1. Ethics, Fairness, and Trust in Negotiations
Chapter 8
Ethics, Fairness, and Trust in Negotiations

2. Ethics Ethics is the study of morality
8-5
Ethics is the study of morality
Ethical belief system is a basis for one’s values
Values reflect belief about “ends” and “means” of achieving goals
Behavioral rules are the accepted customs, standards, or models for ethical actions

3. Values
8-10
Values can be self-centered, internal standards accepted for one’s own behavior
Values can be social-centered, external standards expected for another’s behavior
Rokeach described end or terminal values and means or instrumental values

4. Behavior Rules
8-11
Descriptive behavior rules show what people do in certain situations
Injunctive behavior rules show what people should do in certain situations
Injunctive behavior rules become laws and
codes of ethics

5. Substantive Fairness Seen in distribution of value Proportionality
8-12
Substantive Fairness
Seen in distribution of value
Proportionality
Reciprocity
Impartiality
Parties are heard

6. Traps to Avoid: Alternatives to Lying
8-13
Asked your bottom line, say you’re not ready to reveal it
If you claim you “lack authority” then don’t seek authority
Don’t want to volunteer alternatives, ask opponent for options
Only make promises you can keep
Don’t lie about facts, limit discussion to opinion of facts

7. Procedural Fairness Seen in appropriateness of tactics used
8-14
Seen in appropriateness of tactics used
Functionalist Model
Bargaining is voluntary process
Purpose is to reach valid agreement
Practices that threaten valid agreement violate purpose
Negotiation is also adversarial process in which parties use bargaining techniques to gain information and advantages

8. Appropriate Tactics
8-16
Gain information about opponent by asking friends, associates, and contacts
Make an unrealistically high opening demand
Hide your real bottom line
Give false impression you aren’t in a hurry to pressure your opponent

9. Inappropriate Tactics
8-17
Misrepresent factual information or nature of negotiations to improve one’s position or because your opponent did
Falsely threaten or promise things with no ability to deliver
Bypass your opponent’s negotiator to undermine opponent’s position
Gain confidential information by bribery

10. Unethical Negotiating Gambits
8-18
Unethical Negotiating Gambits
The Decoy
The Red Herring
The Deliberate Mistake
Escalation
Planted Information
Never-Ending Negotiation

11. Trust Essential factor in negotiation Enables cooperative behavior
8-19
Essential factor in negotiation
Enables cooperative behavior
Reduces harmful conflict
Facilitates work
Involves some risk
Requires interdependent relationship

12. Five Bases of Trust Deterrence-based trust – imposed penalties
8-20
Deterrence-based trust – imposed penalties
Self-interest trust / calculus-based trust – mutually advantageous
Relational trust – reliability in past performance
Identity-based trust – “us” culture
Institutional-based trust – imposed by the situation

13. Trust and Distrust Business relationships are multifaceted
8-22
Business relationships are multifaceted
Parties can trust and distrust at the same time
Trust can range from high to low depending on relationship
Distrust can range from high to low depending on relationship

14. High/Low Trust and High/Low Distrust
HIGH TRUST
Interdependency
Joint goals
Reason to be confident
Little reason to be wary
Multifaceted and reciprocal relationship
Separate and shared goals
Many areas for confidence
Many reasons to be wary
LOW TRUST
Limited interactions
No reason for confidence
No reason to be wary
Monitoring or compelling
each other’s behavior
Ample reason to be wary
LOW DISTRUST
HIGH DISTRUST

15. Establishing Trust Assess the situation
8-24
Assess the situation
Are there incentives for parties to deceive one another?
Are there time constraints?
How well do you know the other party?
How does the other party see you?
Are there common interests to build trust upon?

16. Establishing Trust (cont’d)
8-25
Build mutual trust
Use norm of reciprocity
Display trust in the other person
Demonstrate trustworthiness
by following through on a promise
Recognize mutual interests
Guard your reputation for trustworthiness

17. Tactics for Success: How to Build Trust in a Negotiation
8-26
Speak their language by active listening
Manage your reputation by dealing with parties honestly                
Recognize your interdependency because negotiating is a voluntary exercise
Make a unilateral concession   
Label your concessions
Explain reasons for your demands