The Ethics of Negotiations

Negotiating and Bargaining
Knowledge Center


Mohammad Hamdan
Russian Federation

The Ethics of Negotiations

Usually, when negotiating a contract, the parties follow different tricks and tactics to reach satisfactory results, however some parties may resort to lying, deceiving, bluffing or threatening, in order to reach results that only satisfy them. Ethical negotiators do not only think about what they can get, but also what they can offer the other party. They know that building negotiations on an ethical basis will come into satisfactory results for all, and will increase the chances of success in the long run.
Below we review the most important points that define ethical boundaries when negotiating to sign an agreement:
  1. HONESTY: Being honest during a negotiation is a positive addition to you and the company you represent. Although honesty can sometimes cost you a point loss during negotiation, it will earn you a lot at the end of it, and in your future work. For example, if the other party made a mistake when providing certain information, your alert to her/him will make you lose the point gained from this error, except that you will gain the trust and confidence of her/his representative, and that will positively reflect on your and your company's reputation.
  2. CONFLICT OF INTEREST: The most important ethical problem accompanying the negotiation stage is the conflict between the managers' own interests and the interests of the company they represent. Always remember to state any information that might result in a conflict of interest, and remember that in the outcome of negotiation there is a whole community (the corporate community) that will be impacted by its consequences, not only you. Also, bear in mind that if you deal with conflicts of interest in an unethical manner, you will subsequently bear the responsibility for any breakdown in the relationship you built on the basis of your interests.
  3. ETHICS BEFORE THE LAW: Hiding certain information from the other party during the negotiation may have an effect on its results. This hiding may perhaps not constitute a legal violation, but it is considered as an unethical act that gave you some current gains at the expense of the other party. For example, you agreed on selling a machine from your factory's production at $10.000, while experts had determined that it's fair price is $8.500. Hiding the experts' evaluation from the other party is a "legal act" that made you earn more from this deal, but it is an unethical act which, if it is revealed, will cause you to lose your customer and decrease the value of your reputation in the market. If you are on the other side, to avoid becoming a victim of this kind of immoral behaviour, try to end the negotiation by asking, "Is there anything that we haven't discussed yet that could fundamentally affect this deal?"
  4. FULFILLMENT OF COVENANT: Sometimes, while sitting around the negotiating table, you may have to make oral concessions that you did not take into account while you were going to it. Be sure that you keep these promises if the negotiation is successfully concluded. Even if even if they are not documented. That reflects your strength and earns you respect and trust from other parties in the market.
  5. THE PLATINUM RULE: The golden rule says, "Treat others the way you want them to treat you." It is advisable, during negotiation, to follow the platinum rule as Dr. Tony Alessandra said, "Treat people the way they want to be treated". No one likes being treated in an unethical way. Applying this rule will help build long-term relationships based on trust and ethics.
  6. USE OF POWER: In many negotiations, the two parties are not equal in capabilities and possibilities. If you are the strongest, do not use your power to threaten the other. Although the threat is sometimes used as a tactic, it is unethical and has negative effects. Always replace threats with promises that give a positive effect. The willingness of the parties to reach a fair agreement between them honestly, by exchanging information in an ethical manner without misusing their power can be categorized as moral negotiations.
Setting these things as an ethical framework as the basis for negotiation is crucial to your company's business and long-term reputation. Remember: Always negotiate ethically, your reputation is at stake.
⇨ What are your experiences? Do you agree that one should always be ethical in negotiations? Do you agree with each of the principles I mentioned? Perhaps you go by another one?

Peter B. Stark and Jane Flaherty (2003), "Ethical Negotiations: 10 Tips to Ensure Win-Win Outcomes", The Negotiator Magazine, p. 3.
C. Alavoine (2011), "Ethics in Negotiations: The Confrontation between Representation and Practices", International Scholarly and Scientific Research & Innovation, vol. 5(6), p.p. 836 841.
H.R.G. STRANGE (2014), "Ethics of Negotiations: What are Our Responsibilities?" p.10.


Vernon Henry
Business Consultant, Trinidad and Tobago

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Sathya Devarakonda
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