Assignmnt
Learning beyond Negotiation Tactics:
The Sales Marketplace
Seung Hwan (Mark) Lee
Purpose of the Study: In the past, negotiation-based, role-play sales-assignments have involved one-
to-one interaction between a buyer and a seller. Unfortunately, this traditional format often overlooks
the importance and presence of multiple buyers/sellers, the role of location, the dynamics of fluctuating
market price, and the influential function of competitors. This exercise, The Sales Marketplace, teaches
students to be cognizant of these variables beyond just negotiation tactics. Further, additional steps are
put in place to have students reflect on their experience as a sales negotiator.
Method/Design and Sample: Seventy-six upper year undergraduate marketing concentration majors
were given a survey to evaluate The Sales Marketplace exercise.
Results: The students reported that The Sales Marketplace is superior to the traditional format in 15
separate questionnaire items, including providing a better outlook of the sales marketplace, providing a
realistic sales negotiation experience, requiring more problem analysis, interpersonal skills, emotional
control, teamwork, decision making ability, ethical awareness, and class interaction. Students also
reported that the exercise enhanced their learning experience, increased their knowledge of sales
principles, imagination, and creativity.
Value to Marketing Educators: The advantage of the The Sales Marketplace is four-fold. First, the
activity evolves beyond a simple lesson in negotiation tactics. Second, it allows students to reflect on
their sales negotiation skills and self awareness. Third, this exercise deploys active learning techniques
to immerse students in sales-negotiation scenarios. Finally, this method is customizable to any course
(beyond sales-based courses) that utilizes negotiation-based learning.
Keywords: Sales, Negotiations, Active Learning, Sales Marketplace
Seung Hwan (Mark) Lee, Associate Professor, Ryerson University, Ted Rogers School of Retail
Management, 350 Victoria St., Toronto, Ontario, M5B 2K3, Canada. Telephone: (416) 979-5000 ext.
7606; email: lee.mark@ryerson.ca.
T
here has been a growing interest among
industry leaders to emphasize sales coaching
as an essential tool for their business practices.
This is especially true in response to the
shortage in qualified salespeople along with a growing
number of sales career positions (Cummins et al.,
2013; U.S. Bureau of Labor Statistics, 2012). Hence,
educators have developed an increasing interest to
address this need, immersing students in real-life
negotiation scenarios that will better prepare them in
the sales field. Traditionally, role-play has been a
common training method in sales negotiation courses.
It allows students to immerse themselves in sales
negotiation contexts using relatable scenarios
(Widmier, Loe, &Seldon, 2007).Role-play also
provides a representation of a real-life sales scenario
and an opportunity for students to engage in
experiential learning (Serviere-Munoz, 2010). Hence, it
is no surprise that sales negotiation exercises are well-
received by students; they find it to be fun, interesting,
and relevant to managerial practice (Wheeler, 2006).
In its simplest form, students are typically divided
into pairs with one member of the pair designated as a
buyer and the other as a seller. The buyer and the
seller receive their distinct background information
which presents the scenario from their respective
perspective (e.g., a buyer’s information sheet and a
seller’s information sheet). Students are then given a
set amount of time to negotiate and attempt to come to
a consensus which satisfies both parties. The two
parties engage in a conversation where they exchange
information comprising of offers, counter-offers, and
arguments. In general, this form of experiential role
play has been adapted in many sales negotiation
courses.
In the traditional format, the primary goals are to
equip students with basic topics such as conflict theory,
competitive bargaining, cooperative negotiations, and
forming resolutions (Lewicki, 1986). Instructors also
tend to focus on developing four central negotiation
skills, which include preparing, communication,
problem solving, and process management (Lewicki,
Journal for Advancement of Marketing Education, Volume 24, Special Issue in Sales Education, Spring 2016 22
mailto:lee.mark@ryerson.ca
1986). While these provide important benefits to
students, there has been an increasing interest among
sales educators to improve the current format to add
more realism. For example, Smolinski and Kesting
(2012) argue that in-class role plays are limited in their
ability to authentically replicate negotiation contexts,
especially for culturally homogeneous student groups.
They suggested that rather than dividing students into
pairs, instructors should arrange negotiation between
dyads consisting of two members for each party.
Weiss (2003) encourages instructors to focus on
“cultural aspects of negotiations” to encompass intra-
and inter-cultural perspectives. Weiss stresses the
importance of learning beyond negotiation tactics.
More and more, variations to the traditional format are
surfacing to better replicate marketplace
characteristics in negotiation settings.
In response, this paper presents the The Sales
Marketplace- an instructional innovation that teaches a
wider set of learning objectives and creates a strong
experiential learning environment for students. In
subsequent sections, I discuss the exercise in greater
detail. I also discuss its flexibility and its applicability. I
also gather data on students’ assessment of The
Sales Marketplace vs. the traditional format. Finally, I
conclude with benefits and limitations associated with
this exercise, and offer suggestions for future
upgrades.
TEACHING INNOVATION: The Sales Marketplace
Consistent with the experiential learning model (Kolb,
1984; Lewicki, 1986), there are four key steps which
will guide the following instruction: a) Formation of
abstract concepts and generalizations; b) Testing
implications of concepts in new situations; c) Concrete
experiences; and d) Observations and experiences.
These steps provide a guiding framework for
introducing the exercise (see appendix A).
Step 1: Formation of Abstract Concepts and
Generalizations
Prior to leading up to the activity, the course instructor
should have covered the appropriate lecture materials
relating to sales negotiation topics. Typically, a basic
one-semester sales course may cover topics such as
(but is not limited to) bargaining tactics, basic
economics, conflict theory, game theory, dynamics of
interpersonal conflict, competitive/cooperative tactics,
psychological trust, emotional intelligence, and time
management (e.g., Lewicki, 1997). In addition, the
instructor may cover topics such as leadership, team
management, geographic markets, price wars,
emotions (e.g., regret, emotional intelligence), and
stereotypes (i.e., gender stereotypes). In essence, the
topical area of emphasis is based on the instructor’s
discretion. This form of knowledge dissemination may
come from readings, lectures, or both.
Step 2: Testing Implications of Concepts in New
Situations
Before conducting the live role-play (Step 3),
students should have an opportunity to reflect on the
terms and concepts covered within the course. Few
days before, students should prepare a personal
“sales negotiation profile” where they outline their
strengths and weaknesses in negotiation settings. For
instance, a student may reveal that they get extremely
nervous in time-pressured situations. A student may
reveal that they like to work alone rather than in teams.
A student may reveal that they are skeptical of other
people. Here, students are asked to write a short
paper describing their personal profile. The purpose of
developing this profile is two-fold. First, by asking
students to engage in a self-reflection task, it
generates greater self-awareness and knowledge of
the lecture material before heading into the live role-
play. Second, the profile will be useful for instructors in
forming diverse negotiation teams. The instructor
should devise teams of two as suggested by Smolinski
and Kesting (2012). When forming these teams, the
instructor should pair up individuals with differing
personalities and/or demographic characteristics (i.e.,
gender) to add diversity within teams. This also allows
students to experience what it is like to work in a team
rather than as an individual.
Step 3: Concrete Experiences (The Sales
Marketplace)
In preparing for the The Sales Marketplace, the
instructor must first create or obtain negotiation-based
scenarios (see appendix B for an example). The
instructor may find these scenarios in textbooks or
case studies or create scenarios that mimics real-life
sales scenarios. Typically, these scenarios will have
an instruction for the buyer and a separate instruction
for the seller. Then, the instructor should divide the
class so that there are equal number of sellers and
buyers (in teams). For example, in a class of 40
students, there will be 10 teams of sellers and 10
teams of buyers (given that there will be two students
per team).
From the onset, the instructor hands out the buyer
instruction sheet to the buyer teams. All teams will
receive the exact same information. This will ensure
that a team does not have a distinct advantage over
other teams. Subsequently, the instructor hands out
the seller instruction sheet to the seller teams. Then, a
contract sheet is given to the sellers where the
negotiating parties dictate their terms and conditions
(e.g., price). This contract is important as it will be
used to determine their performance scores. Then, the
instructor provides the instruction that the buyer is free
to buy from any of the sellers. Similarly, the sellers
may sell to any of the participating buyers. Next, a
time-limit is set to ensure that students complete the
task within a particular time period. In the past, 15-20
minutes have been a adequate amount for students to
interact, field multiple offers, and complete the contract.
Once a contract is set, the students return the
completed contract back to the instructor. This
completes one round of negotiations. Afterwards, if
there is more time, the instructor can facilitate another
Journal for Advancement of Marketing Education, Volume 24, Special Issue in Sales Education, Spring 2016 23
round of negotiation with a different scenario. In round
2, the instructor should assign students who were
sellers to become buyers and buyers to become
sellers. This gives students an opportunity to
experience both sides of the negotiation party.
As a variation, the instructor can modify the
assignment to use uneven number of teams For
example, if there were more sellers than the number of
buyers (e.g., 11 vs 10), then it increases the
competition among the sellers as supply would
outpace demand. The instructor can dictate certain
stipulations (e.g., sellers cannot move).In the past, this
exercise revealed interesting patterns that are different
from the patterns of a traditional format. These include:
Despite having the same scenarios, students
dealing in one side of the room sold their
products at a different price than those in the
other side of the room. Hence, the geographic
location of where the deal was reached had an
impact. This reveals that the market price for the
product may be different even though the
product offering is exactly the same.
Working with multiple teams created bidding
wars among the groups, especially when the
time was scarce.
Because everyone had the same scenario,
students were forced to think of creative
methods to differentiate their offering. For
example, students have used flattery or have
placed greater emphasis on trivial attributes to
differentiate from their competitors.
Time played a role. There have been instances
where the market price of the product were
much lower (or higher) at one point compared to
another point in time. This reflects how prices
are susceptible to change and fluid based on
time.
Students are prone to experiencing regret.
Because students are bound to encounter
multiple offers from multiple parties throughout
the negotiating round, students may experience
action regret (regretting the decision that they
have made) and/or inaction regret (foregoing a
decision that would have been better).
Because there are multiple rounds, students
experience the value of developing and
maintaining relationships with others.
There have been internal conflicts within the
team that hindered their ability to make a deal.
Some teams were unable to make a deal as a
result.
Step 4: Observations & Reflections
After step 3 (whether immediate or in a subsequent
class), the instructor should hold a debriefing session
to go over some of the challenges that the students
experienced. In the past, students in these debriefing
sessions have spoken about the challenges of keeping
up with the dynamic market price, coping with regret
(either the decision that they may have made or deals
that they have passed on), teammate conflicts,
communication challenges, etc. In addition to the
debriefing session, the instructor should also ask
students to complete a reflection paper on what they
have learned about themselves (and cross-compare it
with their reflection paper in step 2). Once again, these
papers are designed for students to reflect on their
self-awareness.
Students are evaluated in two different areas. First,
the students are assessed on the performance metrics
related to the sales-negotiation scenario. For instance,
if a student achieved higher performance than their
peers (e.g., more money), then they will subsequently
receive a higher grade. An instructor can rank the
students based on how much money they made or
give specific grades based on the actual amount that
they achieved. Second, students are assessed on their
reflection papers that they have written in steps 2 and
4. Here, the instructor should look for integration and
understanding of the course concepts, as well as what
they have observed and experienced. Once again, it is
within the discretion of the instructor to determine what
scoring methods are best suited for their course.
Student Assessment of The Sales Marketplace vs.
the Traditional Format
Seventy-six junior/senior undergraduate marketing
concentration majors across two sections of a
consumer behavior class were given a survey to
evaluate the The Sales Marketplace. For one section,
students participated in two rounds of negotiations. To
allow for proper comparison, in round 1, I implemented
the traditional format where students were divided into
pairs and they negotiated one-on-one with another
classmate. In round 2, I implemented The Sales
Marketplace where students were free to negotiate
and bargain with any participating member. To rule-out
order effects, round 1 and round 2 were reversed for
the other section.
Then, student responses were recorded using a
seven-point Likert scale in which 1 = “strongly
disagree” and 7 = “strongly agree”. Students evaluated
on the effectiveness of the two methods. More
specifically, students completed a 15-item survey
following the exercise which relates to the session’s
learning objectives and their experience with the
exercise. Table 1 details the results. After collecting
the data, a paired sample t-test was conducted to
assess the differences between the two instructional
methods. A comparison between the two sections
revealed no order effects. Overall, students seemed to
have a more favorable impression towards The Sales
Marketplace (vs. the traditional format). Moreover,
what they seemed to appreciate the most was the
realism that it brought to the classroom. Table 1 details
the results.
Journal for Advancement of Marketing Education, Volume 24, Special Issue in Sales Education, Spring 2016 24
http:move).In
Table 1: Comparison between Sales Negotiations 1.0 vs. 2.0
The exercise… Traditional The Sales t-value Cohen’s d
(Strongly Disagree 1 – Strongly Agree – 7) Marketplace (effect size)
1. Provided a better outlook of the sales M=5.33 M=6.32 5.54*** .87
marketplace. (SD=1.33) (SD=0.90)
2. Provided a realistic sales negotiation M=5.38 M=6.33 5.31*** .83
experience. (SD=1.31) (SD=0.94)
3. Required more problem analysis. M=5.26 M=6.26 6.00*** .92
(SD=1.31) (SD=0.81)
4. Required more interpersonal skills M=5.07 M=6.25 7.22*** 1.11
(communication). (SD=1.25) (SD=0.83)
5. Required more emotional control. M=5.20 M=5.87 3.16** .53
(SD=1.30) (SD=1.23)
6. Required more teamwork. M=5.20 M=5.99 3.98*** .66
(SD=1.32) (SD=1.06)
7. Required more decision making ability. M-5.18 M=6.04 4.44*** .75
(SD=1.34) (SD=0.93)
8. Required more ethical awareness. M-5.07 M=6.07 5.72*** .88
(SD=1.27) (SD=0.98)
9. Encouraged class interaction. M=5.14 M=5.84 3.24** .55
(SD=1.32) (SD=1.22)
10. Made me feel more comfortable about M=5.12 M=5.93 3.73*** .62
speaking out in class. (SD=1.46) (SD=1.12)
11. Enhanced my learning experience. M=5.18 M=5.91 3.91*** .64
(SD=1.27) (SD=1.01)
12. Increased my knowledge of sales M=5.17 M=5.89 3.83*** .61
principles (SD=1.29) (SD=1.07)
13. Helped me to get to know other students M=5.04 M=6.03 4.97*** .78
in the class. (SD=1.45) (SD=1.07)
14. Inspired my imaginative side. M=4.64 M=5.99 6.42*** .97
(SD=1.66) (SD=1.05)
15. Increased my creative input. M=4.86 M=5.97 5.24*** .78
(SD=1.66) (SD=1.12)
Source: Items 1-10 were developed by the authors to focus on the specific learning objectives related to the
exercise. Items 11-15 were adapted from Lee & Hoffman (2015).
Notes: Cohen’s d > .80 is considered to be large effect sizes. .4 – .6 is considered to be medium effect sizes. ***
p< .001, ** p < .01, * p< .05
CONCLUSION exercise was superior to the traditional format in
providing a better outlook of the sales marketplace,
The advantage of The Sales Marketplace is four-fold. providing a realistic sales negotiation experience,
First, the activity is more than a simple lesson in requiring more problem analysis, interpersonal skills,
negotiation tactics. In the sales field, salespeople are emotional control, teamwork, decision making ability,
constantly dealing with multiple buyers, engaging from ethical awareness, and class interaction. Students also
multiple locations, dealing with fluctuating market price, reported that the exercise enhanced their learning
and competing against their competitors. By using the experience, increased their knowledge of sales
marketplace format (as opposed to the traditional principles, imagination, and creativity.
format), students must consider these external Second, by implementing steps 2 and 4, it allows
variables which better mimics real life sales contexts. students to reflect on their negotiation skills and self-
Hence, it is not surprising that The Sales Marketplace awareness. It is important to acknowledge that this
Journal for Advancement of Marketing Education, Volume 24, Special Issue in Sales Education, Spring 2016 25
exercise is not just about performance, but also about
the learning experience that one has gained by
participating in the process. Naturally, not everyone
may be adept or be proficient at negotiations. Thus, by
dedicating a large portion of the grade on the reflection
process, it allows students to appreciate the entire
experience. Third, this exercise deploys “active
learning techniques” (Shanahan, Hermans, & Haytko,
2006; Lee & Hoffman, 2015) to stimulate student
interaction. Active learning refers to the experience in
which students are thinking about the subject matter
as they interact with other students (Wright, Bitner, &
Zeithaml, 1994). Given that students are required to
interact with others to gather information and to make
negotiation resolutions, such technique promotes
problem solving, time management, and healthy
competition (Laverie, Madhavaram, & McDonald,
2008).The use of a role play and getting students to
immerse themselves in a sales scenario is beneficial in
increasing the applicability of course concepts. Finally,
this method is applicable to courses outside of sales.
For example, a Human Resource course could adapt
this format to run a worker’s pay negotiation scenario.
Instead of having a one-on-one negotiation, the
exercise can mimic a job market scenario where there
are multiple employers with multiple job seekers.
Overall, this adaptation can be applicable to any
course that involves negotiation-based scenarios.
Despite these benefits, there are some limitations
to this exercise. First, the exercise may not be suitable
for a large-size class (100+). With a class size of more
than 100, it may be difficult for the instructor moderate
REFERENCES:
Cummins, S., Peltier, J. W., Erffmeyer, R., & Whalen,
J. (2013). A critical review of the literature for sales
educators. Journal of Marketing Education,35(1),
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Kolb, D. (1984). Experiential learning as the science of
learning and development. Eaglewood Cliffs. New
Jersey: Prentice Hall.
Laverie, D. A., Madhavaram, S., & McDonald, R. E.
(2008). Developing a learning orientation: The role
of team based active learning. Marketing Education
Review, 18(3), 37-52.
Lee, S. H., & Hoffman, K. D. (2015). Learning the
Sham Wow: Creating Infomercials to Teach the
AIDA Model. Marketing Education Review, 25(1),
9-14.
Lewicki, R. J. (1986). Challenges of teaching
negotiation. Negotiation Journal,2(1), 15-27.
Lewicki, R. J. (1997). Teaching negotiation and
dispute resolution in colleges of business: The
state of the practice. Negotiation Journal, 13(3),
253-269.
Serviere-Munoz, Laura (2010),“Epigrammatic Sales
Scenarios and Evaluations: Incorporating the
Experiential Learning Approach to Research,
Development, and Grading of Sales Presentations,”
Journal for Advancement of Marketing
Education, 17, 112-117.
the marketplace. Thus, the exercise is bound by the
number of students that participates in this exercise.
Second, the assignment tends to favor those students
who have extroverted or assertive personalities.
Hence, there is a natural disposition for some students
perform well. Third, students are bound to face moral
dilemmas when engaging in this exercise. For
example, students may engage in unethical practices
such as lying about their offers to other students or
collude with others to get better results. In one
particular case, a team inadvertently deceived another
team regarding the nature of the contract which gave
them an instant edge. Based on the nature of the
assignment, it is difficult to enforce what is acceptable
and what is not, and how it may affect students’
grades. Fourth, some students may dislike that their
grade is tied to a zero-sum game. Some students have
indicated that they feel uncomfortable that an
improvement in their grade may result in lowering of
someone else’s grade. Finally, the data were collected
from two sections in a consumer behavior course
covering a sales-related topic. In the future, it would be
fruitful to examine how this exercise will generalize to
a sales-specific course. While this may be an
improvement to the traditional format, there are
opportunities for additional upgrades. For instance,
this exercise may be adapted for online courses.
Similarly, most online negotiation exercises has also
been limited to one-to-one battles. By expanding the
option for students to negotiate with any member in
the class, it will likely stimulate more interaction among
students.
Shanahan, K. J., Hermans, C. M., & Haytko, D. L.
(2006). Overcoming apathy and classroom
disconnect in marketing courses: Employing
karaoke jeopardy as a content retention
tool. Marketing Education Review, 16(1), 85.
Smolinski, R., &Kesting, P. (2012). Transcending the
classroom: A practical guide to remote role plays in
teaching international negotiation. Negotiation
Journal, 28(4), 489-502.
Weiss, S. E. (2003). Teaching the cultural aspects of
negotiation: A range of experiential
techniques. Journal of Management
Education, 27(1), 96-121.
Wheeler, M. (2006). Is teaching negotiation too easy,
too hard, or both?. Negotiation journal, 22(2), 187-
197.
Widmier, S., Loe, T. W., & Selden, G. (2007). Using
role-play competition to teach selling skills and
teamwork. Marketing Education Review, 17, 69-78.
Wright, L. K., Bitner, M. J., & Zeithaml, V. A. (1994).
Paradigm shifts in business education: Using active
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content. Journal of Marketing Education, 16(3), 5-
19.
Journal for Advancement of Marketing Education, Volume 24, Special Issue in Sales Education, Spring 2016 26
AAppendix A: The Experieential Learninng Model
NNotes: Kolb’s Experiential LLearning Moddel Adapted frrom Lewicki ((1997).
Journal ffor Advancemeent of Marketingg Education, VoVolume 24, Speecial Issue in Saales Educationn, Spring 2016 27
Appendix B: A Sample Assignment and Assessment
Title: THE “FACADE”
CONFIDENTIAL INFORMATION FOR THE BUYER
The value of antique arts have risen rapidly North America over the last few years, and you are interested in
investing in a piece of art. Given your current state, you would like to find a rare art in the $32,000 to $35,000
range, which you could keep for a few years, then resell at a greater profit. Recently, you attended an showcase
for fine arts in the city. You identified an art piece (“The Facade”) that seemed perfect for your collection. Based
on the description, “The Facade” was exactly the type of investment that you were looking for. The asking price
for the art was $36,000, which was slightly over your budget.
You have since collected more information regarding the art market. After careful consideration, you have decided
that you would like to buy the artwork, but not at a price in excess of $35,000. In fact, you would like to buy the art
at a price closer to $32,000. However, you were willing to shell out up to $35,000 if it was necessary to purchase
the art piece. Few days ago, you have called several owners and submitted an offer of $32,000. The owners
agreed to meet with you today to discuss the offer. If you choose the buy the art, your performance will be
evaluated based upon how close you negotiate with the seller to your goal of $32,000.
CONFIDENTIAL INFORMATION FOR THE SELLER
You have owned a rare art piece called “The Facade” for 20 years. You originally purchased this art piece at a
very low price. Now that time has passed, you decided that it was best to sell the art yourself. You decided to sell
it yourself to save on commission. After doing some research, you figured that “The Facade” was worth the
asking price of $36,000. This art has been on the market for 4 weeks, and you have yet to receive an offer. You
have always believed that you owned a unique art piece. You also think that this art has the potential to
appreciate even more. In addition, the artwork has been well maintained, and you believe that the asking price
was quite fair based on the market for antique arts. However, since your art has been on the market for several
weeks, you have decided that you would settle for any offer that yielded $33,000. However, you would prefer to
sell the art as close as $36,000 as possible. Any offer below $33,000, you would rather not sell the art.
Fortunately, several interested buyers called and wanted to set up a meeting. The initial offers for the art was
$32,000, which was well below your minimum. However, you decided to meet with the prospective buyers in
hopes of negotiating a better deal. If you choose to sell the art, your performance will be evaluated based
upon how close the final price you negotiate with the buyer to your goal of $36,000.
CONTRACT
Name of Buyer: _______________
Name of Seller: ___________________
If you reached a deal, what was the final price? _________________________
Journal for Advancement of Marketing Education, Volume 24, Special Issue in Sales Education, Spring 2016 28
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BUSINESS CULTURE’S INFLUENCE ON NEGOTIATORS’ ETHICAL
IDEOLOGIES AND JUDGMENT: AN EIGHT-COUNTRY STUDY
David L. Alexander , Jamal A. Al-Khatib, Mohamad I. Al-Habib, Naima Bogari,
and Najah Salamah
As international business grows, focus on ethical business practices intensifies and insight into
negotiators’ attitudes towards unethical negotiating practices is essential. Using a sample of
managers from eight countries, we find evidence that a country’s business culture affects the
distribution of ethical orientations/positions. Similar distributions are found among countries
with similar business cultures versus national cultures (e.g., we find Japanese negotiators similar
to U.S. negotiators and differing from Chinese negotiators). We then find ethical orientations and
ethical positions drive perceptions of the appropriateness of using various unethical negotiating
tactics—important insights for hiring and training negotiators and preparing for cross-cultural
negotiations.
Individual and business ethics have become a major con-
cern for corporate executives globally because ethical
lapses can significantly harm their company’s bottom
line. Examples of this harm abound in the business
press. In the US, for example, Volkswagen agreed to pay
more than $10 billion to its customers and more than $4
billion to regulators after admitting it included software in
its diesel cars that sensed when emission tests were in
progress and altered engine operations to fake improved
performance (Associated Press, 2017). Barclays Bank was
fined £290 million after some of its derivatives traders
around the world including in London, New York, and
Tokyo were found to have attempted to rig the London
inter-bank offered rate (Libor) (BBC News, 2013).
Corruption is a huge drain on the global economy as
world-wide bribery takes in roughly $1 trillion annually
(World Bank, 2004). Alarmingly (as a recent investigative
profile finds) intermediaries working for Western coun-
tries often don’t face demands from corrupt foreign offi-
cials but rather work to corrupt those officials “starting off
with small gifts and shopping sprees and eventually hook-
ing them on major graft” (Baumann, Grim, &
Blumenthal, 2016).
Given the stakes involved as opportunities for
international trade and business grow around the
world, insights into the ethical ideologies and
moral philosophies of global marketing executives
and those working for/with them in negotiations
and the potential impact of those ethical ideologies
on the use of unethical negotiating practices have
become a managerial imperative. For firms seeking
to develop effective and efficient international
trade relationships, success depends on developing
insights into how their counterparts approach
those relationships and the negotiations that define
them. Negotiation, as “a process of potentially
opportunistic interaction by which two or more
parties, with some apparent conflict, seek to do
better through jointly decided action than they
could otherwise” (Lax & Sebenius, 1986: p. 11),
sees negotiators come to the table with the objec-
tive of achieving their own goals which often
David L. Alexander (Ph.D., Duke University), Associate
Professor of Marketing, Opus College of Business,
University of St. Thomas, Minneapolis, MN, USA, dlalexan-
der@stthomas.edu.
Jamal A. Al-Khatib (Ph.D., University of Mississippi), Professor
of Marketing, Opus College of Business, University of St.
Thomas, St. Paul, MN, USA, jaalkhatib@stthomas.edu.
Mohamad I. Al-Habib (Ph.D., University of Mississippi),
Associate Professor of Marketing, Faculty of Economics and
Administration, King Abdulaziz University, Jeddah,
Saudi
Arabia, habib@kau.edu.sa.
Naima Bogari (Ph.D., University of Huddersfield), Associate
Professor of Marketing, Faculty of Economics and
Administration, King Abdulaziz University, Jeddah, Saudi
Arabia, nalbogari@kau.edu.sa.
Najah Salamah (Ph.D., University of Huddersfield),
Assistant Professor of Marketing, Faculty of Economics and
Administration, King Abdulaziz University, Jeddah, Saudi
Arabia, nsalamah@kau.edu.sa.
Color versions of one or more of the figures in the article can
be found online at www.tandfonline.com/mmtp.
Journal of Marketing Theory and Practice, vol. 27, no. 3 (Summer 2019), pp. 312–330.
Copyright � Taylor & Francis Group, LLC.
ISSN: 1069–6679 (print) / ISSN 1944–7175 (online)
DOI: https://doi.org/10.1080/10696679.2019.1615841
http://orcid.org/0000-0001-6328-2744
http://www.tandfonline.com/MMTP
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conflict with the goals of their counterparts. These
goals and the resulting conflict can cause negotia-
tors to utilize unethical negotiating tactics (e.g.,
lying, making false promises). To make good deci-
sions during negotiations in a global context, it is
important that negotiators and their managers
understand their negotiation counterparts’ ethical
orientations, how those orientations impact percep-
tions of the appropriateness of using unethical
negotiating tactics, and so how their counterparts’
actions may differ from their own—especially
across country borders.
While the negotiation literature offers many studies
dealing with managing the negotiation process, the
literature is still relatively thin in addressing the spe-
cific role of ethics in the negotiation process
(Robinson, Lewicki, & Donahue, 2000). Negotiators
in a global context must develop an understanding of
how their counterparts from different countries differ
from them in how they think and behave (Thelen &
Zhuplev, 2001). This study is unique and contributes
in this endeavor in that we look for (and find) evi-
dence that a country’s business culture (distinct from
its national culture) affects individuals’ ethical ideolo-
gies. We expect that as people gain experience within
their country’s business environment and its particular
industrial structure, their ethical ideology adjusts to
conform to the country’s resulting business culture.
This implies that the distribution of ethical ideologies
among individuals in a country will be similar to the
distribution in countries with similar business cultures
—so, for example, we find negotiators in Japan are
similar to negotiators in the United States and differ
from those in China.
We use a sample of 1,314 marketing managers with
budgetary and personnel responsibility (and so likely to
engage in negotiations) in a range of industries from
eight countries (i.e., Belgium, China, Egypt, Japan,
Russia, Saudi Arabia, the United Arab Emirates (UAE),
and the United States (US)) to explore the effect of a
country’s business culture on individuals’ ethical ideol-
ogy. We find similarities in the distribution of ethical
ideologies among countries with similar business cul-
tures. Having data for individuals from a range of busi-
ness cultures and countries, allows us to then examine
how ethical positions (i.e., absolutism, exceptionism,
situationism, and subjectivism) affect individuals’ per-
ceptions of the appropriateness of using various
unethical negotiating tactics in predictable ways—con-
firming the value of understanding individuals’ ethical
positions when hiring and training negotiators and then
preparing for and conducting global business
negotiations.
In the paragraphs below, we review the literature on
ethical ideologies/positions and their expected effect on
perceptions of the appropriateness of using various
unethical negotiating tactics. We then discuss the rela-
tionship between a country’s business culture and its
distribution of ethical positions. Next, we review expec-
tations for how individuals’ ethical orientation along
idealism and relativism dimensions affect perceptions
of the appropriateness of using unethical negotiating
tactics and the predictable ways in which ethical posi-
tions differ in those perceptions. Finally, we review the
study methodology and results, discuss the implications
of our findings for researchers and practitioners, and
directions for future research are provided.
Theories of business ethics
Positive business ethics theories (e.g., Ferrell &
Gresham, 1985; Hofstede & Vitell, 1986, 1992, 2006;
Rest, 1986; Treviño, 1986) propose that people apply
their ethical rules when confronted with decisions that
challenge their ethics. Jones (1991) offers a synthesis
of these business ethics theories in an effort to develop
a framework that adequately explains differences in
ethical behavior. His model builds on Rest’s (1986)
four-stage model with ethical issues arising from the
environment (social, cultural, economic, organiza-
tional) leading to recognition of a moral issue, making
a moral judgment, establishing moral intent, and
finally engaging in moral behavior. Each of these
steps is influenced by the characteristics of the moral
issue (i.e., its moral intensity) (Jones, 1991). At the
same time, it is possible that a moral issue may not
be recognized—leading to amoral decision making
(Hofstede & Vitell, 1986; Tenbrunsel & Smith-Crowe,
2008). Ferrell and Gresham (1985) posit that the emer-
gence of an ethical issue directly impacts individual
decision-making moderated by individual, social, and
opportunity factors leading to behavior. Hunt and
Vitell (1986) (referred to as the H-V model), on the
other hand, propose a decision-making model with
Summer 2019 313
both deontological and teleological evaluations pre-
ceding moral judgments that then lead to moral inten-
tions and finally moral behavior.
Positive business models differ from normative
models in that they describe what is actually happen-
ing in an organization rather than what should hap-
pen (Loe, Ferrell, & Mansfield, 2000). Most normative
ethical theories in moral philosophy can be classified
as deontological or teleological (Murphy & Laczniak,
1981). Hunt and Vitell (1986: p. 6) assert that the
fundamental difference between deontological the-
ories and teleological theories is their focus: deontolo-
gical theories focus on individuals’ actions or
behaviors and teleological theories focus on the con-
sequences of the actions or behaviors. For deontolo-
gists, “certain features of the act itself other than the
value it brings into existence” determine its righteous-
ness (Frankena, 1963, p. 14 in Hofstede & Vitell, 1986:
p. 6). For teleologists, “there is one and only one basic
or ultimate right-making characteristic, namely, the
comparative value (nonmoral) of what is, probably
will be, or is intended to be brought into being”
(Frankena, 1963, p. 14 in Hofstede & Vitell, 1986: p.
6).
Forsyth (1980) presents a taxonomy of ethical ideol-
ogies that shares similarities with the H-V model. In
the H-V model (Hofstede & Vitell, 1986), an individual
engages in a deontological evaluation of the evoked
set of alternatives that can be employed to resolve a
perceived ethical problem and a teleological analysis
of the consequences of those alternatives to make an
ethical judgment, form an intention, and then engage
in an action or behavior. Forsyth (1980) proposes that
variations in moral judgements can be described by
looking along two basic independent dimensions of
ethical orientations: relativism and idealism.
Relativism is the degree to which an individual rejects
universal moral rules when making ethical judgments.
Similar to deontologists, relativistic individuals are
concerned with more than the value an action might
bring and consider an act’s alignment with universal
moral rules when drawing conclusions about moral
questions. That said, relativistic individuals “reject
the possibility of formulating or relying on universal
moral rules when drawing conclusions about moral
questions” (Forsyth, 1980: p. 175). Similar to teleolo-
gists, idealistic individuals are concerned with the con-
sequences or outcomes that can be obtained in a
situation. Idealism is conceptualized as the degree to
which individuals “assume that desirable conse-
quences can, with the ‘right’ action, always be
obtained” (Forsyth, 1980: p. 176).
Ethics positions theory
In introducing Ethics Position Theory, Forsyth
(1980)
argues that the idealism and relativism dimensions are
independent of each other and so can be dichoto-
mized (i.e., individuals can be classified as high or
low on each dimension) and crossed to identify four
distinct ethical positions that individuals adopt with
respect to ethical decision-making: exceptionist, sub-
jectivist, absolutist, and situationist (Figure 1). These
positions “result from a lifetime of experience con-
fronting and resolving moral issues” (Forsyth and
O’Boyle Jr. 2011: p. 354). We briefly describe each of
these ethics positions below.
Exceptionists
Score low in idealism and low in relativism. They accept
that some harm may be inevitable among the available
actions while being guided by universal principles.
Exceptionists are typically pragmatists who act in ways
that are consistent with moral rules but are open to excep-
tions to these rules (and accept actions that harm others) if
the overall positive consequences of the action outweigh
the negative outcomes. As such, exceptionists are likely to
apply utilitarian principles (i.e., the greatest good for the
greatest number) than deontological principles (Forsyth,
1980; Tansey, Brown, Hyman, & Dawson, 1994).
Subjectivists
Score low on idealism and high on relativism. They
accept that the available actions will likely result in
harm to others but that such harm is not always
unethical. Rather than being constrained by universal
moral principles, subjectivists’ appraisals are based on
personal values and perspectives. They are likely to
base their ethical judgments, in part, on what they
personally stand to gain or lose. In this respect, this
ethical position is similar to ethical egoism.
314 Journal of Marketing Theory and Practice
Absolutists
Score high on idealism and low on relativism. They
believe in universal moral laws and that, with the right
action, positive outcomes/consequences can be attained
for all involved. As a result, absolutists believe that by
following universal moral rules, they can always achieve
the best possible outcomes. As highly idealistic indivi-
duals, absolutists are also likely to consider issues of
justice, fairness, and humanitarianism in their evalua-
tion of ethical issues (Tansey et al., 1994).
