When negotiators have a great BATNA, they have a lot of power. For example, consider how Palm improved its bargaining power when selling their company by creating a bidding war among several suitors, including Apple, Google, Research in Motion (RIM), HP, and Nokia. RIM originally outbid HP, before HP increased their offer. Whereas Google did not know that Apple was bidding, they did not make an official bid. With as many as 11 other buyers on the fringes, Palm could afford to wait for the best deal while the suitors scrambled to outbid one another and drive up the price. HP was the highest bidder and paid $1.2 billion.⁵ Similarly, wireless provider Clearwire—one of the largest holders of unused wireless spectrum in the world—was the object of a bidding war with billions on the line, complete with intrigue, threats, and multiple parties. Majority-owned by wireless company Sprint Nextel, Clearwire agreed to an acquisition of the entire company at $2.97 a share and $800 million in financing to keep Clearwire from bankruptcy. When the Clearwire board accepted the deal, shareholders sensed a short change and satellite provider Dish network took advantage of the sentiment and offered $3.30 a share for Clearwire. Sprint blinked and offered $3.40 a share; Dish then offered $4.40 a share before Sprint finally raised a bid of $5 a share, which was finalized. In the end, Sprint, and its Japanese backer SoftBank, paid $4 billion more than Sprint had originally bid.⁶

Unfortunately, most of the time, people do not have a great BATNA. For this reason, it is imperative that negotiators cultivate and improve their BATNAs prior to negotiating, by doing the following:

• Keep your options open. Keep your options open even after you have come to the negotiation table because negotiations could break down for a variety of reasons at any point prior to mutual settlement. In August 2013, Nestle announced they were keeping their options open regarding their stock holding in L’Oreal. Nestle owned a 29.4% stake in L’Oreal that was set to expire in April 2014. If Nestle decided to increase their stake in L’Oreal, the resulting stock acquisition would position Nestle as an undisputed worldwide leader in consumer staples as well as enable growth opportunities beyond food and beverage markets. A sale of stockholding would result in a gain of approximately 22.4 billion euros, and for any sale completed after April 2014, Nestle would not be required to offer the majority stockholder, the Bettencourt family, right of first refusal.⁷

• Signal your BATNA, but do not reveal it. If the counterparty does not believe you actually have a BATNA, you should signal that you have options, without revealing their exact value. However, alluding to options you do not actually have is misrepresentation, which is unethical. It is not misrepresentation to signal to the other party that you have alternative courses of action (if you actually do). In the Nestle–L’Oreal negotiation, Nestle was considering three courses of action: increasing their holding in L’Oreal, selling their holding, or maintaining their stock ownership in the company. Because Nestle would make financial benefits from any of these options, it was not clear to outsiders what they considered to be their most attractive course of action.

• Assess the other party’s BATNA. Do not leave any stone unturned when attempting to assess the counterparty’s BATNA. Start your research well before the negotiation begins. Do not wait until you get to the negotiation table. For example, in the Nestle–L’Oreal negotiation, analysts considered several factors, including the overlap of products and strategic focus between the companies, as well as growth rates and stock earnings to attempt to determine what course of action that Nestle might find most attractive. Spend some time before negotiation assessing current data (if you have them), previous years’ data, and current market trends—anything you can get. Also, use multiple sources. Researching the other party’s BATNA is time well spent. Negotiators who think about the counterparty’s BATNA do better in terms of slicing the pie than those who don’t.⁸ For example, before the negotiations that eventually led to Disney buying Marvel for $4 billion and gaining the rights to thousands of new characters, Disney executives had good insight into Marvel’s BATNA. In particular, Disney was aware that Marvel’s financial clout had taken a hit and not fully recovered after the company fell into bankruptcy in 1997. Knowing that a deal would give Marvel much more financial muscle to make films at a time when credit was still tight and give CEO Isaac Perlmutter—who rescued the company from bankruptcy—a payday in the billions, Disney CFO Thomas Staggs set an aggressive target. Holding firm, Disney and Marvel argued over the stock price of the deal in a final negotiating session that stretched out over 24 hours. Ultimately, Disney got their price because they leveraged the information about Marvel’s unattractive BATNA.⁹

