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Business Ethics of Negotiation Report


Ethics is an important part of society. It has been adopted in all aspects of people’s daily living. Business ethics is a relatively new concept. Most organisations have developed policies that are aimed at safeguarding it. Many researchers and authors have attempted to define business ethics. A common definition of business ethics is the study of activities, decisions, or business situations whereby attempts are made to address the rights and wrongs in an organisational setting (Cramton and Dees 362). However, there is a need to differentiate the concept of ethics from that of morality. According to French, Hablein, and van Es, morality is concerned with the social norms and beliefs, which define what is believed to be right or wrong within society (86). On the other hand, the concept of ethics focuses on morality in an attempt to show how it can be used to determine the wrongs and rights in a particular situation (French, Hablein, and van Es 86).

The rules and principles that determine what is wrong or right in a given situation are commonly referred to as ethical theories. The application of ethics in business is important for several reasons. The contemporary organisations have become an integral part of society, and hence the need for business ethics. Currently, businesses possess the ability to inflict harm to the general society, and hence the requirement of ethics. Negotiation is an integral part of the business. Organisations have entered negotiations every single minute. The application of ethics in negotiations has become an important practice, and hence the importance of the report on the ethics of negotiations. This report discusses the application of ethics in negotiations in an organisational set-up.

Ethics and Negotiations

The business life has negotiations as one of its main special features. According to Dellech, there is a need for successful negotiations for business success because the contemporary business environment has been affected by the concept of plurality, which dictates that no institution may exist on its own, and hence the need for negotiations (62). Many studies on ethics have discussed the current business world as being morally imperfect and competitive. As a result, business people have faced the challenge of surviving in such an environment. These ethical challenges continue to define the existence of ethics in business, especially in negotiations.

Ethics exist in part as a way of ensuring that people engage in adequate and upright practices. Some individuals often engage in activities that are meant to protect their interests in the business. The moral argument that is advanced against this kind of behavior is often inadequate to counteract the conduct, with the result being deception in negotiation (Feidakis and Tsaoussi 538). It is imperative that negotiators need to build trust to ensure that they have the most out of the negotiations that they conduct. The important areas of ethics in negotiations include the building of trust, establishment of common interests, and promotion of honesty (Strudler 811).

Different cultures have different values and morals that they hold close. These elements dictate ethical practices in their setting. Some cultures have different ethical behaviors that are considered unethical to other cultures. These differences in the understanding of ethics contribute significantly to the view of ethical practices in different organizations in terms of how they are practiced by different personalities. There are multiple factors that influence ethical behaviors and tactics in the organizational setting.

Reasons for Unethical Behaviour in Negotiations

The use of unethical behavior in business can be classified based on the intended goal of such actions. Most business individuals use unethical behaviors to pursue profits, beat the competition, and survive in a competitive environment (Rivers and Lytle 14). Some of them have even attempted to use unethical actions to restore the areas that they perceive were a violation of themselves or their activities. The main reasons for the existence of a business and the need for negotiations are to ensure that the organisations are profitable. Individuals who engage in negotiations proceed to ensure that they generate profits by partnering with other businesses. During this process of negotiating, opposing sides use special tactics to ensure that they get the desirable parts of the deals. Hence, they end up using unethical behaviors (Feidakis and Tsaoussi 540).

Competition is also a major component of any contemporary organization. Organisations try to outdo each other in the industry and sector within which they operate. The results of the competition include unethical interactions that are harmful to one of the sides while at the same time being perceived beneficial for the other.

When organisations and individuals perceive an injustice in the organisational setting, they may try to solve this situation through unethical actions within the same organisations. Honesty is one of the most common virtues that are eroded in the course of an unethical behaviour (Fulmer, Barry, and Long 692). When business individuals allow dishonest behaviours and practices within an organisation, the justification is mainly to correct the wrongs that have been done in the organisation.

The process of negotiation results in a number of ethical issues such as other interpersonal interactions in the organisational setup. The decision-making model is a simple model that may be used to explain the existence of ethical issues in any interpersonal interaction (Feidakis and Tsaoussi 542). A negotiator chooses to use unethical tactics to increase his or her negotiating powers, with eventual attainment of the desired goal or objective. This negotiator may gain power through manipulating accurate information such as lying (Fulmer, Barry, and Long 695). Lying may help a negotiator achieve a special objective of attaining information on his opponents in the process of negotiations together with the plans that they may possess.