Situationists
Score high on idealism and high on relativism. They are
skeptical of universal moral rules but like absolutists
believe that positive outcomes/consequences can be
attained for all concerned. Situationists are more likely
to base ethical judgments on a particular action’s utility
within the present context rather than on an abstract
ethical code. At the same time, they are concerned that
actions not harm others. As a result, situationists work
for the best outcomes for everyone regardless of whether
conventional moral rules are violated.
Forsyth’s research has shown that individuals who
have different ethical ideologies tend to differ in informa-
tion processing regarding non-business ethical dilemmas
(Forsyth, 1985; Forsyth & Pope, 1984) and in ethical judg-
ments regarding non-business ethical dilemmas (Forsyth,
1980, 1981; Forsyth & Berger, 1982). Several studies have
investigated the impact of ethical ideologies on ethical
beliefs amongst US and foreign consumers (Al-Khatib,
Vitell, & Rawwas, 1997; Chan, Wong, & Leung, 1998;
Erffmeyer, Keillor, & LeClair, 1999; McHoskey et al.,
1999; Van Kenhove, Vermeir, & Verniers, 2001). Despite
the apparent relevance of individual’s ethical ideology to
the ethical decision-making process, until recently there
has been relatively little research regarding its impact on
ethical decision making regarding business issues. Forsyth
(1992) suggests that individual’s ethical ideology should
be relevant to their consideration of ethical issues in busi-
ness, and research has found that individual’s ethical
ideology affects their ethical judgments regarding busi-
ness issues (Al-Khatib et al., 2011; Barnett, Bass, &
Figure 1
Ethics Positions
Source: Forsyth et al. (2008)
Summer 2019 315
Brown, 1994; Forsyth, O’Boyle Jr. and McDaniel 2008;
Malshe, Al-Khatib, & Sailors, 2010; Tansey et al., 1994).
Business culture’s influence on ethical
orientation
The present study seeks to extend the exploration of
ethical ideology within the field of business ethics by
examining 1) similarities/differences in the distribution
of ethical positions across countries and 2) the predict-
ability of relationships between ethical positions and
ethical judgments in negotiations across countries.
Previous research on similarities in ethical orientations
across countries has often used Hofstede’s (2001) dimen-
sions of national culture including individualism/collec-
tivism, uncertainty avoidance, power distance, and
masculinity/femininity (e.g., Franke & Nadler, 2008;
Volkema, 2004). Using these dimensions to predict simi-
larities, negotiators in Arab countries like Saudi Arabia
and Egypt would be expected to be similar in their ethi-
cal orientations and ethical positions.
We instead look at the effect of business culture on
ethical orientations across countries. Drawing heavily
from the work of Fukuyama (1995), we see business
culture as an outgrowth of a country’s industrial struc-
ture—itself an outgrowth of the trust engendered by its
available social capital. Fukuyama (1995) proposes that
differences in sociability and the social capital allowing
people “to trust one another and cooperate in the for-
mation of new groups and associations” (p. 90) lead to
differences in industrial structure and the resulting
approaches to political economy and states: “The most
important form of sociability from an economic stand-
point is the ability of strangers (that is, non-kin) to trust
one another and work together in new forms of organi-
zation” (p. 91). In this view, trust reduces transaction
costs (e.g., governance structure complexity) so that
high-trust societies are able to adopt corporate forms of
organization characterized by large, professionally-man-
aged corporations. Low-trust societies, on the other
hand, tend toward familial-based organizations charac-
terized by smaller scale and often state involvement in
the direction of economic activity.
According to Fukuyama (1995), “The primary impact
of spontaneous sociability would appear to be not on
growth rates but on industrial structure—that is, the
number and importance of large versus small corpora-
tions in a national economy and the ways in which they
interact” (p. 95). He notes that the most obvious differ-
ence among countries is their industrial structure and
proposes that these differences are the result of differ-
ences in the social capital available to societies for the
formation of new groups. Social capital is a resource in a
theory of rational action, like physical capital and
human capital, that enables actors to take some action
and while physical and human capital are created and
embedded in forms (physical or human), social capital is
created and embedded in the relations among indivi-
duals and all three forms of capital then enable produc-
tive activity (Coleman, 1988).
Fukuyama (1995) observes that countries like
Germany, Japan, and the United States are characterized
by networks of voluntary, non-kinship associations that
create the high-trust social capital needed “to form large-
scale, hierarchical, professionally managed corporations
in which ownership was dispersed and separated from
management” (p. 91). He notes that countries like
France, Italy, and China, on the other hand, are character-
ized by strong familial/kinship associations that create
low-trust social capital leading to the formation of smaller
businesses/organizations and inhibiting the formation of
large-scale businesses. He also noted that some countries
lack both strong voluntary and familial associations and
so lack the social capital needed to form strong corporate
or familial businesses. This, what we call “no-trust” social
capital, situation creates environments where the stron-
gest community structures are criminal organizations.
Deshpande and Webster (1989) define business cul-
ture (as a pattern of organizational culture) as “the
pattern of shared values and beliefs that helps indivi-
duals understand organizational functioning and thus
provide them norms for behavior in the organization”
(p. 4). We expect that the business culture that devel-
ops in countries with different industrial structures
will differ significantly. Individuals in countries char-
acterized by large-scale, professionally managed busi-
nesses (referred to as high-trust countries because of
their preponderance of high-trust social capital) are
expected to be more pragmatic and more principled.
They likely understand that “sweetheart deals” are
inappropriate and so harmful decision outcomes are
likely regardless of effort and actions. At the same
time, individuals in these countries likely have more
alternatives available to them and so their evoked set
of alternatives is more likely to include options with
positive outcomes for all. Individuals overall, then,
316 Journal of Marketing Theory and Practice
show more moderate levels of idealism. At the same
time, individuals are likely to be less relativistic
because the business culture emphasizes trust across
voluntary associations leading to highly principled
expectations for decision-making. We expect that indi-
viduals in high-trust countries will skew towards abso-
lutism (high in idealism, low in relativism) and
exceptionism (low in idealism, low in relativism) as a
result.
Those in countries characterized by small-scale
businesses with state support for some large-scale
businesses (referred to as low-trust countries
because of their preponderance of low-trust,
family/kin association-based social capital), on the
other hand, are expected to see opportunities to
push boundaries and find outcomes that benefit
all involved. Individuals are more idealistic because
more outcomes are viewed as positive for all
involved. At the same time, individuals are also
more relativistic because decisions are seen from
family/kin association or political contexts rather
than in terms of moral absolutes. As such, indivi-
duals in low-trust countries should skew towards
situationism (high in idealism, high in relativism).
Individuals in countries characterized by small-
scale businesses, a dearth of trust enabling social
capital and likely with strong criminal/corrupt
organizations (referred to as no-trust countries
because of their lack of trust enabling social capi-
tal) likely face the constant presence of corruption
making them less idealistic. In these countries,
individuals’ relativism is a function of their cultural
beliefs, so for example, someone in a deeply reli-
gious society is likely to be lower in relativism than
someone in a Marxist (and so nominally atheist)
society. Overall then, individuals in no-trust coun-
tries should skew towards exceptionism (low in
idealism, low in relativism) and subjectivism (low
in idealism, high in relativism).
Formally, we propose:
H1: The distribution of ethical positions among
individuals should be similar for countries with simi-
lar industrial structures and levels of trust-related
social capital.
a. The ethical positions of individuals in high-trust
countries should skew towards absolutism and
exceptionism.
b. The ethical positions of individuals in low-trust
countries should skew towards situationism.
c. The ethical positions of individuals in no-trust
countries should skew towards exceptionism and
subjectivism.
ETHICAL IDEOLOGIES AND PERCEPTIONS OF
UNETHICAL NEGOTIATING TACTICS
Given that the distribution of ethical positions among
people in a country should be similar to the distribu-
tions in other countries with similar business cultures,
it is important to understand exactly how individuals’
ethical orientation and ethical position impact their
ethical business decision-making. To that end, we con-
sider how ethical ideology influences perceptions of
the appropriateness of using unethical negotiating tac-
tics. We expect that by teasing apart the separate
effects of ethical orientation (i.e., the separate effects
of idealism and relativism) and ethical position across
countries, we will replicate previous research on the
effects of idealism and relativism and add to our
knowledge by showing predictable relationships
among the effects of ethical positions.
Ethical orientations and perceptions of
unethical negotiating tactics
When negotiating, parties to the process attempt to
reach mutually beneficial outcomes, while each
simultaneously tries to meet their own goals. This
goal asymmetry may lead participants to use ques-
tionable/unethical negotiating tactics that they per-
ceive as effective means for influencing or
persuading their counterpart (Banas & Parks,
2002). Several studies have examined perceptions
of various negotiating tactics and their relationship
to different relational and individual factors (Al-
Khatib et al., 2011; Banas & Parks, 2002; Forsyth
et al., 2008; Lewicki & Robinson, 1998;
Robinson et
al., 2000; Volkema & Fleury, 2002). Elahee and
Brooks (2004), for example, showed an inverse rela-
tionship between trust and the use of unethical
negotiating tactics.
In business situations, research has generally found
“idealism is associated with firm moral convictions,
whereas relativism suggests ethical leniency” (Forsyth
Summer 2019 317
et al., 2008: p. 816). For example, with respect to
budgetary practices, idealists showed less questionable
behavior but relativists showed more (Douglas & Weir,
2005). Individuals high in idealism and low in relati-
vism showed higher levels of honesty and integrity
and perceived ethics and social responsibilities as
more important than individuals low in idealism and
high in relativism (Singhapakdi, Kraft, Vitell, &
Rallapalli, 1995; Vitell, Nwachukwu, & Barnes, 1993).
Ethical ideology and perceptions of the appropriate-
ness of questionable negotiating tactics are correlated
(Banas & Parks, 2002). In a meta-analysis of research
over 30 years, Kish-Gephart, Harrison, and Treviño
(2010) find idealism lessens and relativism increases
unethical intention/behavior.
Among individuals contemplating the appropriate-
ness of using unethical negotiating tactics, we expect
that higher idealism is associated with more negative
perceptions of the appropriateness of using those tactics
while higher relativism is associated with more positive
perceptions of their use. These basic relationships
between ethical dimensions and perceptions of the
appropriateness of using unethical negotiating tactics
should hold across people within and across countries.
Formally, we propose:
H2. As an individual’s idealism increases their per-
ceptions of the appropriateness of using unethical
negotiating tactics decreases.
H3. As an individual’s relativism increases their
perceptions of the appropriateness of using unethical
negotiating tactics increases.
Relationships among ethical positions
For negotiators preparing to engage with counterparts
in other countries (or even their own country), under-
standing how people with different ethical positions
approach ethical decision-making and the resulting
differences across those ethical positions is important.
An American absolutist, for example, should under-
stand how a Chinese or an American situationist will
approach a negotiation so they can prepare appropri-
ately in advance of the start of those negotiations.
Forsyth (1980) argues that idealism and relativism are
independent ethical dimensions. As such, individual
ethical positions may enhance or dampen the effects of
idealism and relativism on perceptions of the appropri-
ateness of using unethical negotiating tactics that we
have proposed in H2 and H3. That is, if idealism and
relativism are independent, we should expect to see pre-
dictable relative differences among the four ethical posi-
tions on the appropriateness of using unethical
negotiating tactics. Forsyth (1980) identifies those high
in idealism and low in relativism as absolutists. Their
position on these two ethical dimensions each reinforces
the dampening effect of that ethical orientation on per-
ceptions of the appropriateness of using unethical nego-
tiating tactics. As such, among the four ethical positions,
absolutists should perceive unethical negotiating tactics
as the least appropriate for use. Subjectivists, on the
other hand, hold the opposite positions on both ethical
dimensions. Being low in idealism and high in relativism
reinforces the enhancing influence of that ethical orien-
tation on perceptions of the appropriateness of using
unethical negotiating tactics. As such, among the four
ethical positions, subjectivists should perceive unethical
negotiating tactics as the most appropriate for use.
Exceptionists and situationists, because they are high
or low on both ethical dimensions are expected to see a
counter-balancing of the effects of idealism and relativism
on perceptions of the appropriateness of unethical nego-
tiating tactics as proposed in H2 and H3. For exceptionists,
lowering idealism increases perceptions of appropriate-
ness while lowering relativism decreases those percep-
tions. For situationists, increasing idealism lowers
perceptionsofappropriatenesswhileincreasingrelativism
increases those perceptions. These counter-balancing
effects of the ethical orientations are expected to result
in exceptionists and situationists showing similar percep-
tions of the appropriateness of using unethical negotiat-
ing tactics. These perceptions of the appropriateness of
using unethical negotiating tactics, then, should be
lower than the appropriateness perceptions of subjecti-
vists and higher than the appropriateness perceptions of
absolutists.
The effects of ethical position and the relationships
among those positions should hold within and across
countries. That said, the business culture in each coun-
try influences the distribution of ethical positions
within that country—meaning that not all ethical
positions may be present in a country.
Formally, we propose:
H4. Relative to the other ethical positions identified
by Forsyth (1980):
318 Journal of Marketing Theory and Practice
a. Absolutists perceive unethical negotiating tactics as
the least appropriate for use.
b. Subjectivists perceive unethical negotiating tactics
as the most appropriate for use.
c. Exceptionists and situationists do not significantly
differ in their perceptions of the appropriateness of
using unethical negotiating tactics and each perceive
the tactics as more appropriate for use than do abso-
lutists and less appropriate for use than do
subjectivists.
Sampling
Testing our hypotheses requires access to a dataset
drawn from actual business decision-makers across
a range of countries representing the different busi-
ness cultures about which we hypothesize. We con-
structed a sample of 1,314 marketing managers
with budgetary and personnel responsibility (and
so who likely engage in negotiations or manage/
work with those who do) from 8 countries using
data collected for and used in other projects.
Outside the US, given the challenges in obtaining
random sampling of individuals in these countries,
judgmental sampling as suggested by Tuncalp
(1988) and Bhuaian, Abdul-Muhmin, and Kim
(2002) was used to identify appropriate samples of
200 marketing executives in each country (300 in
the UAE). The individuals were selected from a
wide variety of demographic and socio-economic
backgrounds. Specifically, every attempt was made
to have a broad distribution across the demo-
graphic categories of gender, age and education.
Participation in the study was restricted to citizens
of their respective nations. Local “data captains”
were selected in each nation and trained in data
collection techniques by two of the study’s authors
and academic collaborators in the sampled coun-
tries. Since information regarding non-respondents
was not provided, it is difficult to discern if any
non-response biases exist. However, it has been
argued in prior studies of cultural phenomena
across borders (e.g., Shane, Venkataraman, &
MacMillan, 1995) that no theoretical evidence
exists that suggest a significant non-response bias
influence on culturally generated data.
Those identified were contacted about the purpose
of the research study and given procedural instruc-
tions for participating in the study. One week later
the survey instrument was delivered by hand in the
morning and picked up at the end of that day. In the
US, on the other hand, a sample of 300 marketing
executives was identified from the membership list
of the Institute of Supply Chain Management. A web
link was emailed to these marketing executives who
were then able to complete the survey instrument
online. A total of 1,314 completed and usable sur-
veys were received. Table 1 provides a summary of
the demographic profile of the sample. Roughly 81%
of the respondents earned a college or a graduate
degree, the majority were men (70.5%), having
approximately six years of experience in their cur-
rent positions and employed by large companies
(average employer size is 1,244 employees).
Measurement
The self-administered survey consisted of three sec-
tions. The first section contained basic demo-
graphic characteristics. Section two focused on
ethical ideologies measured using the Ethics
Position Questionnaire developed and validated by
Forsyth (1980). The section consists of twenty
items designed to measure idealism (10 items) and
relativism (10 items). Respondents were asked to
indicate their agreement or disagreement with
each item using a five-point Likert format where a
5 indicated strong agreement with a statement. All
questions were worded in a positive direction. The
final section contained the 16-item/five-factor Self-
Reported Inappropriate Negotiation Strategies
(SINS) scale developed and validated by Robinson
et al. (2000). Volkema (2004), in a nine-country
study of the impact of several socio-economic fac-
tors on the perceptions of inappropriate negotiat-
ing tactics, found that the traditional competitive
bargaining tactic was perceived to be the most
appropriate and the most likely tactic of all five
negotiating tactics to be used by respondents from
each of the nine countries studied. Based on this
finding, the present study excludes traditional com-
petitive bargaining from the analysis. Respondents
also completed items used for other projects and so
are excluded here.
Summer 2019 319
The back-translation method was used to translate
the survey from the source language (English) to the
target languages. The translated English version was
checked for cross-cultural equivalency and accuracy.
Table 2 provides each construct, source of the mea-
surement scale, sample statement and the present
study’s reliability coefficients. All scales achieved
acceptable levels of reliability (Peter, 1979).
Results
Testing our hypothesis (H1) that the distribution of
ethical positions among individuals should be similar
for countries with similar industrial structures and
levels of trust-related social capital requires first classi-
fying each country in our dataset as either a high-trust,
low-trust, or no-trust country. We started with the
classifications made by Fukuyama (1995) who identi-
fied the US and Japan as high-trust countries and
China as a low-trust country. We then used profiles
in the CIA World Factbook (CIA, 2017) to classify the
Table 1
Sample Demographic Profile
Variable
US
n = 254
UAE
n = 208
Saudi
n = 198
Russia
n = 138
Japan
n = 102
China
n = 111
Belgium
n = 153
Egypt
n = 150
Total
n = 1314
Highest level of education:
High school or less – 1.8% 15.5% – 1.1% – – – –
Some college 6.0% 8.3% 47.3% 6.7% 19.8% 38.3% 30.8% 20.2% 18.8%
College degree 42.9% 76.9% 35.1% 92.6% 58.2% 42.6% 35.6% 64.9% 65.6%
Graduate degree 51.2% 13.0% 2.0% .7% 20.9% 19.2% 33.6% 2.1% 15.6%
Gender:
Male 80.2% 69.8% 97.9% 58.2% 49.5% 63.1% 61.4% 61.3% 70.5%
Female 19.8% 30.2% 2.0% 41.8% 50.5% 36.9% 38.6% 38.7% 29.5%
Age 49.82 38.57 38.61 39.44 38.18 43.95 39.6 43.39 42.30
Years in your current position 8.83 4.42 6.49 5.43 5.31 7.66 5.33 2.76 5.96
Number of employees in your
organization
6.02 3521.63 2079.50 146.47 2711.72 63.99 39.72 1592.03 1244.95
Table 2
Study Measures and Reliabilities
Construct Source
Number
of items Sample item
Cronbach’s
Alpha
Relativism Forsyth
(1980)
10 What is ethical varies from one situation and society to another. .78
Idealism Forsyth
(1980)
10 Risks to another should never be tolerated, irrespective of how small the risks
might be.
