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Unit - 4

Ethics in
Negotiation
s
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HOW
COMMUNICATE
NEGOTIATION ?

PEOPLE
IN

The research has examined different aspects


of how people communicate in negotiation.
We address two aspects related to the "how"
of communication: the characteristics of
language that communicators use, and the
selection of a communication channel for
sending and receiving messages.

HOW
COMMUNICATE
NEGOTIATION ?

PEOPLE
IN

Use of Language
language operates at two levels: the logical
level (for proposals or offers) and the
pragmatic level (semantics, syntax, and
style). The meaning conveyed by a
proposition or statement is a combination of
one logical, surface message and several
pragmatic (i.e., hinted or inferred) messages.
In other words, it is not only what is said and
how it is said that matters but also what
additional, veiled, or subsurface information is
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intended, conveyed, or perceived in reception

HOW
COMMUNICATE
NEGOTIATION ?

PEOPLE
IN

Use of Language
1. The use of polarized language, in which
negotiators use positive words when speaking
of their own positions (e.g., generous,
reasonable, or even-handed) and negative
words when referring to the other party's
position (e.g., tight-fisted, unreasonable, or
heavy-handed).

HOW
COMMUNICATE
NEGOTIATION ?

PEOPLE
IN

Use of Language

2. The conveyance of verbal immediacy (a


measure of intended immediacy, urgency, or
relative psychological distance), either high
and intended to engage or compel the other
party ("Okay, here is the deal" or "I take great
care to ... ") or low and intended to create a
sense of distance or aloofness ("Well, there it
is" or "One should take great care to ... ").
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HOW
COMMUNICATE
NEGOTIATION ?

PEOPLE
IN

Use of Language
3. The degree of language intensity, in which
high intensity conveys strong feelings to the
recipient.(as with statements of affirmation or
the frequent use of profanity) and low
intensity conveys weak feelings.
4. The degree of lexical diversity (Le., the
command of a broad, rich vocabulary), where
high levels of lexical diversity denote comfort
and competence with language, and low
levels
denote
discomfort,
anxiety,
or
inexperience.
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HOW
COMMUNICATE
NEGOTIATION ?

PEOPLE
IN

Use of Language
5. The extent of high-power language style,
with low power denoted by the use of verbal
hedges, hesitations, or politeness to the point
of deference and subordination, and high
power denoted by verbal dominance, clarity
and firmness of expression, and selfassurance

HOW
COMMUNICATE
NEGOTIATION ?

PEOPLE
IN

election of a Communication Channel


the key variation that distinguishes one
communication
channel from another is social presence the
ability of a channel to carry and convey subtle
social cues from sender to receiver that go
beyond the literal "text" of the message itself.
For example, as an alternative to face toface interaction, the telephone preserves
one's ability to transmit social cues through
inflection or tone of voice, but forfeits the
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ability to communicate through facial

HOW
COMMUNICATE
NEGOTIATION ?

PEOPLE
IN

election of a Communication Channel


In written communication, there are only the
words and symbols on paper, although one's
choice of words and the way they are
arranged
can
certainly
convey
tone,
(in)formality, and emotion. E-mail, as an
increasingly ubiquitous mode of personal and
organizational communication, can be viewed
as
simply
another
form
of
written
communication that happens to involve
electronic transmission.
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HOW
COMMUNICATE
NEGOTIATION ?

PEOPLE
IN

election of a Communication Channel


Treating e-mail as just another vehicle for
written
communication
is
analytically
simplistic
because
e-mail
interactions
frequently substitute for communication that
would otherwise occur via telephone, face-toface, or perhaps not at all. Researchers have
been examining the effects of channels in
general, and e-mail in particular, on
negotiation processes and outcomes during
much of the past decade.
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HOW
COMMUNICATE
NEGOTIATION ?

PEOPLE
IN

election of a Communication Channel


Unfortunately, there are few consistent
findings that point to clear effects. We do
know that interacting parties can more easily
develop personal rapport in face-to-face
communication compared to other channels
and at face-to-face negotiators are more
inclined to disclose information truthfully,
Increasing their ability to attain mutual gain.
There is evidence that negotiation through
written channels is more likely to end in
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impasse than negotiation that occurs face-to-

Improving Communication
In Negotiation
Three main techniques have been proposed
for improving communication in negotiation:
the use of questions, listening, and role
reversal.
The Use of Questions
Asking good questions enables negotiators to
secure a great deal of information about the
other party's position, supporting arguments,
and needs. questions could be divided into
two basic categories: those that are
manageable,
and
those
that
are
unmanageable and cause difficulty
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Improving Communication
In Negotiation
Manageable questions cause attention or
prepare the other person's thinking for further
questions ("May I ask you a question?"), get
information ("How much will this cost?"), and
generate thoughts ("Do you have any
suggestions
for
improving
this?").
Unmanageable questions cause difficulty,
give information ("Didn't you now that we
couldn't afford this?"), and bring the
discussion to a false conclusion ("Dont you
think we've talked about this enough?").
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Improving Communication
In Negotiation
Listening
Counselors recognize that communications
are frequently loaded with multiple meanings
and that the counselor must try to identify
these different meanings without making the
communicator angry or defensive. There are
three
major forms
of listening:
I. Passive
listening
involves receiving the
message while providing no feedback to the
sender about the accuracy or completeness of
reception. Sometimes passive listening is itself
enough to keep a communicator sending
information. Some people like to talk and are
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Improving Communication
In Negotiation
Listening

2. Acknowledgment is the second form of


listening, slightly more active than passive
listening.
When
acknowledging,
receivers
occasionally nod their heads, maintain eye
contact, or interject responses like "I see," "Mmhmm," "Interesting, "Really," "Sure:' "Go on,"
3.
Active
listening is the third form of listening.
and
the like.
When receivers are actively listening, they
restate or paraphrase the sender's message in
their own language. Sender: Please, don't ask
me about that now. Receiver: Sounds like you're
awfully busy right now.
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Improving Communication
In Negotiation
Role Reversal
Role-reversal techniques allow negotiators to
understand more completely the other party's
positions by actively arguing these positions
until the other party is convinced that he or
she is understood. For example, someone can
ask you how you would respond to the
situation that he or she is in. In doing so, you
can come to understand that person's
position, perhaps can come to accept its
validity, and can discover how to modify both
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Improving Communication
In Negotiation
Role Reversal
1. Role reversal is effective in producing
cognitive changes (greater understanding of
the other party's position) and attitude
changes (perceived similarities between the
two
2. positions).
When
the
parties'
positions
are
fundamentally compatible with each other,
role reversal is likely to produce acceptable
results (cognitive and attitudinal change);
when the parties' positions are fundamentally
incompatible, role reversal may sharpen the
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perceptions of incompatibility and inhibit

Improving Communication
In Negotiation
Role Reversal
3. Although role reversal may induce greater
understanding of the other party's position
and highlight possible areas of similarity, it is
not necessarily effective overall as a means of
inducing agreement between parties.

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Negotiation
power

an actor ... has power in a given situation


(situational power) to the degree that he can
satisfy the purposes (goals, desires, or wants)
that he is attempting to fulfill in that situation.
Power is a relational concept; it does not
reside in the individual but rather in the
relationship of the person to his environment.
Thus, the power of an actor in a given
situation
is
determined
by
the
characteristics of the situation as well as
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by his own characteristics.

