In his 1996 yearend column for Forbes, merchant banker and economist John Rutledge describes two weeks of negotiations over an acquisition for a private equity fund. The hours of bargaining were tense, long, hard, and far more complicated than he had envisioned. Nevertheless, he reports: Despite all the haggling, we ended on a friendly note. All of usbuyer, seller, lendershook hands and clinked champagne glasses. As we were leaving, the seller said he would like to discuss teaming up with us in a joint venture. I beamed. Some buyers wouldn't have liked this. They think if the seller doesn't hate them at the end of a deal, they haven't squeezed out every last drop of money. I disagree. We believe that when someone wants to do repeat business with us, it is the highest form of praise. Allowing your opponent in a transaction to walk away with his dignity, his humor, and his bearing intact, and with a pretty good deal in his pocket, is the right way to do business. Rutledge then lists a set of principles learned from his first business partner and admonishes his readers to ...walk away from a deal, any deal, rather than violate your principles to win it .... The twist, of course, is that business organizations organized around principles are often more successful and make more money than those organized around the idea that greed is good. Nice guys often finish first. Rutledge's thesis that ethical negotiating is not only the right thing to do but frequently is also more profitable represents an argument more common today than in the socalled "decade of greed" in the 1980sand one that finds more receptive audiences. Should business people take this as an article of faith? Or can reason bring us to similar conclusions? In probing that question, we shall list a number of questionable negotiation tactics or behaviors and evaluate them according to four commonly used ethical criteria. This will help us assess the costs and benefits of ethical versus unethical negotiation tactics. QUESTIONABLE NEGOTIATION TACTICS AND ETHICAL CRITERIA We all have a general idea of what negotiation is: two parties attempting to work out a trade of items or services that is acceptable to both sides. Each side has an array of tactics to employ in achieving this trade. Below are ten popular tactics, the ethics of which have been challenged over the years: 1. LiesStatements made in contradiction to the negotiator's knowledge or belief about something material to the negotiation. 2. PufferyExaggerating the value of something in the negotiation. 3. DeceptionAn act or statement intended to mislead the opponent about the negotiator's own intent or future actions relevant to the negotiations. 4. Weakening the opponentActions or statements designed to improve the negotiator's own relative strength by directly undermining that of the opponent. 5. Strengthening one's own positionActions or statements designed to improve the negotiator's own position without directly weakening that of the opponent. 6. NondisclosureKeeping to oneself knowledge that would benefit the opponent. 7. Information exploitationUsing information provided by the opponent to weaken him, either in the direct exchange or by sharing it with others. 8. Change of mindEngaging in behaviors contrary to previous statements or positions. 9. DistractionActs or statements that lure the opponent into ignoring information or alternatives that might benefit him. 10. MaximizationThe negotiator's singleminded pursuit of payoffs at the cost of the opponent's payoffs. How do negotiators decide if such tacticslaid out in greater detail in Figure 1are ethical? Our interviews with business people have yielded such comments as: "A lie is not a lie when a lie is expected." "When someone tells the truth, that's good; when someone lies, that's wrong. It's that simple." "What's right or wrong really depends on the situation." The variety in comments visavis the first tactic indicates that opinions can vary as to what is ethical. Fortunately, moral reasoning can help negotiators assess the ethical nature of lies and other tactics. Summarized in Figure 2, the four criteria most widely used in business ethics today are the Golden Rule, utilitarianism, universalism, and distributive justice. The Golden Rule Most managers tend to explain ethical behavior as a function of personal values. One of the most frequently cited values is the Golden Rule: "Do unto others as you would have them do unto you." A relatively popular principle, perhaps its most famous and vocal advocate in industry was J.C. Penney, who used it in building and running his business from his youth until his nineties. In practice, it requires decisionmakers to apply the same standards of fairness and equity to their own actions that they would demand of others. Universalism A more complex ethical base is universalism, which argues that the rightness or wrongness of actions can be determined a priori, or before the actual outcomes of those actions can be realized. Based on a system of individual rights and obligations founded by philosopher Immanuel Kant, it argues that human beings are incapable of foreseeing all the outcomes of their decisions and actions, and thus should be held morally accountable for the way they made them. For an act or decision to be moral, it must meet several criteria: 1. It must respect the inherent worth and dignity of those involved or affected; people must never be used primarily as a means to an end. 2. It must be universally applicable to all human beings facing similar situationsthere are no special treatments. 3. It must be consistent with all other universal moral principles. Consider the dilemma of downsizing. Universalism would permit downsizing for sound economic reasons, but it would require informing all those being laid off of that decision when it is made. Withholding such information from employees to keep them working with the same level of dedication and effort would be unethical because it would be using them primarily as a means to an end. Unaware of their impending doom, they might make family, career, or financial decisions they would not have made with valid information about their employer's plans. Utilitarianism In contrast to universalism, utilitarianism judges the rightness or wrongness of actions and decisions by their consequences. It argues that human beings ought to seek those alternatives that produce the greatest amount of good for the greatest number of people, or to maximize the total good produced. When seeking the greatest net good, one must consider all people likely to be affected by a set of alternatives and the array of outcomes (both good and bad) each alternative might generate for each person. Distributive Justice John Rawls's ethical concept of justice implies that individuals have an obligation to exercise their own rights in a way that permits others to enjoy theirs. Justice occurs when all individuals get what they deserve; injustice, when people are deprived of that to which they have a right. In brief, this ethical norm asks, "Is everyone (the group) better off because of this act?" And for each person, it asks, "Would you be willing to trade places with any of the other parties after this act takes place?" Rawls's concept of justice, like universalism, focuses on the process by which outcomes are distributed rather than on the outcomes themselves. Like Kant's universalist perspective, Rawls attempts to derive a set of principles that would be acceptable to all rational people. In considering the justice of any process, we are asked to assume a veil of ignorance. That is, we act as if we are ignorant of our own roles in the situation, and assume we could be assigned any role. Would we be willing to abide by our decision if we might be any of the players affected by it? According to Rawls, the veil of ignorance leads us to construct processes in which: 1. all members of the process could agree to be a part of it, regardless of the position they might happen to occupy in the process; 2. each person would have an equal right to the most extensive liberty that can accommodate similar liberties for others; 3. inequalities work to the benefit of all; 3. inequalities are attached to positions that are accessible to all. Using Multiple Criteria Evaluating bargaining tactics raises the question of which of these four criteria takes precedence. If a tactic is condoned by one criterion and condemned by another, what is a negotiator to do? In the first place, if applied correctly, these criteria ought to yield similar results. They are not designed to bring about different answers; rather, they are different ways of looking for the same answer. Which criterion one uses can be a matter of personal preterence or may be dictated by the nature of the dilemma. Utilitarianism is useful when the number of affected parties is relatively small and known and the outcomes are relatively predictable. However, when the number of affected parties is large, knowledge of their preferences is unreliable, or outcomes are unpredictable, then other criteria are more useful. When dealing with unfamiliar situations (new technology), unfamiliar parties (new markets), or complex issues (mergers and acquisitions), principlebased criteria such as universalism are going to be more reliable than those, such as utilitarianism, that require predictions about very uncertain future events. ETHICAL NEGOTIATIONS Having delineated these four standards, we shall now apply them to the ten questionable negotiation tactics, from lying to maximizing. Lies A lie is a statement made by a negotiator that contradicts his knowledge or beliefs about something material to the negotiations. In negotiating, lies are intended to deceive the opponent about values, intents, objectives, alternatives, constraints, and beliefs. Examples include: "Why should I buy it from you for $10,000 when I've got another seller willing to let me have one just as good for $8,5007"when the buyer has no such alternative. "I can't possibly pay $10,000. I have only $8,500 to spend"; or "My client has directed me to pay no more than $9,000"when the negotiator has no such constraints. Lying and the Golden Rule. Most religions, including Christianity, Judaism, and Islam, contain strict injunctions against lying. Some religions, however, permit lying when it is the only possible way to prevent a greater harm. For example, you may lie to someone in a murderous rage in order to prevent a homicide, or to a drunken, abusive person in search of his usual victims. These exceptions are really not inconsistent with the Golden Rule. The question would be, "Would you prefer to be lied to if that were the only way to keep you from committing a terrible deed?" The rational answer is yes. The examples of lying in negotiations, however, do not prevent a greater harm. They are simply examples of immediate selfinterest, of doing harm by deceit to further your own interest. The question would be, "Would you prefer that others deceive you to enrich themselves at your expense?" The rational answer is no. Lying and Universalism. In his late years, Kant argued that honesty was so important to the concept of intrinsic human worth and dignity that no lie could be justified. The argument is that human beings rely on information to make decisions for themselves. And to make the best decisions, they must have the truth. When others deprive them of the truth through lies, the victims of those lies may be led to make faulty decisions. Some will propose that lying is permissible when you believe your opponent is lying. They argue, in fact, that lying is the only defense against an opponent who lies. But this argument is flawed. First, there are other options, one of which is to terminate the negotiation. Second, you can try to discover the truth that will expose the lie, thus turning a disadvantage into an advantage. If you cannot possibly ascertain the truth, then you must admit that you only believe your opponent to be lying; you don't know it as fact. Such a belief is not sufficient to justify a lie. Lying and Utilitarianism. At first blush, it might seem that utilitarianism could make a case for lying under certain circumstances. A negotiator might think, "This lie helps my company a lot and doesn't harm my opponent very much." However, utilitarianism requires us to consider all the possible consequences to all the people potentially affected by the actionand to consider all the people so affected as equals. We cannot weight the interests of some, such as ourselves, as greater than the interests of others. A further problem with attempting to justify lying through utilitarianism is that one must consider the effects of the lying itself. Beyond the direct effects of a lie are the indirect effects of harm done to society in general by increasing cynicism and decreasing trust. The liar also suffers some loss of selfesteem by admitting that his success, however noteworthy, was achieved by dishonorable means. Cynicism and lack of trust entail significant costs for any society, which requires more laws, surveillance, and sanctionsnone of which add value to a transactionto be in place before enacting agreements. Lying and Distributive Justice. Distributive justice requires us to be willing to take the role of either party in the situation. Would we willingly trade places with the party being lied to? No, because being lied to increases our chances of making a decision that is not in our best interests. Second, does a lie decrease the freedom to act of any of the parties? Yes; consistent with the maxim that the truth frees us to make the best decisions, a lie reduces that freedom. One can also argue that a lie decreases the freedom of the liar, whose subsequent statements and actions are now constrained t:o be (or appear to be) consistent with the lie. Suppose a buyer lies about her reservation price, claiming she could never pay more than $8,000 for an object for which she is willing to pay $9,000, and for which the seller is asking $11,000. If the seller reduces his price to $10,000, the buyer cannot reinforce that concession by raising her offer above $8,000, lest her lie be exposed. Lies constrain the freedom of both the victim and the liar. None of the four ethical models can justify lying in negotiations. Lying is seen to be what it isan act of selfinterest usually taken as a convenient alternative to (a) the hard work of preparing for negotiations, including improving one's knowledge about an opponent, or (b) walking away from a negotiation when one comes to believe the opponent is lying. Only when a lie is the only possible means of preventing a greater harm to another could it possibly be justified. Such an exceptional circumstance is extremely rare in most negotiations, and those circumstances, such :is a hostage negotiation, would be dramatic enough to be relatively obvious. Puffery Puffery is exaggerating the value of something, such as its cost, condition, or worth. Negotiators will often exaggerate the value of alternatives, what they are giving up or are prepared to give up, the importance of issues, product or service attributes, or the value of their case. Examples: "I have a sixfigure offer from another company"when no such offer has actually been made, or the offer is less than six figures. "This union will never give up the right to strike"when job security is actually more important. "I consistently get up to 33 miles per gallon"when in fact that happened only once in the cat's lifetime. "We have enough evidence right now to put your client away for 20 years"when the real evidence at hand is less than convincing. Clearly, puffery is simply a euphemism for lying. Every one of these statements contradicts the negotiator's knowledge or beliefs. Exaggeration may be considered by some as a milder form of lying in that there is a shred of truth in it; nevertheless, a statement that contradicts the truth is a lie. Like