.86
Information
Misrepresentation
Robinson et
al. (2000)
4 Intentionally misrepresent the progress of negotiations to your constituency in
order to make your own position appear stronger.
.79
False Promises Robinson et
al. (2000)
3 In return for concessions from your opponent now, offer to make future
concessions which you know you will not follow through on.
.80
Attacking
Opponents
Robinson et
al. (2000)
3 Attempt to get your opponent fired from his/her position so that a new person
will take his/her place.
.77
Inappropriate
Information
Gathering
Robinson et
al. (2000)
3 Gain information about an opponents’ negotiating position by paying your
friends, associates, and contacts to get this information for you.
.80
320 Journal of Marketing Theory and Practice
remaining countries in our dataset. Russia, with its
communist history and continued state involvement
in the economy and presence of a few large-scale busi-
nesses (indirectly controlled by the state) was classified
as a low-trust country. Saudi Arabia and the UAE were
classified as low-trust countries because of the heavy
involvement of the governments in each country’s
economy through their control of oil revenues and
investments in specific areas to increase job opportu-
nities. Egypt was classified as a no-trust country
because of the predominance of small businesses, the
weakness/unsustainability of public finances, and the
uncertain political, security, and policy environment.
We classified Belgium as a high-trust country because
of its well-diversified economy driven by its geographi-
cally central location and strong links with companies
in the EU countries surrounding it and its lack of state
backing of specific companies/industries.
As a simple, informal initial test of the H1 proposi-
tions with respect to the distribution of ethical posi-
tions in countries with similar industrial structures
and levels of trust-related social capital, we visually
examined scatter plots for each country that mapped
respondents by their reported idealism and relativism
scores (Figure 2). The scatter plots show different pat-
terns for each country but with similarities in the dis-
tribution of individuals’ idealism and relativism
among countries in the same business culture clusters.
As predicted by H1a-c, the distribution of idealism and
relativism in high-trust countries (i.e., US and Japan)
skews towards absolutism, in low-trust countries (i.e.,
China, Russia, and to some degree the UAE) skews
towards situationism, and in no-trust countries (i.e.,
Egypt) skews towards exceptionism. The distribution
in Belgium and Saudi Arabia do not visually show clear
skewing towards a particular ethical position.
Next, per Forsyth (1980), we classified individual
respondents as either high or low on idealism and
relativism so we could assign them to an ethical posi-
tion. In measuring idealism and relativism, we used a
5-point response scale with “neutral” as the mid-point.
We coded the data with neutral as zero (so the data
range from −2 to 2). Forsyth’s (1980) typology pro-
poses absolute rather than relative perspectives on
the ethical positions. That is, someone is either high
or low in idealism/relativism in absolute terms rather
than high or low relative to others in a country. As
such, we classified individual’s scores above zero as
being high on a dimension and scores below zero as
being low on that dimension. Individuals who score
zero then are indeterminate for that dimension. To
account for measurement error in respondents’ use of
the scale, we classified respondents whose score was
within 5% of neutral on the scale as indeterminate on
that dimension (i.e., scores that ranged from −0.10 to
0.10). Respondents were then assigned to an ethical
position based on their idealism and relativism classi-
fications. If a respondent was classified as indetermi-
nate on one or both ethical orientation dimensions,
they were classified as indeterminate with respect to
ethical position. Roughly 26% of respondents were
classified as indeterminate with Japan and Saudi
Arabia (21%) having the fewest and Belgium (36%)
having the most indeterminate respondents.
As a further test of H1, we then looked at the frequency
of high and low idealistic and relativistic individuals in
each country (Table 3) among respondents not indetermi-
nate with respect to ethical position. These data show that
the majority of respondents in all countries except Egypt
were categorized as high in idealism. For relativism, on the
other hand, the US, Japan, and Egypt show a majority
with low relativism with the other five countries showing
a majority with high relativism. Consistent with H1,
when we examine similarities in the distribution of ethical
ideologies across countries (crossing dominant orienta-
tions), we find countries with similar industrial structures
and levels of trust-related social capital have the same
dominant ethical ideology: supporting H1a, the US and
Japan are absolutists (High in idealism/Low in relativism);
supporting H1b, the UAE, Saudi Arabia, Russia, and China
are situationists (H/H); supporting H1c, Egypt is excep-
tionist (L/L). Counter to our expectations in H1a, how-
ever, Belgium shows situationist (H/H) dominance rather
than aligning with the US and Japan. Belgium is unique
because of its division into Flemish and Walloon cultural
camps which may explain this alignment with the low-
trust countries (e.g., Al-Khatib et al., 2011).
Finally, looking at the distribution of the ethical
positions assigned to respondents in each country
(Table 4), offers further support for H1. Supporting
H1a, absolutists and exceptionists predominate in
high-trust countries; supporting H1b, situationists pre-
dominate in low-trust countries; and supporting H1c,
exceptionists predominate in no-trust countries.
Belgium is something of an outlier here as well in
that there is a plurality rather than majority of
Summer 2019 321
Figure 2
Idealism by Relativism Country Scatter Plots
322 Journal of Marketing Theory and Practice
absolutists and exceptionists among individuals
assigned an ethical position.
Given the distribution of ethical positions across
countries, it is important to understand the relative
effects the different positions have on individuals’
attitudes toward using unethical negotiating tactics.
To that end, we tested our propositions that idealism
decreases (H2) and relativism increases (H3) percep-
tions of the appropriateness of using unethical nego-
tiating tactics. There are, of course, many different
negotiating tactics and negotiation contexts resulting
in differences in perceptions of ethicality and of the
potential severity of unethical behavior. Robinson et
al. (2000) developed the Self-reported Inappropriate
Negotiation Strategies (SINS) scale in an effort “to
determine the perceived appropriateness of marginally
ethical tactics in a ‘neutral’ context, and the willing-
ness of respondents to use those tactics” (p. 650–51).
The SINS scale contains 16 items and identifies a five-
factor model with each factor identifying as an unethi-
cal negotiating tactic. In our analyses, we use the four
unethical negotiating tactics seen as least appropriate
in negotiations in prior research (Volkema, 2004) and
test our hypotheses against each of these tactics. The
unethical negotiating tactics in the SINS scale included
in our analyses are (1) making false promises (three
items), (2) misrepresenting information/position to
the opponent (four items), (3) attacking an opponent’s
network (three items), and (4) inappropriate informa-
tion gathering (three items) (Robinson et al., 2000).
Information on these scales is provided in Table 2.
We expect H2, H3, and H4 hold for each of these
unethical negotiating tactics/factors.
To test H2 and H3, for each of the unethical nego-
tiating tactics, we regressed perceptions of the appro-
priateness of using the tactic against respondent’s
idealism and relativism scores while controlling for
respondent’s country using the complete dataset
Table 3
Level of Idealism and Relativism by Country
Idealism Relativism Dominant
Low High Low High Orientation
United States 31.4% 68.6% 75.7% 24.3% H/L
Japan 8.6% 91.4% 64.2% 35.8% H/L
Belgium 31.6% 68.4% 39.8% 60.2% H/H
China 5.0% 95.0% 8.8% 91.3% H/H
Russia 18.3% 81.7% 31.7% 68.3% H/H
United Arab
Emirates
9.1% 90.9% 42.9% 57.1% H/H
Saudi Arabia 10.2% 89.8% 40.1% 59.9% H/H
Egypt 100.0% 0.0% 88.9% 11.1% L/L
Table 4
Frequency of Ethical Ideology by Country
Absolutist Exceptionist Situationist Subjectivist
United
States
95 51.4% 45 24.3% 32 17.3% 13 7.0%
Japan 48 59.3% 4 4.9% 26 32.1% 3 3.7%
Belgium 38 38.8% 1 1.0% 29 29.6% 30 30.6%
China 7 8.8% 0 0.0% 69 86.3% 4 5.0%
Russia 27 26.0% 6 5.8% 58 55.8% 13 12.5%
United Arab
Emirates
66 42.9% 0 0.0% 74 48.1% 14 9.1%
Saudi Arabia 61 38.9% 2 1.3% 80 51.0% 14 8.9%
Egypt 0 0.0% 104 88.9% 0 0.0% 13 11.1%
Table 5
Ethical Orientation’s Effect on Perceptions of Unethical Negotiation Tactics’ Appropriateness
Unethical
Negotiating Tactic Idealism Relativism
Making False Promises b = − .43, t(1304) = − 9.17, p < .01 b = .55, t(1304) = 12.17, p < .01
Information Misrepresentation b = − .48, t(1304) = − 10.20, p < .01 b = .51, t(1304) = 11.09, p < .01
Attacking Opponent Network b = − .54, t(1304) = − 11.41, p < .01 b = .44, t(1304) = 9.49, p < .01
Inappropriate Information Gathering b = − .47, t(1304) = − 9.71, p < .01 b = .44, t(1304) = 9.27, p < .01
Summer 2019 323
(including those classified as indeterminate). Table 5
summarizes the results. Supporting H2, idealism
decreased perceptions of the appropriateness of using
each of the four unethical negotiating tactics. Idealism
showed its strongest effect on the tactic of attacking an
opponent’s network where a one point increase on the
idealism scale lowered perceptions of the appropriate-
ness of using the tactic by 0.54 points on the tactic’s
scale (t(1304) = − 11.41, p < .01). Idealism showed its
weakest effect on the tactic of making false promises
where a one point increase on the idealism scale low-
ered perceptions of the appropriateness of using the
tactic by 0.43 points on the tactic’s scale (t
(1304) = − 9.17, p < .01). Supporting H3, relativism
increased perceptions of the appropriateness of using
each of the tactics. Relativism showed its strongest
effect on the tactic of making false promises where a
one point increase on the relativism scale increased
perceptions of the appropriateness of using the tactic
by 0.55 points on the tactic’s scale (t(1304) = 12.17,
p < .01). Relativism showed its weakest effect on the
tactic of attacking an opponent’s network where a one
point increase on the relativism scale increased percep-
tions of the appropriateness of using the tactic by 0.44
points on the tactic’s scale (t(1304) = 9.49, p < .01).
Finding support for both H2 and H3, we next tested
H4’s propositions on the relationships between and
among the ethical positions’ effects on attitudes
towards using unethical negotiating tactics. To test
the relationships between the ethical positions we
used a series of planned contrasts on an ANOVA exam-
ining the effect of the ethical positions on perceptions
of the appropriateness of using each of our four focal
unethical negotiating tactics while controlling for
respondent’s country. We included all respondents in
the data set (including those classified as indetermi-
nate). Table 6 summarizes the results of the conducted
planned contrasts for each of the unethical negotiat-
ing tactics described below. H4 hypothesizes a linear
relationship among the ethical positions’ perceptions
of the appropriateness of using unethical negotiating
tactics with absolutists perceiving use of these tactics
as least appropriate (H4a), subjectivists perceiving
them as most appropriate (H4b), and exceptionists
and situationists falling between the two (H4c). We
used planned contrasts to test this linear relationship
among the ethical positions’ perceptions of the appro-
priateness of using each of the four unethical
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324 Journal of Marketing Theory and Practice
negotiating tactics. Supporting H4, the linear relation-
ship was significant for each tactic (F
(1,1302) = {119.43 ~ 169.13}, all p’s < .01).
Next, we used planned contrasts to test the compo-
nents of H4. First, we used planned contrasts to test
whether exceptionists and situationists differed in their
effect on perceptions of the appropriateness of using
unethical negotiation tactics (H4c predicts that they do
not differ). The hypothesis that exceptionists and situa-
tionists had significantly different effects on perceptions
of appropriateness was rejected for each of the unethical
negotiating tactics (F(1,1302) = {0.10 ~ 3.60}, all p’s > .05).
Then we tested the relationship between the appropriate-
ness perceptions of exceptionists and situationists and
subjectivists and then absolutists looking for support for
the remainder of H4c and also for H4a and H4b. We used
planned contrasts to test the hypothesis that subjectivists’
appropriateness perceptions were significantly different
from and greater than the appropriateness perceptions
of exceptionists/situationists and accepted this hypoth-
esis for each of the unethical negotiation tactics (F
(1,1302) = {27.56 ~ 51.28}, all p’s < .01). Then, we used
planned contrasts to test the hypothesis that absolutists’
appropriateness perceptions were significantly different
from and lower than the appropriateness perceptions of
exceptionists/situationists and accepted this hypothesis
for each of the unethical negotiating tactics (F
(1,1302) = {74.18 ~ 125.17}, all p’s < .01). These results
provide support for the remaining part of H4c and the
partial order transitivity supports H4a and H4b (among
the ethical positions, absolutists perceive using unethical
negotiating tactics as least appropriate and subjectivists
perceive using them as most appropriate).
Business negotiations are challenging in that nego-
tiating parties come to the table with their own
goals which likely conflict with those of their coun-
terparts. Throughout a negotiation there are oppor-
tunities for negotiators to try and gain an upper
hand by using unethical negotiating tactics. To
make good decisions during negotiations, it is
important that negotiators and their managers
understand their negotiating counterparts’ ethical
orientations, how those orientations impact percep-
tions of the appropriateness of using unethical
negotiating tactics, and so how their counterparts’
actions may differ from their own. This is espe-
cially important in a global context where indivi-
duals bring influences from their home country
and its business culture to their interactions.
The present study adds to our understanding of
cross-cultural differences in perceptions of the
appropriateness of unethical negotiating tactics by
considering how a country’s business culture
(resulting from its industrial structure and trust-
related social capital) affects ethical orientations
and the distribution of ethical positions across
countries. A country’s business culture seems parti-
cularly important in influencing people’s ethical
ideologies because these ideologies develop as peo-
ple confront and resolve ethical dilemmas through-
out their business careers (Forsyth & O’Boyle,
2011). We looked at the industrial structure and
trust-related social capital levels and resulting busi-
ness culture in a country and predicted how it
would influence individuals’ idealism and relati-
vism. Countries with similar industrial structures
and trust-related social capital should show simila-
rities in business culture and so here, using data
from experienced marketing managers from eight
countries who work in a variety of industries, we
find similarities in the distribution of ethical orien-
tations and ethical positions among individuals in
those similar countries.
Those in countries characterized by small-scale
businesses, a dearth of trust enabling social capital
and likely with strong criminal/corrupt organiza-
tions (Egypt in our sample) were low in idealism
likely as a result of the constant presence of corrup-
tion and low in relativism likely as a result of the
strength of Islam in the country (Barnett, Bass, &
Brown, 1996) and so skewed towards exceptionism.
Those in countries characterized by small-scale
businesses with state support for some large-scale
businesses and a preponderance of low-trust,
family/kin association-based social capital (China,
Russia, Saudi Arabia, and the UAE) likely see oppor-
tunities to push boundaries and find outcomes that
benefit all—showing higher idealism and higher
relativism and skewing towards situationism.
Those in countries characterized by large-scale, pro-
fessionally managed businesses (Japan, Belgium and
the US) were low in relativism likely because of the
Summer 2019 325
highly principled expectations for business deci-
sion-making and high in idealism likely because
more alternatives are available increasing the
opportunities for finding outcomes that benefit all.
The impact of ethical ideologies on perceptions of
the appropriateness of using unethical negotiation
tactics along with the similarities in the distribu-
tion of ethical orientations and ethical positions
among individuals in countries with similar indus-
trial structure and trust-related social capital have
important ramifications for 1.) organizations iden-
tifying candidates for positions requiring negotia-
tions (whether national or international), 2.)
organizations training negotiators in negotiation
tactics, and 3.) managers and negotiators preparing
to engage in negotiations. While our studies are
exploratory and generalizations are limited given
our sampling method, we believe these results
have implications for managers and researchers
that are worth reviewing.
Implications for hiring
In developing a taxonomy of ethical ideologies,
Forsyth (1980) offers four mutually exclusive and
exhaustive personal moral philosophies that allow
the categorization of individuals by their underlying
ethical theories. For organizations hiring or assigning
individuals into roles that involve negotiation, our
research reinforces the value of these categories for
understanding how an individual approaches ethical
decision-making and so their appropriateness for a
negotiating role. Previous research has tended to use
Forsyth’s (1980) Ethics Position Questionnaire (EPQ)
to make relative assessments of the level of a respon-
dent’s idealism and relativism (e.g., using median
splits) in order to determine their ethical position lim-
iting the available insights (e.g., Banas & Parks, 2002;
Tansey et al., 1994). Our sample, on the other hand, is
broad enough to allow us to make absolute judge-
ments of level of idealism and relativism using the
EPQ and so test and validate Forsyth’s (1980) original
predictions (H4).
For companies operating in multiple countries, the
insights gained about the effect a country’s business
culture has on the distribution of ethical ideologies in
that country should prove useful. Rather than consid-
ering the traditional national culture (e.g., Hofstede’s
(1980) five cultural dimensions) in recruiting and
remote office decisions, matching candidates on the
business culture resulting from their country’s indus-
trial structure and social capital is more likely to pro-
duce a fit on ethical ideology (H1). For example,
American companies are more likely to find absolutist
candidates like their employees in other high-trust
countries like Japan or Germany than in low-trust
companies like China or France.
Implications for training
Given the strong relationship found here between ide-
alism, relativism, ethical position and perceptions of
the appropriateness of unethical negotiating techni-
ques, ethics position and the EPQ should be valuable
tools in preparing and assessing training of negotiators
in ethical decision making. In preparing ethics train-
ing, focusing on approaches that increase idealism and
reduce relativism and so reinforcing absolutism should
work to minimize unethical behavior. Using the EPQ
to identify the ethical position of trainees in advance
allows training programs to be customized to focus on
changing the specific aspects of an individual’s perso-
nal moral theories that are most likely to lead to con-
sideration or use of unethical negotiating tactics.
