“Competitive negotiators are more effective than cooperative negotiators and the lies they tell are ethically permissible.” Discuss.
“Disputes are an inevitable element of human interaction and society needs to develop efficient and innovative methods of dealing with them.”  To resolve disputes man has developed court system. However there is a huge amount of cases pending in the courts. Lack of sufficient machinery retards the process in resolving these disputes. An alternative to court, what we have is something called Alternative Dispute Resolution (ADR). It has been described as “A halfway house between the certainty of the adversarial system and flexibility of negotiation”.  Summarizing this we can say that this is an informal process, alternate to litigation, with a neutral third party involved in it, given a choice of various processes. Negotiation, Mediation, Arbitration and Conciliation are the different methods of ADR.
The discussion of this essay is “Competitive negotiators are more effective than cooperative negotiators and the lies they tell are ethically permissible”. Part I of this essay defines negotiation and different types of Negotiators. Part II is comparison between competitive and cooperative negotiation tactics. Part III explains why competitive negotiation is often more effective than cooperative negotiation. Part IV discusses about Lying in Negotiation and whether it is ethically permissible? And part V is Conclusion.
Negotiation & different types of Negotiators
“Animals do not negotiate. They use violence or threat of violence, and various forms of ‘dominance’ and ‘display’ to get what they want, be it food, mates or territory. Theirs is a ‘red in tooth and claw’ instinct and intentions.”  . Human beings negotiate, though not all of them use this method. Negotiation has been defined by various people. “The process by which by which we search for terms to obtain what we want from somebody who wants something from us is Negotiation.”  ‘A joint decision made by two or more parties is referred to as Negotiation. Reaching a consensus is the basic idea behind negotiating. Enabling groups of agents to arrive at a neutral agreement regarding a belief, plan or goal, is the key form of interaction’.  “Negotiation is the process of two individuals or groups reaching joint agreement about differing needs or ideas. Oliver (1996) described negotiation as “negotiators jointly searching a multidimensional space and then agreeing to a single point in the space.”  ‘According to Fisher and Ury, when you and the other party have interests that are shared and some that are opposed, an agreement is reached through back and forth communication is what negotiation stands for’. 
Before a suit is filed in the court, negotiation is done. If successful the suit may be prevented, therefore it is a preventive ADR. By systematic dispute management, an emphasis is made on avoiding conflict in the preventive process. In this way damage of relationship, loss of money can be avoided or saved, as well as builds trust and confidence between the disputing parties. Rightly enough, “the interaction between client and lawyer is a form of negotiation.”  In a negotiation, “why does your opponent want” is far more important than ‘what does the opponent want’. This helps the negotiator to decide the methods of negotiation, which are Integration, Obliging, Dominating, Avoiding and Compromising. Based on the above methods there are different types of negotiators; Competitive, Cooperative, Interest based and Avoider type negotiator. Avoider type negotiators prefer to maintain status quo and try and hide behind various rules, legal procedures and regulations. Their limited social skills are no good. “Some people may prefer compromising, others are fiercely competitive. And yet others can be outright adversarial when negotiating.”  Compared to other negotiation styles, Competitive and Cooperative negotiations styles are more preferred by the negotiators.
These types are the aggressive sorts. They are also referred to as assertive, distributive and positional.  The opponent is no real concern of theirs, their interest mainly being profit maximizing for their client  . The attitude they carry clearly reads ‘my way or the highway’. Their characteristics are as follows.
These negotiators do not give much importance to the relation with opposite party.
There is suspicion and hostility in attitude towards opposite party.
They use assertive and tough language.
There may be use of tools like coercion, threat or deception.
They will subtract certain items from the deal to get more profit.
They will listen less of opposite party, and they talk more.
There will make use of domination over the weaker party.
The competitive negotiator will close the negotiation by giving a final offer.
They would not prefer to bargain over it.
