Deterrence-based trust is based on consistency of behavior, meaning people will follow through on what they promise to do. Behavioral consistency, or follow-through, is sustained by threats or promises of consequences that will result if consistency and promises are not maintained. The consequences most often used are punishments, sanctions, incentives, rewards, and legal implications. Deterrence-based trust often involves contracts, surveillance, and sometimes punishment. Over 66% of companies keep tabs on their employees by monitoring their e-mail, Internet, and phone calls. Additionally, many companies use cameras to videotape their employees.⁹ In the Hawthorne plant in the 1940s, the established norm was that workers would not deviate from acceptable levels of production. Whenever a worker was caught over- or underperforming, other plant workers would give him or her a sharp blow to the upper arm (called “binging”). (For another example, see Exhibit 6-3.)

There are two key problems with deterrence-based trust systems. First, they are expensive to develop and maintain (they require development, oversight, maintenance, and monitoring), and second, they can backfire. Reactance theory argues that people do not like their freedom taken away and will act to reassert it. For example, signs reading “Do Not Write on These Walls Under Any Circumstances” actually increase the incidence of vandalism (as compared to signs that say “Please Do Not Write on These Walls” or the complete absence of signs).¹⁰ Similarly, people take longer to vacate a parking space when they know someone else is waiting for it.¹¹ People often have a negative reaction when they perceive that someone is controlling their behavior or limiting their freedom. When people think their behavior is controlled by extrinsic motivators, such as sanctions and rewards, intrinsic motivation is reduced.¹² Thus, surveillance may undermine the behaviors such monitoring is intended to ensure! The fear of monitoring adversely impacted trust among flight attendants at Delta Airlines.¹³ Flight attendants came to fear and distrust their passengers because of a policy allowing passengers to write letters of complaint about in-flight service. The climate of distrust was further intensified when flight attendants became suspicious that undercover supervisors were posing as passengers. (We discuss more about deterrence-based trust in Chapter 11.)

Knowledge-based trust is grounded in behavioral predictability, and it occurs when a person has enough information about others to understand them and accurately predict their behavior. Whenever informational uncertainty or asymmetry characterizes a relationship, it provides opportunity for deceit, and one or both parties risk exploitation. Paradoxically, if no risk is present in an exchange situation, exploitation cannot occur, and high levels of trust will not develop.¹⁴ Trust is a consequence of or response to uncertainty.¹⁵

An intriguing example of the development of knowledge-based trust among negotiators concerns the sale of rubber and rice in Thailand.¹⁶ For various reasons, the quality of rubber cannot be determined at the time of sale but rather, only months later: When rubber is sold, the seller knows the quality of the rubber, but the buyer does not. This is a classic case of information asymmetry. In contrast, in the rice market, the quality of rice can be readily determined at the time of sale (no informational uncertainty). It would seem that the rubber market, because of its informational asymmetries, would be characterized by exploitation on the part of sellers who would only sell cheap rubber at high prices, creating a market of lemons.¹⁷ However, buyers and sellers in the rubber market abandoned anonymous exchange for long-term exchange relationships between particular buyers and sellers. Within this exchange framework, growers establish reputations for trustworthiness, and rubber of high quality is sold.

Knowledge-based trust increases dependence and commitment among parties.¹⁸ For example, suppliers who regularly negotiate with certain customers develop highly specialized products for those customers. Such product differentiation can create barriers to switching suppliers. In addition to economic dependence, people become emotionally committed to certain relationships. For example, in markets characterized by information asymmetries, once negotiators develop a relationship with someone they find to be trustworthy, they remain committed to the relationship, even when it would be profitable to trade with others.¹⁹ When switching does occur, the party who is “left” feels indignant and violated. People who expect to interact with others in the future are less likely to exploit them, even when given an opportunity.²⁰ When negotiators anticipate extended relationships, they are more likely to cooperate with customers, colleagues, and suppliers but not with competitors.²¹ These relationships and the perception of low mobility among individuals promote development of integrative agreements across interactions, rather than only within given transactions.²²

Identification-based trust is grounded in complete empathy with another person’s desires and intentions. In identification-based trust systems, trust exists between people because each person understands, agrees with, empathizes with, and takes on the other’s values because of the emotional connection between them; thus, they act for each other.²³ Identification-based trust means that other people have adopted your own preferences.