Tansey et al. (1994) suggest that the EPQ is then a
useful tool for evaluating changes in ethical decision-
making after ethics training.
Perhaps the most interesting implication of the
links between business culture and ethical ideology is
the expectation that one’s ethical ideology evolves as
one faces and resolves moral issues (Forsyth & O’Boyle,
2011). This suggests that as individuals gain experi-
ence in the business culture of a country (and an
organization), their moral theories change in ways
that can make them more or less suited for roles invol-
ving negotiation. Prior research has found an associa-
tion between work environment and moral judgment
(for a review, see Treviño, Weaver, & Reynolds, 2006).
Moral reasoning scores are different across fields/func-
tions and decline with age/experience (Elm & Nichols,
1993; Lampe & Finn, 1992; Ponemon, 1990, 1992).
This suggests the value of continuing ethics training
at all levels in an organization and that the EPQ and
326 Journal of Marketing Theory and Practice
ethics positions are valuable tools for identifying can-
didates for that training.
For multi-national companies looking to identify
individuals for global leadership positions, the EPQ and
ethical positions offer an added tool for selection into
leadership development/training programs. While lea-
ders’ capacity for moral reasoning appears to be linked
to perceptions of those individuals as transformational
leaders (Turner, Barling, Epitropaki, Butcher, & Milner,
2002), higher moral reasoning isn’t predictive of who
emerges as the leader in a decision-making group
(Dukerich, Nichols, Elm, & Vollrath, 1990). As compa-
nies develop their strategies for leadership development,
the business culture in the countries they operate in and
recruit from offer an initial insight into the ethical train-
ing challenges that might arise.
Implications for preparation
Previous research has shown the effect of Hofstede’s
(1980) cultural dimensions (Forsyth et al., 2008;
Volkema, 2004) on ethical attitudes in a country. Our
research encourages negotiators to also consider the
business culture of a country too. For example, an
American marketing manager preparing for a negotia-
tion with counterparts in Japan using traditional cul-
tural similarities might expect Japanese negotiators to
show situationism like those in China or other Asian
countries. Considering business culture instead would
result in the American negotiator preparing to negoti-
ate with a Japanese counterpart understanding that
the Japanese ethical ideology is likely to be similar to
the American.
Our results also highlight the importance of negotia-
tors’ ethical orientation on the approaches to negotiating
as well. As idealism increases and relativism decreases,
individuals become less likely to view the use of unethical
negotiating tactics as appropriate. Negotiators who have
adopted an absolutist ethical position (high on idealism,
low on relativism) are the least likely to view unethical
negotiation tactics as appropriate. The negotiators who
are most likely to have a positive view of the appropriate-
ness of unethical negotiating tactics are those with a sub-
jectivist ethical position being low in idealism and high in
relativism. Negotiators whose ethical orientation differs
from that of absolutists or subjectivists on one dimension
of ethical orientation (either idealism or relativism) adopt
either the exceptionist or situationist ethical position.
Exceptionists and situationists share similar views of the
appropriateness of unethical negotiating tactics but view
using the tactics more positively than absolutists and less
positively than subjectivists.
For negotiators, the relationships among the ethi-
cal positions are useful because they provide a rela-
tive perspective on how to approach any
negotiation. A negotiator who recognizes their own
ethical position can work to gauge the ethical posi-
tion of their counterpart and adjust their approach
accordingly. Our results offer a starting point by
identifying the likely ethical positions of negotiators
from countries with specific industrial structures and
levels of trust-related social capital. Negotiators
should, as they get to know their counterpart, work
to identify that counterpart’s ethical position—are
they high or low (in absolute terms) on idealism
and relativism.
LIMITATIONS AND DIRECTIONS FOR FUTURE
RESEARCH
Limitations of the sampling method
As with any exploratory study in cross-cultural ethics,
limitations are inevitable. Risks must be taken, how-
ever, in order to extend our current boundaries of
knowledge. The present study sample limits the gen-
eralizability of the findings. Future studies should
attempt to obtain data from a more random sample.
Social desirability bias may have been a factor in
response to some of the questions (despite the fact
that every attempt was made to prevent against this
influence). Some respondents may have simply pro-
vided the socially desirable response in order to appear
ethical. The likelihood of such a possibility has been
expressed by other cross-cultural researchers in busi-
ness and marketing ethics (Al-Khatib et al., 1997).
Future studies should examine the inclusion of mea-
sures for controlling such bias.
Future research
There are many potential areas for future research.
Future research should be conducted to test the gen-
eralizability of the results of this study by exploring
ethical positions for negotiators in other countries,
especially those with low levels of trust-related social
capital and an industrial structure dominated by small
Summer 2019 327
businesses and strong criminal social structures. Our
results indicate that individuals preparing for negotia-
tions in the Arab region or East Asia, for example,
cannot assume their counterparts across countries
will adopt the same ethical position. Future research
should look at other culturally similar regions for simi-
lar results based on business culture.
Future research should also examine other dimen-
sions of business culture and their relationship to ethi-
cal orientation and position. We have assumed that
the industrial structure and level of trust-related social
capital in a country influences the business culture and
people’s ethical orientation. Future research should
also examine entrepreneurialism and brand/corporate
reputation dimensions as well, as both are likely to
change how individuals view the potential outcomes
of different alternatives. Future research should exam-
ine the interactions between dimensions of business
culture (e.g., industrial structure, importance of brand/
corporate reputation, entrepreneurialism) and
Hofstede’s (1980) dimensions of culture to understand
both how business culture develops and evolves over
time and how this interaction enhances or under-
mines similarities in ethical positions across countries.
Finally, while there has been rich development
of positive business ethics models (e.g., Ferrell &
Gresham, 1985; Hofstede & Vitell, 1986; Jones,
1991), some question whether modeling ethical
decision making differently than other decision
making adds value to the endeavor (Elm, Nichols,
& Radin, 2012). Moore, Detert, Treviño, Baker, and
Mayer (2012), following the work of Bandura
(1990, 1999, 2002)), suggest that an important dri-
ver of unethical behavior is “an individual’s pro-
pensity to morally disengage—that is, an individual
difference in the way that people cognitively pro-
cess decisions and behavior with ethical import
that allows those inclined to morally disengage to
behave unethically without feeling distress” (p. 2).
Future research should examine the effect of ideal-
ism and relativism on the processes leading to
moral disengagement.
ORCID
David L. Alexander http://orcid.org/0000-0001-
6328-2744
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- Abstract
- ETHICAL IDEOLOGIES AND PERCEPTIONS OF UNETHICAL NEGOTIATING TACTICS
- LIMITATIONS AND DIRECTIONS FOR FUTURE RESEARCH
- References
ETHICAL IDEOLOGIES
Theories of business ethics
Ethics positions theory
Exceptionists
Subjectivists
Absolutists
Situationists
Business culture’s influence on ethical orientation
Ethical orientations and perceptions of unethical negotiating tactics
Relationships among ethical positions
METHOD AND RESULTS
Sampling
Measurement
Results
DISCUSSION
MANAGERIAL IMPLICATIONS
Implications for hiring
Implications for training
Implications for preparation
Limitations of the sampling method
Future research
THE ETHICAL CHALLENGES OF GLOBAL
BUSINESS-TO-BUSINESS NEGOTIATIONS:
AN EMPIRICAL INVESTIGATION OF
DEVELOPING COUNTRIES’ MARKETING
MANAGERS
Jamal Al-Khatib
University of St. Thomas
Mohammed Y. A. Rawwas
University of Northern Iowa
Ziad Swaidan
University of Houston – Victoria
Richard J. Rexeisen
University of St. Thomas
The present study examines the impact of idealism, relativism and Machiavellianism on the perceived appropriateness of five
opportunistic negotiation tactics (i.e., traditional competitive bargaining, attacking opponent’s network, making false promises,
misrepresentation of infonnation, and inappropriate infonnation gathering) using a sample from the United Arab Emirates (U AE).
Results indicate that idealism and Machiavellianism are strong predictors of managers’ perceptions of the ethical appropriateness
of negotiating tactics. Implications of these results for global firms and marketing executives are discussed and directions for
future research are provided.
46 Journal of Marketing THEORY AND PRACTICE
INTRODUCTION
Today, multinational firms consider the task of understanding
the ethical mindset of their global partners a major priority and
a must for successfully operating in the global market
(Bagozzi 1995). Oil and recent geopolitical events have placed
the Arab world at the center of attention on the global stage
and have presented many potentially profitable opportunities
in the region for interested western firms. Universities have
also responded to such interest by offering executive seminars
devoted to understanding the mindset of business executives
in the region. For example, the University of Memphis CIBER
designed the GlobalEd Seminars in Business, Culture and
Leadership to broaden cultural and leadership understanding
among executives of international corporations to prepare them
for conducting business in the Arab region (Wang Center for
International Education Business Education and Research
2005). Despite this heightened interest, very limited effort has
been made by social and behavioral scientists to study that part
of the world and its people. Most of the current research is
journalistic in nature and tends to lack any scientific support.
Western executives continue to rely on simplistic formulas
such as “do as the Romans do” when dealing witii their Arab
counterparts (Little 2004).
As international trade and business opportunities grow in the
Arab region, western executives are constantly negotiating
with Arab executives. The negotiation process is plagued with
ethical dilemmas and opportunistic temptations. In a tactical
process, as two parties try to reach agreement, each wanting to
maximize their results, the temptations to use deceptive or
dishonest tactics are undeniable. In fact, negotiation has been
defined as “a process of potentially opportunistic interaction
by which two or more parties, with some apparent conflict,
seek to do better through jointly decided action than they could
otherwise” (Lax and Sebenious 1986, p. 11). Despite the
potential for opportunistic tendencies in the negotiation
exchange, western firms’ executives continue to deal with their
counterparts in different Arab countries by regulating their
exchange partners’ behavior through governance structures
(e.g., contractual agreements, ownership) that have varying
capacities to respond effectively to disturbances (i.e., ex post
opportunism that occurs during the relationship) (Williamson
1985). Given the considerable resources needed to monitor ex
post opportunism and the opportunity costs in the form of
valuable deals that will not be executed due to opportunistic
behavior (Wathne and Heide 2000; Calfree and Rubin 1993),
it is essential that more research focus on ex ante opportunism
(i.e., opportunism that occurs in early stages of the relationship
initiation and during the exchange partner selection stage) so
that global firms can develop the knowledge and expertise
necessary to understand how to screen, select and manage
exchange partners prior (ex ante) to the establishment of the
exchange relationship and any dependencies that may prove
ineffective and costly.
The present study contributes to the global business-to-
business negotiation literature in several ways. First, unlike
prior research that conceptualizes and tests opportunistic
behavior during the exchange relationship (ex post
opportunism), we conceptualize opportunistic negotiation
tactics as an ex ante form of opportunism (opportunistic
behavior exhibited during early stage of relationship initiation)
that can be detected and used as an input to the decision
related to whether or not a firm may wish to be involved in an
exchange relationship prior to making any costly commitment.
Second, this paper focuses on the ethical determinants of ex
ante opportunistic negotiation tactics. While opportunism has
been investigated by marketing, management and economics
scholars using various frameworks (i.e., game theory, principle
agent theory, transaction cost analysis) (e.g., Williamson,
1985; Calfee and Rubin 1993; Wathne and Heide 2000),
opportunism has not been studied as a moral issue by business
ethicists. As Romar (2004, p. 667) suggests
Opportunism represents an important risk to
contemporary business organizations, which is
explored by economists and marketers and not by
business ethicists. Opportunism is an important
moral issue in an increasingly global world;
opportunism, whether by large or small firms or
entire industries, has the potential to have a
significant impact well beyond the boundaries of a
single firm or economy.
Third, as corporations participate in Ae global economy, one
of their challenges is to understand the ethical negotiation
practices of their international partners (Volkema 2004).
Despite the feet that the negotiation literature is rich with
numerous studies prescribing the means for managing
confiicts in the negotiation process, very little attention has
been devoted to the ethically challenging component of the
negotiation process (Robinson, Lewicki and Donahue, 2000).
Little guidance is provided to managers on how to deal
effectively with the ethical component of the negotiation
process. The present study fills this gap in the negotiation
literature by examining the ethical mindset of the business
negotiators using executives from the UAE.
The UAE market is the most progressive and open market in
the Arab region as evidenced by the country’s early accession
to the World Trade Organization and the country’s sig^iing of
a Trade and Investment Framework Agreement (TIFA) with
Washington. In November 2004, UAB agreed to undertake
negotiations toward a Free Trade Agreement (FT A) with the
U.S. These initiatives toward market openness and trade
liberalization make the UAE market an attractive destination
for direct foreign investments by international firms from
around the globe and make it imperative for those interested
firms to understand how to negotiate effectively and efficiently
in this important market.
Fall 2005 47
Fourth, the present research helps firms interested in the
Middle Eastern market to test the external validity of their
code of ethics and the extent to which individual ethical values
facilitate or impede the universal application of a firm’s ethical
code. This study assists in this endeavor by examining the
impact of Arab executives’ preferred ethical ideology and
Machiavellianism on their perception of unethical negotiation
tactics. Through the present study’s exploration of patterns of
Arab executives’ negotiation-related ethical beliefs and
orientations, we hope to reveal interesting and significant
differences in the ethical mindset of the Arab executive. By
investigating the impact of these variables on their perceptions
of unethical negotiation practices, global firms’ executives can
better understand the ethical mindset of their Arab
counterparts. With this understanding it is then possible to
utilize this knowledge to efficiently and effectively manage the
negotiation process with their counterparts in this important
maricet. Public policymakers and researchers can also benefit
from this study by understanding the external validity and the
degree of ethnocentrism of not only their own code of ethics
but also the validity of a imiversal code of ethics.
Fifth, despite the recent surge in the business ethics research,
the Middle East in general and the Arab-Gulf region in
particular, have been under investigated. A review of major
refereed journal articles in business and negotiation ethics
published between 1995 and 2005 revealed that less than 1%
of the studies published have utilized Arab executives. This
massive neglect of the region by research poses a serious
question about the degree of ethnocentrism of concepts and
dieories developed on the West and their global applicability.
As Curmingham and Green (1984, p. 9-10) correctly observed:
There is also a need for more fundamental research in
international marketing in order to adapt established
marketing concepts to the realities of the international
marketplace … This is essentially a question of
external validity, and research should be encouraged
to determine which marketing principles can be
universally applied and which are basically
ethnocentric (applicable only in the United States Jind
similar countries).
Finally, given the Arab culture’s emphasis on trust as the
central theme in all exchange relations (Hofstede 1984), we
propose that relational exchange is a more suitable form of
governance structure in the Arab region than the more
formalized forms. The present study surveys managers from
the UAE on the impact of their preferred ethical ideology
(idealism vs. relativism) and degree of Machiavellianism on
their perceptions of various opportunistic negotiation tactics.
This study has not been conducted, and therefore the study
findings should contribute to the literatures of business ethics.
The remaining sections of the paper review the literature
related to negotiation ethics and its relation to ethical ideology
and Machiavellianism; present research hypodieses, describe
the research methodology, present the results and discussion,
and discuss the managerial implications.
LITERATURE REVIEW AND HYPOTHESES
Opportunistic Negotiation Tactics:
Negotiation is a process by which the negotiating parties
interact with one another to reach mutual agreements to
provide terms, conditions, and guidelines for future behavior
(Ghauri and Fang 2001). Negotiation brings two or more
parties together to try to accomplish mutually beneficial
outcomes, while meeting individual goals that may be at odds
with the other parties’ goals.
“Negotiations involve serial communication between parties
to exchange information and attempt to influence or persuade
one’s counterpart,” (Banas and Parks 2002, p. 237). The
negotiation process is plagued with ethical dilemmas. In a
tactical process, as two parties try to reach agreement, each
wanting to maximize his or her results, they may be tempted
to use deceptive or dishonest tactics. Negotiation behaviors
range from the ethical to the unethical. Ethical/appropriate
bargaining in distributive negotiations include exaggerated
demands, hiding one’s bottom line, and not being forthcoming
about one’s negotiation timeline. More questionable tactics
include false promises/bluffing where die negotiator shows an
intention to perform some act without actually having the
intention to follow through; misrepresenting position, which
takes place when the negotiator distorts his or her acceptable
settlement point in order to convince the opponent to provide
more concessions; attacking the opponent network, when the
negotiator attempts to bring members of the opponent team to
join his or her team; and inappropriate infonnation gathering
tactic, where the negotiator uses bribes or payment to collect
information about the opponent (Lewicki and Robinson 1998).
Several studies have examined the relationship between
negotiation tactics and ethics (Lewicki and Robinson 1998;
Robinson, Lewicki and Donahue 2000; Banas and Parks 2002;
Volkema and Fleury 2002; Elahee and Brooks 2004). Lewicki
and Robinson (1998) suggest that there are a wide range of
negotiation behaviors that vary with respect to perceived
ethicality and appropriateness. At the basic level there is
traditional competitive bargaining, consisting of tactics which
are generally acceptable, such as exaggerating demands and
appearing to be in no hurry to come to an agreement. In
addition, there are more questionable tactics, such as attacking
your opponent’s network, making false promises,
misrepresenting information, and gathering inappropriate
information.
In studying business executives’ perceptions of unethical
negotiation tactics, Lewicki and Robinson (1998) and
Robinson, Lewicki and Donahue (2000) found that
respondents are generally more accepting of traditional
competitive bargaining tactics and less accepting of the other
more serious and potentially illegal tactics. In contrasting U.S
and Mexican samples, Volkema (1998) reported similar
results. Elahee and Brooks (2004), in examining the role of
48 Journal of Marketing THEORY AND PRACTICE
trust on Mexican managers’ perception of six negotiation
tactics, empirically demonstrated diat there is a negative
relationship between the trust and the likelihood of using
inappropriate negotiation tactics. Ford et al. (1997) compared
the cognitive moral development and the percent of time
allocated to various negotiation tactics of Chinese and U.S.
businesspeople. They concluded that U.S. businesspeople
negotiating with Chinese executives must be aware of a more
collectivist approach to ethics.