A competitive negotiator is of the belief that they have lost if the opponent gains what they want. They display effective communication skills and ability of faster evaluation in the client’s interest, even in tough conditions. Resisting the competitive negotiators, they feel they are not trying hard enough for the opposite party to submit before their demands. “The long-term consequences of competitive negotiation are unfavorable, yielding reduced enthusiasm and commitment as well as damaged relationships.”  They believe they know best, they may also make a display of authority, which they may not actually have. “A quasi-strength of competitive negotiation is that the tactic often intimidates opponents and creates a situation where competitive negotiators steamroll more cooperative negotiators into offering concessions and more readily agreeing to the objectives of the competitive negotiator. A major weakness of competitive negotiation, on the other hand, is that the other side will likely become competitive as well leading to prolonged labor disputes” 
Unethical techniques used by competitive negotiators are, a) Lying – fact of matter and proposed settlement offers are lied about by hiding the traps in it. b) Bluffing – This being different from lying, facts are exaggerated to give a bigger picture of outcome. The opponent is made to believe that the settlement will be highly advantageous to them, which in fact is not true. In such a situation risky decisions and preparation for consequences is taken by the negotiators. ‘In Garrett v. Mazda Motors of Am., 844 S.W.2d 178, 181 (1992), the salesperson bluffed the buyer that the car had been used by salesperson, whereas the car was stolen and used by a car thief. It was considered as fraud and not mere puffery.’  c) Force – Many types of force may be used. Threat to the opposite party, coercion using some bait, dominance over the other party to accept a settlement, unemotional and unsympathetic attitude or a tantrum thrown during negotiation process are some examples of force. d) Stealing – Data stealing and obtaining information about client in a dishonest fashion during ground work are some forms of stealing. e) Distracting – forcing and arguing about minor, petty issues, pulling away from the main concern is a form of distraction. f) Blaming – attacking the opposite party by blame or other techniques like interruption, insults, gestures or sarcasm again resulting in an attempt to distract from the main issue.
To achieve maximum benefit for the client and also to increase their bargaining capacity the competitive negotiator uses these techniques. They may not use these techniques very frequently. The tougher the situation the more competitive they become. “Competitive bargaining has been criticized for its focus on specific positions rather than attempting to discern the true interests of the parties”  They will stop at nothing to impress their clients and justify the use of unethical techniques saying, the opponent was going to submit or it is necessary in the case of emergency or stating it to be harmless. Competitive negotiators are also called as ‘ distributive negotiators’
“Cooperative negotiations are particular type of negotiations where agents cooperate and collaborate to achieve a common objective, in the best interest of system as whole. In cooperative negotiation, every agent’s point of view regarding the problem and the outcome are combined together via negotiations in interest to solve the conflicts posed by having only partial view.”  In the interest of everyone, these negotiators put together an optimized partial view and cooperate to reach a common object. “Cooperative negotiation is a kind of negotiation that takes advantages of the cooperative nature of the agents to maximize social utility”  To reach a settlement various offers or concessions would be considered through compromises. Focus is made on reaching an agreement rather than a continuous dispute, keeping in mind some gain to the opposite party as well. Expansion of resources between both parties is welcome.  When a party does not have a strong bargaining position this method of negotiation is adopted. “In this type of negotiation the tactics or techniques that negotiators use to reach an agreement are adding issues, subtracting issues, substituting issues, and logrolling.”  Characteristics of cooperative negotiators are as below.
The negotiators give importance to the relationship with opposite party.
They would communicate with honesty.
They would use soft language in communication.
The attitude towards opposite party is friendly and cooperative.
They will be ready to compromise and sacrifice.
They will add certain items to the deal, even if they incur a loss.
They may talk less and listen more.
To resolve a dispute the cooperative negotiator communicates the intention of cooperative negotiation. Other ADR methods may also be proposed, the method of negotiation may not necessarily be communicated. Problem and plan of negotiation may be sent to the opponent negotiator. They show concern about the opposite party. A cooling off period is proposed in case of no positive outcome. A cooling off period allows both parties to consider the happenings and the proposed solutions. Time for evaluation of gains and loses is proposed in the meeting. Thereafter the negotiator can start with fresh new ideas and solutions. In order to reach a final settlement, during the period the negotiator may give a concession or compromise on certain terms. Benefit of this type of negotiation is they can tackle tough environments and smoothing out the flow of negotiation. Cooperative negotiators are also called as ‘integrative negotiators’.
