Bullard/Villard Houses http://www.thecityreview.com/mad451.html McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved

©2006 The McGraw-Hill Companies, Inc., All Rights Reserved Informational Issues A good negotiator will have: Thought in advance about information she does not want to disclose Decided how to deal with requests for that information This preparation helps to: Avoid disclosing inadvertently Avoid lies when put on the spot McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved

Example for Buyer’s Rep “I am not authorized to answer that question but tell me what you are concerned about and I’ll see if I can address your concerns.” Negotiator protects his/her integrity by focusing on the questioner’s interests McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved

Questions of Ethical Conduct that Arise in Negotiation Deception by omission versus commission Omission – failing to disclose information that would benefit the other Commission – actually lying about an issue McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved

Why Use Deceptive Tactics? Motives and Consequences The power motive The purpose of using ethically ambiguous negotiating tactics is to increase the negotiator’s power in the bargaining environment Other motives to behave unethically Negotiators are more likely to see ethically ambiguous tactics as appropriate if they anticipate that the other’s expected motivation would be more competitive McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved

Rationalizations for Unethical Conduct “They were going to do it anyway, so I will do it first” “He started it” The tactic is fair or appropriate to the situation McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved

When is it legal to lie in negotiation? Fraud: Act of commission a knowing misrepresentation of a material fact on which the victim reasonably relies and which causes damage misrepresentation: an affirmative statement Material fact: Demands and reservation points are not material (so you can bluff here) However, lying about alternatives or other offers or other buyers may be McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved

©2006 The McGraw-Hill Companies, Inc., All Rights Reserved Reliance & Causation The receiver must prove that he or she relied on the information and as a result harm was caused McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved

©2006 The McGraw-Hill Companies, Inc., All Rights Reserved Acts of Omission Will silence protect you from legal liability? Not if; You make a partial disclosure that would be misleading The nondisclosing party has ‘superior information’ that is ‘vital’ McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved

©2006 The McGraw-Hill Companies, Inc., All Rights Reserved What Factors Shape a Negotiator’s Predisposition to Use Unethical Tactics? Personality differences Competitiveness versus cooperativeness Machiavellianism Some individuals are more willing and able con artists Are more likely to lie when they need to Better able to lie without feeling anxious about it More persuasive and effective in their lies McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved

©2006 The McGraw-Hill Companies, Inc., All Rights Reserved What Factors Shape a Negotiator’s Predisposition to Use Unethical Tactics? Personality differences (cont.) Locus of control The degree to which individuals believe that the outcomes they obtain are largely a result of their own ability and effort (internal control) versus fate or chance (external control) Individuals who are high in internal control are more likely to do what they think is right McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved