Chapter 8
Ethics, Fairness, and
Trust in Negotiations
8-2
Understanding How Ethics
and Values Apply
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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
Negotiating Skills
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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
8-4
Chapter Case: Withholding
Information
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Employer sought concessions from a union
in contract negotiations to curb rising
health care costs
Union asked employer to switch to selfinsurance 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
Ethics
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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
8-6
Ethical Theories
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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
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:
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What benefits will result if he does?
What harm will result if he does not?
Which outcome has the best overall
consequence?
8-8
Tactics for Success (cont’d)
Ethics of principle:
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Are the employees entitled to the information?
Should the employer expect similar treatment
from the other side?
Ethics of purpose:
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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?
Rokeach’s Terminal and
Instrumental Values
8-10
Values
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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
8-11
Behavior Rules
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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
8-12
Substantive Fairness
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Seen in distribution of value
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Proportionality
Reciprocity
Impartiality
Parties are heard
Traps to Avoid:
8-13
Alternatives to Lying
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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
8-14
Procedural Fairness
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Seen in appropriateness of tactics used
Functionalist Model
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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
8-15
Procedural Fairness (cont’d)
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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?
8-16
Appropriate Tactics
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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
8-17
Inappropriate Tactics
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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
8-18
Unethical Negotiating Gambits
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The Decoy
The Red Herring
The Deliberate Mistake
Escalation
Planted Information
Never-Ending Negotiation
8-19
Trust
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Essential factor in negotiation
Enables cooperative behavior
Reduces harmful conflict
Facilitates work
Involves some risk
Requires interdependent relationship
8-20
Five Bases of Trust
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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
Levels of Trust
8-22
Trust and Distrust
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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
High/Low Trust and High/Low Distrust
Interdependency
HIGH Joint goals
TRUST 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 Limited interactions
TRUST No reason for
confidence
No reason to be wary
Monitoring or compelling
each other’s behavior
No reason for confidence
Ample reason to be wary
LOW DISTRUST
HIGH DISTRUST
8-24
Establishing Trust
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Assess the situation
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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?
8-25
Establishing Trust (cont’d)
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Build mutual trust
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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
Tactics for Success:
8-26
How to Build Trust in a Negotiation
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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