II. Comparison between Competitive and Cooperative negotiation tactics
‘In recent past, researchers have made two attempts to sort out methodically a wide range of bargaining tactics, providing a more speculative cover to the nuts-and-bolts, tactical perspective of the negotiating process, classified as either “cooperative” or “competitive”. For example, a competitive negotiator makes ridiculous, extreme opening demands which they actually hope to obtain, whereas a cooperative negotiator makes a modest and more realistic request. Differentiation of the two helps the negotiator to identify various options whenever they present themselves. Further emphasis on this example shows that when either type is called to make an opening demand, they either result in an aggressive or friendly option.’ 
Before making a comparison between cooperative and competitive negotiation style, let’s take a look at some mathematical formulae to compare the two. Businesses as well as negotiation both have certain profit and loss. Let’s make that calculation. The simple formula to calculate profit is selling price minus cost price is equal to profit (SP-CP=P) and formula for loss is cost price minus selling price is equal to loss (i.e. CP – SP = L). In a negotiation both parties are expecting to gain something as a result. For this they have estimated certain figures as compared to the market value. For example, a person decides to buy a digital camera which costs approximately ₤ 100. Now he looks for where he can get it for less. A sales person gets the same camera for ₤ 75 and sells it for ₤100, profit being ₤ 25. The buyer approaches the salesperson and negotiates the price. The salesperson can choose to sell for less or not bargain. In the sell for less there is no loss incurred except a decrease in profit. The buyer on the other hand is in profit because he has bought at less than market price. If the salesperson had not sold for less and offered freebies, like a memory card or rechargeable batteries with a charger, he may have earned his profit but giving away goodies has incurred some amount of loss. The buyer may not have profited in this case but did get the free goodies which he may have had to otherwise purchase. Here profit being in kind, not cash.
This is the kind of profit we look for when negotiating. The two can be called negotiation profit and negotiation loss respectively. Considering the same situation in yet another way the loss that the seller incurred may not actually be a loss to him, or the profit the buyer got may not be a profit to him. The free goods may have been from old stock for other cameras. The buyer on the other hand may already have the extras before buying the camera, hence not a real profit. Any method that provides more profit as compared to other negotiation process may be considered more effective.
Now taking a look at the characteristics of negotiators, cooperatives will add and competitive will deduct. However addition may result in failure if the opponent does not agree. The condition of the market at that time also determines the negotiation profit. For example, if a computer is available everywhere at the same price and is also in high demand, the salesperson may not decrease the profit margin. Thus the buyer does not gain any profit irrespective of where he buys from. There the amount of negotiation profit is less. In a second scenario, the computer is not available because it is outdated and has no demand. The seller has only a few pieces and is in a hurry to clear the stock. Here the seller is willing to sell for less as few may actually buy. The buyer may be willing to buy for more, because the computer is not easily available. Therefore the amount of negotiation profit in this transaction is more because any amount above the purchase price of the salesperson is a profit to him, and any amount less than the market prices is profit for the buyer. Hence they both are at profit. Therefore when the condition of the market is in favour of both parties and they are left with no choice, a competitive negotiator stands to gain and when the condition of market favors one party it is always good to have cooperative negotiation.
Attitude of competitive negotiator is hostile towards the opponent whereas cooperative negotiator is helpful. Competitive negotiators are only interested in themselves and in a settlement that works only in their favour. On the other hand the cooperative negotiators are outcome oriented and may even give away some demands if it results in a settlement. The competitive negotiators make one sided demands without offering anything in return, they only want to get but do not want to give. The cooperative negotiator may make a demand with something in return for it. They also submit to the opposition’s demands without considering their own. This form may be harmful if the opponent has adopted the competitive approach. Cooperative negotiator gives most away in order to reach a settlement.
III. Why Competitive Negotiation is more effective than Cooperative Negotiation.
Cooperative Negotiation seems nice, but may not be as effective. There are certain reasons for that. Since they give away, they subtract items from the deal resulting in negotiation loss instead of negotiation profit. They offer their best deal, by adding items to an already existing list. However, this may not be approved by the opposite party. The opposite party may consider other options before accepting the deal. For example, someone selling a house may also provide furnishing free, but the buyer may already have it, or the stuff may be available for less elsewhere. Therefore negotiation may not always give the expected result. In such a situation competitive negotiator will demand a discount and refuse the additional items. They may want to buy the furnishing later or from elsewhere. Thus adding more items may not always have favourable results. However, demanding a discount may result in an actual cash discount.