The consequences of unethical tactics in negotiations include attainment of the targets for the negotiator or non-attainment of the same. The other consequence is the eventual criticism of the unethical tactics by the negotiator’s opponent or other observers (Strudler 811). Negotiators also end up often criticising themselves. They may want to justify their actions in the negotiations. The main aim of justifying the actions of an unethical behaviour in negotiations is to establish a good reason why the unethical actions were necessary.

The decision to engage in an unethical behaviour or the use of unethical tactics is influenced by many factors. One particular influence on the use of unethical tactics is the background of the negotiators who are involved in the use of the tactics (Rivers and Lytle 15). According to Dellech, individuals are more likely to engage in unethical behaviours if they have a background of the same (66). When an individual is convicted of unethical tactics during a negotiation process, there is a high probability that he or she has been involved in the same in the past.

The other influence on the use of unethical tactics in negotiations is the personality of an individual. This element is the most important determinant of an unethical behaviour in any setting, which applies even in the process of negotiation (Fulmer, Barry, and Long 696). Researchers have attributed the actions of individuals to the personality that they possess. Those who exercise unethical tactics in the process of negotiation have special personality traits that ensure that they engage in such practices. The results of unethical tactics in the process of negotiations include the promotion of unethical tactics that are displayed by the negotiating individuals (Rivers and Lytle 16).

Another factor that affects the use of unethical practices in the negotiation process is the benefit that is expected from such negotiations. Individuals in this negotiation process are more likely to engage in the use of unethical practices if they perceive the rewards as being significant (Feidakis and Tsaoussi 540). These rewards are consequences of the negotiation process. They may also be in the form of punishments. Therefore, the drive to use unethical tactics in negotiations may be to avoid the punishments that are a consequence of the negotiation process. When individuals perceive that the punishment may affect them significantly, they resort to the use of unethical tactics.

Every environment has a set of norms that dictate what is appropriate or not suitable in a particular society or culture. This provision also affects the use of unethical tactics in the negotiation process. Some individuals may perceive that a tactic is allowed in their culture or social norm. This accessibility leads to the use of this tactic in the negotiation process. However, the outcome of this tactic may be offensive to the opponents in the negotiations. Ignorance is not a defence tool for the unethical tactics in the organisational setup. Individuals have the responsibility to practice what is acceptable to the parties in the negotiations. The above causes of unethical tactics in the process of negotiation are responsible for the development of structured interactions in the engagement. Special rules are developed for negotiations. Each of the parties is obliged to follow them.

Importance of Ethics in Negotiations

The ethics of negotiation tactics have been the subject of numerous studies in the past. Some professions have been associated with negative tactics. Examples include lawyers, horse traders, car salespeople, and salespersons. People who engage in these professions have been accused of using falsehoods and misrepresentation of facts to influence the negotiation process (Fulmer, Barry, and Long 697). They use special tactics that are meant to influence other folks towards reaching agreements that are beneficial to themselves at the expense of their opponents. The presence of this special type of people and professions has created stereotypes, which exist in different countries and among different groups of people. Some age groups have also emerged more likely to engage in unethical tactics in the negotiation process.

One characteristic of negotiation is that it allows an individual to convince other individuals on the accuracy of information in decision-making process. Negotiators have a common understanding that lying is one major way of influencing people into certain decisions. These negotiators also understand that unethical tactics such as lying hold risks to the processes that they are engaged in, especially if the other party finds out the dishonesty (Strudler 812). They lose credibility and end up losing trust from the same people whom they thought were their friends and counterparts.

A common consequence of unethical tactics in the process of negotiation is the resentment of the tactic by people who have been affected by it. Negotiators have to abide by special rules in the process of negotiations for this process to be effective (Rivers and Lytle 17). Each side has to make full disclosures in the negotiation process, with partial disclosures being one of the unethical tactics. Another unethical practice is where the negotiator is the fiduciary during the negotiation process (Fulmer, Barry, and Long 697). According to Dellech, it is unethical for a negotiator to have information on the transaction in process without informing the other partner in the negotiation process (71).

