Two sources with five and seven ethical principles for negotiations in business were explored to give you three simple ethics principles for negotiations. This article introduces information on each of the articles and provides you with a link to each for further analysis for the interested reader. Taking a lesson from neuroscience that we tend to remember up to three things well, these principles are shortened to three for business ethics in negotiations.
Background on sources
The first source is from the Harvard Program on Negotiation daily blog of July 18,2019 entitled Ethics and Negotiations: 5 Principles of negotiation to Boost Your Bargaining Skills in Business Negotiations. These five principles are Reciprocity, Publicity, Trusted Friend, Universality, and Legacy.
The second source is from the book 7 lenses: Learning the Principles and Practices of Ethical Leadership by Linda Fisher Thornton. The author offers the 7 lenses as Profit, Law, Character, People, Communities, Planet and Greater Good.
Each of these sources provides great information for you to consider when faced with an ethical dilemma in a business negotiation.
Having read each and knowing that we tend to remember best with groups of three pretty a process was applied to determine three consistent principles from these two sources. The following is a commentary taking elements from each source to leave you with three principles. These are elaborated on below.
The three principles
Since this is a business negotiation topic related to ethics, it is necessary to consider profit. No business can proceed operating at a loss for very long. Staying in business is critical. A second category has to do with people and reciprocity. Here the focus is on the golden rule of do unto others as you would have them do unto you. The third principle is legacy. That is what do you want to be remembered for in this life. This principle explores accomplishments and how others think of you. With the commentary that follows each of these three principles is elaborated on for your consideration.
Profit
Profitability is necessary to long-term business success.
Profiting responsibly is a major concern.
Profitability needs to be thought of in terms economic, social and environmental concerns. When considering a problem, it is important to define the problem correctly. Think of your interests in a negotiation. Certainly, profit has to be a consideration. However, profit at all costs can cause failure in relationships, long term connections, timing of future events etc. It is important to define the problem as wider than simply profit.
After defining the problem properly, developing a series of alternatives is critical.
Regarding profit consider your starting point, their starting point, your best alternative to a negotiated agreement (BATNA) and several options between your starting point and BATNA. Exploring this a little deeper next consider your and the other party’s interests using these 10 steps for interest based decision making.
1. Define the problem (issues) and take on one issue at a time
2. Listen to understand the emotion and facts associated with the issue
3. Identify and clarify interests
4. Generate options
5. Determine the impacts of options (economically, socially, environmentally)
6. Evaluate the impacts of the options (economically, socially, environmentally)
7. Select a solution
8. Consider Implementing the solution or go back to an appropriate step
9. Before implementing the solution consider testing the solution
10. Consider BATNA and WATNA if no solution were to be found
It is quite possible to have to double back to an earlier step as part of the negotiating process. Having considered profit let’s take a look at the second principle, that of reciprocity.
Reciprocity
Apply the Golden Rule.
Think of how you would like to be treated and apply this same principle to the other side. It may also be applied negatively as one should not treat others in ways that one would not want to be treated. Either way the ethical principle considers how to treat or not to treat others. This is a very old rule with a background in several religions. Wikipedia states that these principles are found in early Confucian times, Buddhism, Christianity, Hinduism, Judaism, Taoism and many of the world’s major religions.
A minimum standard
Keep in mind this is a minimum standard.
What you may think of as being acceptable to you, may not be acceptable to the other party. Consideration has to be given to the skill level, experience, culture and perspective of the other party too. Be careful not simply go forward with consideration of how you may want to be treated. Rather consider how the other party may want to be treated too. Explore cultural and other norms of the other side.
An analogy
For example, many managers may say I wouldn’t give an assignment to one of my employees that I wouldn’t do myself. However, often new front-line managers are hired as the group manager, because they have great technical skills. Now if everyone performed as the top performer, the group would be even better.
However, here is an analogy looking at the team members as various animals.
The person that is promoted to lead the group is an eagle. Other members of the group have various strengths. These should be encouraged and expanded. However, the team member that is a fish will never fly. The team member that is a squirrel won’t fly or become a great swimmer.
Knowing this, the new manager’s job is to bring out the strengths in everyone and make the team the best performing team possible.
The manager is no longer evaluated by his or her performance, but rather on the performance of the team.
Consider interests and perspective
When considering reciprocity look beyond your own perspective and consider the perspective of the other party.
Actively listen to the other party by asking open ended questions, paraphrase, summarize and empathize with the other party.
Having considered profit and reciprocity let’s next consider the third principle legacy.
Legacy
Legacy involves how you will be remembered. Yes, profit is important in business, but do you want to be known strictly as a bottom-line maximum profit person? Or do you want to be remembered considering who you are? For example, it is better to remembered as on one that has respect for life, nature, the environment. It is better to thought of as a leader that provided sustainable business practices, a succession plan, excellent systems in place, and making this world a better place.
This principle involves long term thinking and improving society.
Legacy incorporates not only your home or your business, but also considers the entire planet. This principle calls on us to consider the quality of life for future generations globally.
Looking a little deeper
When we follow this principle and dive deeper, this principle causes us to look at what we eat, what we drink, where we live, our impact on the environment and our budgets.
All budgets are moral budgets.
It also causes us to look at how we impact social change. Are we making the world a better place? Do we care? How do we show it at work and in how we live?
Building teams with volunteer activities
Many businesses provide all employee volunteer activities.
This allows all members to participate in various volunteer activities within their community. This is chance to work together on a project and give something back to the community. This is but one way to provide a lasting legacy with employees. The employer demonstrates and improves elements associated with teamwork, caring, kindness and conscientiousness. Beyond the event it improves the perspective of an underlying principles of the firm.
Summary
As indicated in the background commentary, two great sources were presented for your consideration. However, knowing that we have a harder time remembering five or seven principles, this commentary offers three primary principles for negotiations in business having considered both sources. All of the elements if the two articles are incorporated into these three over riding principles.
These are:
Profit,
Reciprocity, and
Legacy.
Do consider additional reading on this topic as a negotiator.
About the author
Mike Gregory is an expert on The Collaboration Effect ® and in application with the IRS, business to business, and within businesses. Mike is an international speaker and he has written 11 books including Business Valuations and the IRS: Five Books in One, The Servant Manager and Peaceful Resolutions. Mike may be contacted directly at mg@mikegreg.com and at (651) 633-5311. [Michael Gregory, ASA, CVA, NSA, MBA, Qualified Mediator with the Minnesota Supreme Court]