lies, exaggerations are intended to deceive and gain advantage at another's expense. Deception A deception is an act or statement intended to mislead another about one's own intent or future actions relevant to the negotiations. These include false promises or empty threats, excessive initial demands, careless statements of fact, and asking for things not wanted. Examples include: "If you give us the contract, we'll begin shipments in 30 days"when such a delivery date is known to be impossible (false promise). "If we don't settle this right now, the whole deal is off and we'll just find somebody else"when the negotiator has no intention of losing this deal (empty threat). "In order to accept a position on your board, I would expect to receive 20,000 shares of stock, luxury class travel and lodging, and to be named chair of the personnel committee"when what the negotiator really wants is 10,000 shares and a seat on the personnel committee (excessive demands, asking for things not wanted). "We need at least a $50,000 contribution from loyal supporters like you because our people tell us that the opposition plans to eliminate Medicare for people like you if they are elected"when the negotiator knows that the opponents will only seek to halt increases in Medicare spending (careless statement of facts). Some of these deceptive tactics clearly fall into the first category of lies. False promises and empty threats are statements made in contradiction to the negotiator's knowledge or beliefs. We have already determined that lies are unethical. But what about excessive demands, careless statements of fact, asking for things not wanted, or distracting statements? Deception as a category of acts is clearly designed to profit at others' expenseto lead others into acts that are not in their selfinterest, or away from an act that is. In this light, deceptive acts can be seen to be unethical. None of us wants to be deceived, so deception fails the Golden Rule. It does not treat the deceived parties with respect, but takes advantage of their trust or vulnerability, so it fails the test of universalism. It does not create the greatest good for the greatest number of people, but only allows the deceiver to profit at the expense of the deceived, violating the standards of utilitarianism. And it limits the deceived person's choices, failing the test of distributive justice. In the end, then, deception fails all four tests of ethical behavior. Weakening the Opponent A tactic for improving your relative position is to weaken that of your opponent, either psychologically or economically. Direct attacks are generally aimed at lowering another's selfesteem, often through guilt or embarrassment. Indirect attacks include closing off another's alternatives or undermining his support or alliances. Frequently, the means for weakening one's opponent involve lying, deception, or exaggeration. You could blame your opponent for damage caused by others or of unknown origin, or create the impression that he was the author of harm done to you or others when no real harm had been done. We have already demonstrated that such tactics are unethical. But what about those cases in which the negotiator can weaken an opponent by telling the truth? The morality of the tactic depends on a number of factors. Information about your own position ("Our company will be bankrupt if we increase wages by that much") would meet ethical criteria. Such admissions are usually painful, and you should be permitted to make personal sacrifices under any of the frameworks we have studied. They typically involve uncertainty and risk for the discloser; the opponent may ignore or even exploit such knowledge. However, when the information concerns the opponent, the situation becomes murkier. Can you ethically publicize personal information about an opponent that would undermine his support or embarrass him in some way? If you obtained that information in confidence during the negotiations, you may not use it to do your opponent harm for your benefit. It would be permissible only if revealing the information would prevent a greater harm to others, such as disclosing evidence of criminal activity. If you did not obtain the information in confidence, the moral question would shift to one of intent: Would you be morally required to reveal the information if you and your opponent were not negotiating? In other words, your benefit in the revelation should not influence your decision. The difference between taking risks for oneself and doing direct harm to another is best understood in the context of distributive justice. A key maxim is whether an action would increase or decrease the other's freedom. Risktaking and selfdisclosure increase an opponent's options, so they are permissible. Harming him reduces his options, and thus requires other justification. Strengthening One's Own Position A host of tactics are designed to improve one's own position without doing direct harm to the opponent. Instead of involving lying, deception, or exaggeration, they entail ability, effort, and intelligence. Moreover, conceptually at least, they are available to all parties in a negotiation. Again, distributive justice tells us inequalities are permitted as long as all parties have the opportunity to pursue them. If you work harder, train better, prepare more effectively, or create and follow a more successful strategy than your opponents, you have done them no direct harm. You are willing to permit them to do their best in preparation and execution. We are all permitted to improve ourselves; none of the four ethical frameworks deny selfimprovement. Under the Golden Rule, we are willing to permit others to strengthen themselves. According to utilitarianism, the net benefits of strengthening go to those who have done the best joba "survival of the fittest" outcome. Under universalism, one can argue that preparation and discipline in execution actually enhance the dignity of one's opponent. To be wellprepared is to show respect for the other; shoddy preparation is actually demeaning to an opponent. Nondisclosure We have determined that negotiators are ethically required to tell the truthlying, deception, and exaggeration are wrong. But are they required to tell the whole truth? May a negotiator withhold factual information that could be of use to an opponent? The answer depends on the nature of the hidden truth. If failure to disclose the truth would harm one's opponent, it would be unethical. Hiding a product or service defect or flaw that would mislead the other about the value of the item being bargained for would be wrong. If, to induce a potential buyer into paying a higher price, you fail to disclose a lien on property or a mechanical problem with an automobile you are attempting to sell, you are wrong. Just so, potential buyers who fail to disclose information revealing that they are, in fact, unlikely to be able to make payments on a purchase are acting unethically. However, you are not required to disclose personal information that could be harmful to your case. You need not reveal that you are able and/or willing to pay far more for an item than the asking price. And you are not required to disclose your reservation price, although you are not permitted to lie about it. Likewise, if youas a buyersuspect that the value of an offered item is greater than the asking price, you are not required to disclose that fact to the seller, presuming the seller has the competence to assess the value of the object. It would be wrong to take advantage of someone incapable of evaluating the worth of an object. From a different perspective, are you permitted to disclose the true value of an object to a misinformed seller? Yes; there is nothing wrong with being more generous in a negotiation than you are morally required to be, as long as you are negotiating for yourself. However, if you are acting as an agent for another, you are required to obtain the best deal that is legally and ethically permissible, so you cannot disclose the true value. Exploiting Information Effective negotiators uncover information about themselves, their opponents, and the object of a negotiation during both the preparation phase and the negotiation itself. If that information is gained by legal and ethical means, no ethical proscription forbids a negotiator from using it. If you learn that your opponent really wants what you have to offerin fact, values it more than he is disclosingyou are permitted to raise your asking price. If you learn that your opponent has fewer options than he suggests, thereby raising his valuation of what you have to offer, you may do likewise. As long as that information is legally and ethically accessible to both parties, you are permitted to use it to strengthen your position. Are you permitted to use information obtained by illegal or unethical means? Certainly not if you had a hand in the unethical or illegal actcommitted it yourself or induced someone else to commit it. But what if information so gained became public knowledge, and you had nothing to do with either the discovery or the publication of that information? Then you would be permitted to exploit it. Earlier, we concluded that one is not permitted to do direct harm to an opponent; however, if the harm has already been done by another, one may take advantage of it. If a police report of a burglary reveals that your opponent has a greater need or ability to pay for an item over which you are negotiating, you are permitted to use the information to your advantage. May you use it to defame your opponent, thereby decreasing his options or weakening his alliances? No, because that would be doing direct harm to him that would not be done without your action. Change of Mind Sometimes in the course of negotiations, something happens to alter the attraction of the object for one of the parties. The need is diminished or increased; an attractive alternative appears or vanishes; one's ability to pay is changed. May you abruptly change your negotiating position in light of these new circumstances? As long as you are not breaking a commitment or agreement, you are permitted to change your mind. You may decide to accept an offer you said you would never accept, or to pay a higher price than your original reservation price. If you intentionally lied about your reservation price, the act of lying was wrong. However, paying more than you said you would pay or accepting less than you said you would accept is not wrongyour act is doing no harm to your opponent; in fact, it benefits him. May you withdraw an offer you have made? Yes, providing your withdrawal meets the legal requirements and the opponent has not accepted the offer. However, once the opponent has accepted an offer or commitment in any way, you may not ethically withdraw it even if it is legal to do so. Reneging on agreements is wrong from all standpoints. You would not wish others to do so to you. It does more harm than good, not only to your opponent but to the general level of trust among negotiators. And you certainly would not be willing to trade places with the person who accepted your offer. Of course, you are permitted to ask an opponent to withdraw his acceptance of your offer or release you from your commitment because of changed circumstances. However, if he refuses to do so, then you are morally bound to your agreement. Distraction Negotiators are sometimes tempted to protect a weakness or conceal their interest in a particular issue by distracting their opponents. As long as the distractive tactic did not involve lying, puffery, or outright deception, is one ethically permitted to distract an opponent? We concluded earlier that you need not disclose harmful information about yourself if the nondisclosure would do no harm to another. We can assume that the other is entitled to a fair outcome in the negotiation; however, he is not entitled to maximize his outcomes at your expense. He may attain them through his skill, your ineptitude, or other factors; you are not depriving him of his rights by limiting his outcomes to something between fair and maximization. Distraction as a tactic does not reduce an opponent's options, according to distributive justice. It also provides him with informationif he is skilled enough to uncover itabout your perceptions of what you believe to be important and what you believe he considers to be important. If you evade answering certain questions, your opponent may learn that you do so to protect a weakness. Burying issues that you see as important or surrounding critical questions with questions you consider trivial reflect your own judgments. They may not be correct; they do not limit the opponent's options; they provide an opponent with opportunities to learn from them; they certainly involve risk on your part. Neither the Golden Rule nor universalism would prohibit distraction. Maximization Is it ethical to pursue your own payoffs at another's expense? Yes, but it depends on the manner in which the gain is pursued. Keep in mind that a negotiation has two facets. First, one side usually does not have the same goals as the other, yet both share a goal in that they want to have an exchange with the other side. A machine shop operator buying bolts from a manufacturer has a goal that differs from the manufacturer's. The operator wants a low price and the manufacturer seeks a high one. Yet they both want an exchange, because the machine shop operator needs bolts to produce machines and the manufacturer prefers money to an inventory of bolts. In the negotiated exchange, the two sides usually bargain over a number of items. And the value of each item differs for each side. In the bolt negotiation, there might be four issues: antirust coating, bolt strength, delivery schedule, and method of payment. For the machine shop operator, the first two items would be very important. He needs antirust coating so that the bolts don't rust in inventory, and he must have strong bolts in order to produce highquality machines. Because these two characteristics are important, he is willing to pay handsomely for them. By contrast, the bolt manufacturer knows he can put an antirust coating on the bolts rather inexpensively, and, with some minor modifications of his production process, produce very strong bolts. Consequently, the bolts are of low cost to him. However, the delivery schedule is important to the manufacturer, as is the method of payment. Specifically, he would prefer to make deliveries when he is sending bolts to other customers in the city, and he wants the shop owner to use a standard invoicing system that cuts the amount of paperwork. In this setting, it would be unethical for the manufacturer to maximize his own goalsat the machineshop owner's expenseon every item. To do so would violate the Golden Rule; he probably would not want the operator to behave in this manner. It violates the universalism criterion because it exploits the opponent; that is, it uses the opponent for the benefit of the negotiator rather than permitting the opponent, as well as the negotiator, to share adequately in the negotiation benefits. It also violates the utilitarianism criterion because this approach does not provide the greatest good to the greatest number. Rather, it forces the negotiation into a winlose result and does not allow the two sides to improve their total joint benefit. Likewise, it violates the distributive justice criterion because everyone is not better off from this act. How, then, should the negotiator bargain if all items are fixed sum ("My loss is your gain") and of equal value to the negotiator and opponent? The utilitarian criterion proffers no guidance here because there is no variation in the total value; rather, all points have equal total value. Moreover, distributive justice provides modest instruction because everyone will not be better off in the various agreement points. However, the universalism and Golden