Negotiation
power

During economic downswings, labor unions


can find themselves negotiating new contracts
that delay wage increases or even reduce
wages, which means giving hard-won
concessions back to management-hardly
something union officials want to do. They
have usually done so when company officials
have argued that unless wages go down. the
firm will layoff thousands of employees, move
operations to another country, drop a line of
business, or take some similar action.
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Negotiation
power

The union officials can be seen as making a


rational or calculated decision to do
something they ordinarily would not do
(Dahl'S
definition),
but
in
this
case
management
is simply taking advantage of the shift in
power within the economic environillent. As
markets shift, demand for products changes;
costs rise; or less expensive (nonunion) labor
becomes available in other areas.
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Negotiation
power
SOURCES OF POWER-HOW
PEOPLE ACQUIRE POWER
French and Raven (1959) identified five major
types: expert power, reward power, coercive
power, legitimate power, and referent power.

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Negotiation
power
Coercive Power
Power that is based on fear. One reacts to this
power base out of fear of the negative results
that might occur if one fails to comply. It rests
on the application, or the threat of the
application, of physical sanctions such as the
infliction of pain, the generation of frustration
through restriction of
movement, or the controlling by force of basic
physiological or safety needs.
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Negotiation
power
Coercive Power
At the organizational level, A has coercive
power over B if A can dismiss, suspend, or
demote B, assuming that B values his or her
job. Similarly, if A can assign B work activities
that B finds unpleasant or treat B in a manner
that B finds embarrassing, A possesses
coercive power over B.

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Negotiation
power
Reward Power
The opposite of coercive power is reward
power. People will go along with the wishes or
directives of another if doing so produces
positive benefits; therefore, one who can
distribute rewards that others view as valuable
will have power over those others. In an
organizational context, we think of money,
favourable
performance
appraisals,
promotions, interesting work assignments,
friendly colleagues, important information, and
preferred work shifts or sales territories.
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Negotiation
power
Legitimate
Power

The most frequent access to one or more of


the bases of power is through a persons
structural position. This is called legitimate
power. It represents the power a person
receives as a result of his or her position in the
formal hierarchy of an organization. Positions
of authority include coercive and reward
powers. Legitimate power, however, is broader
than the power to coerce and reward.
Specifically,
it
includes
acceptance
by
members of an organization of the authority of
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a position.

Negotiation
power
Expert Power
Expert power is influence based on expertise,
special skills, or knowledge. Expertise has
become one of the most powerful sources of
influence as the world has become more
technologically oriented. Most of us follow the
advice that our doctors give us. Expert power
relies on trust that all relevant information is
given out honestly and completely. Of course,
since knowledge is power, the more that
information is shared, the less expert power a
person has.
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Negotiation
power
Referent Power
Referent power develops out of admiration of
another and a desire to be like that person. If
you admire someone to the point of modelling
your behaviour and attitudes after him or her,
that person possesses referent power over you.
Sometimes teachers and coaches have
referent power because of our admiration of
them. Referent power explains why celebrities
are paid millions of dollars to endorse products
in commercials.
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Negotiation
power
Information
Power
Information power comes from access to and
control over information. People in an
organization who have data or knowledge that
others need can make those others dependent
on them. Managers, for instance, because of
their access to privileged sales, cost, salary,
profit, and similar data, can use this
information to control and shape subordinates
behaviour.
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Negotiation
power
1- Power Based on Information
and Expertise
The accumulation and presentation of data
intended to change the other person's point of
view or position on an issue; and (for
expertise) an acknowledged accumulation of
information, or mastery of a body of
information, on a particular problem or issue.

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Negotiation
power
2- Power Based on Control
over resources
The accumulation of money, raw material,
labor, time, and equipment that can be used
as incentives to encourage compliance or as
punishments for noncompliance.

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Negotiation
power
3- Power Based on Position
Power derived from being located in a
particular position in an organizational or
communication structure; leads to two
different kinds of leverage:
Formal authority, derived from occupying a
key position in a hierarchical organization.
Access to or control over information or
supply flows,
derived from location within a network,
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Relationship in
Negotiation
Relationships can be described in many ways.
A characteristic of most relationships is that
each party has a causal influence on the other
party's behavior. How people react to that
influence
depends
on
what
type
of
relationship they have.

