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INER 9.

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International Negotiation 9: 315–339, 2004.
© 2004 Koninklijke Brill NV. Printed in the Netherlands.

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New Research Directions
The research described in this article by Volkema, Fleck and Hofmeister-Toth builds upon the
theme of a recent issue of International Negotiation, “Ethical Issues in Conflict Resolution” (Vol.
7, no. 2, 2002). The authors test the implications of using deceptive tactics in negotiation. Their
research relates to the larger theme of this present issue by its use of an innovative means of
negotiation, e-mail, as the channel for the experimental exercise.

Ethicality in Negotiation: An Analysis of Attitudes,
Intentions, and Outcomes
ROGER J. VOLKEMA*
Kogod School of Business, American University, 4400 Massachusetts Ave., NW, Washington,
DC 20016 USA (E-mail: volkema@american.edu)

DENISE FLECK**
COPPEAD Graduate School of Business, Federal University of Rio de Janeiro – UFRJ, Rio de
Janeiro, Brazil (E-mail: denise@coppead.ufrj.br)

AGNES HOFMEISTER-TOTH***
Marketing Department, Budapest University of Economic Sciences, Budapest, Hungary (E-mail:
agnes.hofmeister@bkae.hu)
Abstract. The study reported in this article examines the prediction and use of invalid information (e.g., exaggerated offers, false promises, misrepresented facts) in a two-party, property
leasing negotiation in which participants from different countries negotiated seven issues via

* Roger Volkema is Associate Professor of Management at the Kogod School of Business,
American University, Washington, DC. His research focuses on negotiation, conflict management, group/meeting processes, and problem formulation. He received his Ph.D. from the
University of Wisconsin, and was a Fulbright Fellow at Catholic University in Rio de Janeiro,
Brazil in 1988.
** Denise L. Fleck is an Associate Professor of Strategy at Coppead Graduate School of
Business, UFRJ, Brazil. Her research interests include corporate growth, organizational selfperpetuation, change and institutionalization processes, and innovation roles in growth
processes. She received a Ph.D. in Management from McGill University.
*** Agnes Hofmeister-Toth is Professor of Marketing at the Budapest University of
Economic Sciences and Public Administration. She teaches Consumer Behavior and
Negotiation and Conflict Management. Her research interests include cultural differences,
international negotiation, transition of consumer behavior, changing consumer values and
lifestyles, and symbolic consumption. She received her Ph.D. in Marketing from BUESPA.

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ROGER J. VOLKEMA, DENISE FLECK AND AGNES HOFMEISTER-TOTH

electronic mail. Prior to negotiating, attitudes and intentions towards questionable or unethical
tactics were measured, and perceived behavior was measured through a post-negotiation questionnaire and compared with actual behavior and negotiated outcomes (differential and joint).
The results suggest that the pre-negotiation questionnaire was a modest predictor of actual
behavior, with general attitudes effective in predicting general behavior. Ethical behavior of the
negotiator, ethical behavior of the other party, and perceived honesty of the other party were the
best predictors of performance (perceived and actual), while likely use of unethical tactics and
perceived honesty of the other party predicted whether or not an agreement was reached.

Keywords: negotiation, ethics, information exchange, e-mail.

Information is often cited as one of the central elements in understanding and
managing the negotiation process (McMillan 1992; Pruitt and Carnevale
1993; Rubin and Brown 1975; Shell 1999; Thompson 1998). In theory, information exchange can help build trust between parties, which in turn can lead
to a fuller, richer exchange of information and, ultimately, better joint/integrative outcomes. On the other hand, information is a source of power, so the
more information one party has about a counterpart’s strengths and weaknesses (preferences, priorities, alternatives), the stronger his/her bargaining
position (Brodt 1994; French and Raven 1959; Lewicki, Saunders and Minton
1999; Schelling 1960; Walton and McKersie 1965). Consequently, negotiators
are faced with the challenge of determining how much and what types of information to reveal while assessing their negotiating counterpart’s honesty and
forthrightness.
The types of information that individuals might employ in a negotiation can
range from valid and relevant information (e.g., a statement of fact critical to
the outcome of the negotiation) to erroneous or invalid information (e.g., an
intentional misstatement of fact). While the former has been the focus of a
number of studies, generally linking valid information exchange to negotiator performance (Pruitt and Lewis 1975; Olekalns, Smith and Walsh 1996;
Roth and Murnighan 1982; Thompson 1991), there have been far fewer studies focused on the exchange of invalid information, such as through misrepresented facts, false promises, and bluffs.
Several studies have documented the frequent use of invalid information in
real and simulated negotiations (Boles, Croson and Murnighan 2000;
Murnighan, Babcock, Thompson and Pillutla 1999; O’Connor and Carnevale
1997), and at least one questionnaire (the “Incidents in Negotiation
Questionnaire” or SINS questionnaire, developed by Lewicki and his colleagues) has been designed to measure individuals’ perceptions of the appropriateness and their likely use of these tactics, although no empirical evidence
exists linking the questionnaire to actual behavior. Most importantly, it seems

time constraints. This is further exacerbated by the increasing reliance on media of lower information richness (e.2_f8_314-339 10/27/04 9:15 AM Page 317 ETHICALITY IN NEGOTIATION 317 likely that invalid information such as misrepresented facts.INER 9. international negotiation. Thompson 1998. Volkema 2004). false promises. openness. Pruitt and Rubin 1986. Moag and Bazerman 1998). Walton and McKersie 1965). and their physical proximity could moderate the use of invalid information. and to assess the impact of the tactics on differential and joint outcomes (perceived and actual). Iklé 1964). to assess the questionnaire’s utility in predicting actual use of these tactics. media that offer apparent efficiencies but which may be associated with greater use of questionable or unethical tactics (Daft and Lengel 1986. These relationships.. media limitations. electronic mail) in international negotiations (Shell 2001. Relevant information. and bluffs could affect both the process (pace. While there exist both anecdotal and empirical evidence regarding the differing values and behaviors to expect in cross-cultural negotiations (cf. Daniels 1967. Information can take a number of forms. which was conducted via electronic mail. responsiveness) and the outcome of a negotiation (perceived and actual). By understanding the impact of these tactics on negotiation outcomes. might include a negotiator’s . through third-party measures of actual behavior. have received only modest attention by researchers and scholars. for example. Puffer and McCarthy 1995. based on its relevancy and validity. second. competitive or unethical opponents/counterparts) in an international context. Background and Hypotheses Information exchange is generally considered one of the keys to understanding and managing the negotiation process (Pruitt and Carnevale 1993. through participants’ self-reporting of their behavior in this property leasing negotiation. and third. Schuster and Copeland 1996. the cultural values of the principal negotiators. 2002. This article reports on a study of predicted and actual use of invalid information in a two-party. Tinsley et al. Lincke and Kavakaya 2001). Shell 1999. the inherent uncertainty in these negotiations often leads the parties to engage one another with caution if not suspicion (Hopmann 1996. through a questionnaire (the “Incidents in Negotiation Questionnaire”) to assess attitudes and intentions towards questionable or unethical tactics. their familiarity with one another. Invalid information was measured in three ways: first. we can begin to understand the rationales of negotiators faced with differing challenges (high stakes. commercial-property leasing negotiation. Valley.g. In an international context. The purpose of the study was to determine the frequency of use of questionable or unethical tactics in an e-mail-based. however. Ulijn.

resources. and style (Chatterjee and Ulvila 1982. Invalid information can take several different forms.e. Trevino and Youngblood 1990).. in fact.g. The exchange of valid. failed to correct a counterpart’s faulty assumptions). 1996. Malone. most notably when that information is about the parties’ interests or priorities (Olekalns et al. made an invalid statement) and were deceptive (i. These communications. hobbies).. In addition. perceived time pressure (Yukl. have been found in several studies to occur with some degree of frequency. Peterson and Kray 1995). Kelley. Scouller 1972). they noted that the individuals making propositions were far more likely to outright lie than were the individuals responding to propositions.INER 9. for example. Fisher. Pinkley. Negotiators also communicate invalid or misleading information in the form of exaggerated offers. and their own personal characteristics/values (Hegarty and Sims 1978. building on the . discovered that participants misrepresented information in 28% of their negotiations in a laboratory study. building rapport. Smith and Walsh (1996) all found that parties with an informational advantage performed better than their peers or negotiating counterparts with respect to substantive outcomes. negotiators frequently share valid information that is not directly relevant to the issues of a negotiation (e. O’Connor and Carnevale (1997). 1999. Thompson 1991). and false promises of future business opportunities (Anton 1990. which can assist the parties in getting comfortable. environmental competitiveness (Hegarty and Sims 1978). (1999) compared experienced and naive bargainers. misrepresented facts. weather. There are a number of reasons why individuals may choose to use invalid information in a negotiation. Pruitt and Lewis 1975. Beckman and Fischer 1967. These include the financial stakes (Boles et al. Lewicki (1983). current events. with more deception occurring in the early rounds of negotiation. relevant information has been found to predict both differential and joint outcomes. Faure 2002. from generally accepted behaviors like exaggerating an offer or demand to less accepted behaviors such as making false promises. Harsanyi 1962. Likewise.2_f8_314-339 10/27/04 9:15 AM Page 318 318 ROGER J. Griffith and Northcraft 1995). VOLKEMA. and Olekalns. The last of these factors – personal characteristics/values – will likely be influenced by the individual’s cultural frame-of-reference (Banas and McLean Parks 2002. utilities. (2000) found that participants in a laboratory negotiation were deceptive about 13% of the time. Tenbrunsel 1998).. and reaching agreement (Lewicki et al. Hayslip and Pamin 1976). Roth and Murnighan (1982). Volkema 2004). 2000. Boles et al. In addition. discussions of traffic. Thompson. alternatives.e. and found that 34% of the former both lied (i. Murnighan et al. DENISE FLECK AND AGNES HOFMEISTER-TOTH needs. several researchers have found that information exchange can be positively associated with higher joint outcomes. Ury and Patton 1991. Brodt (1994).

such as paying others for information).2_f8_314-339 10/27/04 9:15 AM Page 319 ETHICALITY IN NEGOTIATION 319 work of Bok (1978) and others. Attitudes have been found to predict behavior. we propose the following: Hypothesis 1: Attitudes and intentions towards questionable or unethical negotiating tactics (high perceived appropriateness and likely use. encouraging others to defect). and behavior (for a review see Ajzen 1988). lying about an informational item). Lewicki.e. misrepresentation of information (i. Despite the apparent frequency with which invalid information appears to be employed.INER 9. and influencing a counterpart’s professional network (e.e. and Donahue (2000) associate perceptions of appropriateness with attitudes. In a meta-analysis of over one hundred studies. while O’Connor and Carnevale (1997) found that subjects . developed a questionnaire (“Incidents in Negotiation Questionnaire”) and typology of lying and deception in negotiation that consists of five categories: traditional competitive bargaining (e. however. Further.. intentions.g. The questionnaire measures individuals’ perceptions of the appropriateness of questionable negotiating tactics and their likelihood of using those tactics. Robinson. intentions.. Kim and Hunter (1993) found significant support for these linkages between attitudes. various forms of bribery. such as through promises you may not be able to fulfill). 2004) have employed this questionnaire to examine differences in perceptions due to demographic factors. Subsequently. while likelihood of use corresponds to behavioral intentions. exaggerating an initial offer or demand). Lewicki and Robinson (1998) and Volkema (1999a. as measured by the “Incidents in Negotiation Questionnaire”) will be positively associated with self-reported and actual use of those tactics.. While the “Incidents in Negotiation Questionnaire” appears to be a useful tool in assessing attitudinal differences. with behavioral intentions acting as a mediating variable.g. specific attitudes appear better at predicting specific behaviors. not actual behavior. while general attitudes are better at predicting general behaviors.g. particularly where an individual’s actions fall within his/her control. bluffing (i. There is.. and behavior. inappropriate information collection (e. there have been relatively few studies that have examined the influence of invalid information on negotiation outcome. a long history of research that links attitudes. there have been few studies to confirm the predictive validity of the instrument (Banas and McLean Parks 2002). Roth and Murnighan (1982) found that the party with the larger outcome (payoff) and an informational advantage was inclined to misrepresent his or her outcome to his/her ultimate advantage. Given that this is the case for most of the negotiating tactics identified by Lewicki and his colleagues.. leading your counterpart to believe that you are in control of consequences which you are not.

Brodt (1994) did one of the few studies that examined the effects of information on perceived outcome. and found that informed parties were significantly more positive about their performance than were their uninformed peers. however. decreasing with the use of unethical tactics and vice versa. Instead. comparing a negotiator’s outcome with his or her peers’ performance) or differential outcome (i. We might assume that the individual using questionable tactics believes he/she has an advantage over the other party. DENISE FLECK AND AGNES HOFMEISTER-TOTH who misrepresented information achieved higher outcomes.g. The communication of false or deceptive information might even create a sense of openness and trust on the part of the other party.2_f8_314-339 10/27/04 9:15 AM Page 320 320 ROGER J. Negotiators seldom know the actual payoff (differential or joint outcome) in real-world negotiations. they make their decisions regarding whether or not to engage in future negotiations based on perceived outcomes. since they seldom know the utilities and winnings of the other party (Putnam and Jones 1982). comparing a negotiator’s outcome with his/her negotiating counterpart’s performance)..e. so the validity of the information might not have been questioned. it would be valuable to know what effect questionable or unethical tactics have on perceived outcomes. Other tactics in the typology identified by Lewicki and his colleagues (e. In addition. Thus.e.INER 9. the inside information that was shared with these parties came from a third party. the negotiator would expect that his/her outcome would exceed the other party’s performance. It would seem reasonable that individual outcomes as well as differential outcomes would increase with the use of unethical tactics.. as one’s counterpart is making decisions based on erroneous information. and the lower the joint outcome. causing him/her to share additional valid information. the parties may actually negotiate a settlement that comes closer to their mutual benefit rather than benefiting one party (the party exaggerating an offer or misrepresenting information) at the expense of the party. not joint or integrative outcomes (which are based on the combined performance of parties in a dyadic negotiation). Given these arguments. For example. and only on misrepresentation of information. focused only on individual outcomes (i. since this individual knows that the other party is making decisions based on erroneous information. and that as a consequence their joint outcome might suffer as well (assuming there is no opportunity to increase a fixed-pie outcome for both parties). Therefore. The use of such tactics would likely have the opposite effect on joint outcomes. the higher will be his/her actual outcome.. These studies. bluffing) were not examined. VOLKEMA. by not exaggerating an initial offer or misrepresenting information. However. the higher his/her differential outcome. . the following hypothesis is offered: Hypothesis 2: The more questionable or unethical tactics an individual employs.

which was the primary language of their courses. Sixty-one percent of the subjects were male. If either party perceives the other party as being untrustworthy (for example. many authors advise negotiators to develop alternatives to a negotiated agreement as a way of protecting themselves against a bad deal. the higher will be his/her perceived outcome. This group included individuals from Brazil and France. Volkema 1999b). There are a number of factors that might lead one or both negotiators to back away from an agreement. Russia. thirty-three of whom were taking a course offered in Rio de Janeiro.2_f8_314-339 10/27/04 9:15 AM Page 321 ETHICALITY IN NEGOTIATION 321 Hypothesis 3: The more questionable or unethical tactics an individual employs. In reality. the greater the likelihood of suspicion being raised. this is not always the case. Given this reasoning. ranging in age from 22 to 37 years old (mean = 26. as a result of grossly exaggerated offers or demands. many of the studies conducted to date assume that an agreement will be reached by the negotiating parties. Brazil. In fact. including Hungary. Greece. Hungary. the use of unethical tactics can actually create a cycle of distrust when individuals project their own circumstances and unethical behavior onto others. The students taking the course in Budapest came from a number of different countries. Each of these students was paired with a student taking a comparable course at another university in Budapest. Thompson 1998. Ury and Patton 1991. and the lower the perceived joint outcome. or contradictory statements). the Netherlands. The more a negotiator employs such tactics. All participants were fluent in English. including the terms of the agreement (which may not allow a negotiator to reach his/her breakeven point) or the perceived ethicality of either party. the deal may seem too risky to consummate. the greater the likelihood of not reaching an agreement. Mexico. the following is hypothesized: Hypothesis 4: The more questionable or unethical tactics an individual employs. the introduction of questionable facts. Method Participants The participants in this study were sixty-six graduate business students taking courses in negotiation. .INER 9. Germany. sometimes the best alternative is to walk away (Fisher. the higher his/her perceived differential outcome. As Tenbrunsel (1998) noted. Finally. and the United States.3).

furnishings. a real estate firm with properties in the desired area. 2000). In addition to background information about their company. Robinson et al. which allowed for collection of all dialogue. hiding one’s bottom line) to tactics involving the other party’s professional network (e. DENISE FLECK AND AGNES HOFMEISTER-TOTH Procedure The subjects participated in a two-party. 7 = very likely). duration of lease. each representative was given a scoring table with seven critical issues to be negotiated. as described in Volkema (1999b). This time frame was deemed more than sufficient. VOLKEMA. As such. All respondents were assured confidentiality. both in person and via the internet. The other party (graduate students in Hungary) represented RJW Properties.” (Note: There have been several versions of this questionnaire. cost of utilities. asks respondents to rate the appropriateness and likelihood of using eighteen tactics or behaviors. . and vice versa. Three weeks prior to commencing the negotiation. developed by Lewicki and his colleagues (Lewicki and Robinson 1998. exaggerating an offer or demand.. 7 = very appropriate. so respondents are encouraged to be candid in their answers. The negotiation took place via electronic mail.g. The thirty-three graduate students in Brazil represented a company called Logan Telecommunications. seeking to discredit one’s opponent with his or her supervisor).. The tactics consist of a range of behaviors with respect to ethicality. Olekalns et al.. 1996. which was interested in expanding its operations in a new geographic area. Inc. property leasing negotiation. The questionnaire indicates that there are no “right answers” regarding the right or wrong thing to do. renovations.) This questionnaire. negotiators had an opportunity to maximize their joint score as well as their individual and differential scores. The seven issues included cost per square meter.2_f8_314-339 10/27/04 9:15 AM Page 322 322 ROGER J. and advanced payment.g. from generally accepted competitive tactics (e. the individual earned a certain number of points (Table 1). and participants had fourteen days to complete the negotiation. Depending upon the outcome negotiated for an issue.INER 9. parking space. they were interested in leasing 300 square meters of commercial space. the thirty-three individuals representing Logan Telecommunications were asked to complete the “Incidents in Negotiation Questionnaire. Multi-issue simulations of this type have been used effectively in a number of prior studies (cf. All negotiating dyads remained the same throughout the study. All communications were in English. for likelihood of use: 1 = not at all likely. based on prior testing of the simulation. Because some of the issues were worth more points to the representative of Logan Telecommunications than to the representative of RJW Properties. Thompson 1991). rating each behavior on a 7-point Likert scale (for appropriateness: 1 = not at all appropriate.