Rule criteria do assist us. The former dictates that the negotiator must consider the wellbeing of the opponent. Therefore, it posits that the negotiator can press his own interests up to the point at which the wellbeing of the opponent is endangered. The Golden Rule's dictate is consistent with this idea; the negotiator should pursue his own interests only as far as he would want the opponent to do so. APPLYING ETHICS TO NEGOTIATIONS: OIL ON WATER? Acynic's retort to these evaluations might be, "Ethics are fine in theory. I can negotiate ethically and sleep well at night, but I'll be hungry tomorrow, and next week." In other words, some might expect that ethical bargaining would lead to low payoffs, or no agreement, or one that costs them their job. How do we respond to that? True, ethical bargaining does entail risks and sometimes seems to place a negotiator in a vulnerable position. Yet the ethical route, for operational as well as moral reasons, is the preferable one, because unethical negotiation has four major costs that are often overlooked: rigidity in future negotiations; a damaged relationship with the opponent; a sullied reputation; and lost opportunities. Rigid Negotiating Even when it is successful, unethical behavior has a personal cost for negotiators. If their lies, deceptions, and puffery yield highoutcome agreements, they will repeat those behaviors in subsequent negotiations, because such actions have paid off. In addition, they will tend to attribute their success to such acts. Consequently, unethical negotiators will sacrifice some of their flexibility, creativity, and openness to others' ideas, thereby trapping themselves into a rigid bargaining approach that will eventually be matched by their opponents. Keep in mind that unethical negotiating is not as advantageous as it may seem. One may lie about an alternative; but doesn't silence about an alternative prove as valuable as the lie? Wouldn't the comment "I'd better find another buyer" be just as potent as the statement "I've got another buyer"? Moreover, it is a wiser strategy to interrapt the negotiation, find another buyer, and let the original opponent know about it than to lie about already having another buyer. Damaged Relationships Unethical negotiation also mars the relationship between the two sides, causing emotional fallout (such as anger) as well as higher operational costs. When the negotiation is a single eventsuch as the sale of building materialsa negotiator who has been the victim of unethical behavior is less likely to implement the deal fully, perhaps not delivering all the materials. Or he will be less than cooperative when postagreement problems arise, such as if some of the building materials are defective or do not meet construction specifications. When negotiations are of a repeated nature, the costs of unethical behavior mount. Today's bargainer becomes an embittered enemy rather than tomorrow's customer. Such an enemy might refuse to bargain with an unethical opponent, could return to the table with some open Machiavellian tactics of' his own, or, more devastatingly, could voice no complaints but secretly seek revenge in the next round. Sullied Reputation Seldom do victims of unethical behavior hold their tongue, in public or across the bargaining table. At times, they are even apt to embellish. Thus, an unethical reputation often permeates the business environment and precedes or accompanies its owner to the bargaining arena. Consequently, the opposing negotiator expects unethical behavior. A building contractor once commented about a subcontractor, "He'll lie to you, cheat you, steal from you, and then brag about it, if you give him a chance." Once an opponent has experienced unethical behavior, he will prepare to counteract your unethical tactics in the future. Moreover, he will suspect that they are present, even if they are not. And often he will use them as excuses for his own obstinate behavior. Lost Opportunities The most detrimental effect of unethical behavior comes in the negotiation itself. The explanation for this is somewhat complex, but with assistance from a simple example it can be quickly understood: The essence of a productive negotiation is trading a package of issues in which each side concedes heavily on issues that are of low cost (or value) to it in return for major concessions on issues that are of high cost (or value) to it. A company supplying tractor seats to John Deere probably finds that the cost of painting them green and packing them ten to a carton for shipment is not very difficult. If Deere places high value on green seats packed ten to a carton, it would be wise for the supplier to agree (or concede) on these issues. In turn, the firm could have John Deerewith its large storage facilitiesaccept the supplier's entire production run and store it until used. This concession would cost Deere quite little and would be a major benefit to a small company with limited storage facilities. Most negotiations have manifold issues like thesenamely, they are of low cost to one side and high value to the other. For the negotiators, the key is to find as many of these issues as possible and arrange trades among packages of them. In such trades, the first step is to determine which issuesof those currently under negotiationhave differential