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Relationship in
Negotiation
Four Fundamental Relationship Forms. A clear
representation of the types of social
relationships is presented by Fiske (1991).
Fiske argues for four fundamental forms:
communal sharing, authority ranking, equality
matching, and market pricing. He defines
them as follows:
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Relationship in
Negotiation
I.Communal
sharing is a relation of unity,
community, collective identity, and kindness,
typically enacted among close kin. People are
bound to one another by feelings of strong
group membership; common identity; and
feelings of unity, solidarity, and belonging.
Collective identity takes precedence over
2."Authority
ranking is a relationship of
individual identity.
asymmetric differences, commonly exhibited
in a hierarchical ordering of status and
precedence, often accompanied by the
exercise of command and complementary
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displays of deference and respect"

Relationship in
Negotiation
3."Equality matching is a one-to-one
correspondence relationship in which people
are distinct but equal, as manifested in
balanced reciprocity (or tit-for-tat revenge),
equal
share
distributions
or
identical
contributions,
in-kind
replacement
4.
"Market and
pricing
is based on an
compensation,
turn-taking"
(intermodel) metric of value by which people
compare different commodities and calculate
exchange and costlbenefit ratios. The values
that govern this kind of relationship are
determined by a market system.
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Relationship in
Negotiation
imensions of Relationships

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Ethics in
negotiations
What Are Ethics And Why Do They
Apply To Negotiation?
Ethics are broadly applied social standards
for what is right or wrong in a particular
situation, or a process for setting those
standards. They differ from morals, which are
individual and personal beliefs about what is
right and wrong. Ethics proceed from
particular philosophies,
which purport to (a) define the nature of the
world in which we live, and (b) prescribe41

Ethics in
negotiations
Major Ethical Concerns
End-result Ethics,
Rule Ethics,
Social Contract Ethics, And
Personalistic Ethics.

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Ethics in
negotiations
Major Ethical Concerns

End-Result Ethics

Many of the ethically questionable incidents


in business that upset the public involve
people who argue that the ends justify the
means-that is, who deem it acceptable to
break a rule or violate a procedure in the
service of some greater good for the
Individual, the organization, or even society
at large.
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Ethics in
negotiations
Major Ethical Concerns

End-Result Ethics
Suppose a television network has convincing
statistical evidence that a particular pickup
truck was designed unsafely, so that in 1 test
out of 10, it bursts into flame when it in a
side collision. To highlight this defect, the
network producer decides to stage and
videotape an accident. But because a
collision may create a fire only 1 time in 10,
and the producer can't afford to destroy 10
(or more) trucks, he decides to place44

Ethics in
negotiations
Major Ethical Concerns

End-Result Ethics

Thus, the exploding truck viewers would see


would have been designed to "simulate"
what (supposedly) happens to (supposedly)
1 truck out of 10. Is this unethical, even if the
producer's goal is to warn viewers about the
hazards of this truck model?

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Ethics in
negotiations
Major Ethical Concerns

Rule Ethics
Rule Ethics emphasize that individuals ought
to commit themselves to a series of moral
rules or standards, and make decisions
based on those rules. Rule utilitarians argue
that a decision based on the utilitarian
standards reviewed above leads decision
makers into more trouble than benefit;
instead, they argue, the best way to achieve
the greatest good is to closely follow a set of
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rules and principles.

Ethics in
negotiations
Major Ethical Concerns

Rule Ethics
Who makes the rules? What are the rules
that apply in all circumstances? For example,
those
who
believe
strictly
in
the
commandment (rule) "Thou shalt not kill" will
argue that the commandment is the same,
regardless of whether the subject is murder,
the death penalty for a convicted murderer,
military combat, abortion (even to save the
life of the mother), or euthanasia (mercy
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killing
of
terminally
ill
or
suffering

Ethics in
negotiations
Major Ethical Concerns

Social Contract Ethic


A third standard of ethics holds that the
rightness of an action is determined by the
customs and social norms of a community.
Rather than arguing that the utility of ends
determines the standards, or that the utility
of particular rules should apply in all
situation, social contract ethicists argue that
societies,
organizations,
and
cultures
determine what is ethically appropriate and
acceptable for themselves, and then
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Ethics in
negotiations
Major Ethical Concerns

