Becoming an Ethical Negotiator

Think you negotiate fairly? Harvard Business School professor Michael Wheeler and colleague Carrie Menkel-Meadow have co-edited a new book, What’s Fair: Ethics for Negotiators. Here’s a Q&A.
by Martha Lagace

The book What's Fair: Ethics of Negotiators is a rich collection of pointers from professional dealmakers, attorneys, academic specialists, and, not least, ethicists. Michael Wheeler, an HBS professor and editor of Negotiation Journal, edited the volume with Carrie Menkel-Meadow, a professor of law at the Georgetown Law Center in Washington, D.C., and associate editor of Negotiation Journal. Wheeler agreed to take some questions from HBS Working Knowledge.

Martha Lagace: Some cynical people might say that "ethical negotiation" is an oxymoron. What motivated you and Carrie Menkel-Meadow to edit this book and publish it now? What was your thinking when you selected the many essays?

Michael Wheeler: I disagree with the cynics. When it comes to ethics, negotiation is where the rubber hits the road. Every time you deal with someone—be it a friend, a colleague, or a stranger—you have to decide what you owe them (if anything) in terms of fairness, candor, and use of pressure tactics. Whatever poster or credo you may hang on the wall doesn't mean very much if your actions don't really match those values.

My colleague, Carrie Menkel-Meadow, and I recognized that although many scholars and practitioners had addressed specific ethical issues in negotiation, no one had taken a comprehensive look at the process. Our collection [in What's Fair] includes articles by economists, lawyers, decision analysts, psychologists, and yes, even ethicists. We made a special effort to represent a range of viewpoints so that readers are provoked to examine their own principles and practices.

Q: Answering the question of "What's fair?" in negotiation is very difficult, as your co-editor points out in her own essay. What are some of the circumstances and reasons why each negotiator might answer this question differently for him- or herself?

A: Think about a simple case that was reported a few years ago. The owner of a sports memorabilia shop had to leave for a few hours so he asked an inexperienced friend to cover for him. While the owner was gone, a kid came in and paid $10 for a rare card that actually was priced at $1,000. The temporary clerk had wrongly assumed that there was a decimal point.

When the owner learned of the mistake and went to the boy's home, the father refused to return the card. "Tough luck," he said. "A deal's a deal."

That strikes a lot of people as the wrong answer, myself included, but what's interesting is how different people reach that conclusion. Some people say that the father's attitude is shortsighted, for instance, that he failed to take into account how his reputation will suffer. Actually, I don't see that as an ethical argument, actually. It's really just a different calculation of personal costs and benefits.
Regarding people as individual value-maximizers is a valid point of view, but it certainly isn't the only one.

Other people see the situation in moral terms, whether they express them as the Golden Rule (treating others as you'd like them to treat you) or frame it Rawlsian language (that is, considering the problem in a veil of ignorance, not knowing if you're the buyer or the seller). Still others emphasize relational factors—the example that a parent should set for a child, for example, or the matter of taking advantage of an unsophisticated seller.

Examining cases like this exposes the core principles from which people reason and act.

Q: The two books Getting to Yes and You Can Negotiate Anything tend to be the popular bibles many people turn to for advice. What do you think accounts for their staying power, and where do you fault them?

A: Those two classics were published within a few months of each other almost twenty-five years ago. They continue to sell thousands of copies a week. On the surface, they couldn't be more different. Getting to Yes preaches a win-win, "principled" approach to negotiation and has special appeal to people who want to avoid conflict. By contrast, You Can Negotiate Anything is the handbook for hard-bargainers.

In spite of their obvious differences, however, the implicit value structure of both books—the pursuit of self-interest—is quite similar. Getting to Yes argues for "enlightened self-interest," that is, accounting for long-term reputational and relational costs.

Regarding people as individual value-maximizers is a valid point of view, but it certainly isn't the only one. For others, meaning in life is created by how we relate to one another. They believe that attaching a price to integrity or loyalty is fundamentally to debase it.

Q: You write, "Intent and impact are important factors in thinking about negotiation and relationships." Could you expand on this point?

A: Some ethical precepts are codified in law. Fraud, for example, is defined as a "material misrepresentation of fact on which someone reasonably relies to his or her detriment."

Each of those words carries weight. The notion of misrepresentation implies intent to deceive, not a mere oversight. Likewise, someone claiming fraud must show that they were actually harmed—that's the detriment requirement. Merely being wronged isn't enough. Philosophers debate intricate nuances but practical ethics may be a bit like basketball: no harm, no foul.

Q: Without naming names, could you briefly deconstruct a poor negotiation you've witnessed in your professional life and tell us why it went badly?

A: I've done work in land use and environmental disputes and sometimes seen questionable behavior on both sides of the table. In one case, a developer filled a wetland without a permit. He was hit with a big fine, but the damage was done, and he came out ahead financially. I've also seen project opponents file frivolous appeals to drag out the approval process in hopes of exhausting the developer. It's disheartening to hear how parties rationalize such behavior, villainizing the other side or claiming, "Everybody does it."

Q: What makes a great, ethical negotiator in your view?

A: Foresight is critical to maintaining ethical standards. People get into trouble when they make hasty decisions, or when they feel as if they've been backed into a corner. Before you go to the bargaining table, you should anticipate hard questions. You may be asked for your bottom line, for example. You should have an answer that doesn't compromise your values but also doesn't expose you to exploitation. Planning ahead is a lot easier than constructing convoluted excuses for your behavior.

About the Author

Martha Lagace is senior editor of Working Knowledge.