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

2. Understanding How Ethics and Values Apply
8-2
Understanding How Ethics and Values Apply
Negotiation is voluntary process dependent upon communication and motivation
The process often involves less than frank and open communication
Need to reconcile deceptive tactics and fair agreements
Need to establish trust

3. Negotiating Skills
8-3
Skill 8.1: Identify ethical systems that may guide parties to a negotiation
Skill 8.2: Determine the substantive fairness of a negotiation
Skill 8.3: Ensure the procedural fairness of a negotiation
Skill 8.4: Distinguish between ethical and unethical concealment behaviors
Skill 8.5 Learn to create trust in
negotiations

4. Chapter Case: Withholding Information
8-4
Employer sought concessions from a union in contract negotiations to curb rising health care costs
Union asked employer to switch to self-insurance to reduce cost
Employer was already self-insured but did not share that information with the union in case the union asked for share of savings

5. 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

6. Ethical Theories
8-6
Ethics of purpose: A good end cannot be reached with bad means
Ethics of principle: “Do unto others as you would have them do unto you”
Ethics of consequence: The end justifies the means

7. Tactics for Success: Moral Decision Making
8-7
Chapter Case: Should the negotiator tell the employees that the employer is already self-insured?
Ethics of consequence:
What benefits will result if he does?
What harm will result if he does not?
Which outcome has the best overall consequence?

8. Tactics for Success (cont’d)
8-8
Ethics of principle:
Are the employees entitled to the information?
Should the employer expect similar treatment from the other side?
Ethics of purpose:
Does withholding the information subvert the negotiation process?
If the employees do not have all the information, can they fairly evaluate the employer’s offer?

9. Rokeach’s Terminal and Instrumental Values

10. 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

11. 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

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

13. 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

14. 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

15. Procedural Fairness (cont’d)
8-15
Reciprocity standard—would you want to be treated in this way?
Universality standard—would you advise others to behave this way?
Publicity standard—would you like to see the actions in the press?
Trusted friend standard—would you tell your friend of your actions?
Legacy standard—do you want to be remembered for acting in this way?

16. 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

17. 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

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

19. 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

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

21. Levels of Trust

22. 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

23. 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

24. 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?

25. 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

26. 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