This essay offers a philosophical defense of deception about reservation prices in business negotiation. Its discussion is prompted by arguments that Charles N.C. Sherwood makes in a recent issue of Business Ethics Quarterly and develops ideas I put forward in an earlier issue of Business Ethics Quarterly. The essay argues that although reservation price deception cannot be justified by appeal to the consent of negotiating parties, it can be justified by appeal to a separate but related notion, assumption of risk, (...) as long as the assumption of risk occurs in a suitably fair context. (shrink)

I argue that lying in business negotiations is pro tanto wrong and no less wrong than lying in other contexts. First, I assert that lying in general is pro tanto wrong. Then, I examine and refute five arguments to the effect that lying in a business context is less wrong than lying in other contexts. The common thought behind these arguments—based on consent, self-defence, the “greater good,” fiduciary duty, and practicality—is that the particular circumstances which are characteristic of business negotiations (...) are such that the wrongness of lying is either mitigated or eliminated completely. I argue that all these “special exemption” arguments fail. I conclude that, in the absence of a credible argument to the contrary, the same moral constraints must apply to lying in business negotiations as apply to lying in other contexts. Furthermore, I show that for the negotiator, there are real practical benefits from not lying. (shrink)

The first issue of BusinessEthics Quarterlyappeared five years ago. This article classifies the content of the 141 articles that have appeared since that time along 18 dimensions, and 118 categories within those dimensions, to determine trends within the discipline. The major trend appears to be a shift in focus towards the increased discussion of a new approach/paradigm for the field, and towards a normative/descriptive interface of the theory. The major problem seems to be a lack of explicit conceptual definition and (...) beginning empirical effort to support that new focus, which may thus prove unsustainable over time. (shrink)

It is common for people to misstate their bargaining positions during business negotiations. This paper will focus on cases of the following sort: I am selling a house and tell a prospective buyer that $90,000 is absolutely the lowest price that I will accept, when I know that I would be willing to accept as little as $80, 000 for the house. This is a lie according to standard definitions of lying-it is a deliberate false statement which is intended to (...) deceive others. I will defend the following two theses:a. Appearances to the contrary, this kind of bluffing typically does not constitute lying. (I will argue that standard dictionary definitions of lying are untenable and defend an alternative definition hinted at, but never clearly formulated by, W. D. Ross. On my definition, deliberate false statements about one's negotiating position would rarely constitute lies in this society.)b. It is usually permissible to misstate one's bargaining position when one has good reason to think that one's negotiating partner is doing the same and it is usually impermissible to misstate one's negotiating bargaining if one does not have good reason to think that the other party is misstating her position. (shrink)

Alan Strudler has written a stimulating and provocative article about deception in negotiation. He presents his views, in part, in contrast with our earlier work on the Mutual Trust Perspective. We believe that Strudler is wrong in his account of the ethics of deception in negotiation and in his quick dismissal of the Mutual Trust Perspective. Though his mistakes may be informative, his views are potentially harmful to business practice. In this paper, we present arguments against Strudler’s position and attempt (...) to salvage the Mutual-Trust Perspective from his attack. Strudler’s work reaffirms the need for a more pragmatic approach to business ethics. We close the paper with a renewed call for more constructive and practical approaches to business ethics research. (shrink)

The Giving Voice to Values pedagogy and curriculum is described as an example of a powerful leverage point in the integration of business ethics and values-driven leadership across the business curriculum. GVV is post-decision-making in that it identifies an ethical course of action and asks practitioners to identify who are the parties involved and what’s at stake for them; what are the main arguments to be countered; and what levers that can be used to influence those who are in disagreement. (...) The internalization of GVV’s constructs allows faculty to comfortably raise and endorse ethics as part of the natural order of business decision-making because the stakes of doing so have been normalized. Methods for introducing and using GVV in undergraduate through MBA courses are given. An illustration is given for economics courses. (shrink)