Some of the commonly held beliefs that propagate unethical practices in the negotiation process include the belief that negotiations are areas of competition. Some of the parties that are involved in the negotiation may perceive winning the negotiation as winning any sport. This finding is a misleading fact that has led to the existence of unethical tactics in negotiations, and hence the perceived increase in these cases. Some negotiators treat the opposite parties as opponents.

The result of this case is the creation of reluctance in the process of negotiation where one side expresses reservations for the decisions that are reached in the negotiations. Any agreement that is arrived at in this form of environment is likely to disintegrate as some of the negotiations fail (Fulmer, Barry, and Long 697). Therefore, unethical practices in negotiations have the capacity to result in the failure of the negotiation process.

The practice of ethics in negotiation is important based on the basic relationships that negotiating partners should have. One simple understating is that reluctant partners in the negotiation process are undependable (Strudler 813). Therefore, it is imperative that the bargaining parties should handle each other with sincerity and reverence. The use of negotiations is to solve conflicts, conclude on sales, arrive at project agreements, and ensure that organisations are benefitting from interactions with each other. Negotiators need to understand this fact in the negotiation process, and hence the application of ethics in negotiation.

Negotiators are human beings who have feelings. Every action in the negotiation process affects them in one way or the other. The practice of honesty and transparency in the negotiation process ensures that the feelings of negotiators are safeguarded, and hence a better output from these individuals. According to Dellech, the golden rules in negotiations are to treat everyone else in a manner that one will want to be treated (73). Some of the negotiation ethics that are necessary include the practice of honesty, transparency, respect, and mutual understanding (Feidakis and Tsaoussi 538).

The major approaches that have been proposed in the literature on negotiation ethics include the strategy of ethical reasoning, the principle of utilitarianism, and social contrast ethics among others. Negotiators have the obligation of using these tactics “to evaluate the strategies that they use in the negotiation process together with their appropriateness” (Feidakis and Tsaoussi 538). Unethical behaviours in negotiations are important as they dictate the result of the negotiation process. Individuals in the negotiation process should be acquainted with ethical behaviours in organisations. This conduct should be applied in the processes of negotiation. Researchers have studied the different approaches in the ethics of negotiation, with most of them agreeing that utilitarianism is one of the major approaches. Some of the researchers also propose that the use of ethical reasoning in research is a sure way of avoiding ethical issues in negotiations.

Application of Ethics in Negotiations

The application of ethics in negotiations is an important aspect in any organisation. Negotiators have the responsibility of being honest in any negotiation. They should divulge details that the partners may need in arriving at favourable decisions. Several dimensions of ethical conduct in the negotiation process are evident. These dimensions include the means-end approach, absolutism vs. relativism and truth telling and withholding information (Strudler 814). The first dimension is where the negotiators adopt the concept of focusing the ethical tactics on the outcome of the negotiations. When the outcome of a given process is desirable, the natural response is to maintain the paths followed to arrive at the outcome.

When firms are bidding for contracts, they may be forced to apply whatever it takes to win the contract, including the application of unethical tactics (Fulmer, Barry, and Long 697). The result of such an interaction means that the negotiators need to use any method at their disposal to achieve the desired results. An example is where a construction manager sends individuals from the firm to bid a contract to construct a bridge. The individuals who are sent to make the bid may have instructions from their manager that they should do whatever it takes to win this contract.

Some of the actions that an individual may engage in include bribing an inside person to divulge the actual cost of the project or bribe the agents of rival firms to ensure that they do not bid for the same project. Some individuals can even go to the extent of killing agents to ensure that they do not bid for a rival company if they decline to take the offer to pull out of the bidding process. The result of such an interaction may be interpreted as the consequence of the means-end approach. The manager may be held liable for the mistakes of the agent. The organisation in question is also responsible for the actions of its employee who uses these unethical tactics.

Absolutism vs. relativism is another model that may be used to explain ethical approaches in negotiations. Absolutism and realism are two opposing ethical approaches that are useful in real life (Feidakis and Tsaoussi 540). Absolutism holds that everything in life is certain while relativism presents itself as being more certain (Fulmer, Barry, and Long 699). As applied in ethics, absolutism holds that human beings have a single moral standard that should be followed by all individuals at their respective areas of work. This ethical approach may be used to explain the inconsistencies that exist between two individuals in the course of conciliation. If two individuals were to disagree on a certain aspect of the negotiation, absolutism dictates that one of the individuals is wrong since the ethical factors on which they are in disagreement are universal.

Relativism is different from absolutism in that it allows exceptions in morals and ethics (Strudler 813). This ethical approach allows negotiators to hold different views and/or come to a middle ground. In the scenario where two negotiators differ on a particular ethical issue, relativism dictates that both of these individuals can be right since there is no universally accepted code of moral ethics (Strudler 814). The society within which negotiators exist is flawed. Relativism allows the accommodation of all opinions that are held by such individuals.

The last aspect of ethics in negotiations is that of truth telling and withholding of information. Negotiations need to be conducted in an honest environment where the parties engage in a mutually beneficial relationship. This aspect of negotiations is important, especially in medical negotiations where they are crucial to the lives of patients. In this line of work, individuals have the responsibility of sharing the truth with their clients. Truthfulness is important in negotiations since it allows negotiators to make the best decisions during this process. None of the parties in a negotiation process is allowed to withhold information from each other, especially if this plan will lead to the best results in the negotiations.

Consequences of Unethical Negotiations

Unethical negotiations lead to desirable results. Many individuals have lost their source of livelihood due to the unethical tactics they apply in the process of negotiations. Dishonesty in negotiations means that one of the sides has to suffer the consequences of the engagement. When one side realises that the other side used unethical tactics in the negotiations, the result is the wearing of trust between the two parties. The individual representing the interests of one side may be engaging in unethical activities without the knowledge of the organisation that they represent. Most of these individuals have ended up losing their job.

The other consequence of the unethical tactics in negotiations is the failure of the intended benefits in the negotiations. Individuals enter an agreement or negotiations that are meant to achieve certain benefits for their organisations (Fulmer, Barry, and Long 672). The benefits that are intended to come from negotiations can be lost where negotiators engage in unethical tactics. Individuals can also lose the trust created in the negotiation process by engaging in unethical practices. The underlying intended benefit of profit from negotiations is lost where an individual engages in unethical practice and tactics.


In conclusion, the use of unethical tactics in negotiations is not a relatively new practice. Any organisation has an experience in this matter. Negotiations are important since they lead to profitability for the negotiating sides if the right processes are followed. The contemporary development in the global world of trade and business has led to the emergence of unethical tactics in business. Many individuals that are in business have to conform to the contemporary beliefs that have been adopted in the business world such as dishonesty. The report has looked at the consequences of unethical conduct and tactics in the process of negotiation. Ethics in negotiations ensures fairness and honesty. It often leads to the best results for the involved parties. The report has established that negotiators need to be done in a fair manner as witnessed in the globally accepted codes of ethics.

Works Cited

Cramton, Peter C., and Gregory Dees. “Promoting Honesty In Negotiation: An Exercise In Practical Ethics.” Business Ethics Quarterly 3.4 (1993): 359-394. Print.

Dellech, Dorsaf. “Relational Variables and Ethical Behaviour Of Negotiator.” Journal Of Business Studies Quarterly 3.3 (2012): 57-86. Print.

Feidakis, Andreas, and Aspasia Tsaoussi. “Competitiveness, Gender And Ethics In Legal Negotiations: Some Empirical Evidence.” International Negotiation 14.3 (2009): 537-570. Print.

French, Warren, Christian Hablein, and Robert van Es. “Constructivist Negotiation Ethics.” Journal Of Business Ethics 39.1/2 (2002): 83-90. Print.

Fulmer, Ingrid, Bruce Barry, and Adam Long. “Lying And Smiling: Informational And Emotional Deception In Negotiation.” Journal Of Business Ethics 88.4 (2009): 691-709. Print.

Rivers, Cheryl, and Anne Louise Lytle. “Lying, Cheating Foreigners!! Negotiation Ethics Across Cultures.” International Negotiation 12.1 (2007): 1-28. Print.

Strudler, Alan. “On The Ethics Of Deception In Negotiation.” Business Ethics Quarterly 5.4 (1995): 805-822. Print.

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