We have argued that the ability to walk away from negotiation is a potent form of power in negotiation. We refer to such power as power based on one’s BATNA (alternatives). Another source of power in negotiation is based on a person’s perceived ability to influence others. Social power is the power people have over other people; personal power is the freedom people have from other people in terms of decreasing their dependency on others.¹⁰

A key question is what determines social and personal power? One trigger of power is a person’s posture. For example, people who adopt an expansive body posture enhance their own sense of power. When people are actually put in situations in which they have power and are told to adopt either an expansive or constricted posture, it is their posture that affects their own self-reported perceptions of power.¹¹

How does the balance of power between negotiators affect the processes and outcomes of negotiation? In a simulated employment negotiation, three types of power balance were investigated: symmetric high-power negotiators, symmetric low-power negotiators, and asymmetric power negotiators.¹² For symmetric high-power dyads, value creation (win-win) was associated with increased mutual accommodation; but in low-power dyads, value creation was associated with greater contentiousness. Asymmetric-power dyads maximized value creation when they adopted a neutral stance, neither overusing or under using accommodation or contentiousness.

Power has a number of social and cognitive effects on the power user. In general, experiencing power decreases the perceptual acuity of the power holder and also decreases their inhibitions.

What are the psychological effects of those who have more power on those who have less power? People with less power are highly accurate in perceiving the behaviors and attitudes of those with higher power.²⁰ Less powerful people are dependent upon those with higher power for important organizational rewards. If someone is in a position to control a variety of organizational benefits that could dramatically affect your well-being, you would probably closely scrutinize his or her behavior. However, this greater accuracy may come at a price. Those who are low in power may exhibit signs of paranoia, believing they are being constantly scrutinized and evaluated by those who are higher in power.²¹ Moreover, whereas anger helps powerful negotiators, who feel more focused and assertive and claim more value, low-power negotiators are particularly susceptible to the emotions of the other party and consequently lose focus and yield ground when they face a powerful, emotional counterparty.²²

Power and status are different. Power is the potential a person holds to influence others successfully; the capacity or ability to direct or influence the behavior of others or the course of events. Status is the relative social position or rank given to people or groups by others. Status may be formal, such as an organizational title (e.g., CEO) or informal (e.g., a person who has prestige that is not formally recognized by the organization). For example, people who are older (up to a point) and more experienced may be perceived as higher in status by their coworkers.

Two types of status are relevant in most negotiation situations: primary status characteristics and secondary status characteristics. Primary status characteristics refer to indicators of legitimate authority; for example, a person’s rank within an organization, the number of supervisees in that person’s unit, and a person’s various titles and degrees all denote primary status. The impact of status on the conduct of bargaining can be quite enormous. High-status individuals talk more, even when they do not necessarily know more. A high-status person will also generally control when he or she speaks in a conversation. Furthermore, a low-status person will defer to the high-status person in terms of turn-taking in the conversation. These factors affect the distribution of resources in negotiation.

When primary status cues (such as rank and status in an organization) are absent, or when people of equal status negotiate, people often pay attention to secondary status characteristics, which are cues and characteristics that have no legitimate bearing on the allocation of resources or on the norms of interaction, but nevertheless they exert a powerful influence on behavior. Such pseudostatus characteristics include sex, age, ethnicity, status in other groups, and cultural background. The three most common secondary status characteristics are gender, age, and race. Men have more influence than women, older people have more influence than younger people, and Caucasian people have more influence than African American people when it comes to interpersonal interaction.²³ Because men are perceived to be of higher status than women, in a negotiation context, men are given the “right” to propose agreements and to have them viewed as coming from competent source.²⁴ Although pseudostatus characteristics are not legitimate markers of status, people treat them as though they do. People notice status cues very quickly, often within minutes after negotiators are seated at the bargaining table. Furthermore, even when a negotiator does not regard these pseudostatus cues to be significant (or even rejects them outright), if someone else at the bargaining table considers them significant, it may create a self-fulfilling prophesy. Another pseudostatus cue is posture. Striking a pose that opens up a person’s body and takes up space alters hormone levels and makes a person feel more powerful and more willing to take risks.²⁵ In a complementary fashion, constrictive postures lower a person’s sense of power and willingness to take risks.