Individuals often lie for psychological rewards (e.g., preserving self image and/or protecting others), absent economic rewards. We conducted a laboratory experiment, using a modified dictator game, to identify conditions that entice individuals to lie solely for psychological rewards. We argue that such lies can provide a ready means for individuals to manage others’ impression of them. We investigated the effect of social distance (the perceived familiarity, intimacy, or psychological proximity between two parties) and knowledge of circumstances (whether parties have common (...) or asymmetric information) on the frequency of lying. We found that lying occurs more frequently when social distance is near and that the effect is exacerbated when information is asymmetric. Our theoretical development suggests that, under these conditions, individuals’ need to manage others’ impression is magnified. We discuss the implications of our findings. (shrink)

A growing body of research has started to examine how individuals from different countries may differ in their use of ethically questionable tactics during business negotiations. Whereas prior research focused on the main effect of the national culture or nationality of the negotiator, we add a new factor, which is the nationality of the counterpart. Looking at both these variables allows us to examine whether and how people may change their likelihood of using ethically questionable tactics in inter-cultural negotiations as (...) opposed to intra-cultural ones. Results of an experiment show that overall, American participants were less likely than Chinese participants to use ethically questionable tactics in negotiations. However, American participants were more likely to use ethically questionable tactics, particularly those related to false promises and inappropriate information gathering, in inter-cultural negotiations with Chinese counterparts, than in intra-cultural negotiations with American counterparts. By contrast, Chinese participants were less likely to use ethically questionable tactics, particularly those related to false promises and attacking opponent’s network, in inter-cultural negotiations with American counterparts, than in intra-cultural negotiations with Chinese counterparts. Implications and future directions are discussed. (shrink)

In business ethics literature, debate over a special ethics generally has framed examination of the rules governing business. By constructing a dilemma faced by proponents of a special ethics, I argue that this framing is misguided. Proponents must adopt either an insular or a derivative conception. The former, the view that business is insulated from moral rules, is problematic because arguments used to support it force proponents to accept the idea that each aspect of life is insulated from moral rules. (...) This idea, however, renders philosophically insignificant the claim that business has a special ethics. Proponents no longer make a claim about business, but, rather, a relativistic claim about ethics in general. The derivative conception is the view that business is a set of circumstances that bear on the application of moral rules. This, however, is true of each aspect of life, and is simply an application of the principle 'ought implies can'. The result is that there is nothing special about this sense of a special ethics. Despite lacking specialness, however, the derivative conception provides proper framing for examination of the rules governing business. It subjects business to moral rules, but, also, accounts for the challenging circumstances businesspersons face. (shrink)

This study explores the direct and interactive effects of individual differences in interpersonal trust and negotiation style on ethical decision-making processes across commonly faced negotiation situations. Individual differences influence basic ideas about legitimate negotiating behaviors, affect behavioral intentions directly, and interact with the favorability of negotiating situations, resulting in direct, indirect, and interactive effects on ethical decision-making processes. Using a sample of 298 participants in executive education workshops, the study analyzes the relationship between interpersonal trust, competitiveness, moral judgment, and behavioral (...) intentions in different negotiating conditions through a series of structural equation models and regression analyses. Our results suggest that individual difference variables exert a significant influence not only on how managers assess the morality of ethically ambiguous negotiation practices but also directly on their behavioral intentions, and that this effect changed across specific negotiation situations. We discuss these results in terms of their usefulness in explaining ethical decision-making processes in negotiations. (shrink)

Abstract:The randomized response technique (RRT) is used to study the deceptive behavior of purchasing agents. We test the proposition that purchasing agents’ perceptions of organizational expectations influence their behavior. Results indicate that perceived pressure to perform and ethical ambiguity on the part of the firm are correlated with purchasing agents’ unethical behavior, in the form of acknowledged deception of suppliers.