Personalistic Ethics
A fourth standard of ethics is that, rather
than attempting to determine what is ethical
based on ends, or rules, or the social norms
of a community, people should simply
consult
their own
conscience.
Personalistic
Ethics
maintain that everyone
ought to decide for themselves what is right
based on their conscience. Whether one lies,
cheats, or steals, therefore, is ultimately a
matter of individual conscience and not the
nature of the ends, absolute rules, or narrow49

Best Practices in
Negotiations

reparing for the Negotiation

Rule 1: Be Prepared to Prepa


The most important fact to consider is that the
negotiators task starts largely before people
sit around the table: they have to be well
prepared, have a clear understanding of their
basic interests, objectives, bottom line and
room for manoeuvre. Before participating in a
negotiation, they have to learn the basics
about the behavioural norms of their partners
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culture, especially concerning appointments,

Best Practices in
Negotiations

reparing for the Negotiation

Rule 2: Gather Factual Informat


Key information must be collected prior to the
negotiation and the lack of such information
has often been noted as a reason for the
failure of negotiations. The negotiators should
thus create and demonstrate willingness to
exchange information with each other. This
can be done through:
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Best Practices in
Negotiations

reparing for the Negotiation

Rule 2: Gather Factual Informat


First, Look for the match between your and
the other parties organisation. Secondly, what
type of people are involved from their side;
team or individuals, technical or commercial
people. Thirdly, Check which level of people is
involved; Marketing/purchasing managers, VPs
or CEO. And finally, in case of international
business negotiations, Know any restrictions or
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limitations regarding trade or business

Best Practices in
Negotiations

reparing for the Negotiation

Rule 2: Gather Factual Informat


Expectations of the other party: their
constraints and limitations (especially in terms
of performance thresholds or mandate given
by
theirother
superiors).
The
partys decision-making process:
general style of decision making (centralised,
decentralised, committee, etc.); who decides?
How? Is decision strongly related to
implementation? To what extent does it fit with
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your own decision-making style.

Best Practices in
Negotiations

reparing for the Negotiation

3: Assess Intercultural Obstacles as Early as P


you dont need to know everything your
foreign counterpart knows about his country
and its culture. What you do need to know is
how your culture and the ways in which it
differs from that of your opponents affect what
happens at the table. Your strength lies in your
knowledge and understanding of yourself and
your culture, as your opponents strength lies
54
in his knowledge and understanding of his

Best Practices in
Negotiations

reparing for the Negotiation

4. Prepare for the Type of Deal that will be Neg


Different types of projects need different types
of preparation. Projects such as turnkey,
export
sales,
licensing,
joint
venture,
dealership agreement, merger and acquisition,
etc., involve different depth or scope in
negotiation. In licensing agreements for
example, you have to decide whether royalties
will be paid on total production, sales or as a
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lump sum.

Best Practices in
Negotiations

reparing for the Negotiation

ule 5: Empathy is Not Enough


To be empathetic to other people thus means
to understand their needs and motives as well
as they do themselves. To be successful in
negotiations, you must be able to interpret
and understand the other sides arguments
and reactions.
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Best Practices in
Negotiations

reparing for the Negotiation

Strategy Formulatio

ule 6. Define your Basic Interest

ule 7. Prepare Walk-Away Options

8: Prepare for Tough Strategies on the Other S

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Best Practices in
Negotiations

reparing for the Negotiation

Face-to-Face Negotiatio
ule 9: Control Location and Tactics

e 10: Change Negotiation Style when Needed

ule 11: Control your Concessions

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Best Practices in
Negotiations

reparing for the Negotiation

Face-to-Face Negotiatio
ule 12: Allow Yourself Plenty of Time

e 13: Be Flexible with the Negotiation Agenda

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All the Best


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