As a case in point, consider Wendell Primus, who exudes status as one of Capitol Hill’s most influential politicians, having served as former Speaker of the House Nancy Pelosi’s point man during the 2010 Health Care debates. Primus possesses a number of influential secondary status markers: his gray hair and reading glasses and soft-spoken manner—described as grandfatherly. Even though he is not an elected official, elected officials deferred to him on a regular basis during the debates. “Wendell probably says the fewest words of any person in senior staff and probably says the most,” said Rep. Robert E. Andrews.²⁶

Power and status have similar positive effects on how dominant we think someone is. Power has a negative effect on how warm we think someone is, but status moderates this “power penalty.”²⁷ In other words, high power without status is associated with low warmth (i.e., coldness), but people who have both power and status are judged to be warm. Consequently, high-status people, regardless of their actual power, are perceived positively—dominant and warm—but, high-power, low-status individuals are judged most negatively—dominant and cold.

A number of studies have investigated how men and women fare in negotiations. Across the board, men are more successful than women in terms of pie slicing—they inevitably get a bigger slice.²⁸ And, when men and women negotiate against one another, men get a larger slice of the pie. A large-scale meta-analysis revealed that men negotiated significantly better outcomes than did women; opponent gender, power, mode of communication, nature of the task, and year of the investigation did not explain this robust effect.²⁹

A key determinant of how well men and women do is their opening offer. Opening offers reveal men and women’s aspirations. Women set lower aspirations (and ask for less) in their opening offers than do men, holding constant their previous experience, education, and bargaining position. A meta-analysis of how gender influences negotiation performance revealed that 48% of the investigations involved monetary purchases, 25% involved compensation, and 28% involved legal issues.³⁰ When negotiators believe a negotiation simulation is diagnostic of their true negotiation ability, men do even better relative to women.

It is one thing to find gender differences in simulated salary negotiations; it is quite another question to document them in real-world situations. In 2003, the wage gap between men and women graduating from elite MBA programs was almost negligible. However, by 2013, the pay gap significantly widened.³¹ Female graduates earned 93 cents for every dollar earned by their male classmates. Differences in compensation can increase exponentially over time. For example, suppose a man and a woman are both offered a $50K salary when they are 25 years old. Suppose the man negotiates a 10% increase, but the woman does not. Next, assume that both the man and the woman get a steady, 5% annual raise every year for the next 40 years, until they both retire at age 65. The man will earn over $600,000 more than his female colleague.³²

The ability to initiate negotiations, rather than avoid them and simply accept the first offer that is tendered is a key to negotiation success in the management world. Women are less likely to initiate negotiations than men.³³ This can be catastrophic when it comes to salary and job negotiations. For example, when it comes to negotiating compensation, women are more likely to avoid negotiation than are men.³⁴ Interestingly, there are some negotiations that men prefer to avoid, rather than confront. For example, in one investigation, women were more likely to avoid negotiation about compensation than men, but men were more likely to avoid negotiation about access to a lactation room.³⁵

There are four key reasons that act as barriers for women asking for what they want:³⁶

• They don’t feel a given situation is negotiable.

• They think they will be given things when they “deserve” them.

• They do not establish aggressive goals.

• They do not want to damage the relationship.

Willingness to engage in versus avoid negotiation may also depend on whom one is negotiating with. Thus, a relevant question concerns whether women or men are more or less likely to initiate negotiations with a man or woman. In one job simulation investigation, people had to decide whether to initiate negotiation for a higher salary.³⁷ Men were more likely than women to initiate negotiating their compensation: 42% of the male versus only 28% of the female participants initiated negotiations. However, this gender difference was only observed when the negotiation counterparty was a female. Indeed, when the counterparty was a female, women were less likely to negotiate as compared to men, but when the counterparty was a male, women were only 5% less likely to initiate negotiations.