misrepresentation of factual information. which tactics they had used (i.2_f8_314-339 10/27/04 9:15 AM Page 323 323 ETHICALITY IN NEGOTIATION Table 1. exaggerating an opening demand or offer. participants completed a second questionnaire in which they were asked to indicate how well they thought they had performed in the negotiation and how well they thought the other party had done (both on 7-point Likert scales. making promises that could not be kept. pretending not to be in a hurry). Issues. where 1 = not well and 7 = very well).. and point values Issue Negotiated outcome Point value Logan Telecom.INER 9. RJW Properties Cost per square meter $500 $600 $700 $800 $900 900 750 600 450 300 300 450 600 750 900 Renovation of space No rooms renovated One room Two rooms Three rooms 150 400 500 600 250 200 150 100 Utilities included None Water/sewer Water/sewer/electricity 100 150 200 300 200 100 Length of lease One year Two years Three years Four years 500 450 300 200 200 500 700 900 Parking available No cars One car Two cars Three cars Four cars 100 300 500 600 650 300 250 200 150 100 Furnishings None Refrigerator/stove 100 350 100 150 Advanced payment One month Six months One year 500 350 150 200 600 900 Maximum 3700 3700 Minimum 1100 1100 On the final day of the negotiation (following collection of e-mail transcripts). and .e. negotiated outcomes.

only those offers/demands that were outside the specified range shown in Table 1 were counted as exaggerated offers. their independent assessments were compared and any differences were resolved through discussion. Perceived outcomes were based on self-assessments . where 1 = not very honest/ethical and 7 = very honest/ethical). Murnighan et al. 2000.” the 7-point Likert ratings of appropriateness and likely use were taken for all eighteen tactics. are techniques could not be affected by participants in this negotiation. The method of asking participants to report in a post-experiment questionnaire on tactics and information exchanged has been employed successfully in other studies of bargaining and negotiation (cf. several measures of outcome were taken. These four focal tactics each had the potential of being employed during the actual negotiation. Using the Estimate-DiscussEstimate approach (Nutt 1992). To determine the influence of ethics on performance. DENISE FLECK AND AGNES HOFMEISTER-TOTH overall how honest they had been and how honest they thought the other party had been in the negotiation (on 7-point Likert scales. Independent and Dependent Measures To gain insight into the predictive validity of the “Incidents in Negotiation Questionnaire. Other tactics. such as hiding one’s bottom line. Boles et al. Self-reported use of the four focal tactics was taken from the post-negotiation questionnaire. In addition. All post-negotiation questionnaires were confidential.INER 9. misrepresenting information. participants also were asked to indicate on this questionnaire their overall honesty in the negotiation (as previously detailed). Still other approaches. exaggerating an offer or demand. Overall measures were calculated as the sums of the ratings for the four focal tactics as well as for all eighteen tactics for appropriateness and likely use.2_f8_314-339 10/27/04 9:15 AM Page 324 324 ROGER J. These individuals. and making promises that could not or would not be kept. who did not know the value of the negotiated outcomes at the time of their review. Actual behavior for each negotiator (Logan Telecommunications and RJW Properties) was determined by three individuals independently reviewing printed transcripts of the e-mail negotiations. For exaggerating an offer or demand. identified incidents of the four focal tactics. VOLKEMA. such as talking directly to the people to whom an opponent reports in order to undermine the negotiation or intentionally misrepresenting the progress of negotiations to the press. An overall measure of ethicality for each participant was determined by adding the occurrences of these questionable or unethical behaviors across categories. respectively (Robinson et al. including four focal tactics – pretending not to be in a hurry (when you were). 1999). 2000). could not be easily measured by third parties reviewing transcripts of the negotiation.

misrepresent information (mean = 3.15. As these numbers suggest.05 level for pretending to be in no hurry. Of these four tactics. SD = 1. these variables were included as independent variables in these analyses. SD = 1. SD = 2.44). Given that the simulation allowed for both differential and joint outcomes. and make false promises (mean = 1. participants generally felt that it was more appropriate to use each tactic than they indicated they were likely to do (supported by t-tests at the .39).15. Actual outcome was measured by totaling the point values for each of the seven issues negotiated (Table 1).52).15). followed by exaggerate an offer or demand (mean = 5. where subjects were asked to indicate how well they thought they had done in the negotiation and how well they thought the other party had done (as previously detailed). Analyses Hypotheses 1–3 were tested using regression analyses.10 level for exaggerating an offer or demand and for making false promises. the correlations between attitudes (appropriateness) and intentions (likely use) were all . as well as the sum of their scores ( joint outcome). followed closely by exaggerating an offer or demand (mean = 5.94. and making promises that could not or would not be kept (mean = 2.. SD = 1. participants indicated that they would be most likely to pretend to be in no hurry (mean = 5. SD = 1.02).85.75).g.88. the difference in scores between an individual and his/her counterpart (differential outcome) was calculated. only outcome data from Logan Telecommunications representatives were analyzed in testing hypotheses (Kenny 1995). Since perceived and actual ethical behavior of the other party in the negotiation might influence the outcomes predicted by Hypotheses 2 and 3. SD = 1.52. misrepresenting information (mean = 3.21.37) (Table 2).) Consistent with findings reported elsewhere (cf. and at the .” respondents indicated that pretending to be in no hurry was the most appropriate of the four focal tactics (mean = 5. while Hypothesis 4 was tested using discriminant analysis. Volkema 1997). SD = 1.79. Results From the “Incidents in Negotiation Questionnaire. Due to dependency concerns with data from negotiating dyads (e. highly correlated outcome measures within dyads). while perceived joint outcome was calculated as the sum of these values.INER 9. Perceived differential outcome was the difference in these point values (self minus other). SD = 1.98).2_f8_314-339 10/27/04 9:15 AM Page 325 ETHICALITY IN NEGOTIATION 325 recorded on the post-negotiation questionnaire.

VOLKEMA.36 * – – -.08 -.01 .31 -.01 15 .04 .06 .42 * .24 – – -. * p < .79 59.54*** .12 .24 -.14 .15 66.14 -.43* .02 -. Descriptive Statistics and Correlation Matrix for Attitudes. 4.20 -.24 .08 .52 1.04 .33 .49 ** -.21 .14 -.05 -. info. Exaggerate offer 13.98 2.17 1.70*** .27 .27 -. Exaggerate offer 8. Honesty – other Actual Behavior 17. info.21 .09 .13 -.44** 6 – – -.23 . Pretend no hurry 7. Misrep.02 .47** . 9.03 2.03 12 – – .48** .14 .13 -.2_f8_314-339 10/27/04 9:15 AM Page 326 ROGER J.18 .12 4.73 .06 .18 -.11 .44 .16 -. info.44 1.77 2.04 . DENISE FLECK AND AGNES HOFMEISTER-TOTH .48** -.20 .18 -.56*** .20 8 t – – .17 .15 .20 -.30 t .15 1.45 ** .41 * -.5.06 .39* 9 t – – .32 t 13 – – -.14 -.23 .00 .30 2.08 – – .21 5.12 .28 .67 .11 -.61*** . Pretend no hurry 12.05.09 .23 .14 .09 . Exaggerate offer 3.10 -.26 -.06 . All Tactics .08 .11 -.33 t .13 .06 .03 -.67*** .23 .63*** 5 .30 t .19 .98*** – – 19 326 a Mean Variables Table 2.48 ** -. 20.94 Attitude 1.30 t -.85*** .24 .11 . Misrep.18 .00 3.17 .10.24 1 N = 33.23 .07 .34* .82 5.21 16 – – – – -.20 .23 -. Make promises 21.02 1.04 .85 2.11 .02 .19 -.88 1.28 .71*** .03 .91 .12 .12 .45 .53** . Exaggerate offer 19.09 .20 -.12 . t p < . *** p < .55 *** .11 .01.31 t .05 .18 . Misrep.01 -.24 -.07 .54 *** .28 .10 .21 -.02 -.31 .52** -.01 .94 12.14 -.28 -.46** .37 * .65*** .02 t .52** 4 .20 2 .32 t -.29 .03 .06 . All tactics Intentions 6.02 1.03 -.01 . Pretend no hurry 18.20 10 – – .27 .11 18 – – – – .68*** 3 – – .75 1.81 .11 .15 .02 -. Pretend no hurry SD – – .11 14 -.11 7 .57 .12 .10 -.001 5.42 * .02 -.31 t .15 3. Intentions. 14.03 6.53 *** .47 .71 1. Make promises 10.12 .13 .36 * .32 t .05 .02 . All tactics Self-reported Behavior 11.05 .24 . ** p < .11 17 20 – – – – .39 –– .52 3.10 .07 .44 .24 .05 -.56 *** -.38* .17 -.35* .28 .00 2.03 .37 16.19 .92 1.23 .07 ** – – .48 ** -.39 * . info. Honesty – self 16.08 -. Misrep.53*** .06 -.34 t . Make promises 15.09 .20 .06 -. Make promises 5.33 t -.01 11 – – -.24 -.28 .73 . and Behaviors a INER 9.

02).44).73. SD = . while ten individuals (30.001).) Overall. No one was found to have made a promise that could not be kept.45 (p < . Fifteen individuals (45. That . from one to three times (mean = . SD = .65 (p < .01).001). These overall numbers were comparable for those individuals representing RJW Properties – twenty-five (75. and the correlation for making a promise that could not or would not be kept was .29. two individuals (6. the correlation for pretending to be in no hurry was .3%) were found to have exaggerated an offer or demand.24.8%) of the thirty-three participants representing Logan Telecommunications used at least one of the four focal tactics. was not significant.1%) pretended to be in no hurry (when they actually were in a hurry).03.53 (p < .52. Their mean perceived honesty of the other party was 4. Overall.73.81 (SD = 1.5%) indicated that they had misrepresented information.7%) felt that they had exaggerated an offer or demand during the negotiation (mean = . overall the thirty-three representatives of Logan Telecommunications felt that they had been more honest than their negotiating counterparts at RJW Properties (t = 3.7%) misrepresented information. the correlation for misrepresenting information was . while the correlation between perceived misrepresentation of information and actual misrepresentation was . In terms of actual behavior (as determined from transcripts). SD = 2. Specifically.05). while some individuals may have exaggerated within a specified range for a given issue.2_f8_314-339 10/27/04 9:15 AM Page 327 ETHICALITY IN NEGOTIATION 327 significant. The correlation between participants’ perception of pretending to be in no hurry and their actual use of this tactic was . One person indicated that he/she had made a promise that could not or would not be kept (mean = . SD = .85 (p < .8%) used at least one of the tactics. The correlation between attitudes and intentions for all eighteen tactics in the questionnaire was . twenty-seven (81.71 (p < .001). participants indicated a mean honesty in their negotiations of 6.11). the correlation for exaggerating an offer was .43 (p < .57). There were sizeable correlations between several of the self-reported behaviors and actual behaviors.67. from one to ten times (mean = 2.94).01). The correlation between perceived exaggeration and actual exaggeration. SD = . Twenty-four (72.45). On a scale from one to seven. p < . Eight of the thirty-three focal participants (24.2%) indicated on the postnegotiation questionnaire that they had pretended not to be in a hurry (mean = .INER 9.17).12 (SD = 1. Thus. while twenty-four participants (72.01). while positive (. where seven means very honest/ethical.91). p < . participants’ perceptions of their honesty were highly correlated with actual use of these tactics (r = –.001).70 (p < . (The fact that more individuals reported exaggerating offers than were actually counted is likely due to the fact that only offers or demands that were outside the specified ranges shown in Table 1 were counted as exaggerated offers.001).

10.27. These results also suggest a relationship between participants’ perceived honesty and their actual unethical behavior.10) as well as with perceived unethical behavior (b = . SD = 183. with the latter also potentially affected by the other party’s perceived or actual behavior.31. The only significant findings were for exaggerating an offer (attitude: r = . the higher the perceived appropriateness of the tactics from the questionnaire.94). The differential outcome for the focal participants ranged from 400 to 600 (mean = 102. p < .32.32. the higher the perceived appropriateness of questionable or unethical tactics. the less honest the participant perceived himself/herself to be in the negotiation.05).25). SD = 284. DENISE FLECK AND AGNES HOFMEISTER-TOTH is. but at best marginally significant (Hypothesis 1). while the scores for their counterparts (representing RJW Properties) ranged from 2400 to 3050 (mean = 2675. with a mean of 2777.01) and positively associated with perceived unethical behavior (b = . That is. In addition. When actual unethical behavior was regressed on perceived honesty of self and other as well as actual unethical behavior of other (Table 4). intentions: r = .INER 9. p < .30. Regression analyses revealed that the “Incidents in Negotiation Questionnaire” did predict both self-reported and actual behavior (Table 3). The joint outcome ranged from 5300 to 5700 (mean = 5452. participants’ appropriateness ratings for the sum of the four tactics were positively associated with actual unethical behavior (b = . VOLKEMA.01.00. the more honest a participant judged himself/herself to be in this negotiation. the perceived honesty of self was .05). intentions: r = . the scores for the negotiators representing Logan Telecommunications ranged from 2550 to 3000.33. consistent with Hypothesis 1.48.10). p < . twenty-two of the thirty-three pairs of negotiators completed their negotiations.71).2_f8_314-339 10/27/04 9:15 AM Page 328 328 ROGER J. In terms of performance. participants’ ratings of general appropriateness were negatively associated with perceived honesty in the negotiation (b = –. p < . p < . SD = 122. Therefore. With appropriateness and likelihood of use of the four focal tactics as the independent variables. p < . p < . p < .34. The correlations between participants’ specific attitudes and their actual behavior and between intentions and actual behavior were all positive.27 (SD = 119.05).27.35.10).48. Participants’ ratings for general appropriateness of tactics (all eighteen tactics) were positively associated with actual unethical behavior (b = . the less he or she actually used these questionable or unethical tactics in the negotiation. p < . However. participant’s ratings for all attitudes and all intentions were significantly correlated with actual behavior for all tactics (attitude: r = . the more questionable or unethical tactics the individual thought he or she employed in the negotiation and the more tactics he or she actually did employ.42. For those reaching an agreement. p < .10) and misrepresenting information (attitude: r = .30).

Results of regression analysis of actual behavior on the perceived honesty of self and honesty of othera Predictor variable Perceived honesty of self Perceived honesty of other Actual unethical behavior of other Adjusted R2 F a ⊥ n = 33 p < .2_f8_314-339 10/27/04 9:15 AM Page 329 329 ETHICALITY IN NEGOTIATION Table 3.05.38* .01.48** . the positive relationship between actual unethical behavior of the two parties suggests that unethical behavior might breed similar behavior from the other party.10.INER 9.08 .09 –.05).34* .001 ⊥ found to be negatively associated with actual unethical behavior of self (b = –.32⊥ –.59 . *** p < . Table 4. p < .06 1.01) suggests that participants did not necessarily project their own ethicality onto their negotiating counterpart.05 .001 Actual unethical behavior –. ** p < .74*** .00 –.30⊥ –.19 All eighteen tactics Appropriateness Likely use Adjusted R2 .11⊥ n = 33 p < .49 –. * p < .01.36 9.05.01 .14 * .48.01) while actual unethical behavior of the other party was found to be positively associated with actual unethical behavior of self (b = .42* .21 ⊥ F a .03 3. the more honest the negotiator perceived himself/herself to be in the negotiation. the fewer questionable or unethical tactics the individual employed during the negotiation. The lack of a significant correlation between perceived honesty of self and the other party (r = –.48** . However.08 .67 4. *** p < . * p < .13 . Thus.09 * 6. Results of regression analyses of actual and perceived behavior on the Incidents in Negotiation Questionnairea Predictor variable Four focal tactics Appropriateness Likely use Actual unethical behavior Perceived unethical behavior Perceived honesty of self .17 3. ** p < .15 ** 9.38.10.01 . p < .

001).01). The more honest the other party was perceived to be.001) and the more unethical the other party actually was (b = –.10).2_f8_314-339 10/27/04 9:15 AM Page 330 330 ROGER J. in eight cases (24.64.2%) only one party used a focal tactic.10).. In those cases where both parties employed one or more focal tactics there was a high correlation between stages of first use (r = . eleven pairs of negotiators were unable to reach an . both parties used one or more tactics.64. the smaller the perceived differential outcome (i. DENISE FLECK AND AGNES HOFMEISTER-TOTH As a follow-up analysis.. Furthermore. p < . In twenty-two (66. Outcomes (actual and perceived) were regressed on attitudes.10) and the less honest he/she thought the other party was in the negotiation (b = –. However. and the earlier the RJW representative used a questionable or unethical behavior. The participant’s perception of the honesty of the other party and the actual unethical behavior of the other party were the only variables significantly associated with perceived outcomes. p < .51. These results suggest that the perceived or actual ethicality of the other party was a better predictor of actual outcomes than the ethics of the principal party (although. p < . there was no support for a relationship between actual unethical behavior of the Logan Telecommunications negotiators and perceived outcomes (Hypothesis 3). the more honest the other party was perceived to be. As previously noted. p < .001). the more honest the other party was perceived to be (b = –. The more questionable or unethical tactics a party used (b = . and in three cases (9. p < . and actual behavior (Table 5).001). the first use of a questionable or unethical behavior was examined for each representative. the greater the differential outcome (b = .INER 9. p < . Finally. p < .62.e.05).37. the larger the perceived joint outcome (b = .40.10) and the better the negotiator perceived the other party did in the negotiation (b = .29.7%) of the negotiations.40.05).30. unethical behavior by one party appears to promote similar behavior by the other party). as previously noted. perceived honesty. p < . the earlier a Logan Telecommunications representative used a questionable or unethical behavior in the sequence of e-mail messages exchanged. the more unethical the RJW representative was overall (r = –.58.55. the better the negotiator perceived he/she did in the negotiation (b = . the difference between his/her perceived performance and the perceived performance of the other party). intentions. In addition. location in the sequence of e-mail messages sent by a party where the first use of a focal tactic occurred). the more unethical the Logan Telecommunications representative was overall (r = –.e. p < .1%) neither party used one of these tactics. p < . VOLKEMA. p < . the higher the negotiator’s score (the former consistent with Hypothesis 2). Logan Telecommunications and RJW Properties (i.10) and the smaller the joint outcome (b = –. suggesting that the first incidence of a questionable or unethical behavior on the part of one negotiator was followed quickly by reciprocal behavior on the part of the other negotiator. The more unethical the other party. p < .36.

09 .30⊥ –.04 .02 . which exceeds the threshold suggested by Hair et al. perceived honesty of the other party during the negotiation. The more likely the use of competitive or unethical tactics. mean score for likely use of tactics (intentions). and actual ethical behavior of each party during the negotiation as the predictor variables. however. the greater the likelihood of not reaching an agreement.01. p < .00 –.06 . ** p < .12 .07 . *** p < . and actual behaviora Predictor variable Attitude/intentions (Incident in Negotiation Questionnaire.1.37⊥ . which appeared substantial for completing the negotiation).25 .40⊥ –. (1998). p < .20 –. the greater the likelihood that no agreement would be reached. for perceived outcomes. Press’s Q was significant (Q = 10.66* 3. 18 tactics) Appropriateness Likely use Perceived honesty Self Other ___Actual outcome____ Self Differential Joint _____Perceived outcome______ Self Other Differential Joint . The analysis yielded a significant function (canonical correlation = .55*** Actual unethical behavior Self Other .62** .26 . Results of regression analyses of outcomes on attitudes.15 .11 .10. To determine if the ethics of the subjects might have played a role in predicting whether or not an agreement was reached.54.09 . with agreement/no agreement as the dependent variable. In addition. In addition. * p < .16 –.2_f8_314-339 10/27/04 9:15 AM Page 331 331 ETHICALITY IN NEGOTIATION Table 5.01 –.25*** F a ⊥ 2.15 –.03 –.20 .01).04 –. n = 22.06 –. p < .07 –. and the mean score for appropriateness of tactics (attitude).15 .64** 7.18 –.11 Adjusted R2 .06 . supporting the efficacy of the function.21 . the less honest the other party was perceived to be.64*** .23*** For actual outcomes.28 .36 . perceived honesty during the negotiation. this result did not support Hypothesis 4.INER 9. The function correctly classified 78.25 . .05.01) involving two variables – likely use of tactics and perceived honesty of the other party.80⊥ 12.29⊥ .11** 13. perceived honesty.04 .06 . Strictly speaking.89⊥ 21.06 .40 . Wilks’ lambda = .03 –. which predicted that the more questionable or unethical tactics an individual employed.08 –. n = 33. a discriminant analysis was performed.03 –.51* .1% of all cases into their original groups.58*** . the greater the likelihood that no agreement would be reached.02 –.14 –.05 –. intentions.71.001 agreement in the allotted time (a period of two weeks.28 3.

The tactic that was used most frequently was misrepresenting information. Scouller 1972). 1998). 1999. the use of questionable or unethical tactics in negotiating is a common phenomenon. a negotiator did better relative to others representing Logan Telecommunications when he/she used these questionable tactics and when he/she presumed the other party was using these tactics. and behavior has reported significant correlations between specific attitudes or intentions and specific behaviors. the measure of general appropriateness (all eighteen behaviors) was the best predictor of actual ethical behavior. which may be due to the medium employed in this study – electronic mail – and the fact that most of the dyads represented cross-cultural negotiations. The likely use of questionable or unethical tactics. particularly a country known for its skilled negotiators. these percentages are somewhat higher than the numbers reported in previous studies. and the perceived honesty of the other party were the critical variables in predicting outcomes. Prior research on the linkages between attitudes. due in part to the inability of the other party to read nonverbal cues which can give away intentions to deceive (Valley et al. the actual use of those tactics. while the perceived honesty of the other party was negatively or inversely associated with the negotiator’s score. VOLKEMA. Murnighan et al. In addition. The use of questionable or unethical tactics by a party was positively associated with a party’s performance. intentions.2_f8_314-339 10/27/04 9:15 AM Page 332 332 ROGER J. the use of questionable or unethical tactics by the other party was associated with lower joint outcomes. approximately 80% of the participants were found to use one or more of the four focal tactics. . In this study. DENISE FLECK AND AGNES HOFMEISTER-TOTH Discussion As reported elsewhere (Boles et al. In addition. The “Incidents in Negotiation Questionnaire” was found to be modestly predictive of perceived (self-reported) and actual behavior. Thus. The somewhat weak finding for the former (specific-to-specific linkages) might be an artifact of only four tactics from the questionnaire having applicability to this particular simulation. O’Connor and Carnevale 1997. At least one study has suggested that the use of unethical tactics increases when negotiations occur via electronic mail. While there were some marginally significant relationships between perceived appropriateness or likely use of specific tactics and the actual use of those tactics. The positive link between the measure of general appropriateness and actual ethical behavior is encouraging as regards the predictive utility of the questionnaire. which was used by over 70% of the participants. Volkema and Fleury (2002) report that the likelihood of unethical behavior increases when an individual is negotiating with someone from another country. and between general attitudes or intentions and general behaviors (Ajzen 1988). 2000. In general.INER 9.

There were two variables that were most effective in differentiating between negotiations that reached agreement and negotiations that did not reach agreement – likely use of questionable or unethical tactics (as measured by the “Incidents in Negotiation Questionnaire”) and the perceived honesty of the other party. that the rating of the other party’s honesty occurred at the conclusion of the negotiating period (when it was clear no agreement would be reached). this perception might be measured at several points throughout the negotiation. the poorer the individual perceived he/she did in competition with the other party (differential outcome). but the better the individual perceived he/she did in cooperation with the other party ( joint outcome). timing appeared to influence frequency of use. As already noted. the more honest the other party was perceived to be. the better a negotiator perceived he/she did compared to others representing Logan Telecommunications. or accommodation on certain issues. Since exaggeration is often one of the first tactics employed by negotiators. Interestingly. as such findings have not always been reported by researchers. It is important to note. going beyond specified ranges may have sent a signal to the other party that future unethical behavior was likely (prompting not only reciprocation but escalating use of questionable or unethical tactics). the other party’s perceived honesty led to an increase in exchange of valid information. it is conceivable that the respondent was seeking to explain or justify the failed negotiation by placing blame elsewhere. the more the other party used questionable or unethical tactics. to determine if perceptions change when it first appears that no agreement will be reached. The perceived honesty of the other party was the primary variable significantly related to perceived outcomes. the greater the likelihood that the parties would not reach an agreement. In future research. the better the negotiator perceived the other party did in the negotiation.INER 9.2_f8_314-339 10/27/04 9:15 AM Page 333 ETHICALITY IN NEGOTIATION 333 There appears to be a reciprocating effect involving the use of questionable or unethical tactics. The significant positive relationship found between subjects’ self-reported behavior and actual behavior is also worth noting. In addition. Conceivably. as early use by one party was associated with early use by the other party. The high correlation between self-reported behavior and actual behavior found in . The more honest the other party was perceived to be. as the earlier one party used one of these four tactics. In general. Therefore. The more likely the use of these tactics and the less honest one’s counterpart was perceived to be. however. restricting the recall of an event to a short and recent reference period and providing specific recall cues can help improve recall (Gilbert. Fiske and Lindzey 1998). exaggerating an offer or demand was only coded as such if the offer or demand was outside the specific ranges shown in Table 1. However. individuals still may choose to misreport events when social capital is at stake.

The more honest the other party is perceived to be. where nonverbal cues can be read). through demographic information. based on the findings of this study.) or early in the negotiation (e. the more unethical the other party is likely to be.26) but not statistically significant (p = . as reported in prior research.INER 9. This could be costly if a viable agreement is lost due to inaccurate perceptions of the other party. the more likely one is to use questionable or unethical tactics and the less honest the other party is perceived to be. one’s perceived performance (differential and joint) is likely to be tied to the perceived honesty of the other party.. Therefore. Fifth. Whether or not someone can easily project honesty while in fact acting unethically is important to this finding. it is not unreasonable to assume that the other party in a negotiation will use a questionable or unethical tactic. An ad hoc correlation analysis of participants’ perceptions of the other parties’ honesty and the other parties’ actual unethical behavior was in the expected direction (r = –. the use of questionable or unethical tactics is commonplace among negotiators (approximately 80% in this study used at least one such tactic).g. since many times negotiators do not know how they actually performed relative to their counterpart. the researchers) for verification. Furthermore. especially misrepresentation of information (which was the tactic used most frequently)..g.. the greater the likelihood that no agreement will be reached. Exaggerating an . Fourth.2_f8_314-339 10/27/04 9:15 AM Page 334 334 ROGER J. through background and anecdotal exchanges) could be valuable in predicting the degree of unethical behavior. DENISE FLECK AND AGNES HOFMEISTER-TOTH this study may be due to the fact that participants knew transcripts of their exchanges would be available to others (e. etc. While this finding requires further study. The use may actually increase when a medium such as electronic mail is employed (rather than face-to-face negotiations. although some tactics may be considered more acceptable than other tactics. perceived outcomes matter. First.g. the use of questionable or unethical tactics will likely result in reciprocal behavior on the part of the other party. a decision to engage in future negotiations with the same party must therefore be based on perceptions. Second. an individual’s general attitude/intentions towards the appropriateness and use of questionable or unethical tactics will likely translate into actual use of such tactics. Finally. the extent to which another party’s general attitude or intentions towards tactics can be ascertained prior to the negotiation (e. where the issue is more one of honesty in reporting than accuracy in reporting behaviors. reputation. and the earlier such tactics are employed. it suggests one way of increasing the validity of self-report data of this type. Third.15). VOLKEMA. the less the negotiator’s differential advantage is perceived to be and the larger the joint outcome is perceived to be. These findings have some direct implications for practitioners. Thus. the use of questionable or unethical tactics by a negotiator and the perceived dishonesty of the other party can positively influence the negotiator’s actual performance.

As with all research. which in turn can reinforce the tendency to view oneself as good and the other party as bad or evil (Hopmann 1996). In one study. Although electronic mail may be used increasingly in negotiations over the coming years. 2002). With the continued globalization of markets and the reliance on technologies such as electronic mail to negotiate agreements (particularly when challenging economic times limit travel). and flexible time orientation. Dees and Cramton 1991). it should be pointed out that this negotiation took place entirely via electronic mail. extended socialization. Schuster and Copeland 1996). Cramton and Dees (Cramton and Dees 1993. A growing number of studies have reported the use of questionable and . It should also be pointed out that the parties in this negotiation were from many different cultures (as is the case in most multinational organizations these days) and had had no prior contact or the guarantee of future contact. Tinsley et al. and how individuals perceive the actions (or inactions) of the other party. can induce greater competition between negotiators where trust and honesty appear lacking (Paese. Daniels 1967. First. 2002). argue that a negotiator has a moral right to exaggerate an initial offer. for example.INER 9. These factors also can affect the extent to which a party employs questionable tactics (Volkema and Fleury 2002). Before generalizing beyond this medium. these factors will become increasingly important. electronic mail introduces other issues that can complicate the development of rapport and trust between parties. since the other party will assume this was the case in any event and demand the negotiator compromise on a sincere initial offer. in fact. as already noted the use of questionable or unethical tactics may vary depending on the medium and its richness (Daft and Lengel 1986. While this medium has its benefits in terms of data analysis and has been employed effectively elsewhere (Tinsley et al. Innocuous behaviors. which are often more common in the business practices of non-Western cultures. the parties frequently have some face-to-face contact as well. is both a generally accepted tactic and a tactic that can directly affect outcome by serving as an anchor around which a final settlement is reached. such as gift-giving. further study is clearly warranted. preliminary face-to-face contact was found to mitigate the likelihood of deadlocks in e-mail negotiations (Shell 2001). It is easy for a cycle of mistrust and hostility to emerge under such conditions.2_f8_314-339 10/27/04 9:15 AM Page 335 ETHICALITY IN NEGOTIATION 335 initial offer. Remote media. suddenly become suspect (Donohue and Hoobler 2002. In addition. such as telephone and electronic mail. Researchers need to recognize that other media (or combination media) might influence ethical behavior and outcome. there are several caveats that must be offered regarding this study and our findings. and other media such as video conferencing have begun to emerge. Schreiber and Taylor 2003). as an asynchronous form of communication that is not always reliable.

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