Successful negotiation depends on good ground work such as gathering information about the opposite party before negotiation. The upper and lower limit of the terms of negotiation, need to be discussed before negotiation starts. This help to arrive at a decision. The cooperative negotiator may assume certain figures or may have a list of things to offer or might even have set a lower limit of the offer they plan to give. They may get less than the anticipated negotiation profit. The situation will be different in a competitive negotiators case as they accept only a deal favourable to them. For example, 10 employees resign due to no increment on the same day. The management negotiates and offers promotion, free transport and health insurance but no increment. Jack is a competitive negotiator and is only interested in a raise of 25% and nothing else. Others take the offer, but company wants to retain them all and accept an increase for Jack. Competitive Negotiators will never settle for less and thus obtain the desired outcome.
Competitive negotiators lie to get a favourable outcome. They modify the opponent’s perception and convince them of how unfruitful the outcome would be if the deal goes as per the other parties’ terms. For example, let’s say Martin has a land to sell. He doe not tell the prospective buyer that part of the land may be acquired shortly for road widening. Instead he points out the benefits of road touch land, making the prospect feel like he is getting a good bargain. However, a cooperative negotiator would not hide that fact.
There is always some extra amount which is to be distributed in the form of negotiation profit during negotiation. Whoever can make best use of their skills gains maximum. For example, in situation of divorce, there is a property, house, car and jewelry that need to be distributed amongst the spouses. A competitive negotiator will use coercion, assertive and tough language and will not listen to the other. They will try and get maximum gain for their client, whereas the cooperative negotiator will give rather than take. Therefore this situation only benefits a competitive negotiator and not a cooperative one.
Competitive negotiators look for weakness in the opposite party and use it in their best interest. For example, John needs to make a shift from one place to another. He decides to sell his beautiful rugs and chandelier because the cost of transporting them is almost the same as compared to buying a new one. Wilma shows her interest to buy, John demands more than she expects. She doesn’t have that much money. Through conversation she learns that he needs to leave the place in 2 days, hence is in a hurry to sell the goods. She makes a final offer and puts the cash in front of him, assuring she would pick them up in an hour. John accepts the offer because of the hurry to dispose off his goods. In this case a cooperative negotiator may have given John the price he requested.
In Panama Canal case, a French company had started construction of the Panama Canal. It went bankrupt due to crisis. The U.S. government was interested in this canal route. The company wanted to sell off for $ 109 million. U.S. government was ready to offer only $ 40 million. The U.S. Rear Admiral who was in charge of this negotiation, hinted that they were looking for other canal in Nicaragua. To make it look genuine, there was news leak in newspapers about this new canal route. When the company’s president resigned, the shareholders pressurized the company to accept any deal from U.S. Thus the Rear Admiral got a settlement for the price he wanted, by showing interest in other canal which he had no intention to build. 
Therefore in situations where cooperative negotiation seems beneficial, it is actually a competitive negotiator who takes bigger share of profit, as compared to cooperative negotiator. Since competitive negotiators gain more benefit for their clients they are more efficient and effective than cooperative negotiators.
IV. Lying in Negotiation – Whether ethically permissible?
A. Ethics in Negotiation
“Ethics are broadly applied social standards for what is right or wrong in a particular situation or process. They differ from morals due to individual and personal belief. Ethics come from philosophies which purport to define the nature of the world we live in or lay down rules for living together.”  A negotiator may use a different approach, but however during a negation they may use various strategies that may work including unethical tactics. In the negotiating process the law does not permit or encourage unethical techniques or practices. “In Ernst Young v. Butte Mining plc  , misleading behaviour in negotiation led the court to set aside a purported agreement to serve a notice of discontinuance.”  ‘In the case of Spaulding v. Zimmerman  , Spaulding a minor was injured in an accident. There was a medical test conducted and doctors claimed his wounds to be healed completely. The defense lawyers had him examined by their doctors to find any substantive material for defense. They found an aneurysm, which they did not disclose. After grant of settlement when Spaulding discovered this problem he sued to set aside the settlement. The court granted his prayer and vacated the order.’  ‘In Stare v. Tate  , there was a divorce negotiation and involved equal distribution of property. Due to miscalculation by Stare, she received fewer shares, Tate’s attorneys were aware of this miscalculation. The court ordered resettlement and gave her remaining claim.’  However ‘in case of Brown v. County of Genesee  , the diabetic employee could have got higher salary than the one she got because county lawyers did not disclose certain things to her. Court held that she or her lawyer did not check the public records and opposite party lawyers were not obliged to inform her about any such records. The mistake was from both sides.’ 
B. Lying in Negotiation
Telling the truth is one of the major issue in negotiating. Negotiators avoid disclosing the complete truth. “Effectiveness in negotiations is central to the business of lawyering and a willingness to lie is central to one’s effectiveness in negotiations.”  Lawyers may use various types of lies to negotiate. False claims are made on the value and history of movable and immovable property. Rates may be inflated or vice versa. They make false promises and may lie about the authority and power given to them by the client. They may conceal their interest in the outcome of the deal. They may also hold back facts regarding third party reservation or claims in property. False or incorrect claims may also be made; they may not also disclose alternative agreements which may prove more beneficial. “These lies operate to misrepresent our willingness to settle the price above which we will not buy (or below which we will not sell), our client’s insistence on custody, the presence or activities of competing bidders, or our availability and readiness for trial.”  ‘In Virzi v. Grand Trunk Warehouse & Cold Storage Co.  , the court set aside an agreement because lawyers did not disclose death of the client before the settlement.’  Similarly in case of ‘Kentucky Bar Ass’n. v. Geisler  , the attorney was publicly reprimanded for failing to inform the defense attorney about the death of plaintiff during the negotiation.’ 
C. Is lying ethically permissible.
Honesty is the best policy is what many lawyers assert and that is most profitable in the long run. They maintain that lying in negotiation is ineffective. “Others seem to say that lying is not a serious problem in negotiation, because those lies are ethically permissible.”  “The American Model Rules of Professional conduct states that a lawyer shall not knowingly make a false statement of material or law to third person and rule 4.1 a paragon of charity says “A Lawyer may not lie””  . “While Rule 4.1 prohibits the knowing misrepresentation of material fact or law, Comment 2 expressly recognizes that statements regarding client values and settlement intentions made during bargaining interactions do not concern material fact. It is thus ethical for negotiating attorneys to deliberately misrepresent such matters. They may do this overtly, partially, or through the nondisclosure of information” 
Lawyers justify the usage of unethical tactics. The imposition of fairness standards would be opposed by most attorneys for negotiators. “Client first” is a maxim that is deeply ingrained. Absolute confidentiality is entitled to a client, unless the attorney believes the client intend to commit a criminal act in future.  Whatever they do is for the clients benefit and for these benefits, they speak lies. According to law, any communication between the client and attorney is subject to attorney-client-privilege is another justification to the lies they speak. The attorney is not liable or forced to disclose certain details by any law. He/she may withhold it. When disclosing certain facts during negotiation, the same condition is applicable. However it was held “in Mann v. Adams Realty Co., Inc.  , that the duty to disclose is particularly compelling when one party has superior knowledge and the unknowing party has been induced to take action it otherwise might not have taken.” 
Therefore, though lying is unethical it is permissible in certain conditions. Lawyers use those conditions to gain benefit for the client. The non disclosure law supports the lawyer in keeping certain secrets about his clients.
Competitive Negotiation is complex and deserves its own nuanced analysis. Supporters of cooperative negotiation caricature the competitive negotiation tactics as limited to making unreasonable demands and further refusing to reach an agreement. A Stubbornness and aggressiveness may have their place in ap
Cite This Work
To export a reference to this article please select a referencing stye below:
Related ServicesView all
DMCA / Removal Request
If you are the original writer of this essay and no longer wish to have your work published on LawTeacher.net then please: