Course Name: Negotiation Skills & Techniques

Course Code: MBA G506

Project Report
Submitted by:
 Aliasghar Abezer Vali [2019H1490820P]

 Akanksha Mudgal (2019H1490867P)

 Akash Mandloi (2019H1490858P)
 Areesha Tanzeem (2019H1490817P)
 Amandeep Singh (2019H1490845P)
 Arun Singh Tomar (2019H1490852P)
Submitted to: Dr. Mohammad Faraz Naim
Date of Submission: 20/04/2020

Topic:

Ethics in Negotiation

 Judging whether a behaviour is ethical or unethical

 Identify deceptive behaviour in others

How to avoid the temptation to be unethical?

INTRODUCTION

The term ethics is derived from the Greek word ethos which means customs/ habits/ disposition. Ethics
are a system of moral principles which affect the decisions and lifestyles of people taking those
decisions. It is concerned with the various perspectives on what is good for individuals versus what is
good for societies. Our concepts of ethics have been derived from philosophies, religions and cultures
and have result in widespread debates on topics like abortion, human rights and professional conduct.
Ethical theories with respect to negotiation fall into three broad categories:
Consequentialist theories: These theories deal with the ethical consequences of actions.
Non-consequentialist theories: These theories speak more about the intentions of the person making
the decisions.
Agent-centred theories: These theories are more concerned with the ethical status of an individual than
the morality of the action.

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There are three widely used criteria for evaluating ethical behaviour in a negotiation: utilitarianism,
distributive justice, and the rights approach.

Utilitarianism: The utilitarian approach measures the total of benefits and negatives that arise in
alternative situations and identifies the best approach as the one with higher sum total of benefits as
compared to the other alternatives with the ultimate goal of satisfying maximum stakeholders involved.

Distributive justice: This approach deals with a normative distribution of goods and resources among
various stakeholders differentiating on the basis of who, what good and why must a particular
stakeholder of negotiation have them. It is more need based rather than wants. Also, in this approach
the main ethical conflict crops up when the resources to be allocated are limited in quantity.

Rights approach: In this approach the benefit is provided to any stakeholder on the basis of basic
fundamental rights like speech, tax funded healthcare, dignity, etc.

JUDGING WHETHER A BEHAVIOUR IS ETHICAL OR UNETHICAL

As found in a Harvard based Case study, a series of five questions would help one analyse if a behaviour
is ethical or unethical:

1. Reciprocity: Would I want others to treat me or someone close to me this way?

2. Publicity: Would I be comfortable if my actions were fully and fairly described in the newspaper?

3. Trusted friend: Would I be comfortable telling my best friend, spouse, or children what I am doing?

4. Universality: Would I advise anyone else in my situation to act this way?

5. Legacy: Does this action reflect how I want to be known and remembered?

Building on these questions one may always try and interpret his/ his counterpart’s actions and try to
judge whether the deal is being made on ethical grounds or not. By putting ourselves in the
counterpart’s
shoes we can evaluate if he is indulging in ethical/unethical behaviour.
A few negotiation tactics that are questionable from an ethical standpoint are:
 Lies: when a negotiator makes a statement that is contrary to known facts
 Puffery: when a negotiator exaggerates the value of something
 Deception: when a negotiator makes a misleading statement

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  Nondisclosure: when a negotiator omits or hides a pertinent fact

Indulging in unethical negotiation tactics inevitably leads to a bad long-term reputation in the market
and poses increasing difficulty in closing deals in the future. Also, negotiators must consider that
reputation is built over a multitude of years, however, a very short span of time may result in
destruction of a company’s entire reputation. Thus, though unethical practices may prove rewarding in
negotiations in the short-term, it is extremely detrimental to a firm in maintaining long-term
relationships which are the key to its sustainability.

IDENTIFY DECEPTIVE BEHAVIOUR IN OTHERS

In order to understand deceptive behaviour in others, we must first understand why people indulge in
such practices. Despite best intentions, any of these forces may get the better of any negotiator during
negotiation:

1. Temptation:

The ethicality of our negotiation depends heavily upon the rewards set for various outcomes of the
negotiation. If the job is highly paying and provides perks and extra frills to negotiators who are able to
secure favourable outcomes, the temptation of these rewards leads to negotiators indulging in lies to
get the better end of any negotiation at any cost. As per a Harvard study, 61% negotiators were found to
indulge in lies when the rewards at stake were high, thus giving in to temptation.

2. Uncertainty

In situations of uncertainty, where trust is not easy to be established, people tend to conceal important
facts, and exaggerate the value of their offer in the eye of the counterparty often by misrepresentations
of facts, misleading statistical figures, showcasing incorrect BATNA and resorting to other such measures
instead of building long-term trust between the stakeholders.

3. Disadvantageous Position

Whenever a negotiator founds that he/she is cornered due to the lack of potential alternatives, they are
motivated to participate in unethical practices like puffery, non-disclosure, etc in order to “win” the deal
at any cost, as in such a situation the negotiator feels that there is nothing more to lose.

4. Anonymous victims

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When the negotiation is carried out between individual & group of people versus when it is being carries
between individual & representative individual of a group, there is marked difference in the way
negotiation ethics are found to pan out. When an individual is negotiating with a group of people,
he/she has the notion that he is more vulnerable as the main victim in such a case is anonymous, which
leads to negotiators misrepresenting their true offers and withholding value. As per a Harvard study,
approximately in 73% of the cases, a behaviour as described in the above situation was exhibited by
negotiators.

The following measures can be taken to identify deceptive behaviour in others:

Before the negotiations begin

 Researching background and bona fides – A person may check public sources of information and
perform a perceptual map based on his research. Also, by soliciting a brief introduction of the
counterparty and seeking polite reassurance on any dubious point found as a result of research
may prove extremely helpful during the negotiation.
 Setting special ground rules for bargaining: By doing so one may minimize the scope of conflict
and deception as a special scope has been pre-defined.

During the negotiation process, there are a variety of tools to detect lies. Even if lies can’t be detected,
safeguards can be built against them.

 Looking for potential signs of deception: Some individuals are incompetent liars which can be
identified by carefully observing the other party by monitoring his/her baseline demeanour. If
an animated person suddenly becomes shy or a calm person begins to fidget, it is important to
pay attention to what they are saying and take additional protective measures.

 Asking questions in different ways: By asking the same question in different ways, if the other
party is indulging in deception it will definitely faulter at some point by providing self-
contradictory statements.

 Asking the opponent to “come clean.”: If one has a feeling that the entire information isn’t being
disclosed by the other negotiating party they may press for more information by inviting the
party to come clean about any hidden facts by stating that this wouldn’t hamper the business
deal.

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  Asking questions to which you already know the answer: Such questions are a sure shot way to
identify and catch the bluff of a counterparty. If a person has lied once or twice it is quite
possible that the entire premise of negotiations has been based on a premise of lies and in such
cases immediate decisions and actions must be taken on the continual of business negotiation.

 Taking notes during negotiations: This method helps in creating a vivid and detailed picture of
the negotiations taking place, so that if a party is backtracking on some clause through
diversionary tactics, all points still remain within the purview of the negotiator as they have
been jotted down.

 Including written claims as part of the final agreement.

 Using contingent agreements for protection.

 Trusting but verifying: For negotiations trust is important, but at the same time verification of
the facts discussed during the meeting is crucial towards understanding and differentiating
between reality and deception.

HOW TO AVOID THE TEMPTATION TO BE UNETHICAL?

The following measures may be taken to avoid the temptation to be unethical:

 Setting reasonable objectives for negotiation and indulging in integrative negotiation styles

 Honesty is the best policy: Understanding the fact that if the other party realised that you are
dishonest in negotiations, it would result in bad reputation in the industry and ultimately may
lead to loss of bargaining power.

 By defining and prepare your BATNA and WATNA well before hand, so that any negotiation may
be weighed against it and pressure to close the deal at any cost would be minimum (In case of a
strong BATNA).

 By identifying the common links between one’s goals and the counterpart’s goals would lead to
better and higher chances of collaboration.

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  By identifying with the counterparty on the basis of age, gender and other demographic lines.

REFERENCES:
https://study.com/academy/lesson/what-is-the-role-of-ethics-in-negotiation.html
https://www.pon.harvard.edu/daily/negotiation-skills-daily/deceptive-tactics-in-negotiation-how-to-ward-them-
off/
https://www.negotiate.org/your-resources/dealing-with-deception-in-negotiations
https://www.negotiate.org/your-resources/negotiation-and-ethics
https://sloanreview.mit.edu/article/negotiating-with-liars/
http://thoughtreach.com/importance-ethical-negotiations/
https://www.pon.harvard.edu/daily/negotiation-training-daily/questions-of-ethics-in-negotiation/
https://www.pon.harvard.edu/daily/dealing-with-difficult-people-daily/dealing-with-difficult-people-
when-youre-tempted-to-deceive/

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