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Other pages in this series:
» Distributive Bargaining
» Bargaining Strategies
» Leverage
» Ethics
» Agents in Negotiations

Other pages of interest:
» Nonverbal Communication in Negotiation
» Is it lying?




Ethics in Negotiation: some starting thoughts



Negotiation is all about meeting one's interests. These include explicit goals (I want to get a 5% raise) but also less conscious or public interests (After what he did to me, he deserves to lose. She's got to learn that I am the manager and I make the decisions here. ). When someone else stands in the way, the negotiator faces the core ethical issue of negotiation: when are my needs and wants more important than treating this person in a moral or socially acceptable manner? Whatever choice you make may involve significant costs to yourself, to the other party, to the wider community. Often the "right" thing to do is not clear.


Starting Points

Here are some starting points for thinking about ethical choices you face as a negotiator:

 The type of work you choose and the type of people you hang out with, will eventually shape your ethical choices as a negotiator. If you care about having honest and forthright relations with others, think carefully about what kind of friends, colleagues, clients you want to have in your life.

  be honest with yourself  --if you are deceptive, you can end up rationalizing your actions to yourself also. Over time, you may get in the habit of lying or using other tactics that are unnecessarily risky or harmful.

  For example: harmful or cruel treatment of others, illegal or unethical threats and coercion, bribes, kickbacks, corruption, preventing parties from participating or selling them out if they aren't at the table, demeaning other parties/groups of people, hate-talk, threats or actions of violence, ruining someone's reputation without cause, etc.

  While we worry a lot about the price we might pay for being forthright or for extending a measure of trust the other party, there is also a price to pay for withholding information, lying, or being suspicious of them. In addition to the relationship costs of distrust, and the anger of feeling mistreated, you can incur significant business expenses for protective measures such as fact-finding, inspections, legal discovery processes, drawing up legal contracts, keeping detailed records, certification, etc.

  Transactional negotiations lend themselves to unethical behavior but even in short one-time interactions, relationship matters. You may think you'll never meet someone again but you never know who your company will hire next year, who might become a potential client, a political adversary, a useful connection.... And the way you handle negotiations is noticed by the people around you with whom you may have more signficant relationships.



Legal Standard for Fraud

One starting point for ethical choices is "what's legal"? In the US, fraud is:
  1. Knowing
  2. Misrepresentation (of)
  3. Material
  4. Facts
  5. On which the victim reasonably relies
  6. Resulting in damages.
(from Richard Shell's Bargaining for Advantage)

Of course lawyers can argue for hours about whether an action fits this set of conditions. It's up to you as a negotiator to choose how close to the cliff edge you want to skate.


Conditions for Deception

If you find yourself in these circumstances, be particularly alert to possible deception:

  1. One party has little to lose or much to gain from deception.
  2. Information asymmetry is great
  3. Hard to tell if there is intent to deceive.
  4. Verification is difficult. Parties don't have resources to safeguard against deception.
  5. Interaction or interdependence between parties is infrequent.
  6. If deception is caught, redress is difficult.
  7. Reputation information is unavailable, unreliable, costly.

Protections that Promote Honesty

Mechanisms, formal and informal, that can help build and sustain trust between negotiating parties:

  • Social and institutional support
  • Building personal relationships and interdependence
  • Laws and regulations
  • Independent sources for facts and evaluation
  • Institutional sources of reputation information
  • 3rd parties
  • Standardized contract mechanisms and norms
  • Affiliations and credentials


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