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Ethics In Negotiation

Ethics In Negotiation. “Ethics are broadly applied social standards for what is right or wrong in a particular situation” (LSM p. 164) Does negotiation raise ethical issues? Are there widely-accepted standards for judging ethical behavior in negotiation that LSM recommend?

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Ethics In Negotiation

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  1. Ethics In Negotiation • “Ethics are broadly applied social standards for what is right or wrong in a particular situation” (LSM p. 164) • Does negotiation raise ethical issues? • Are there widely-accepted standards for judging ethical behavior in negotiation that LSM recommend? • What standards might be used? • Ethics: Right and wrong • Prudence: Effectiveness • Practicality: Expedience, efficiency

  2. Ethical Standards for Negotiation • Hitt suggests four possible standards for evaluating business and negotiation • Expected results, return (profit, or an “end result ethic”) • Law (a “rule ethic”) • Strategy and values of one’s organization (“social contract ethic”) • Personal convictions or conscience (“personalistic ethic”) • Carr: Like poker, bluffing, concealment, etc. are a normal part of business dealings

  3. Simple Model of Ethical Behavior/Unethical Behavior (UB) Intentions and Motives Consequences 1. Impact: Does it work? 2. Self-evaluation 3.Others’ reactions Influence Situation Range of Tactics Selection and Use Explanations and Justification

  4. Model of Ethical Decision Making: Intent and Motivators • Basic function (Intent): Increase power by changing balance of accurate information • Lies of commission: Active deception • Lies of omission: Not saying what we should? • Typical motives • Profit (often that’s why we negotiate) • Competition (winning at any cost) • Justice (to remedy perceived unfairness) • Distributive (Equality, Equity, or Need) • Procedural (Being treated fairly) • Two wrongs make a right? • Cooperation/Competition assumptions matter

  5. Model: Common Marginal/Unethical Tactics • Some common tactics • Misrepresentation (lies) • Bluffing (false threat or promise) • Falsification (factually erroneous info) • Deception (leading to wrong conclusion) • Selective disclosure/misrepresentation to constituencies (to play one against the other) • Appears to be a fuzzy line between falsification and deception for MBA students/Execs

  6. Unethical (#17 of 18) “Gain information about an opponent’s negotiating position by trying to recruit or hire one of your opponent’s key subordinates” (on the condition they reveal confidential info) Ethical (#1 of 18) “Gain information about an opponent’s negotiating position and strategy by asking around in a network of your own friends, associates, and contacts” How fuzzy is it? (MBA/Exec Study)

  7. Consensus On What Constitutes “UB”? • Results from study of MBAs and Execs • Samples of most and least ethical tactics (18 tactics) • What’s noteworthy from results? • There is consensus (or tacitly-agreed norms) • People saythey will use what is ethical (r=.81) • Be cautious in generalizing • Business -- maybe • Beyond -- risky • 1999 study of business execs (May, 1999 WSJ) • Rate themselves 80 on a1-to-100 ethical behavior scale • News media people rate them 30 on that same scale

  8. Model: Possible Consequences of “UB” • Intended outcome -- did it work or not? • Others’ judgments and evaluations, e.g., • Outrage and revenge-seeking • Legal action • Professional censure, disbarment, etc. • Self-assessment • Guilt • Stress

  9. Model: Rationalizing Unethical Behavior (Explanations and Justifications) • Unavoidable -- “I’m not responsible” • Harmless -- A “white lie” • Avoiding greater harm (negative consequences) • For greater good, or good of others • “They had it coming” • Tit for tat -- precedent • Anticipatory (may be self-fulfilling) • It’s appropriate for the situation (recall Carr’s view)

  10. Other Factors: Personal • Demographic factors associated with higher ethical standards • Female gender (women more ethical) • Age associated with higher ethics • Ditto for parochial school grads • Professionals with ethical codes

  11. Other Factors: Personal • Personality traits associated with lower ethical standards • Aggressiveness • Machiavellianism • External locus of control • Cognitive Moral Development • People may differ in their stage of CMD • May account partly for age and school effects?

  12. Other Factors: Situational • Relationship (friendliness, cooperation, timeframe) • Relative power -- More power, less ethical • Intoxication? • Opportunity? (ability to get away with it) • Acting as an agent for others • Group/organizational norms & pressures

  13. Dealing With Their Use of Deception • Ask probing questions: Ask for elaboration, look for contradictions, signs of discomfort, anxiety (see Table 7.1) • Recall “The Negotiator” movie and similar views • But beware: Skilled liars don’t give cues • Recall basic options noted previously: Consider the options and make a strategic response • Ignore it, don’t let it work • Call them on it (“Let’s discuss what you’re doing here”) • Respond in kind (problems with escalation potential) • Befriend or co-opt them -- help them to change

  14. Summary • Negotiation always or almost always raises ethical issues. Recall basic dilemmas of honesty and trust • Common problem is confusing ethical standards with other standards • There are some norms (e.g. MBA/Exec study) • There’s no “Negotiator Code of Honor” that we could look to as THE standard • Dealing with it: • Certain situations and other factors favor UB - be alert • Probe to help detect it. Importance of questions again! • Deal with it strategically, not haphazardly

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