Whereas it may seem that personal relationships would be completely grounded in knowledge-based or identification-based trust, this is not always the case. For example, a deterrence-based trust system is put in place when couples get prenuptial agreements or when husbands or wives hire private investigators to monitor the actions of their spouses.

Two basic types of conflict occur in relationships. Personal conflict, also known as emotional conflict, is rooted in anger, personality clashes, ego, and tension. Task conflict, also known as cognitive conflict, is largely depersonalized. It consists of argumentation about the merits of ideas, plans, and projects, independent of the identity of the people involved. Task conflict is often effective in stimulating the creativity necessary for integrative agreement because it forces people to rethink problems and arrive at outcomes that everyone can accept. Personal conflict threatens relationships, whereas task conflict enhances relationships, provided that people are comfortable with it.²⁶

When negotiators share a vision of the best method for reaching a bargaining agreement, they are more likely to make less selfish offers and reach an agreement.²⁷ The importance of a common goal was summed up in a quote by Steve Jobs, who led three high-profile Silicon Valley companies—Apple, NeXT, and Pixar: “It’s okay to spend a lot of time arguing about which route to take to San Francisco when everyone wants to end up there, but a lot of time gets wasted in such arguments if one person wants to go to San Francisco and another secretly wants to go to San Diego.”²⁸

Shortly after Steve Jobs negotiated a multi-million dollar marketing distribution deal with Disney, he was quoted as saying that Disney’s top brass, Michael Eisner and Jeffrey Katzenberg, didn’t appreciate and “had no clue” about how far Pixar’s technology could take them. Jobs was convinced that Pixar’s technology would revolutionize the business model for animated films and with Disney’s investment, ensure Pixar’s future survival. Even though the two businesses came from two different backgrounds, Jobs found a common bond between the companies: making a great movie. “One way to drive fear out of a relationship is to realize that your partner’s values are the same as yours, that what you care about is exactly what they care about. In my opinion, that drives fear out and makes for a great partnership.”²⁹

Negotiators who do not know each other may attempt to build a more trusting relationship by trying to find a common node in their social networks. However, getting people to talk to someone outside their social network is challenging. An investigation of a weekly business “mixer” revealed that people don’t mix as much as would be expected, given the purpose of the mixer.³⁰ Affect-based trust is high among people who are embedded densely in their networks and among those who provide social support; cognition-based trust is higher in those with whom people engage in instrumental exchanges.³¹

It is remarkable how the presence of a common enemy can unite people and build trust.³² A shared goal was established during the Reagan–Gorbachev summit talks. One evening, President Reagan and Soviet leader Mikhail Gorbachev were drinking coffee after dinner on Lake Geneva. Secretary of State George P. Shultz turned to Georgi Kornienko, the Soviet first deputy foreign minister, and accused him of trying to stall summit negotiations on bilateral issues. “You, Mr. Minister, are responsible for this,” Shultz declared. Then, turning to Gorbachev, the secretary of state added forcefully, “This man is not doing what you want him to do. He is not getting done what you want done.” Reagan took advantage of the situation to create a common bond and looked at Gorbachev: “To hell with what they’re doing. You and I will say, ‘We will work together make it come to about.’ ” Reagan and Gorbachev then shook hands. The moment marked a critical turning point in the summit talk.³³

If negotiators can forget the past and focus on their future, they can go a long way toward building trust. When negotiators expect to have future interaction with the counterparty, they have lower aspirations, expect negotiations to be friendlier, are more satisfied, and predominantly use a problem-solving bargaining style. Moreover, compared to one-time negotiations, those who expect to interact in the future have harmonious expectations and seek mutually beneficial solutions.³⁴ Viacom and Sony negotiated a deal in 2013 based on future cooperation. Viacom, the owner of cable channels including Nickelodeon, Comedy Central, and MTV, agreed to let several of their channels be carried by Sony’s Internet TV service—a first-of-its-kind agreement between a major programmer and a technology giant not traditionally a television provider. Both parties recognized the mutual benefit of having popular Viacom channels on a system that targets a young demographic uninterested in traditional cable and satellite providers.³⁵