Several studies found that demographic factors impact the
perception of the ethicality of negotiation behaviors. It has
been shown that age, gender, and occupation lead to different
perceptions of deception in negotiation (Anton 1990). Women
have been found to be less accepting of unethical deception
tactics than men (Lewicki and Robinson 1998; Robinson,
Lewicki, and Donahue 2000). In addition, nationality has been
shown to cause differences in perception of ethicalness of
negotiation tactics, with subjects from Western Europe and to
a lesser degree the Asian Pacific rim more likely to endorse
ethically marginal tactics than other groups (Robinson,
Lewicki, and Donahue 2000).
Finally, situational factors have also been shown to have an
effect on the perception of appropriate behavior (Volkema and
Fleury 2002). Examples of situational factors include having
a counterpart who comes with a reputation as an unethical
negotiator, being under a time deadline, and dealing with the
likelihood of future business relations with an opponent.
Ethical Ideology and Opportunistic Negotiations Tactics:
Marketing ethics theories suggest that when individuals are
faced with morally questionable situations, they tend to apply
rules that are based on different moral philosophies or
orientations to guide their judgments (Ferrell and Gresham
1985; Hunt and Vitell 1986; Ferrell, Gresham, and Fraedrich
1989; Hunt and Vitell 1992). For example, Ferrell, Gresham,
and Fraedrich (1989) stated that, “moral philosophies provide
standards to judge the act, the actor’s intentions, and the
consequences of the act,” (p. 56). Similarly, in Hunt and
Vitell’s (1986) general theory of marketing ethics, normative
moral philosophy was at the core of their model. These moral
philosophies could be deontological or teleologicai in nature
(e.g. Murphy and Laczniak 1981). While the deontological
moral philosophy focuses on the specific actions or behavior
of the individual, the teleologicai philosophy stresses the
consequences of the action or behavior (Hunt and Vitell 1986).
When faced with an ethically challenging situation, individuals
who subscribe to the deontological philosophy tend to evaluate
the inherent rightness or wrongness of a set of possible
alternatives that he/she considers as possible courses of actions
against predetermined deontological norms or rules that reflect
the individual personal value or behavior. As for those
individuals who subscribe to the teleologicai philosophy, their
evaluations of actions are based on their perception of the
consequences of these actions on various stakeholder groups
and relative to the likelihood for the consequences to occur,
their desirability, and the importance of the impacted group
(Hunt and Vitell 1986; Hunt and Vitell 1992).
Forsyth (1980; 1992) conceptualized two evaluative
dimensions that have long been used to classify an individual’s
ethical and moral judgments: idealism and relativism.
Forsyth’s (1992) use of idealism and relativism “assumes
individuals can range from high to low in their emphasis on
principles and in their emphasis on consequences (p. 462).”
Idealism refers to the degree to which an individual believes
that the “right” decision can be made in an ethically tenuous
situation. This is essentially the deontological perspective that
embodies concern for others’ welfare when evaluating
alternatives. Idealistic individuals believe that there is a
morally correct alternative that will not harm others. Less
idealistic individuals may make decisions irrespective of the
impjict on others.
Relativism, on the other hand, refers to the rejection of
universal rules in making ethical judgments. People who
espouse relativism make decisions on a situation-specific
basis. That is, high relativists evaluate the current situation and
use the evaluation as the basis for making a judgment. Low
relativists, on the other hand, believe that standard rules can be
applied regardless of the issue at hand. Forsyth (1992)
suggested that an individual’s ethical ideology should have an
impact on how she/he would handle ethically challenging
situations.
Scholars examining ethical issues in the marketing and
management fields have found that ethical judgments among
business executives and individuals are mediated by their
ethical ideology (Vitell, Nwachukwu, and Barnes 1993;
Tansey, B r o w n , a n d H y m a n 1994; Bamett, Bass, and
Brown 1994, 1996; Sin^apakdi et al., 1995; Rao and
Sin^apakdi 1997; Wong 1998; Singhapakdi et al., 1999;
Swaidan, Vitell and Rawwas 2003; Swaidan, Rawwas and Al-
Khatib 2004; Al-Khatib, Stanton and Rawwas 2005).
Examining these constructs, Vitell Nwachukwu, and Barnes
(1993), found that more idealistic and less relativistic members
showed higher levels of honesty and integrity than their less
idealistic and more relativistic counterparts. In addition, those
who exhibited high levels of idealism and low relativism
tended to perceive ethics and social responsibilities as more
important than their less idealistic and more relativistic
counterparts (Singhapakdi et al., 1995).
Examining ethical ideology and judgments regarding
inappropriate negotiation tactics, Banas and Parks (2002)
found that ethical ideology and acceptability of the Self-
Reported Inappropriate Negotiation Strategies Scale (SINS)
were correlated. The authors hypothesize that, individuals’
ethical judgments as to the appropriateness of negotiation
tactics are mediated by their ethical orientations.
Fall 2005 49
Machiavellianbm and Opportunistic Negotiations Tactics: H2c:
Machiavellianism, a personality trait measured along a
continuum, is often examined in relation to ethical decision-
making. A high Machiavellian individual believes it is
appropriate to use any means to accomplish personal and
organizational goals, including manipulation, persuasion, and
deceit (Hunt and Chonko 1984). Hundreds of studies have
investigated Machiavellianism (Gunnthorsdottir, McCabe, and
Smith 2002). Researchers have also applied this concept to the
business arena with many looking at die level of current and
future business executives (Chonko 1982; Hunt and Chonko
1984; Corzine, Buntzman and Busch 1999). The research
indicates that individuals scoring high on the Mach scale are
likely to behave unethically. For example, Christie and Geis
(1970) found that Machiavellian individuals lie more
plausibly, manipulate others more, are persuaded by others
less, and pay bribes more than non-Machiavellian individuals.
Shapiro, Lewicki, and Devine (199S) found that Machiavellian
individuals tend to engage in deceptive tactics to achieve
personal objectives more often dian non-Machiavellian
individuals. Beu, Buckley and Harvey (2003) reported
significant correlation between Machiavellianism and the
intent to behave unethically. Examining the impact of
personality factors, cognitive moral development, and
demographic factors on unethical intent was die strongest
predictor of unethical intent. It has been found that high Machs
are more likely than low Machs to behave unethically (Beu,
Buckley and Harvey 2003). Machiavellian individuals do not
mind bending the rules to achieve their desired gains. High
Mach managers would not hesitate to take advantage of
personal connections. In summary, current research predicts a
direct relationship between relativism, Machiavellianism, and
an inverse relationship between idealism and the five
questionable negotiation tactics. Based on the above theory,
flndings and discussions, we hypothesize that:
HI a: Marketing managers’ idealistic orientation will have
a positive impact on their perception of the
opportunistic negotiation tactic of traditional
competitive bargaining.
HJb: Marketing managers’ relattvistic orientation will
have a negative impact on their perception of the
opportunistic negotiation tactic of traditional
competitive bargaining.
Hlc: Marketing managers ‘Machiavellian orientation will
have a negative impact on their perception of the
opportunistic negotiation tactic of traditional
competitive bargaining.
H2a: Marketing managers’ idealistic orientation will have
a positive impact on their perception of the
opportunistic negotiation tactic of attacking the
opponent’s network.
H2b: Marketing managers’ relativistic orientation will
have a negative impact on their perception of the
opportunistic negotiation tactic of attacking the
opponent’s network
H3a:
H3b:
H3c:
H4a:
H4b:
H4c:
Marketing managers’ Machiavellian orientation will
have a negative impact on their perception of the
opportunistic negotiation tactic of attacking the
opponent’s network.
Marketing managers’ idealistic orientation will have
a positive impact on their perception of the
opportunistic negotiation tactic of false promises.
Marketing managers’ relativistic orientation will
have a negative impact on their perception of the
opportunistic negotiation tactic ojffalse promises.
Marketing managers ‘Machiavellian orientation will
have a negative impact on their perception of the
opportunistic negotiation tactic of false promises.
Marketing managers’ idealistic orientation will have
a positive impact on their perception of the
opportunistic negotiation tactic of misrepresentation
of position.
Marketing managers’ relativistic orientation will
have a negative impact on their perception of the
opportunistic negotiation tactic of misrepresentation
of position.
Marketing managers ‘Machiavellian orientation will
have a negative impact on their perception of the
opportunistic negotiation tactic of misrepresentation
of position.
Marketing managers’ idealistic orientation will have
a positive impact on their perception of the
opportunistic negotiation tactic of inappropriate
information gathering.
Marketing managers’ relativistic orientation will
have a negative impact on their perception of the
opportunistic negotiation tactic of inappropriate
information gathering.
Marketing managers’ Machiavellian orientation will
have a negative impact on their perception of the
opportunistic negotiation tactic of inappropriate
information gathering.
METHODOLOGY
United Arab Emirates (UAE) was selected as the research
setting—and provided the sampling frame—for this study.
There were several reasons for this selection. First, UAE is
relatively wealthy, included in the top seven Middle Eastern
nations in GDP per capita while holding huge oil and natural
gas (Central Intelligence Agency Publications, 2005). UAE is
the commercial gate to the Gulf region. This makes the UAE
an attractive destination for foreign direct investment (FDI)
and an excellent setting for testing our research hypotheses.
Second, the country is in the process of diversifying and
privatizing its economy. As part of the process of accession to
the World Trade Organization (WTO), foreign direct
investment is likely to rise in the region, making UAE at the
center of globalization.
H5a:
H5b:
HSc:
50 Journal of Marketing THEORY AND PRACTICE
Sampling and Data Collection:
The difficulties associated with conducting research in
developing economies necessitated the use of in-country
contacts to identify specific participants (Teagarden et al.,
1995). A sample of 400 UAE marketing executives with
budgetary and personnel responsibilify was identified. Those
identified were pre-notified of the purpose of the research and
given basic procedural instructions. One week later, the survey
instrument was hand-delivered in the morning and picked-up
at the end of the same workday using sealed boxes. This
method resulted in an operational data set of 208 respondents,
for a response rate of 52%. The majority of the sampled
respondents were males who are employed by firms operating
in various sectors of the economy (manufacturing, service and
trade). On average respondents have been serving in their
current positions for four years. Nearly all respondents have a
college or graduate degree. Table 1 provides details on the
demographic profile of the sample.
TABLE 1
DEMOGRAPHIC PROFILE OF THE SAMPLE (N=208)
GENDER:
Male: 69.7 %
Female: 30.3%
Average number of years in
cnrrentjob: 4 years
Levet of Education:
Some College: 2 . 1 %
College Degree: 85.1%
Graduate Degree: 12.8%
Average work experience: S.S
years
7ype of business:
Retail/wholesale (Trade): 78%
Manufacturing:
Services: 14%
Measurement of Key Variables
A one-page (front and back) survey was administered to
respondents. The instrument consisted of four major sections.
Machiavellianism was measured in the first part of the survey
using the MACH IV scale. Moral ideologies (i.e., idealism and
relativism) were measured in the second part of the survey
using the EPQ scales. The third portion of the survey measured
the opportunistic negotiation tactics using the SINS scale. The
last part of the survey measured the demographics of the
participants. All measures used in this study were developed
by researchers, validated by previous studies, used by many
scholars, and published in scientific journals. Factor analysis
using principle components analysis with varimax rotation was
performed to confirm the underlying dimensionalify of these
scales. As expected, all items loaded on the intended factors
(MACH IV, Idealism, Relativism, and the five dimensions of
the SINS). Table 2 provides a list of constructs used in the
study, number of statements used to measure each construct,
a sample statement from each construct, and the reliability
measurements.
The Self-Reported Inappropriate Negotiation Strategies
Scale (SINS): The SINS was developed and validated by
Lewicki and his colleagues (Lewicki 1983; Lewicki and
Robinson 1998; Robinson, Lewicki, and Donahue 2000).
SINS was utilized to measure marketing managers’
perceptions of the appropriateness of questionable negotiating
tactics and their likelihood of using those tactics. Volkema,
Fleck, and Hofineister-Toth (2004) concluded that the SINS
appears to be a useftil tool in assessing attitudinal differences.
There were many studies that confirmed the predictive validity
of the instrument (e.g., Banas and Parks 2002). Also, SINS
was used successfully by many researchers (e.g., Volkema
1999; 2004; and Volkema, Fleck, and Hofineister-Toth 2004).
The scale contained 16 items representing five dimensions:
traditional competitive bargaiaing, attacking the opponent’s
network, making felse promises, misrepresenting of
information, and inappropriate infonnation gathering. The five
dimensions achieved acceptable levels of reliabilities as
measured by Cronbach’s alpha (i.e., coefficient alpha ranged
from .71 to .86).
Machiavellianism Scale: Machiavellianism was measured
using the MACH IV scale developed and validated by Christie
and Geis (1970). MACH IV scale was used successfully by
many researchers to explore ethical judgments (e.g., Raybum
and Raybum 1999; Bass, Bamett, and Brown 1999; and
Razzaque and Hwee 2002), and ethical intentions (e.g., Ross
and Robertson 2003). This scale contains 20 items with ten
items worded in a Machiavellian direction and ten items
worded in the opposite direction. Each respondent was asked
to indicate the degree of either agreement or disagreement
with each of the 20 items using a five-point Likert scale where
a 5 indicated strong agreement. Two items of the original scale
were deleted (up front) due to their irrelevance to the culture
of the country under study. The 18-item scale achieved an
acceptable level of reliabilify (coefficient alpha= .71).
Ethical ideology Scales: A person’s predominant ethical
ideology or perspective was measured using the EPQ
developed and validated by Forsyth (1980, 1992). EPQ
consists of two scales with each containing ten items; one is
designed to measure idealism, or the acceptance of moral
absolutes, and the second is designed to measure relativism, or
the rejection of universal moral principles. Respondents were
asked to indicate their agreement or disagreement with each
item using a five-point Likert format where a 5 indicated
strong agreement with a statement. All questions were worded
in a positive direction. Idealism and relativism scales have
been shown to be both reliable and valid in several studies
(e.g., Sivadas et al. 2003; Kim 2003; Elias 2002). Many
studies used the EPQ successfully to explore ethical awareness
(e.g., Yetmar and Eastman 2000; Sparks and Hunt 1998),
judgments (e.g., Elias 2002; Boyle 2000; Bass, Bamett, and
Brown 1999), and intentions (e.g., Singhapakdi et al. 2000).
The coefficient alpha reliabilities for the Idealism and
Relativism scales were (.84) and (.78) respectively.
Fall 2005 51
TABLE 2
STUDY MEASURES AND RELUBILITY OF CONSTRUCTS
VARIABLE
Idealism
Relativism
Mach IV
Traditional Competitive
Bargaining (TCB)
Attacking Opponent’s
Network (AON)
False Promises (FP)
Misrepresentation of Position
(MP)
Inappropriate Information
Gathering (IIG)
NUMBER
O F ITEMS
10
10
18
3
3
3
3
3
SAMPLE STATEMENT
A peison should make certain that their actions never intentionally harm
another even to a small degree.
What is ethical varies from one situation and society to another.
One should take action only when sure it is morally right
Make an opening demand that is far greater than what you really hope to settle
for.
Threaten to make your opponent look weak or foolish in front of a boss or
others to whom he/she is accountable, even if you know that you won’t
actually carry out the threat
Promise that good things will happen to your opponent if he/she gives you
what you want, even if you know that you can’t (or won’t) deliver these things
when the
other’s cooperation is obtained.
Intentionally misrepresent information to your opponent in order to strengthen
your negotiating arguments or position.
Gain information about an opponent’s negotiating position by trying to recruit
or hire one of your opponent’s teammates(on the condition that the teammate
ALPHA
COEFnCIENT
.84
.78
.71
.86
.71
.80
.85
.84
TABLE 3
REGRESSION ANALYSIS RESULTS
DEPENDENT VARIABLE: TRADITIONAL COMPETmvE BARGAINING (HI)
F Value =16.420
Significant F =
.000
Adjusted R’ = .661
Variable
Idealism (Hla)
Relativism (HIb)
II
Standardized Beta
II – . 4 8 6
II – . 0 9 9
Machiavellianism (HIc) ||-.083
DepcDdent Variable:
F Value = 21.77
Significant F = .000
Adjusted R’ = .305
Variable
Idealism (H2a)
Relativism (H2b)
Attacking Opponents Network (H2)
II Standardized Beta
II – . 3 0 1
II . 1 7 0
Machiavellianism (H2c) II .229
Depcadent Variable:
F Value = 29.19
Significant F = .000
Adjusted R’ = .321
Variable
Idealism (H3a)
Relativism (H3b)
False Promises (H3)
Machiavellianism (H3c)
Dependent Variable:
F Value = 9.028
Significant F = .000
Adjusted R’ = .221
Variable
Idealism (H4a)
Relativism (H4b)
Standardized Beta
-.469
.118
-.142
Misrepresentation of Information (H4)
Machiavellianism (H4c)
Dependent Variable:
F Value = 27.175
Significant F = .000
Adjusted R’ = .364
Variable
Idealism (H5a)
Relativism (H5b)
Standardized Beta
-.143
.032
.282
Inappropriate Information Gathering (HS
II Standardized Beta
II – . 3 4 4
II 1 2 5 1
MarhinvplHiini-im (HSr) II 7^0
Ii T-test 1
II – 4 . 6 8 0 1
II -1.273 1
II – . 8 1 9 1
T-test
-2.896 J
2.263
2.192
T-test
-4.762
1.653
-1.438
T-test
-1.240
.384
2.428
T-test
-3.444
.725
Significance of T-Test
.000
.205
.414
Significance of T-Test
.004
.025
.030
Significance of T-Test
.000
1.10
.153
1 Significance of T-Test
.217
1.701
1.016
Significance of T-Test
.001
.087
n i l
52 Joumal of Marketing THEORY AND PRACTICE
DATA ANALYSIS AND RESULTS
To examine the relationships between employees’ preferred
ethical ideology/orientation, Machiavellianism and UAE’s
marketing managers’ perception of opportunistic negotiation
tactics, five regression models were used (Table 3). Each
equation used the manager’s perception of: 1) traditional
competitive bargaining tactics; 2) attacking an opponent’s
network; 3) false promises; 4) misrepresentation opposition;
and 5) inappropriate information gathering as a dependent
variable and the idealism, relativism and Machiavellianism as
the independent variables.
The first equation examined the impact of idealism, relativism,
and Machiavellianism on marketing managers’ propensity to
engage in traditional competitive bargaining tactics. The three
independent variables explained 66.1 % of the variation on the
equation {F= 16.42,/? < .05). Idealism was the only influential
factor of the three variables {Beta = -.486, p < .05). The
negative Beta indicates that marketing managers in UAE who
possess high levels of idealism are less likely to become
involved in traditional competitive bargaining tactics. This
result supports the hypothesis Hla. Hypotheses H l b and Hlc
were not supported.
The second equation investigated the determinants of
mariceting managers’ engagement in attacking opponents’
network tactics. The three predictive variables explained
30.5% of the variance in the equation {F = 21.77, P < .05).
Idealism was the most influential factor {Beta=-.301 ,/> < .05),
followed by Machiavellianism {Beta = .229, p < .05) and
relativism {Beta = .170,/? < .05). Examining the directions of
the signs of the Beta coefficients indicate, as hypothesized,
that marketing managers exhibiting h i ^ level of idealism, low
levels of relativism, and low levels of Machiavellianism are
less likely to engage in attacking their negotiating opponent's
network. These results confirm hypotheses H2a, H2b and H2c.
When examining the role of the independent variables on
managers’ tendencies to make false promises, the thr«e
independent variables explained 32.1% of the variance in the
marketing managers’ perceptions of the false promises
behavior {F = 29.19, P < .05). Idealism was the only
influential variable in this equation {Beta=-.469,p < .05). The
direction of the beta sign indicates an inverse relationship
between the degree of the respondent's idealistic orientation
and the engagement in actions involving making false
promises to a negotiating partner. That is, idealistic marketing
managers are less likely to be involved in such unethical
behavior. This result supports the hypothesis H3a.
When examining the determinants of marketing managers’
engagements in misrepresentation of position to opponents, the
three independent variables explained 22.1% of the variance
in the dependent variable {F = 9.03, P < .05).
Machiavellianism was positively related to the
misrepresentation of information fector {Beta = .282,;? < .05)
indicating that Machiavellian managers tend to engage in such
tactic. This result provides support for hypothesis H4c.
The final equation investigated marketing managers’ use of
inappropriate information gathering tactics. Idealism,
relativism and Machiavellianism explained 36.4% of the
variance in the equation {F = 27.18, />< .05). Idealism was
found to be negatively related to the respondents' tendencies
to engage in this tactic {Beta = -.344, p < .05) and
Machiavellianism was found to be positively related to
participants' tendencies to engage in the questionable tactic of
inappropriate information gathering {Beta = .260, p < .05).
These results provide partial support forhypotheses H5a and
H5c.
DISCUSSION AND MANAGERIAL IMPLICATIONS
Several factors have been described as predictors of ethical
behavior, including personality variables (Hunt and Chonko
1984), demographics (Volkema 2004), ethical orientation (Al-
Khatib, Vitell, and Rawwas 1997), trust (Al-Khatib, Stanton
and Rawwas 2005), cultural values (Vitell, Nwachukwu, and
Bames 1993), opportunism (Al-Khatib, Stanton and Rawwas
2005) and economic Actors (Ford and Richardson 1994).
Given the presumption of conflicting interests among the
negotiating parties, it has been shown that many negotiators
attempt to seek advantages through opportunistic behavior or
other unethical means (Lewicki et al. 1994).
This study explored the relationship between three
independent variables (i.e., idealism, relativism, and
Machiavellianism) and five dependent variables (i.e.,
traditional competitive bargaining, attacking your opponent’s
network, making false promises, misrepresentation of
information, and inappropriate informadon gathering) using a
sample of managers firom the UAE. This was the first study to
explore these relationships between the three independent
variables and the five dependent variables using a sample of
marketing managers from the UAE. The findings of current
study are comparable to other ethical studies that used the
three independent variables to explore ethical awareness,
judgments, intentions and behavior. This study found an
inverse relationship between idealism and direct relationships
between relativism, Machiavellianism and the five
questionable negotiations tactics. These results cotifinn the
outcomes of other ethical studies that tested similar
relationships. For example, Kim (2003) found that individuals
with high idealism or low relativism tend to make stricter
ethical judgments. Yetmar and Eastman (2000) found that
relativism is negatively associated with ethical sensitivity.
Raybum and Raybum (1996) found that Machiavellians are
less ethically-oriented than non-Machiavellians. O’Fallon and
Butterfield (2005) in their review of the empirical ethical
decision making literature for the period 1996-2003 concluded
that idealism, relativism, and Machiavellianism revealed fairly
consistent findings over the last two decades of ethical
research. They concluded that idealism was positively related
Fall 2005 53
to ethical decision making, while relativism and
Machiavellianism were negatively associated with ethical
judgments. Our study’s results support the extemal validity of
the previous studies conducted in westem cultures.
Forsyth (1992) used both idealism and relativism to classify
people into four different ethical groups. First, absolutists are
individuals with low relativism and high idealism. Absolutists
believe that their actions are moral only if they yield positive
consequences through conformity to moral absolutes. They
believe that deception is always wrong since it violates
fiindamental moral principles. Second, subjectivists are
individtials with high relativism and low idealism.
Subjectivists are those who reject moral mles and base their
moral judgments on personal feelings about their actions. They
believe that deception is a personal matter to be decided upon
by the individual. Third, exceptionists are individuals with low
relativism and low idealism. Exceptionists believe that
conformity to moral mles is desirable, but that exceptions are
permissible. They believe that if deception cannot be avoided,
then it is allowable as long as safeguards are used. Last,
situationists are individuals with high relativism and high
idealism scores. Situationists are those who reject moral mles
while asking if their actions yield the best possible outcome in
a situation.
To gain better understanding of the various types of ethical
ideologies, we classified the sample into four groups using the
median points of the idealism (3.90) and relativism (3.10)
scales (Forsyth 1992). In past researeh we found two studies
(i.e., Vitell et al. 1991 and Rawwas 1996), which used this
scheme to classify respondents. Overall, the UAE managers
were mostly “absolutists” (38.6%) who strictly conform to
moral standards and norms. The second sub-group was the
“subjectivists” (24.8%); individuals belonging to this subgroup
not only reject moral standards, but also base their ethical
judgments on their personal whims. The third group, who hold
the same moral standards as the “absolutists” but who may
bend them somewhat under certain extraordinary
circumstances are the “exceptionists.” The “exceptionists”
formed 22.8% of the sample. The fourth group was the
“situationists” (13.9%), who judge ethics by the consequences
of the situation. Most of the individuals in the fourth group are
probably utilitarian who believe that an act is right only if it
produces a greater balance of positive consequences than do
other available alternatives.
The mean score for the idealism scale was 3.77 and for the
relativism scale was 3.03. It is clear that UAE managers are
giving higher weight to idealistic rather than to relativistic
moral philosophies when making their ethical decisions. It is
interesting to note that idealism emerged as the most important
factor in determining respondents’ perceptions of inappropriate
negotiation tactics that involves one’s negotiating opponent
directly (e.g., making false promises, traditional competitive
bargaining). The Machiavellianism constmct manifested its
significant impact on questionable negotiation practices that
involves a third party (e.g., inappropriate information
gathering, attacking opponent network and inappropriate
information gathering). These results are consistent with
previous research (Volkema and Fleury 2002) and suggest that
UAE negotiators may be more concemed with face saving in
direct negotiation by employing negotiation tactics that are
less harsh and generally accepted tactics in distributive
negotiation. However, when the tactic involves an indirect
third party, they may act in a more bmtal, opportunistic and
unethical manner. These results can be explained in the
context of the Arab culture. Previous research has shown that
cultures characterized by high power distance and uncertainty
avoidance, such the UAE culture, produce a lack of tmst with
the imfamiliar, and outsiders are viewed with suspicion and
distmst (Volkema 1998; Volkema and Fleury 2002). Second,
in the UAE culture, cell loyalty is of great importance
(Sommer, Welsh, and Gubman 2000). There is a great focus
on tmst and building relationships and doing business with
those people in the inner circle. To the Arab manager,
engaging in behaviors that exploit the “stranger” is
permissible; however, behaviors that exploit colleagues or an
irmer circle member are frowned upon. Given the nature of the
relationship among negotiating parties, the UAE negotiator’s
counterpart is an outsider who is not trustworthy and thus
deserves exploitation.
The lack of significant relationship between relativism and the
respondents’ perceptions of unethical negotiation practices
fails to support the hypothesized relationship; however, it is
not completely inconsistent with previous researeh findings
linking relativism to the acceptance of questionable ethical
practices (Forsyth 1980; Bamett, Bass, and Brown 1994; and
Bass, Bamett, and Brown 1998). These studies have found that
idealism has a stronger impact than relativism on ethical
judgments. The present study’s result suggests that the
individuals’ concems for the consequences of actions may be
less influential than their idealistic moral philosophy when
judging questionable negotiation practices.
Since little research has focused on the ethical mindset of Arab
negotiators, the findings from this study can be used to help
multinational companies doing business in the Arab-Gulf
region to become more aware of their host country’s ethical
environment. Intemationai managers should also find the
results of this study intriguing and helpful in their dealings
with associates in the UAE.
Given the important role of Machiavellianism in shaping Arab
executives’ perceptions of opportunistic negotiation tactics,
coupled with high levels of hostility (the legal environment
favoring local businesses regardless of just cause) (Cavusgil,
Deligonul, and Zhang 2004), westem finms need to be cautious
when drafting legal contracts. That is, if westem firms impose
explicit legal contracts on their Arab counterparts, the
counterparts may perceive such action as a means of
controlling them. This can raise the inclination to behave more
opportunistically. Westem firms negotiating in the Arab region
54 Journal of Marketing THEORY AND PRACTICE
can promote honesty, enhance trust and curb opportunism by
exhibiting benevolence, moral commitment, and mutual trust
to their Arab coimterparts.
Westem firms negotiating with Arab counterparts can also
curb opportunistic behavior by implementing screening and
selection programs of various types that result in selecting
partners who are not opportunistically inclined or inherently
cooperative (Orbell and Dawes 1993). These selection efforts
should identify the criteria to be used in screening and
selecting future exchange partners. One possible criterion is
the reputation or past behavior in other relationships. Existing
reputation provides disincentive for opportunistic behavior
(Wathne and Heide 2000) and can be useful in judging the
potential exchange partner’s willingness, motivation and
ability to behave ethically in the current relationship (Shapiro,
Lewicki, and Devine 1995). However, for this tool to be
effective, westem firms operating in the Arab region should
have information on their negotiating partner’s past and
current behavior. Westem firms who have an established
presence in the region may find this information gathering task
manageable; however, for first time movers, the employment
of a local and independent consultant may be a more efficient
way to assess potential partners’ reputations. Basic reputation
assessment tools such as a credit rating bureau and better
business bureau can also be useful in this assessment process;
however, in case these databases are not readily available,
local media coverage of legal actions taken or pending against
the negotiating counterpart may be an effective altemative.
Another means of curbing opportunistic tendencies (e.g.,
making false promises) is ex ante verification which involves
the verification of claims or promises before making
commitments that depend on these claims or promises
(Cramton and Dees 1993). Given the long-term ramification of
this opportunistic tactic, it is essential that westem firms
negotiating in the region employ a local agent (i.e., an insider)
who can assist in this verification effort. In a similar manner,
a local agent can be employed to represent the westem firm in
early stages of negotiation to reduce the potential use of
opportunistic tactics used against a third party (i.e.,
inappropriate information gathering, attacking opponent
netwoik and in^propriate infonnation gathering) and resulting
from the Arab culture’s distrust of outsiders.
The high emphasis on trust in relationship building in the Arab
region heightens the need to rely on trust-based exchange as
the most effective and efficient negotiation process in the
region. Westem firms operating in the region can enhance
mutual trust by exhibiting to their Arab partners that they are
trustworthy and that they can be trusted. One way to
demonstrate trustworthiness early in the negotiation process is
for the westem firm to ^cilitate the other party’s verification
efforts by providing privileged information that is otherwise
not obtainable, thus reducing information asymmetry and
imcertainfy ( e.g., causes of opportunistic behavior). To
demonstrate the ability to trust, western firms need to use a
personalized trust approach suitable for the Arab culture. This
approach may include the creation of more opportunities for
face-to-face meetings over a longer period of time and the use
of preliminary meetings prior to the actual negotiation to
discuss issues of mutual concems, the use of pre-negotiation
social contacts and even gift exchange among the parties
involved (Cramton and Dees 1993).
The strong negative relationship between idealism and the
Arab executives’ likelihood of using opportunistic negotiation
tactics indicates that the groimds for ethical dealing is fertile
and underscores the need for multinational corporations, joint
venture partners to Arab firms, and intemational managers
operating in the UAE to codify the desirable and undesir^le
behavioral activities of the Arab negotiating partner. Given the
high power distance and high uncertainty avoidance
characterizing the Arab culture, these codification efforts ar«
likely to prove successful. However, such efforts need to be
developed with the Arab culture and past history in mind;
otherwise, any effort to codify behavior is bound to fail.
Moreover, understanding the Arab negotiator’s ethical mindset
provides a valuable decision-making tool for firms interested
in this maricet. The strong emphasis that the Arab culture
places on trust as the backbone of all social, organizational and
transactional relationships infiuences both firm-level
perceptions of transaction costs and the preference for foreign
direct investment (FDI) as an entry strategy (Hofstede 1984;
Shane, Venkataraman, and MacMillan 1995). Intemational
firms capable of developing trustworthy relationships with
Arab strategic partners can reduce transaction costs and
increase FDI in the region.
Finally, situational factors such as possibilify of future/long
term business with the negotiating partners, ethicality of the
negotiating counterpart, and the degree of favorabilify of the
negotiation condition, can dramatically affect the negotiator’s
perception of the appropriateness of opportunistic negotiation
tactics and the likelihood of their use (Volkema and Fleury
2002). Thus, it is possible for westem negotiators to influence
their Arab counterparts’ choice of appropriate negotiation
tactics by discussing long term business opportunities,
exhibiting high ethical standards during the negotiation
process and by understanding the conditions under which their
Arab partners are negotiating. Such understanding can then be
integrated into training programs tailored to each specific
negotiation situation and offered to westem negotiators as part
of their preparation for the negotiation process.
LIMITATIONS AND FUTURE RESEARCH
The difficulfy of drawing a true random sample impairs the
generalizability of the specific findings of the current study.
Procurement of data from additional nations in the Middle
East would also add to the appeal of the existing database.
Given the sensitive nature of die topic being investigated and
Fall 2005 55
despite the effort to control for it, social desirability bias may
have been an issue among respondents. Future research should
include measures for controlling such bias and seek methods
of data collection that provide greater levels of respondents
identities confidentiality.
Future research should also investigate negotiation ethics in
Middle Eastem countries with more social, economic and
political problems than are evidenced in the current study. This
will provide a deeper understanding of the impact of
environmental factors (e.g., the civil unrest in Lebanon, the
economic and political hardships in Iraq, and the strong
foreign cultural infiuence on the population of the Arab nations
of North Africa) on consumers’ ethical beliefe and preferred
ethical ideologies.
Another avenue of research suggested by this study would be
to empirically investigate how other intervening variables
mediate the impact of cultural values on ethical judgments and
ideologies. For example, what role does national identity play
in shaping the ethical mindset of individuals from different
nations? This can be contrasted with other well established
cultural value approaches (e.g., Hofstede’s typology). It would
also be interesting to examine the impact of various levels of
religiosify in the Middle East on ethical conduct. This is
especially important considering the speed at which
modernization is taking place in the countries of the region
and the subsequent possible erosion of religious values at the
individual level. Finally, the roles of trust among exchange
partners as well as their ethical ideologies and their impact on
the individual’s perceptions of negotiation practices should be
an interesting and useful area for future research.
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AUTHOR BIOGRAPHY
Jamal Al-Khatib (Ph.D., University of Mississippi), Professor of Marketing, College of Business, University of St.
Thomas, St. Paul, MN, jaalkhatib@stthomas.edu.
AUTHOR BIOGRAPHY
Mohammed Y.A. Rawwas (Ph.D., University of Mississippi), Professor of Marketing, College of Business
Administration, University of Northern Iowa, Cedar Falls, IA, Mohammed.Rawwas@uni.edu
Fall 2005 59
AUTHOR BIOGRAPHY
Ziad Swaidan (Ph.D., University of Mississippi), Assistant Professor of Marketing, School of Business Administration,
University of Houston Victoria, Victoria, TX, swaidanz@uhv.edu.
AUTHOR BIOGRAPHY
Richard Rexeisen (Ph.D., University of Minnesota), Professor of Marketing, College of Business, University of St.
Thomas, St. Paul, MN, rjrexeisen@stthomas.edu
60 Journal of Marketing THEORY AND PRACTICE
International Negotiation 9: 315–339, 2004.
© 2004 Koninklijke Brill NV. Printed in the Netherlands.
New Research Directions
The research described in this article by Volkema, Fleck and Hofmeister-Toth builds upon the
theme of a recent issue of International Negotiation, “Ethical Issues in Conflict Resolution” (Vol.
7, no. 2, 2002). The authors test the implications of using deceptive tactics in negotiation. Their
research relates to the larger theme of this present issue by its use of an innovative means of
negotiation, e-mail, as the channel for the experimental exercise.
