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LOGO www.themegallery.com Chapter 9 Ethics in Negotiation Evangeline Wu WHY DO NEGOTIATORS NEED TO KNOW ABOUT ETHICS? What are ethics and how do they apply to negotiation? What are the major ethical concerns that apply to negotiation? What major types of ethical and unethical conduct are likely to occur in negotiation? What factors shape a negotiator’s predisposition to use unethical tactics? How can negotiators deal with the other party’s use of deception? 8.1 What are ethics? Ethics defined Ethics: Broadly applied social standards for what is right or wrong in a particular situation, or process for setting those standards. Ethics define the nature of the world in which we live Prescribe rules for living together 8.1 What are ethics ? Ethics vs. prudence vs. practicality vs. Legality Ethical: Appropriate as determined by some standards of moral conduct Prudent: Wise, based on trying to understand the efficacy of the tactic and the consequences it might have on the relationship with others Practical: What is the easiest, cheapest, or fastest way of getting something done to achieve an objective Legal: What the law defines as acceptable practice 8.1 What are ethics ? E.g. What standards could a salesperson preparing a presentation on a new product use in determining her strategy? “What is the truth about this new product?” ---- Ethical judgement “How can I best present this product?” ---- Prudent judgement “What is the cheapest or most cost-effective way to sell this product?” ---- Practical judgement “H. Ross Perot gave this advice to young business people: ‘Don’t govern your life by what is legal or illegal, govern it by what’s right or wrong’” “Unethical bargaining practices are, as often as not, illegal or become so after they are brought to light. The law simply expands to include them” From “When is it Legal to Lie in Negotiations? “ by G. Richard Shell, Wharton in Sloan Mgt Review Spring1991 Make the decision on the basis of expected results, or what would give us the greatest return on investment. What the law says, on the legality of the matter. The strategy and values of my organization. My own personal convictions and what my conscience told me to do Ethical System Definition Major Proponent End-Result Ethics Rightness of an action is determined by considering consequences John Stuart Mill (1806-1873) Rule Ethics Rightness of an action is determined by laws and standards Immanuel Kant (1724-1804) Social Contract Ethics Rightness of an action is determined by the customs and norms of a community Jean Jacques Rousseau (17121778) Personalistic Ethics Rightness of an action is Martin Buber determined by one's conscience (1878-1965) 8.1 What are ethics ? Different approaches to ethical reasoning End-result ethics: The rightness of an action is determined by evaluating the pros and cons of its consequences. Duty ethics: The rightness of an action is determined by one’s obligation to adhere to consistent principles, laws, and social standards. 8.1 What are ethics ? Social contract ethics: The rightness of an action is based on the customs and norms of a particular community. Personalistic ethics: The rightness of an action is based on one’s own conscience and moral standards. Three major dimensions of ethical conduct arise in negotiations Means / Ends Relativism / Absolutism Truth - Telling Means/Ends Utilitarianism •Seek the greatest good for the greatest number •Quantitate and optimize happiness in society while minimizing pain •Examples: Interstate highways through farms benefit the larger public Relativism/Absolutism /Nihilism •Absolutism What is right is universal, timeless, and absolute •Relativism What is right may be different for different people or cultures •Nihilism There is no right or wrong Truth-Telling •How does one define truth? •How does one classify various deviations from truth? All they all lies? TYPOLOGIES OF DECEPTIVE TACTICS AND ATTITUDES TOWARD THEIR USE Category Example Traditional competitive bargaining Not disclosing your walkaway; making an inflated opening offer Emotional manipulation Faking anger, fear, disappointment; faking elation,satisfaction Misrepresentation Distorting information or negotiation events in describing them to others Misrepresentation to opponent's networks Corrupting your opponent's reputation with his peers Inappropriate information gathering Bribery, infiltration, spying, etc.. Bluffing Insincere threats or promises THE MOTIVATION TO BEHAVE UNETHICALLY O’Connor and Carnevale (1997) “individualistic” orientation “cooperative” orientation • Conditions under which negotiators say they would engage in deception • lie-for-a-lie • one shot • personal gain • not getting caught • life or death • low power • protecting reputation • dislike • fixed pie psychological bias and unethical behavior bounded ethicality: the limit of people to make ethical decisions because they are either unaware or fail to fully and deliberately process information illusion of superiority: people view themselves and their actions much more favorably than others view them illusion of control: people believe they have more control over events than they really do overconfidence: people are overconfident about their knowledge how can negotiators best answer the question of whether a given behavior is ethical: the front-page test reverse golden rule role modeling third-party advice strenghten your bargaining position EXPLANATIONS AND JUSTIFICATIONS The tactic was unavoidable The tactic was harmless The tactic will help to avoid negative consequences The tactic will produce good consequences “They had it coming” or “they deserve it” or “I’m just getting my due” “They were going to do it anyway, so I will do it first The tactic is fair or appropriate to the situation