Given the differences in outcomes that men and women receive at the negotiation table, the natural question is whether anything can level the playing field or help women attain better outcomes. We consider three strategies. One involves recognizing and confronting stereotypes, a technique we refer to as stereotype regeneration. Another strategy involves removing ambiguity and creating more certainty in otherwise-ambiguous situations. A third strategy involves building a constituency by negotiating on behalf or someone or something.

A key question is, how are male and female negotiators regarded and evaluated during negotiations? In other words, might there be repercussions for initiating negotiations and advocating for one’s own interests? Unfortunately, women encounter both social and economic backlash when they behave assertively at the bargaining table. The backlash is most evident when gender stereotypes that prescribe communal, nurturing behavior are activated.⁴⁴ When women behave in a stereotypically feminine way, such as flirting, they are judged as more likeable, but less authentic.⁴⁵

Negotiating effectively means acting assertively by stating one’s interests and aspirations. Women believe that assertive behavior will elicit a negative response from the counterparty. As it turns out, this is not a faulty perception: Women who “ask” are viewed more negatively than men who ask, and evaluators penalize women who ask more than men who ask.⁴⁶

Female negotiators are more reluctant to assert their interests and consequently do not reap as much as self-advocating females or males. Self-advocating female negotiators suffer negative social judgments—that is, backlash.⁴⁷ Specifically, women who ask for what they want in negotiation—that is, women who self-advocate—are less well liked than women who do not self-advocate. Self-advocating women are associated with high-negative masculine and low-negative feminine characteristics. Nonassertive, other-advocating women suffer a leadership backlash, and are regarded as less competent because their behavior is regarded to be high-negative feminine and low-positive masculine. Male negotiators do not suffer any backlash consequences.

Thus far, we’ve reviewed evidence suggesting that women are less likely to initiate negotiations than are men, and when they do, they do not reap as much of the bargaining pie, and when they do self-advocate, they are disliked. A relevant question is whether men are offered better prices, salaries, and terms than are women? A landmark investigation of how new-car dealers quote prices to prospective buyers revealed that dealers quoted significantly lower prices to white males than to black or female test buyers using identical scripted bargaining strategies.⁴⁸ White female buyers were asked to pay a 40% higher markup than white males, black males were asked to pay more than twice the markup for the white males, and black females were asked to pay more than three times the markup of white males. A follow-up study replicated the finding that dealers systematically offer lower prices to white males than to women and blacks, with black males being particularly discriminated against in terms of price quotes.⁴⁹

An investigation of the taxi market in Lima, Peru was conducted in which the bargaining script secured that only the seller could change prices and terminate the negotiation.⁵⁰ Male and female passengers who used the same bargaining script (i.e., made the same arguments and comments) were not treated equally by the taxi driver. Men faced higher initial prices, higher final prices, and greater rejection than women. Male drivers were resistant to capitulate to demanding negotiation arguments made by male passengers.

Whereas women are often the target of backlash in their own negotiations, a key question is how they fare relative to men when they act as third parties in conflict resolution. In an investigation of the effectiveness of third-party intervention, women who lacked authority over disputants (i.e., could not impose an outcome, but could suggest process ideas) were more successful than men in terms of facilitating an outcome that was both acceptable to disputants and met larger organizational objectives.⁵¹ The effectiveness of women in the third-party peer role was due to women eschewing agentic behavior; in contrast, men engaged in agentic behavior.

When it comes to gender and ethics, some studies reveal that men set lower ethical standards than do women in negotiations.⁵⁷ The male pragmatism hypothesis suggests that men, more than women, are motivationally biased in setting ethical standards. Stated simply, men are more egocentric in their ethical reasoning, and grant themselves more leniency in ethics than others, and consequently exhibit more moral hypocrisy than women.