This paper considers future directions of empirical research in business ethics and presents a series of recommendations. Greater emphasis should be placed on the normative basis of empirical studies, behavior (rather than attitudes) should be established as the key dependent variable, theoretical models of ethical decision making should be tested, and empirical studies need to focus on theory-building. Extensions of methodology and the unit of analysis are proposed together with recommendations concerning the need for replication and validity, and building links (...) to managerial and public policy applications. (shrink)

There has been widespread emphasis on the importance of trust amongst parties to the employment relationship, associated with a call for increased "integrative bargaining". Trust is bound up with ethical action, but there has been some debate about the ethics of deception in bargaining. Because it is possible for cooperative bargainers to be exploited, some writers contend that deceptive behavior is ethical and established practice. There are several problems about that view. It is questionable how clear and uniform such a (...) practice has been. An appearance of deceptive bluffing can often be explained as exchange of genuine concessions. Recent trends have seen increased devolution of bargaining from professionals to non-professionals, which dilutes any shared understandings there have been in the past, while practices that do exist may not be freely or voluntarily accepted and the existence of such practices is not enough to compensate for inequalities of power and skill. It is questionable to what extent bluffing and deception are necessary for self-defense. There other techniques available by which parties can guard themselves against exploitation. (shrink)

Social context shapes negotiators’ actions, including their willingness to act unethically. We use a simulated negotiation to test how three dimensions of social context—dyadic gender composition, negotiation strategy, and trust—interact to influence one micro-ethical decision, the use of deception. Deception in all-male dyads was relatively unaffected by trust or the other negotiator’s strategy. In mixed-sex dyads, negotiators consistently increased their use of deception when three forms of trust were low and opponents used an accommodating strategy. However, in all-female dyads, negotiators (...) appeared to use multiple and shifting reference points in deciding when to deceive the other party. In these dyads, the use of deception increased when a competitive strategy combined with low benevolence-based trust or an accommodating strategy combined with high identity-based trust. Deception in all-female dyads decreased when a competitive strategy was used in the context of low deterrence-based trust. (shrink)

Using a simulated, two-party negotiation, we examined how characteristics of the actor, target, and situation affected deception. To trigger deception, we used an issue that had no value for one of the two parties (indifference issue). We found support for an opportunistic betrayal model of deception: deception increased when the other party was perceived as benevolent, trustworthy, and as having integrity. Negotiators’ goals also affected the use of deception. Individualistic, cooperative, and mixed dyads responded differently to information about the other (...) party’s trustworthiness, benevolence, and integrity when deciding to either misrepresent or leverage their indifference issue. Mixed dyads displayed opportunistic betrayal. Negotiators in all-cooperative and all-individualistic dyads used different information in deciding whether to leverage their indifference issues and used the same information (benevolence) differently in deciding whether to misrepresent the value of their indifference issue. (shrink)

Using a simulated two-party negotiation, we examined how trustworthiness and power balance affected deception. In order to trigger deception, we used an issue that had no value for one of the two parties. We found that high cognitive trust increased deception whereas high affective trust decreased deception. Negotiators who expressed anxiety also used more deception whereas those who expressed optimism also used less deception. The nature of the negotiating relationship (mutuality and level of dependence) interacted with trust and negotiators’ affect (...) to influence levels of deception. Deception was most likely to occur when negotiators reported low trust or expressed negative emotions in the context of nonmutual or low dependence relationships. In these relationships, emotions that signaled certainty were associated with misrepresentation whereas emotions that signaled uncertainty were associated with concealment of information. Negotiators who expressed positive emotions in the context of a nonmutual or high dependence relationship also used less deception. Our results are consistent with a fair trade model in which negotiator increases deception when contextual and interpersonal cues heighten concerns about exploitation and decrease deception when these cues attenuate concerns about exploitation. (shrink)

Abstract:Why does it matter that every negative thought you have had about car salespeople, they have likely had about you? The answer to this question opens up the distinctive challenges, and opportunities, facing business ethics. Those challenges and opportunities emerge from the significant bearing organizational reality has upon individuals’ conduct. As we consider how to assign responsibility for misconduct; how to provide guidance to organizational actors about what they ought to do; and how to develop responsive ethical theory, we need (...) to take psychological and social forces into account. Organizations shape human behavior in ways that pose unavoidable questions about responsibility, practical guidance, and the enterprise of business ethics itself. Adopting the agents’ perspective suggests that business ethics can take a leading role in addressing these vexing questions that confront ethical inquiry and social science more broadly. (shrink)

In the current paper we present an instrumental approach to deception. This approach incorporates the notion that bargainers (a) will use deception as a means to reach their goals in bargaining but (b) will refrain from using deception when they have alternative means to reach their goals. We demonstrate that different goals can lead to differences in the use of deception (Experiment 1). Furthermore, we demonstrate that reactions to deceit can also be understood from an instrumental perspective (Experiment 2).

In the current paper we present an instrumental approach to deception. This approach incorporates the notion that bargainers (a) will use deception as a means to reach their goals in bargaining but (b) will refrain from using deception when they have alternative means to reach their goals. We demonstrate that different goals can lead to differences in the use of deception (Experiment 1). Furthermore, we demonstrate that reactions to deceit can also be understood from an instrumental perspective (Experiment 2).

Turbulent changes in the American business landscape over the past several years present a potentially ominous future for our society. The confluence of corporate downsizing, declining unionism and the surging preference for hiring part-time/temporary workers poses a threat to the very existence of our blue-collar middle class. Furthermore, when these conditions are juxtaposed against prevailing corporate rhapsodies to employee participation programs and a teamwork approach to quality improvement, the scenario becomes absurd.Solutions to the societal and workplace problems we face require (...) both ethical and practical attention. This paper examines current labor-management hostilities from the Mutual Trust perspective on morality. Furthermore, I propose a strategic internal marketing framework as one mechanism for trust-building at the labor-management frontier. The premise for the study is that as a society we will be better off with the system of checks and balances which labor unions can provide; that positive business performance will result from cooperative rather than adversarial relations; and that to be a premier player in the global economy, we must replace worker cynicism and detachment with hope. (shrink)

This study investigated attitudes toward the use of deception in negotiation, with particular attention to the distinction between deception regarding the informational elements of the interaction (e.g., lying about or misrepresenting needs or preferences) and deception about emotional elements (e.g., misrepresenting one's emotional state). We examined how individuals judge the relative ethical appropriateness of these alternative forms of deception, and how these judgments relate to negotiator performance and long-run reputation. Individuals viewed emotionally misleading tactics as more ethically appropriate to use (...) in negotiation than informational deception. Approval of deception predicted negotiator performance in a negotiation simulation and also general reputation as a negotiator, but the nature of these relationships depended on the kind of deception involved. (shrink)

In a competitive and morally imperfect world, business people are often faced with serious ethical challenges. Harboring suspicions about the ethics of others, many feel justified in engaging in less-than-ideal conduct to protect their own interests. The most sophisticated moral arguments are unlikely to counteract this behavior. We believe that this morally defensive behavior is responsible, in large part, for much undesirable deception in negotiation. Drawing on recent work in the literature of negotiations, we present some practical guidance on how (...) negotiators might build trust, establish common interests, and secure credibility for their statements, thereby promoting honesty. We also point out the types of social and institutional arrangements, many of which have become commonplace, that work to promote credibility, trust, and honesty in business dealings. Our approach is offered not only as a specific response to the problem of deception in negotiation, but as one model of how research in business ethics might offer constructive advice to practitioners. (shrink)

According to a widely credited model in the business ethics literature, ethical decisions are a function of two kinds of factors, personal(individual) and situational, and these factors interact with each other. According to a contrary view of decision making that is widely held in some areas of business research, individuals’ decisions about ethical issues (and subsequent actions) are purely a function of their self-interest.The laboratory experiment reported in this paper provides a test of the person-situation interactionist model, using the general (...) theoretical and experimental framework used in the experimental economics literature. One individual and two situational factors relating to moral intensity were examined which may influence decisions to misrepresent information in the course of business activities.The individual and one situational variable were significantly related to participants’ actions. The interactions among individual andsituation variables were not individually significant, although the model including interactions had a much higher level of statistical significance. Gender was significant, both directly and in interaction with moral development, suggesting that it may be worthy of further examination. (shrink)