People who are similar to each other like one another.³⁶ Negotiators are more likely to make concessions when negotiating with people they know and like. The similarity-attraction effect may occur on the basis of little and sometimes downright trivial, information. Many sales training programs urge trainees to “mirror and match” the customer’s body posture, mood, and verbal style because similarities along each of these dimensions produce positive results.³⁷ Similarity in dress also has dramatic effects. For example, marchers in a political demonstration not only are more likely to sign the petition of similarly dressed requester, but do so without bothering to read it first.³⁸ As a case in point, dressing like the boss may open doors. For example, Jeff Scott, director of community relations to the Brooklyn Nets, deliberately upped his own clothing game when he worked for his CEO, Brett Yormark, who always wore a suit and tie to work.³⁹

The more we are exposed to something—a person, object, or idea—the more we like it. The mere exposure effect is extremely powerful and occurs below the level of our awareness.⁴⁰ For example, fractious political negotiations were smoothed by mere exposure initiated by the “Senate Wives” during the 1950s. The Senate wives met each Tuesday morning and included both Democrats and Republicans. The 50 wives achieved results that went far beyond a morning social club. During the presidency of Lyndon Baines Johnson, rifts between the administration and congressional Republicans led by Gerald Ford, were often smoothed over by Lady Bird Johnson and Betty Ford, who regularly met socially along with the wives of other leaders. A more recent club, dubbed the “Senate Spouses,” meets less than once a month and fewer than a dozen wives attend. Former Senate majority leader Trent Lott summarized the mere exposure effect this way, “If you live across the street from your political opponent, if you know his kids, if you’ve been to dinner at his house, it’s impossible to go up on the floor of the Senate or House and blast him the next day.”⁴¹ (See Exhibit 6-5 for an example of how mere exposure increases liking in classrooms.)

When students are seated alphabetically in a classroom, friendships are significantly more likely to form between those whose last names begin with the same or a nearby letter.⁴² This is what is called the propinquity effect. This may not seem important until you consider the fact that you may meet some of your closest colleagues, and perhaps even a future business partner, merely because of an instructor’s seating chart! Similarly, people given a corner seat or an office at the end of a corridor make fewer friends in their organization.⁴³ If an instructor changes seat assignments once or twice during the semester, each student becomes acquainted with additional colleagues.⁴⁴ Consider the entering class of the Maryland State Police Training Academy.⁴⁵ Trainees were assigned to their classroom seats and to their dormitory rooms by the alphabetical order of their last names. Sometime later, trainees were asked to name their three best friends in the group; their choices followed the rules of alphabetization almost exactly. Larsons were friends with Lees, not with Abromowitzes or Xiernickes, even though they were separated by only a few yards.⁴⁶

For another example, consider friendship formation among couples in apartment buildings. In this particular case, residents had been assigned to their apartments at random as vacancies opened up, and nearly all of them were strangers when they moved in. When asked to name their three closest friends in the entire housing project, 65% named friends in the same building. Among those living in the same building, the propinquity effect was in play: 41% of next-door neighbors indicated they were close friends, compared to only 22% who lived two doors apart and only 10% who lived on the opposite ends of the hall.

Certain aspects of architectural design make it more likely that some people will come into contact with each other more often than with others, even though the physical distance between them might be the same. This is known as functional distance. For example, more friendships are made with people on the same floor than on other floors, presumably because climbing stairs requires more effort than walking down the hall.

According to the reciprocity principle, we feel obligated to return in kind what others have offered or given to us. This principle is one that all human societies subscribe to—it is a rule permeating exchanges of all kinds.⁴⁷ Feelings of indebtedness are so powerful that, if unresolved, they are carried into the future and are passed on to the next generation to repay. People feel upset and distressed if they have received a favor from another person and are prevented from returning it.

Madeleine Albright, former U.S. Secretary of State, knew the power of reciprocity. One of Albright’s first public meetings with members of Congress was an appearance to testify before the House Appropriations Subcommittee chaired by Republican Harold Rogers. Albright needed to be on good terms with Rogers because his subcommittee’s jurisdiction included the state department’s operating budget. For the occasion, Albright carried with her a big box, gift wrapped in red, white, and blue ribbon. Inside was a book of photographs. Albright had learned that Rogers had lost all his papers and photographs in a fire at his home, a disaster that had erased many souvenirs of his career and compounded the grief caused by the recent death of his wife. Albright instructed embassies in countries he had visited to provide copies of photos taken and compiled them in an album she bestowed on him right there in the committee hearing room.⁴⁸

Not surprisingly, people are aware of the powerful grip that reciprocity has on them. People often do not accept favors from others because they do not want to feel obligated. For example, suppose the counterparty provides us with a favor, gift, or service that we never invited and perhaps even attempted to avoid. Our attempts to return it have been denied, and we are left with the unwanted gift. Even under these circumstances, the reciprocity rule may operate. Thus, we should beware of the unsolicited gift from our real estate agent, the courtesy token from our business associate, and the free lunch from the consulting firm. For example, the Sunshine Act is a provision that requires companies to record all transactions with doctors—from sales representative visits to research meetings. The provision was a result of a concern that that doctors’ prescription choices were tainted by payments and gifts, as well as allegations that drug companies use payments to convince doctors to prescribe drugs for unapproved uses.⁴⁹

Reciprocity is made even more difficult when parties place different value on aspects of a relationship. For example, trustors focus primarily on the risk associated with trusting someone, whereas trusted parties (those who are in a position to reciprocate) base their decisions on the level of economic benefits they have received.⁵⁰ Unfortunately, neither party is particularly sensitive to the factors that affect their counterpart’s decision.

Small talk often seems to serve no obvious function. The exchange of pleasantries about the weather or our favorite basketball team seems to be purposeless. However, schmoozing has a dramatic impact on our liking and trust of others. Even a short exchange can lead people to develop trust.⁵¹ Wine and small talk at a San Diego convention resulted in a collaboration of millions of research dollars between the Salk Institute for Biological Studies and the French pharmaceutical company, Sanofi-Avenits. Sanofi agreed to sponsor huge research discovery grants in areas of interest to both companies, including stem cell research, in exchange for first rights to the license intellectual property from discoveries, an educational and business partnership potentially worth hundreds of millions of dollars. And it all began over wine. When two Salk scientists were enjoying a drink at a reception hosted by the French consulate in San Diego, they introduced themselves to a Sanofi scientist and then began to talk research. A meeting was made for a Sanofi executive to tour the Salk facility, and a scientist travelling home to Spain was asked to stop in Paris to talk about the work of Salk. From there, interests aligned to the point of the lucrative collaboration.⁵²

People like others who appreciate and admire them. People are more likely to trust others who like them and to respond more favorably when they are flattered. Even if people suspect the flatterer has another reason for flattering them, this behavior can still increase liking and trust.⁵³ The most strategic type of flattery, in terms of advancing one’s own interests, is to flatter another person on a personally important dimension about which he or she feels somewhat insecure.⁵⁴ John Wakeham, previous chief whip for British Prime Minister Margaret Thatcher, said about Westminster politics, “I was absolutely fascinated by how Westminster actually works… the smoke-filled rooms, the nods and the winks. As a businessman, I found it more comprehensible than most politicians do. One thing I learnt as chief whip was the infinite capacity of human beings to absorb flattery.”⁵⁵

Strategic behavioral mimicry can facilitate the discovery of integrative outcomes. Specifically, negotiators who mimic the mannerisms of their opponents secure better individual outcomes and greater joint gains, compared to negotiators who do not mimic.⁵⁶ Negotiators who mimic the mannerisms of the counterparty build trust. When negotiators interact virtually or online, those who mimic their counterparty’s language receive better outcomes.⁵⁷ Moreover, negotiators who mimicked language within the first 10 minutes of the negotiation received higher outcomes compared to those who mimicked during the last 10 minutes. Moreover, this early-mimicking effect works for both independent and interdependent cultures. Parties whose trust in one another is equal or congruent have a special advantage in negotiations. Indeed trust congruence predicts the integrativeness of negotiated outcomes.⁵⁸