In addition to lying about positions, interests, preferences, priorities, BATNAs, reservation prices, or material facts, let’s consider other strategies negotiators might regard as unethical.

• Traditional competitive bargaining. In general, traditional competitive bargaining behavior, such as hiding one’s real bottom line, making very high or low opening offers, and gaining information by asking among one’s contacts, is not regarded as unethical.⁶⁴ Self-rated “aggressive” negotiators are more accepting of such tactics than are self-rated “cooperative” negotiators.⁶⁵

• Manipulation of an opponent’s network. This tactic involves an attempt to weaken an opponent’s position by influencing his or her associate or constituency. For example, consider how state labor unions attempted to use access to social networks to defeat an antitax initiative in the state of Washington.⁶⁶ Labor union groups sent e-mails pretending to be from campaign supporters who were requesting petitions, signs, and stickers. The idea was to get the protax group to waste a lot of money and time sending people pamphlets, stickers, and other items that would ultimately be thrown away.

• Reneging on negotiated agreements. In many important negotiations, deals are closed without formal contracts. For example, even in the purchase of houses and cars, an understanding is often reached before official papers have been signed. Even after formal contracts are signed, a period of rescission exists, wherein either party can legally exit from the agreement. However, considerable disagreement and ethical debate concern the issue of whether parties have a right to renege on an agreement once an informal closing (such as a handshake) has occurred.

• Retracting an offer. According to an unwritten rule, once a negotiator puts an offer on the table, he or she should not retract it. This action would be bargaining in bad faith. Even so, negotiators may need to retract offers because a mistake has been made. For example, a newspaper published winning lottery numbers, but a typo was made, and a large number of people mistakenly believed themselves to be winners. However, what the offering negotiator may see as an honest mistake is often viewed by the recipient negotiator as bargaining in bad faith.

• Nickel-and-diming. The strategy of continually asking for “just one more thing” after a deal has been closed is annoying to most people. Most people are reluctant to make concessions when they fear the other party will continue to prolong negotiations. Negotiators are more likely to make concessions if they feel they will be successful in closing the deal. Thus, it is often an effective strategy to inform the other party of the terms you need to make the agreement final. Even better, prepare the official paperwork and indicate that you will “sign today” if your terms are met. The prospect of closing a deal is often enough of an enticement for negotiators to agree to the terms proposed by the other party.

In sum, there are several predictors of the extent to which a negotiator will engage in each of the strategies listed, including their attitude toward competitive-unethical tactics, the early use of competitive unethical tactics, and the behavior of the counterparty.⁶⁷ Personality differences in empathy and perspective taking differentially affect the use of unethical strategies, such as lies and bribes.⁶⁸ Empathy, but not perspective taking, discourages attacking the opponent’s network, misrepresentation, inappropriate information gathering, and feigning emotions to manipulate the other. Thus, unethical bargaining is more likely to be deterred by empathy, as opposed to perspective taking. Interestingly, negotiators who suppress their emotions are more likely to misrepresent information.⁶⁹ To examine your own ethical values, see Exhibit 7-2, which measures a seven-factor model of ethical and unethical bargaining tactics, including traditional competitive bargaining, attacking an opponent’s network, making false promises, misrepresentation, inappropriate information gathering, strategic misrepresentation of positive emotion, and strategic misrepresentation of negative emotion.⁷⁰ Consider the typical responses regarding five types of ethically questionable strategies in Exhibit 7-3.

Sins of commission (active lying) are regarded as more unethical than sins of omission. (For an example of the complexity of sins of omission, consider the scenario in Exhibit  7-4.) It is possible to withhold information and not be regarded as unethical, but willful shielding from material information does not exculpate the negotiator. In other words, a businessperson should not refuse to see company reports in order to maintain a stance that the company is in financial health.

Former Senator Sam Ervin once remarked that “the problem with lying is you have to remember too damn much.”71 Several costs or disadvantages are associated with lying, the first being that the liar can be caught and face criminal charges. Even if the liar is not caught, one’s reputation and trustworthiness can be damaged. This event, when it happens repeatedly, can then lead to a culture in which everyone in the organization lies and general suspiciousness increases. Lying also may not be strategic: Because a negotiator who lies about his or her reservation price effectively decreases the size of the bargaining zone, the probability of an impasse increases.

There are several factors that may lead people to engage in deception: the lure of temptation, uncertainty, powerlessness, and anonymity of victims.⁷² The more negotiators have to gain economically by lying, the more likely they are to lie.⁷³ And, the more uncertainty negotiators have about material facts, the more likely they are to lie.

One survey asked MBA students to describe the conditions under which they personally would engage in deception (defined as lying) in negotiations. Most people were able to identify situations in which they would lie. Only 2 people out of 47 said they would never deceive. More than 25% said that they would use “white lies” or exaggerations in nearly any negotiation. The most common reason for lying is when we think the other party is lying (see Exhibit 7-5). Financial self-interest does not fully explain dishonesty. Rather, dishonesty is influenced by emotional reactions to wealth-based inequity, even when it is personally costly.⁷⁴ Negative inequity leads to envy and subsequent hurting behavior; conversely, positive inequity leads to guilt and motivates helping behavior.⁷⁵

Being in a team or group may increase the tendency to lie. Groups are less honest than individuals in the same bargaining situation.⁷⁶ In fact, the group “default” response is to lie, whereas the individual “default” response is to be honest. Only by strongly introducing a climate of organizational honesty do groups move away from their default.

Paradoxically, another condition that may promote unethical behavior and lying in particular, is perspective taking. Indeed, perspective taking or putting oneself in the other party’s shoes is most often regarded to be a key to successful relationships. However, in competitive contexts such as negotiation, it leads people to prophylactically engage in unethical behavior to prevent being exploited. For example, in one investigation, people who were encouraged to engage in perspective taking were more likely to deceive a partner by cheating when the task was competitive, but not cooperative.⁷⁷ And in another investigation, negotiators who were exposed to empathy-related concepts (e.g., compassion, empathy, nurturing, sympathy, understanding, building) lied more than negotiators who were not exposed to empathy concepts and lied more than negotiators who were exposed to competition-related concepts (e.g., competitive, winning, perform, superior); those who were exposed to empathy-related concepts also told the truth less often.⁷⁸

• Bounded ethicality. Bounded ethicality refers to the limits of people to make ethical decisions because they are either unaware or fail to fully and deliberately process information.⁷⁹

• Illusion of superiority. People view themselves and their actions much more favorably than others view them.⁸⁰ People focus on their positive characteristics and downplay their shortcomings. In relative terms, people believe they are more honest, ethical, capable, intelligent, courteous, insightful, and fair than others.

• Illusion of control. People believe they have more control over events than they really do. For example, in games of chance, people often feel they can control outcomes.⁸¹ Obviously, this thinking can lead to a type of gambler’s fallacy in decision making. However, it can also give rise to ethical problems, such as when people make claims of quality control that cannot be met.

• Overconfidence. Most people are overconfident about their knowledge. For example, when people are asked factual questions and then asked to judge the probability that their answers are true, the probability judgments far exceed the accuracy measures of the proportion of correct answers. On average, people claim to be 75% certain, when they are actually correct only 60% of the time.⁸² And, people who have unmet goals (presumably because of overconfidence) are more likely to engage in unethical behavior.⁸³

Given that our judgments of ethical behavior are often biased, how can negotiators best answer the question of whether a given behavior is ethical? Consider the following:

1. The front-page test. The front-page test, or light-of-day test, poses the following ethical challenge to negotiators: Would you be completely comfortable if your actions and statements were printed in full on the front page of the local newspaper or reported on the evening news? If not, then your behavior or strategies in question may be regarded as unethical. Another version: “How would I feel if I had to stand before a board of inquiry and describe what I have done?” One study found that contemplation and morally oriented conversation, conceptualized as thinking about one’s behavior, promotes more ethical decision making, as compared to self-interested conversation.⁸⁴

2. Reverse Golden Rule. The Golden Rule states: “Do unto others as you would have them do unto you.” In this strategy, the negotiator asks himself or herself, “If the tables were turned, how would I feel if my opponent did this to me?” If the answer is, “I wouldn’t like it very much,” then it means the behavior in question may be regarded as unethical.

