Ethical Negotiation Strategies: Balancing Integrity and Success in Modern Business

This article was written with the help of Paul Bradford, with over 30 years of experience in sales, marketing, and consultancy, is a seasoned professional in negotiation. As a consultant for The Gap Partnership, a negotiation training provider, his expertise has helped clients worldwide maximise value and profitability across diverse industries.

Over the past 30 years, attitudes towards business ethics have gradually shifted. The rise of environmentalism in the 1990s accelerated social responsibility, subjecting companies whose good and services affected health and the environment to greater scrutiny. Today, all businesses face similar critical examinations of their policies for responsible growth and sustainability. It has become standard for companies to prioritise low carbon, renewable energy, ethical sourcing, or environmentally sustainable growth as primary corporate objectives.

The early 21st century saw unprecedented scrutiny of large business operations. Events such as the bursting of the dot-com bubble, the Enron scandal, the sub-prime housing crisis, the 2008 banking collapse, and the ensuing global recession highlighted significant flaws in corporate governance. This period of intense examination led to the introduction of restrictive legislation and a heightened focus on corporate governance.

The “cyber age” and the rise of social media have further transformed business processes, governance, and privacy issues. Social media’s global reach enables extensive scrutiny and pressures businesses to adhere to ethical practices. These ongoing trends and past events have significantly influenced business attitudes, prompting companies to commit to business ethics and measure success beyond profitability alone. This shift has introduced the concept of the triple bottom line, also known as “people, planet, profit,” coined by John Elkington in 1994.

Companies now report on their financial, social, and environmental performance, preparing three distinct bottom lines. The Dow Jones Sustainability Index benchmarks companies based on this concept, promoting ethical and sustainable business conduct. While not yet universal among large global organisations, this approach is gaining traction. To support these changes, many businesses are incorporating negotiation training or courses to ensure their teams are equipped with the skills needed to negotiate ethically and sustainably.

These changes inevitably impact ation, a process that attracts similar scrutiny and commentary regarding its ethics. Negotiation, defined as “the process of discussing something with someone to reach an agreement,” is full of contradictions. Participants’ or observers’ judgments of negotiation ethics are influenced by their own interpretations and social values. Additional complexity arises from the circumstances surrounding the negotiation, such as whether it is a one-off or ongoing, the equality of the partners, and the personal investment in the outcome. These factors make it difficult to prescribe appropriate behaviour.

The legacy of negotiation behaviours from the latter part of the 20th century is also relevant. The 1980s and 1990s, characterised by relative global prosperity, saw societal changes that many social commentators described as excessive and greedy. Time magazine dubbed the 1980s “the decade of greed,” and the “Baby boomer” generation that led this period has been called “the most selfish generation.” This mindset influenced business negotiations, with aggressive haggling and zero-sum tactics becoming prevalent. The phrase “greed is good,” from the 1987 movie Wall Street, epitomises this competitive cultural mindset.

During the 1980s, recognising the limitations of a distributive approach, the movement for alternative, collaborative negotiation methods emerged. “Win-win” strategies, popularised by Fisher and Ury’s 1981 book “Getting to Yes,” began to gain traction. This collaborative approach, also known as “the Harvard Principle,” promotes mutual benefit over zero-sum gains. Despite this philosophical shift and the rational arguments for collaboration, the legacy of competitive, win-lose tactics persists, influenced by past generations and competitive pressures.

Most people, when asked about negotiation, describe it as a haggling process aimed at compromise. This prevailing view blurs the lines of acceptable negotiation tactics and raises questions about the ethics underlying them. Human nature itself can lead to questionable behaviours in negotiation, driven by short-term goals, egocentric interpretations of fairness, and a reluctance to invest time in longer-term solutions.

Unethical activities in negotiation often involve deception, including false statements, exaggeration, or misleading information. While many people mentally reject such behaviours as unacceptable, practical scenarios reveal a different reality. In job interviews, house buying, business deals, or contract negotiations, individuals often justify deceptive tactics based on the circumstances.

Surveying colleagues, clients, and friends about these tactics revealed varied responses, but common themes emerged. People are tempted to use these tactics for perceived advantages, viewing them as part of the negotiation process. Experienced negotiators expect these tactics, considering them acceptable if appropriately used. However, responses also indicated that ethical considerations depend on the context, such as the importance of the deal, the presence of long-standing relationships, and the level of dependency between parties.

Two critical points were highlighted. Firstly, awareness of these tactics is essential to protect oneself from exploitation. Secondly, trust is crucial in ongoing relationships. Misleading behaviour can damage trust, weakening relationships and reducing business opportunities. The primary motivation for maintaining trust is often self-serving, aimed at building business relationships rather than adhering to personal ethics.

Despite recognising the moral stance against deception, negotiation behaviours often depend on circumstances. However, there is a positive trend towards more collaborative and transparent negotiation approaches, driven by economic, legislative, and political changes. This shift reflects a growing recognition that today’s agreements must be sustainable and flexible, focusing on the eventual outcome rather than just the point of signature.

In conclusion, ethical behaviour in negotiation is subjective and circumstance-driven. Negotiators must balance their sense of “right” or “wrong” with the behaviours appropriate for the situation. Reflecting on personal values and ethics is crucial, guided by principles such as reciprocity, publicity, trust, universality, and legacy. As John Rutledge suggested, ethical negotiating is not only the right thing to do but can also be more profitable.