reputation can be difficult to repair.

Reactions of self.

When the other party suffers, a negotiator may feel discomfort.

Negotiators who have no problem using deceptive tactics may use them again and ponder how to use them more effectively.

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Explanations and Justifications

Here are some typical examples.

The tactic was unavoidable – so the negotiator is not responsible.

The tactic was harmless – according to the deceptive party.

The tactic will help to avoid negative consequences – for who?

The tactic will produce good consequences, or altruistically motivated.

“They had it coming,” or “They deserve it,” or “I’m getting my due.”

They were going to do it anyway, so I will do it first – anticipation.

“He started it” – anticipation in the past tense.

The tactic is fair or appropriate to the situation – ethical relativism.

Explanations allow the negotiator to convince others – particularly the victim – that conduct is acceptable.

They also help rationalize the behavior to themselves.

© McGraw-Hill Education

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Dealing with the Other’s Use of Deception

Ask probing questions to reveal a great deal of information.

Rephrase questions to uncover answers which skirt the truth.

Force the other party to lie to your face or back off.

Test the other party by asking a question you already know the answer to, and note the response.

“Call” the tactic, and indicate your displeasure.

Ignore the tactic for a relatively minor aspect.

Discuss and help the other party shift to more honest behavior.

Responding in kind will escalate the conflict.

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End of Main Content

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No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education.

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www.mheducation.com

Accessibility Content: Text Alternatives for Images

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Figure 5.1: Analytical Process for the Resolution of Moral Problems – Text Alternative

The first step is developing a complete understanding of the moral problem at hand.

This means grasping the various subjective moral standards in play among involved parties, including individual values and beliefs as well as social norms.

It also means recognizing the mix of potential harms, benefits, and rights that are involved in the situation.

With the problem fully defined, the path to a convincing solutions travels through the three modes of analysis shown on the right side of the figure.

A determination of economic outcomes of potential courses of action.

A consideration of legal requirements that bear on the situation.

An assessment of the ethical obligations to other involved parties regarding what is “right” and “just” and “fair.”

The result from this process is to propose a convincing moral solution.

Return to slide containing original image.

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Figure 5.2: A Simple Model of Deception in Negotiation – Text Alternative

This flowchart model describes a rational calculation process in which the negotiator selects a tactic, uses the tactic, evaluates the consequences, and attempts to manage the consequences (if the tactic is detected) through explanations and justifications.

The model puts a negotiator in an influence situation and identifies possible influence tactics that could be effective, some of which might be deceptive, inappropriate, or marginally ethical.

Once identified, the negotiator may decide to use one or more tactics – the selection and use are likely influenced by the negotiator’s own motivations and their judgment of the tactic’s appropriateness.

Once the tactic is employed, the negotiator will assess consequences on three standards: whether the tactic worked and produced the desired result; how the negotiator feels about themselves after using the tactic; and how the individual may be judged by the other party or by neutral observers.

Negative or positive conclusions on any of these three standards may lead the negotiator to try to explain or justify use of the tactic, and they will eventually affect a decision to employ similar tactics in the future.

Return to slide containing original image.

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