7 Steps for Negotiating Ethically
Does negotiating stress you out? These tips can help you negotiate with confidence and integrity.
Elizabeth Pittelkow, CPA
Controller, Litera Microsystems
Bidding on a new property, haggling for a new car, or securing a new starting salary are
probably the situations that come to mind when you think about negotiating. However, we
negotiate all the time; for example, we negotiate for tasks at work, how to proceed when
we encounter a problem, and even what activities to do with our friends. We negotiate so
much that I am certain that a negotiation class has been one of the most useful ongoing
education sessions I have taken since starting my career.
But what happens when we let our ethics lapse in the course of, say, negotiating a bigger
salary? If you say you have a higher alternative job offer when you do not, does the end
justify the means? I encourage you to be careful when justifying your behavior. Once you
start telling small lies, it becomes much easier to tell big lies. As your integrity line moves,
you should consider the short-term gains against the long-term impacts on your reputation
and conscience. You want to be known as someone who acts with integrity in both your
professional life and personal life.
Let’s break down negotiations and see how we can become better ethical negotiators.
The popular book, “Getting to Yes: Negotiating Agreement Without Giving In,”
by William Ury and Roger Fisher defines negotiation
as “back-and-forth communication designed to reach an agreement when you and the
other side have some interests that are shared and others that are opposed.” This definition
is only part of the understanding you need to successfully negotiate; knowing three other
terms is key in being a successful and ethical negotiator:
• Best Alternative to a Negotiated Agreement (BATNA) –
This term means knowing what
your best outcome is if the negotiation does not happen or is not successfully completed.
• Walk Away Price (WAP) –
When you understand your BATNA, you can then set your
WAP to ensure you are not worse off than before.
• Zone of Possible Agreement (ZOPA) –
ZOPA is the bargaining range; it is where the
negotiation needs to land for an agreement to be made where all parties involved feel
Equipped with the understanding of these terms, you can now focus on negotiating
ethically. Here are some tips to help you succeed:
1. Know your BATNA and WAP.
It is crucial to keep your interests
and your stakeholders’ interests in mind when negotiating. For
example, if you are negotiating pricing for your company,
consider what price will yield a profit and what price range will
yield a loss. There may be reasons to accept a price that will
produce a loss or lower profits but ensure you have buy-in from
key stakeholders at your company for what the WAP is.
2. Be truthful without being misleading.
If you do not have other
pricing offers, do not say you have other offers. Research
Ann E. Tenbrunsel, a business ethics professor in the Mendoza
College of Business at University of Notre Dame, demonstrated
that whether negotiators lie depends in part on how lucrative
the reward could be — higher rewards provided a significant
temptation to lie. She also observed that when people were less
certain of the information they were presenting, the more likely
they were to be aggressive and deceitful to compensate for the
uncertainty and to mask weakness.
3. Limit counterproductive emotions.
While you may have strong
feelings about the outcome, it is always best to negotiate with
facts. In fact, anxious negotiators make deals that are 12 percent
less financially advantageous, according to a 2011 study
Harvard Business School assistant professor Alison Wood
Brooks. Planning for negotiations leads to confidence, which
produces more effective negotiations. In his book, “Thinking,
Fast and Slow,” Daniel Kahneman points out
pressured to make a quick decision can fuel unproductive
emotions like anxiety. Slowing down the process and the
timeline will give you a less stressful environment for analyzing
and negotiating your position with confidence.
4. Avoid group pressures.
Research by Charles Naquin, an associate
professor of management at DePaul University’s Driehaus
College of Business, determined that people tend to lie more
when negotiating with a group instead of an individual. In one
study, participants who negotiated with an individual lied
approximately 36 percent of the time, while participants who
negotiated with a group of people lied 73 percent of the time.
5. Honor your promises.
Whatever you decide to commit to in a
negotiation, ensure you do what you say you will. Your
reputation and your organization’s reputation are at stake.
6. Respect relationships.
Negotiating with customers you want to
keep likely looks different than negotiating with customers you
are okay with losing. However, treating people respectfully in a
negotiation is always the right thing to do. If the relationship
you have with the other party is more important than the
outcome of the negotiation, then negotiating may not be the
best option. Consider your goals for a negotiation and determine
where the ZOPA is to see if a negotiation will even work.
7. Seek counsel.
If you believe your emotions may be detrimental
to the negotiation, consider asking an independent third party
to negotiate for you (or for both sides). Additionally, you can
seek counsel to help you understand if you are thinking through
a situation rationally before entering a negotiation.
Negotiations do not have to be stressful. Knowing your goals,
planning your strategy, and putting these tips into practice will help
you be a successful — and ethical — negotiator.