Self-affirmation is a technique in which a person (negotiator) focuses on an important personal value. When people focus on important personal values at the outset of a potentially contentious negotiation, they are less likely to derogate the concessions made by others and are more open to agreement.⁵⁹

In some cases, a real breach of trust does not occur but a miscommunication occurs that causes one or more parties to interpret it as such. Miscommunication is more likely when parties are not in regular contact, especially when they have little face-to-face communication.

Negotiators often make dispositional, as opposed to situational, attributions for the questionable behavior of the other party which can threaten trust.⁶² A dispositional attribution is one that calls into question another person’s character and intentions by citing them as the cause of a behavior or incident (e.g., arrogance, greed). In contrast, a situational attribution cites one or more situational factors as the cause of a behavior or incident (e.g., a traffic jam, a faulty mail-delivery system). Assigning dispositional attributions to opponents’ behaviors can threaten the trust between negotiators. It is much more difficult for people to respond to a dispositional attribution than a situational one. For example, consider how people interpret ambiguous and slightly negative social interactions (i.e., when a person you know does not acknowledge you when you walk past). The power or status differential is significant in interpreting these situations. The high-power person who does not acknowledge a colleague usually reported having a busy day or more often, not even being aware of the other person. In contrast, the low-power person was often extremely paranoid and upset, believing that the high-power person was attempting to ostracize or punish them.⁶³ Thus, the low-power person makes a dispositional attribution for what is really a situational cause.

In a team or group, one person may have a reputation for being less trustworthy, tougher, or less easy to work with than other members of the group. We call this person the “bad apple,” and bad apples can stand out. Unfortunately, the bad apple can spoil the bunch. For example, in simulated negotiations between labor and management groups, negotiators were significantly less likely to trust the group as a whole than any individual in the group.⁶⁴ It seems the “bad apple” in the group called the entire group’s trustworthiness into question.

When trust has been violated, one person (party) either directly or indirectly accuses the other (target) of doing something that was unfair. The target should suggest a face-to-face meeting with the party as quickly as possible. Indeed, verbal explanations are more effective than written explanations.⁶⁸

Instead of launching into discussions of who is right or who is wrong, the focus should be on what both people care about: the relationship. Often, parties will readily agree the relationship is worth saving. For example, U.S. President Obama focused on the relationship between the United States and China when he said that he was eager to boost cooperation and grow the relationship with senior Chinese leaders as the two countries attempted to sort through a range of issues that had been darkened by chilled relations. Obama expressed his commitment to “building a relationship defined by higher levels of practical cooperation and greater levels of trust” while still addressing the differences that put the countries at odds with one another.⁶⁹ In the business world, JPMorgan lost nearly $2 billion during the Chrysler Group bankruptcy in 2009. Yet in 2013, Chrysler approached JPMorgan to advise concerning the sale to majority shareholder Fiat. JPMorgan saw this as an opportunity to make amends on the fractured relationship, and Chrysler recognized the expertise of one of the largest investment banks in the world.⁷⁰

Resist the urge to immediately blurt out an apology: Apologies offered later in a conflict are more impactful and effective than those offered immediately.⁷¹ Later apologies are more effective because the “victim” has had an opportunity for self-expression and feels more understood. If you are at fault, then admit it. If you are not at fault, then apologize in a way that takes ownership for your actions or behavior, yet does not necessarily accept the party’s version of what happened intentions. For example, a target might tell a party, “I am very sorry that I did not consult you before preparing the report.” By saying this, the target does not agree with the party’s accusation that the violator attempted to take more credit for the report; rather, the target only identifies the action as being hurtful for the victim. Indeed, when companies acknowledge they have committed acts that threaten their legitimacy (e.g., newspaper claims of illegal conduct), they are more successful in blunting criticism when they point to external, mitigating circumstances (e.g., company norms, budgetary problems).⁷²

It is important for people to express their anger, rage, disappointment, and feelings of betrayal over an event. Merely talking about negative events can actually be part of the cure.⁷³ Expressing disappointment often helps people take a significant step in the healing process.⁷⁴

Do not behave defensively, no matter how misinformed or wrong you believe the other party is. It is appropriate to tell the other person you view the situation differently and to point out that the situation can be viewed in many ways. Only after the party has had an opportunity to vent and explain his or her perspective should the violator attempt to tell the party in clear and simple terms what his or her intentions were. For example, a target might say, “My intention was to submit the report and not bother too many people with unnecessary requests to edit it.”

Targets should invite the party to provide clarifying information in a nondefensive fashion. For example, a target might say “Am I wrong in thinking you did not ask to be listed on the report?” or “Did you receive the draft copy I sent last week?”

If a person feels understood, the chances for rebuilding trust are greatly increased. It is helpful if one party can truly empathize with the other’s perspective (e.g., “I can understand why you felt out of the loop. I have felt that way before, too.”). A negotiator’s ability to understand emotion is directly related to how satisfied the other party feels, independent of the monetary value of the outcome.⁷⁵

A major stumbling block in the trust rebuilding process is that parties have different ideas about what is fair. The egocentric bias once again rears its ugly head with most harmdoers perceiving themselves as more beneficent than the harmed. However, the mere act of asking the harmed what he or she needs can go a long way toward rebuilding trust. In an empirical investigation of breaches of trust, harmdoers who asked “What can I do?” were more successful in rebuilding cooperation than those who did not ask or asked “What will it take?”⁷⁶ Penance is critical to trust in mixed-motive relationships.⁷⁷ Aggravating a counterparty after a breach by making offers of penance that do not seem sincere may further antagonize. In contrast, volunteering to do penance, even in small amounts, is particularly effective.

The speed and amount of “trust recovery” are significantly moderated by the promises that a person makes.⁷⁸ No one should underestimate the power of the spoken word, especially when it contains an apology. For example, verbal explanation can dramatically dampen people’s negative reactions to aversive behavior.⁷⁹ However, when it comes to truly rebuilding cooperation, the power of the deed exceeds the power of the spoken word. “Substantive amends have significantly more positive effects than explanations alone [on rebuilding cooperation].”⁸⁰

Do not just try to remedy the past; rather, think about a way to make sure this problem, and any others like it, does not occur in the future.

It is often wise to pull out your calendars and book a lunch or coffee meeting in a month or so to discuss how each party is feeling about the situation and occurrences since the breach of trust occurred. It is also helpful to schedule this date during the first meeting because it may seem awkward to bring it up after this time. This step ensures that parties will have a reason to meet and an opportunity to talk things through at a later date.

People often feel uncomfortable negotiating with friends.¹⁰⁰ “Friendship dictates that we should be concerned with fairness and the other person’s welfare, while negotiations dictate that we should get a good deal for ourselves.”¹⁰¹ These two dictates are in conflict with one another. Most friendships are built on communal norms, which mandate that we should take care of people we love, respond to their needs, and not “keep track” of who has put in what.¹⁰² Thus, the communal norm prescribes that we should be sensitive to the needs of people we love or like and attempt to meet those needs, rather than try to maximize our own interests. The opposite of communal norms are exchange norms, which state that people should keep track of who has invested in a relationship and be compensated based on their inputs. Thus, people need to have a mental accounting system that records who has done what.

Friends are less competitive with each other than they are with strangers.¹⁰³ Friends exchange more information, make more concessions, make fewer demands, and are more generous with one another.¹⁰⁴ Consequently, negotiators in a relationship are often unable to profitably exploit opportunities to create value. The oft-observed pattern where people in close relationships reach monetarily inefficient outcomes but increase their relational satisfaction is known as the “O. Henry Effect.”¹⁰⁵ In O. Henry’s story “The Gift of the Magi,” the main characters—husband and wife—are madly in love with each other but engage in an inefficient exchange in a desperate attempt to provide each other with a Christmas gift. When relationship partners sacrifice instrumental value, they actually increase their relational satisfaction.

Friends and lovers are too willing to compromise.¹⁰⁶ Friends are reluctant to engage in the firm flexibility maxim that is often required to reach integrative agreements. In short, friends believe that reaching an impasse may permanently damage their relationship, so they settle quickly. Yet, as we have seen in our discussion of integrative agreements in Chapter 4, it is important to focus on differences of interest and maintain high aspirations to reach integrative outcomes. When people compromise quickly because they want to avoid conflict and minimize the threat of impasse, they are likely to leave value on the table. In short, they satisfice rather than optimize. Too much focus on the relationship can lead to satisficing, rather than optimizing.¹⁰⁷ As can be seen in Exhibit 6-7, when both negotiators have a high relational focus, there is a tendency to satisfice. When one negotiator has a high relationship focus and the other does not, there is distancing; when both are low in relationship focus, there is trading; it is only when both negotiators are moderately focused on the relationship that integrating occurs.

Imagine piling into a steamy car on a 104-degree west Texas afternoon, tempted by the best ice cream in Texas at the other end of a long 50 sunbaked miles across a flat and dust-blown landscape. Your group seems enthusiastic, and says so even though at home it is tolerable with fans, cold drinks, and games. The best ice cream on a hot day: Who wouldn’t go for that?! But after the sunbaked trip to the ice cream shoppe in Abilene, the flavors on hand are bland—vanilla and an uninspiring chocolate—and neither as good as remembered. Silence descends as the ice cream is eaten. Hours later, after a return trip across the dusty semi-desert, you arrive back home. No one says anything until you break the silence. “Great trip, right?” you say. “Honestly, no,” a friend pipes up, adding that she felt pressured into the trip. “What?!” says another friend. “I went along with it because it seemed like everyone else wanted to go. Who’d want to go 50 miles for ice cream in that heat?” In other words, three people had taken a 100-mile round trip for ice cream on a 104-degree day, even though they did not want to do so, because they thought that’s what the other people in the group wanted to do. The story of the Road to Abilene epitomizes the notion that among family and friends, conflict is to be avoided at all costs, even if it means a lose-lose outcome for all involved.¹⁰⁸ The need for friends to maintain the illusion of agreement means that important differences in preferences, interests, and beliefs are often downplayed or buried. Paradoxically, it is precisely these kinds of differences that should surface in any negotiation to enable negotiators in personal relationships to fashion value-added trade-offs and develop contingency contracts. Somehow, friends and families need a way to make their differences known so they can capitalize on them in a win-win fashion.

When it comes to dividing the pie, friends use an equality rule (thereby allocating equal shares to everyone involved), whereas strangers and business associates use an equity rule—otherwise known as a merit-based rule—in which those who have contributed more are expected to receive more.¹⁰⁹ Unfortunately, equality norms may promote compromise agreements, thereby inhibiting the discovery of integrative trade-offs. However, norms of equality are not blindly applied by people in close relationships. For example, friends who differ in their ability and effort in a joint task will favor the less able but more diligent partner in the allocation of resources.¹¹⁰ Similarly, people in communal relationships will meet others’ needs, with no expectation of remuneration.¹¹¹ Equity, in which outcomes are allocated proportional to inputs, is a hallmark feature of the business world. For example, most of us do not expect to earn the same exact salary as our colleagues; we earn salaries based upon various contributions and inputs to the specific business situation. However, equity does not seem to have a legitimate role in personal relationships.

We often must deal with people we do not like and may regard to be offensive. For example, a woman might find herself negotiating with a male who is a blatant sexist. It is often difficult for people to separate their feelings about someone as a person from the business at hand. (See Exhibit 6-8 for an example of an uncomfortable business relationship.)

Most friendships are not hierarchical, meaning that people in friendships do not have different status and rank. In contrast, businesses are generally organized around rank and status—either explicitly (e.g., an organizational chart) or implicitly (e.g., salaries, number of supervisees, office space). In one investigation, an employment negotiation was simulated: When people believed themselves to be in an “egalitarian” (equal status) relationship, they were less likely to expand the pie but liked one another more. In contrast, when people believed themselves to be in a hierarchical relationship (in which one person had more authority), they were more likely to expand the pie but not feel as good about the relationship.¹¹³ As we will see in Chapter  10, in some cultures, it is perfectly acceptable for members of different status and rank to meet each other at the bargaining table. However, in other cultures people find this uncomfortable and insulting.

Sometimes we need to build trust with people very rapidly, on the basis of little information, and in many cases, with no expected meaningful future interaction. Consider how swift trust between Taco Bell and Frito Lay facilitated the Doritos Locos Taco (DLT) as the most successful product in Taco Bell launch history, resulting in more than 450 million taco sales and a 14% sales jump. The companies worked together without any official contracts. When Doritos and Taco Bell CEOs met, they realized that if they let the lawyers get involved, the product would get bogged down. So they did a handshake only deal and agreed that if either one of them got sacked or promoted, only then would they bother to write a contract.¹¹⁴ Many new business relationships require that strangers come together and produce a product, service, or carry out some task and then immediately disband, perhaps never to see one another again. In contrast, our personal relationships are longer term; we have a past history with family and friends, and we expect to have future interactions with them. Business situations increasingly require swift trust, which is necessary among people who have a finite life span in a temporary system. The question is, how do we build trust with no past and no likely future? We deal with this issue in Chapter 11.

In the business world, through its web of networked relationships, it is impossible not to experience the consequences of our interactions with others. Social networks mean that even though the particular people in a business interaction may never interact or see one another again, their companies will interact again, or others in their social network will become apprised of the interaction, which will, in turn, affect the nature of future business interactions. The one-shot business situation may be extinct.

When business and friendship combine, the emotional potential can often be overwhelming, and interpersonal conflict can result. For example, if someone has a poor exchange with a neighbor that leaves the friendship in question, it is quite disturbing, but the person can at least travel to work knowing the situation is “contained.” Similarly, a person may have a terrible day at work and still be able to go home that evening to take solace in friends and family. Somehow, the separation of work and friendship creates a “buffer zone” for the parties involved. However, when things go awry in an embedded relationship during the course of negotiation, all systems can potentially fail. Consider the Maritz Company, which suffered through three generations of feuding.¹¹⁹ Before Bill Maritz passed away, he wrote at the end of his memoir, “I still find it virtually impossible to understand and accept the lack of respect and feeling my two sons, Peter and Flip, have shown me.” Their mother, Phyllis Maritz, said, “It would be my greatest hope to see the company sold and out of the family forever. Then perhaps the family could heal.” Similarly, L’Oreal heiress Liliane Bettencourt—Europe’s richest woman—and her daughter Francoise Bettencourt-Meyers feuded for several years over Liliane’s purported mental frailty after she attempted to adopt the son of a friend to whom she had already given millions of dollars in art and gifts. Bettencourt-Meyers filed a criminal complaint against the son, and the eventual agreement led to an increased role in the company for Bettencourt’s son-in-law, Jean Pierre Myers, who was elevated to chief executive.¹²⁰

Personal relationships are driven by people’s need for acceptance, love, and identity, whereas business relationships are generally guided by a need for achievement and utilitarian goals. In embedded relationships, people often experience more internal value conflict because competence and liking are at battle with one another. For example, we may find someone to be a delightful friend, a wonderful and empathic listener, and a good person with whom to spend time; however, this person may be incompetent at the business task at hand. Conversely, the person who is more competent may be annoying to us. The question is, which of these factors do we respond to in the situation: competence or liking?

We have seen that embedded relationships can often reduce the costs associated with surveillance. However, embedded relationships may create myopia if people are reluctant to move beyond their own networks. At the extreme, imagine a cliquish network in which people engage only in business matters with their friends. This interaction may eventually result in a myopic view of reality, if people within the network are biased in their perceptions and not connected to others who may have more or better information. These are sticky ties—relationships that emanate from ingrained habits of past social interaction.¹²¹ Most people are reluctant to turn to new, untried partners for information, resources, and the variety of interactions that are required in organizations.