insight magazine

Ethics Engaged | Winter 2018

7 Steps for Negotiating Ethically

Does negotiating stress you out? These tips can help you negotiate with confidence and integrity.
Elizabeth Pittelkow Kittner CFO, GigaOm

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.

Defining Negotiations

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 successful.

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 by 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 by 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 that being 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.

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