value to the two sides. To locate these, the parties must exchange valid information. If either side lies, deceives, or engages in puffery or distracts the other, it is very difficult, if not impossible, to determine the winwin trades, because the opponent does not receive accurate information. Moreover, the unethical behavior, if detected, motivates the opponent to withhold information (that he feels will be used against him) about the cost and values of the issues. Not only does unethical behavior undermine the first step toward package trading, it also precludes the second: discovery of new issues. Productive negotiations are those that grow beyond the issues on the table. A simple expansion is one in which both sides agree on a twoyear contract, even though the negotiation began with a one year frame. A more complex expansion, taken from our earlier example, might be that Deere and its seat supplier jointly discover that Deere has vibrationreduction expertise that the supplier could use in its production machines. And the supplier has discovered a method for mixing and applying paint that makes it highly chipresistantwhich Deere would no doubt find useful. With an open, trusting negotiation, the two sides probably would be able to ferret out the two new issues and, through some creative discussions, arrange a trade on these or explore the prices for each technology transfer. Here the impact of unethical bargaining is clear. Not only does it undermine the negotiators' capabilities to reach win win agreements on the current issues, it also interferes with discussions that would bring new, mutually profitable issues to the table. Coming full circle, then, we agree with John Rutledge that ethical negotiation is not only morally right, it is frequently more profitable. Business men and women often feel they move into a different environment when they negotiate one in which anything goes and the rules are understood by all players. Yet negotiations today are not a separate function; they are an integral part of all business environments. Joint ventures, purchasing options, labor contracts, leasing agreements, salaries and benefits, daytoday disputes, mergers, and spinoffs are all negotiated. And in such bargaining, ethical rules must apply. The four we have touched onthe Golden Rule, universalism, utilitarianism, and distributive justicerule out several negotiation tactics, guide the use of some, and permit the use of others. This guidance does not make negotiating easy. With their high stakes, complexity, deadlines, uncertainty, emotions, and stress, negotiations will always remain tough going. But those who take care to negotiate ethically should find the process better for thempersonally, interpersonally, and economically. Tactic Description/Clarification/Range Lies Subject matter for lies can include limits, alternatives, the negotiator's intent, authority to bargain, other commitments, acceptability of the opponent's offers, time pressures, and available resources. Puffery Among the items that can be puffed up are the value of one's payoffs to the opponent, the negotiator's own alternatives, the costs of what one is giving up or is prepared to yield, importance of issues, and attributes of the products or services. Deception Acts and statements may include promises or threats, excessive initial demands, careless misstatements of facts, or asking for concessions not wanted. Weakening the opponent The negotiator here may cut off or eliminate some of the opponent's alternatives, blame the opponent for his own actions, use personally abrasive statements to or about the opponent, or undermine the opponent's alliances. Strengthening one's own position of This tactic includes building one's own resources, including expertise, finances, and alliances. It also includes presentations persuasive rationales to the opponent or third parties (e.g., the public, the media) or getting mandates for one's position. Nondisclosure to Includes partial disclosure of facts, failure disclose a hidden fact, failure to correct the opponents' misperceptions or ignorance, and concealment of the negotiator's own position or circumstances. Information used exploitation Change of mind Information provided by the opponent can be to exploit his weaknesses, close off his alternatives, generate demands against him, or weaken his alliances. Includes accepting offers one had claimed one would not accept, changing demands, withdrawing promised offers, and making threats one promised would not be made. Also includes the failure to behave as predicted. Distraction Maximization concessions These acts or statements can be as simple as providing excessive information to the opponent, asking many questions, evading questions, or burying the issue. Or they can be more complex, such as feigning weakness in one area so that the opponent concen-trates on it and ignores another. Includes demanding the opponent make that result in the negotiator's gain and the opponent's equal or greater loss. Also entails converting a win-win situation into win-lose. Figure 2 Ethical Criteria Criteria Explanation/Interpretation Golden Rule Do unto others as you would have them do unto you. Universalism to People are not to be used as a means Utilitarianism an end. Do the greatest good for the greatest number of people