3. Role modeling. “Would I advise others to do this?” or “Would I be proud to see my child act this way?” or “What if everyone bargained this way? Would the resulting society be desirable?”

4. Third-party advice. It is wise to consult a third party (someone who takes an impartial view of the negotiation) to see how that person regards your planned behavior. When consulting the third party, do not reveal your own vote. Describe the event or situation in the third-person voice.

5. Strengthen your bargaining position. Negotiators who have prepared adequately will be less tempted to lie. For example, a negotiator who initiates efforts to improve his or her BATNA does not need to lie about his or her BATNA. A negotiator who has thought about the factors that affect his or her reservation price can simply inform the other party, “It’s none of your business.” And a negotiator who has considered the facts can express an “opinion” based on the facts. Some argue that ethics, “far from being a check or drag on negotiator power, can actually help to enhance it.” The “samurai negotiator” derives power from ethics and their principles are perceived by the other party as a sign of strength.⁸⁵ Consider, for example, how Pizza Hut dropped their key tomato sauce supplier, Hunt-Wesson (HW), in an aggressive cost-cutting move.⁸⁶ Pizza Hut threatened HW to drop their price by 2.5 cents or lose the Pizza Hut business. HW refused. Six weeks later, Pizza Hut begged HW to come back to the bargaining table because of quality problems (runny pizza) and asked HW to name its price to reinstate the contract.

The relatively high incidence of ethically questionable behavior in negotiation leads to the question of how to respond to unethical behavior. First, a healthy amount of suspicion might serve a negotiator well. Indeed, negotiators who are suspicious are more effective at the bargaining table because a variety of adaptive defense mechanisms operate. People who are suspicious of the counterparty are better able to guard against influence strategies.⁸⁷

Consider the options that a negotiator has when he or she perceives the other party as behaving unethically. First, it is important to recognize that negotiators take risks when considering or contemplating ethically questionable behavior. These risks involve risks to immediate or short-term goals; risk to immediate or short-term relationships; risk to future or long-term goals; and risks to future or long-term relationships.⁸⁸ By signaling these risks to the counterparty in a negotiation, a negotiator can educate the counterparty about the disadvantages of unethical behavior. By doing so, the negotiator may minimize the likelihood that the opponent will engage in unethical behavior. Thus, it is important to signal these risks to the other party through persuasion and convincing, which act as neutralizing by warding off unethical behavior before it occurs. Such neutralizing strategies include: convincing the counterparty that his or her immediate or short-term goals will be achieved in the negotiation; convincing the counterparty that progress is being made toward achieving her goals; convincing the counterparty that the immediate or short-term goals of the parties are linked (interdependent); convincing the counterparty that he or she has few, if any, viable immediate alternatives; pointing to the personal similarities between the negotiators; convincing the counterparty they are identified with an ethical organization; showing the counterparty that you are part of their social network; pointing out the long-term business opportunities between the parties; hinting about the serious legal implications of unethical behavior; referencing the long-term future support that you can provide to the counterparty; and assisting the counterparty in gaining future entry into valued social and business networks.⁸⁹ As a case in point, consider how Johnson & Johnson (J&J) consistently refer to their credo in their business interactions and negotiations. J&J’s credo contains specific statements pertaining to the conduct of negotiations, including, “We must constantly strive to reduce our costs in order to maintain reasonable prices. Our supplier and distributors must have an opportunity to make a fair profit.” When it comes to salary negotiations within the company, the credo states, “Compensations must be fair and adequate…”⁹⁰ By referencing their values and in particular, their credo, to treat customers, employees, suppliers, and shareholders fairly, Johnson and Johnson effectively neutralizes their negotiation counterparty’s intent to use unethical behavior.