Ethicality in Negotiation: An Analysis of Attitudes,
Intentions, and Outcomes
ROGER J. VOLKEMA
*
Kogod School of Business, American University, 4400 Massachusetts Ave., NW, Washington,
DC 20016 USA (E-mail: volkema@american.edu)
DENISE FLECK**
COPPEAD Graduate School of Business, Federal University of Rio de Janeiro – UFRJ, Rio de
Janeiro, Brazil (E-mail: denise@coppead.ufrj.br)
AGNES HOFMEISTER-TOTH***
Marketing Department, Budapest University of Economic Sciences, Budapest, Hungary (E-mail:
agnes.hofmeister@bkae.hu)
Abstract. The study reported in this article examines the prediction and use of invalid infor-
mation (e.g., exaggerated offers, false promises, misrepresented facts) in a two-party, property
leasing negotiation in which participants from different countries negotiated seven issues via
315
* Roger Volkema is Associate Professor of Management at the Kogod School of Business,
American University, Washington, DC. His research focuses on negotiation, conflict manage-
ment, group/meeting processes, and problem formulation. He received his Ph.D. from the
University of Wisconsin, and was a Fulbright Fellow at Catholic University in Rio de Janeiro,
Brazil in 1988.
** Denise L. Fleck is an Associate Professor of Strategy at Coppead Graduate School of
Business, UFRJ, Brazil. Her research interests include corporate growth, organizational self-
perpetuation, change and institutionalization processes, and innovation roles in growth
processes. She received a Ph.D. in Management from McGill University.
*** Agnes Hofmeister-Toth is Professor of Marketing at the Budapest University of
Economic Sciences and Public Administration. She teaches Consumer Behavior and
Negotiation and Conflict Management. Her research interests include cultural differences,
international negotiation, transition of consumer behavior, changing consumer values and
lifestyles, and symbolic consumption. She received her Ph.D. in Marketing from BUESPA.
INER 9.2_f8_314-339 10/27/04 9:15 AM Page 315
316 ROGER J. VOLKEMA, DENISE FLECK AND AGNES HOFMEISTER-TOTH
electronic mail. Prior to negotiating, attitudes and intentions towards questionable or unethical
tactics were measured, and perceived behavior was measured through a post-negotiation ques-
tionnaire and compared with actual behavior and negotiated outcomes (differential and joint).
The results suggest that the pre-negotiation questionnaire was a modest predictor of actual
behavior, with general attitudes effective in predicting general behavior. Ethical behavior of the
negotiator, ethical behavior of the other party, and perceived honesty of the other party were the
best predictors of performance (perceived and actual), while likely use of unethical tactics and
perceived honesty of the other party predicted whether or not an agreement was reached.
Keywords: negotiation, ethics, information exchange, e-mail.
Information is often cited as one of the central elements in understanding and
managing the negotiation process (McMillan 1992; Pruitt and Carnevale
1993; Rubin and Brown 1975; Shell 1999; Thompson 1998). In theory, infor-
mation exchange can help build trust between parties, which in turn can lead
to a fuller, richer exchange of information and, ultimately, better joint/inte-
grative outcomes. On the other hand, information is a source of power, so the
more information one party has about a counterpart’s strengths and weak-
nesses (preferences, priorities, alternatives), the stronger his/her bargaining
position (Brodt 1994; French and Raven 1959; Lewicki, Saunders and Minton
1999; Schelling 1960; Walton and McKersie 1965). Consequently, negotiators
are faced with the challenge of determining how much and what types of infor-
mation to reveal while assessing their negotiating counterpart’s honesty and
forthrightness.
The types of information that individuals might employ in a negotiation can
range from valid and relevant information (e.g., a statement of fact critical to
the outcome of the negotiation) to erroneous or invalid information (e.g., an
intentional misstatement of fact). While the former has been the focus of a
number of studies, generally linking valid information exchange to negotia-
tor performance (Pruitt and Lewis 1975; Olekalns, Smith and Walsh 1996;
Roth and Murnighan 1982; Thompson 1991), there have been far fewer stud-
ies focused on the exchange of invalid information, such as through misrep-
resented facts, false promises, and bluffs.
Several studies have documented the frequent use of invalid information in
real and simulated negotiations (Boles, Croson and Murnighan 2000;
Murnighan, Babcock, Thompson and Pillutla 1999; O’Connor and Carnevale
1997), and at least one questionnaire (the “Incidents in Negotiation
Questionnaire” or SINS questionnaire, developed by Lewicki and his col-
leagues) has been designed to measure individuals’ perceptions of the appro-
priateness and their likely use of these tactics, although no empirical evidence
exists linking the questionnaire to actual behavior. Most importantly, it seems
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ETHICALITY IN NEGOTIATION 317
likely that invalid information such as misrepresented facts, false promises,
and bluffs could affect both the process (pace, openness, responsiveness) and
the outcome of a negotiation (perceived and actual). These relationships,
however, have received only modest attention by researchers and scholars.
In an international context, the cultural values of the principal negotiators,
their familiarity with one another, and their physical proximity could moder-
ate the use of invalid information. While there exist both anecdotal and empir-
ical evidence regarding the differing values and behaviors to expect in
cross-cultural negotiations (cf. Puffer and McCarthy 1995; Schuster and
Copeland 1996; Volkema 2004), the inherent uncertainty in these negotiations
often leads the parties to engage one another with caution if not suspicion
(Hopmann 1996; Iklé 1964). This is further exacerbated by the increasing
reliance on media of lower information richness (e.g., electronic mail) in
international negotiations (Shell 2001; Ulijn, Lincke and Kavakaya 2001),
media that offer apparent efficiencies but which may be associated with greater
use of questionable or unethical tactics (Daft and Lengel 1986; Daniels 1967;
Tinsley et al. 2002; Valley, Moag and Bazerman 1998).
This article reports on a study of predicted and actual use of invalid infor-
mation in a two-party, commercial-property leasing negotiation, which was
conducted via electronic mail. Invalid information was measured in three
ways: first, through a questionnaire (the “Incidents in Negotiation Question-
naire”) to assess attitudes and intentions towards questionable or unethical tac-
tics; second, through participants’ self-reporting of their behavior in this
property leasing negotiation; and third, through third-party measures of actual
behavior. The purpose of the study was to determine the frequency of use of
questionable or unethical tactics in an e-mail-based, international negotiation,
to assess the questionnaire’s utility in predicting actual use of these tactics, and
to assess the impact of the tactics on differential and joint outcomes (perceived
and actual). By understanding the impact of these tactics on negotiation out-
comes, we can begin to understand the rationales of negotiators faced with dif-
fering challenges (high stakes, time constraints, media limitations, competitive
or unethical opponents/counterparts) in an international context.
Background and Hypotheses
Information exchange is generally considered one of the keys to understand-
ing and managing the negotiation process (Pruitt and Carnevale 1993;
Pruitt and Rubin 1986; Shell 1999; Thompson 1998; Walton and McKersie
1965). Information can take a number of forms, based on its relevancy and
validity. Relevant information, for example, might include a negotiator’s
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318 ROGER J. VOLKEMA, DENISE FLECK AND AGNES HOFMEISTER-TOTH
needs, alternatives, resources, utilities, and style (Chatterjee and Ulvila 1982;
Fisher, Ury and Patton 1991; Harsanyi 1962; Pinkley, Griffith and Northcraf
t
1995). In addition, negotiators frequently share valid information that is not
directly relevant to the issues of a negotiation (e.g., discussions of traffic,
weather, current events, hobbies), which can assist the parties in getting com-
fortable, building rapport, and reaching agreement (Lewicki et al. 1999;
Thompson, Peterson and Kray 1995).
The exchange of valid, relevant information has been found to predict both
differential and joint outcomes. Roth and Murnighan (1982), Brodt (1994), and
Olekalns, Smith and Walsh (1996) all found that parties with an informational
advantage performed better than their peers or negotiating counterparts with
respect to substantive outcomes. Likewise, several researchers have found that
information exchange can be positively associated with higher joint out-
comes, most notably when that information is about the parties’ interests or pri-
orities (Olekalns et al. 1996; Pruitt and Lewis 1975; Thompson 1991).
Negotiators also communicate invalid or misleading information in the
form of exaggerated offers, misrepresented facts, and false promises of future
business opportunities (Anton 1990; Scouller 1972). These communications,
in fact, have been found in several studies to occur with some degree of fre-
quency. O’Connor and Carnevale (1997), for example, discovered that par-
ticipants misrepresented information in 28% of their negotiations in a
laboratory study. Murnighan et al. (1999) compared experienced and naive
bargainers, and found that 34% of the former both lied (i.e., made an invalid
statement) and were deceptive (i.e., failed to correct a counterpart’s faulty
assumptions). Boles et al. (2000) found that participants in a laboratory nego-
tiation were deceptive about 13% of the time, with more deception occurring
in the early rounds of negotiation. In addition, they noted that the individuals
making propositions were far more likely to outright lie than were the indi-
viduals responding to propositions.
There are a number of reasons why individuals may choose to use invalid
information in a negotiation. These include the financial stakes (Boles et al.
2000; Kelley, Beckman and Fischer 1967; Tenbrunsel 1998), perceived time
pressure (Yukl, Malone, Hayslip and Pamin 1976), environmental competi-
tiveness (Hegarty and Sims 1978), and their own personal characteristics/val-
ues (Hegarty and Sims 1978; Trevino and Youngblood 1990). The last of these
factors – personal characteristics/values – will likely be influenced by the indi-
vidual’s cultural frame-of-reference (Banas and McLean Parks 2002; Faure
2002, Volkema 2004).
Invalid information can take several different forms, from generally
accepted behaviors like exaggerating an offer or demand to less accepted
behaviors such as making false promises. Lewicki (1983), building on the
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ETHICALITY IN NEGOTIATION 319
work of Bok (1978) and others, developed a questionnaire (“Incidents in
Negotiation Questionnaire”) and typology of lying and deception in negotia-
tion that consists of five categories: traditional competitive bargaining (e.g.,
exaggerating an initial offer or demand), misrepresentation of information (i.e.,
lying about an informational item), bluffing (i.e., leading your counterpart to
believe that you are in control of consequences which you are not, such as
through promises you may not be able to fulfill), inappropriate information
collection (e.g., various forms of bribery, such as paying others for informa-
tion), and influencing a counterpart’s professional network (e.g., encouraging
others to defect). Subsequently, Lewicki and Robinson (1998) and Volkema
(1999a, 2004) have employed this questionnaire to examine differences in
perceptions due to demographic factors.
While the “Incidents in Negotiation Questionnaire” appears to be a useful
tool in assessing attitudinal differences, there have been few studies to confirm
the predictive validity of the instrument (Banas and McLean Parks 2002). The
questionnaire measures individuals’ perceptions of the appropriateness of
questionable negotiating tactics and their likelihood of using those tactics, not
actual behavior. Robinson, Lewicki, and Donahue (2000) associate percep-
tions of appropriateness with attitudes, while likelihood of use corresponds to
behavioral intentions.
There is, however, a long history of research that links attitudes, intentions,
and behavior (for a review see Ajzen 1988). Attitudes have been found to pre-
dict behavior, with behavioral intentions acting as a mediating variable.
Further, specific attitudes appear better at predicting specific behaviors, while
general attitudes are better at predicting general behaviors.
In a meta-analysis of over one hundred studies, Kim and Hunter (1993)
found significant support for these linkages between attitudes, intentions, and
behavior, particularly where an individual’s actions fall within his/her control.
Given that this is the case for most of the negotiating tactics identified by
Lewicki and his colleagues, we propose the following:
Hypothesis 1: Attitudes and intentions towards questionable or unethical
negotiating tactics (high perceived appropriateness and likely use, as mea-
sured by the “Incidents in Negotiation Questionnaire”) will be positively
associated with self-reported and actual use of those tactics.
Despite the apparent frequency with which invalid information appears to
be employed, there have been relatively few studies that have examined the
influence of invalid information on negotiation outcome. Roth and Murnighan
(1982) found that the party with the larger outcome (payoff ) and an informa-
tional advantage was inclined to misrepresent his or her outcome to his/her
ultimate advantage, while O’Connor and Carnevale (1997) found that subjects
INER 9.2_f8_314-339 10/27/04 9:15 AM Page 319
320 ROGER J. VOLKEMA, DENISE FLECK AND AGNES HOFMEISTER-TOTH
who misrepresented information achieved higher outcomes. These studies,
however, focused only on individual outcomes (i.e., comparing a negotiator’s
outcome with his or her peers’ performance) or differential outcome (i.e., com-
paring a negotiator’s outcome with his/her negotiating counterpart’s perfor-
mance), not joint or integrative outcomes (which are based on the combined
performance of parties in a dyadic negotiation), and only on misrepresentation
of information. Other tactics in the typology identified by Lewicki and his col-
leagues (e.g., bluffing) were not examined.
It would seem reasonable that individual outcomes as well as differential
outcomes would increase with the use of unethical tactics, as one’s counter-
part is making decisions based on erroneous information. The communication
of false or deceptive information might even create a sense of openness and
trust on the part of the other party, causing him/her to share additional valid
information. The use of such tactics would likely have the opposite effect on
joint outcomes, decreasing with the use of unethical tactics and vice versa. For
example, by not exaggerating an initial offer or misrepresenting information,
the parties may actually negotiate a settlement that comes closer to their
mutual benefit rather than benefiting one party (the party exaggerating an offer
or misrepresenting information) at the expense of the party.
Given these arguments, the following hypothesis is offered:
Hypothesis 2: The more questionable or unethical tactics an individual
employs, the higher will be his/her actual outcome, the higher his/her differ-
ential outcome, and the lower the joint outcome.
In addition, it would be valuable to know what effect questionable or uneth-
ical tactics have on perceived outcomes. Negotiators seldom know the actual
payoff (differential or joint outcome) in real-world negotiations, since they sel-
dom know the utilities and winnings of the other party (Putnam and Jones
1982). Instead, they make their decisions regarding whether or not to engage
in future negotiations based on perceived outcomes. Brodt (1994) did one of
the few studies that examined the effects of information on perceived outcome,
and found that informed parties were significantly more positive about their
performance than were their uninformed peers. However, the inside informa-
tion that was shared with these parties came from a third party, so the validity
of the information might not have been questioned.
We might assume that the individual using questionable tactics believes
he/she has an advantage over the other party, since this individual knows that
the other party is making decisions based on erroneous information. Therefore,
the negotiator would expect that his/her outcome would exceed the other
party’s performance, and that as a consequence their joint outcome might suf-
fer as well (assuming there is no opportunity to increase a fixed-pie outcome
for both parties). Thus,
INER 9.2_f8_314-339 10/27/04 9:15 AM Page 320
ETHICALITY IN NEGOTIATION 32
1
Hypothesis 3: The more questionable or unethical tactics an individual
employs, the higher will be his/her perceived outcome, the higher his/her per-
ceived differential outcome, and the lower the perceived joint outcome.
Finally, many of the studies conducted to date assume that an agreement will
be reached by the negotiating parties. In reality, this is not always the case. In
fact, many authors advise negotiators to develop alternatives to a negotiated
agreement as a way of protecting themselves against a bad deal; sometimes the
best alternative is to walk away (Fisher, Ury and Patton 1991; Thompson 1998;
Volkema 1999b).
There are a number of factors that might lead one or both negotiators to back
away from an agreement, including the terms of the agreement (which may not
allow a negotiator to reach his/her breakeven point) or the perceived ethical-
ity of either party. As Tenbrunsel (1998) noted, the use of unethical tactics
can actually create a cycle of distrust when individuals project their own
circumstances and unethical behavior onto others. If either party perceives
the other party as being untrustworthy (for example, as a result of grossly
exaggerated offers or demands, the introduction of questionable facts, or con-
tradictory statements), the deal may seem too risky to consummate. The more
a negotiator employs such tactics, the greater the likelihood of suspicion
being raised.
Given this reasoning, the following is hypothesized:
Hypothesis 4: The more questionable or unethical tactics an individual
employs, the greater the likelihood of not reaching an agreement.
Method
Participants
The participants in this study were sixty-six graduate business students taking
courses in negotiation, thirty-three of whom were taking a course offered in
Rio de Janeiro, Brazil. This group included individuals from Brazil and
France, ranging in age from 22 to 37 years old (mean = 26.3). Sixty-one
percent of the subjects were male. Each of these students was paired with a
student taking a comparable course at another university in Budapest,
Hungary. The students taking the course in Budapest came from a number of
different countries, including Hungary, Germany, the Netherlands, Greece,
Russia, Mexico, and the United States. All participants were fluent in English,
which was the primary language of their courses.
INER 9.2_f8_314-339 10/27/04 9:15 AM Page 321
322 ROGER J. VOLKEMA, DENISE FLECK AND AGNES HOFMEISTER-TOTH
Procedure
The subjects participated in a two-party, property leasing negotiation, as
described in Volkema (1999b). The thirty-three graduate students in Brazil rep-
resented a company called Logan Telecommunications, which was interested
in expanding its operations in a new geographic area. As such, they were inter-
ested in leasing 300 square meters of commercial space. The other party
(graduate students in Hungary) represented RJW Properties, Inc., a real estate
firm with properties in the desired area.
In addition to background information about their company, each repre-
sentative was given a scoring table with seven critical issues to be negotiated.
The seven issues included cost per square meter, duration of lease, renovations,
cost of utilities, parking space, furnishings, and advanced payment. Depending
upon the outcome negotiated for an issue, the individual earned a certain num-
ber of points (Table 1). Because some of the issues were worth more points to
the representative of Logan Telecommunications than to the representative of
RJW Properties, and vice versa, negotiators had an opportunity to maximize
their joint score as well as their individual and differential scores. Multi-issue
simulations of this type have been used effectively in a number of prior stud-
ies (cf. Olekalns et al. 1996; Thompson 1991).
The negotiation took place via electronic mail, which allowed for collection
of all dialogue. All communications were in English, and participants had four-
teen days to complete the negotiation. This time frame was deemed more than
sufficient, based on prior testing of the simulation, both in person and via the
internet. All negotiating dyads remained the same throughout the study.
Three weeks prior to commencing the negotiation, the thirty-three individ-
uals representing Logan Telecommunications were asked to complete the
“Incidents in Negotiation Questionnaire.” (Note: There have been several ver-
sions of this questionnaire.) This questionnaire, developed by Lewicki and his
colleagues (Lewicki and Robinson 1998; Robinson et al. 2000), asks respon-
dents to rate the appropriateness and likelihood of using eighteen tactics or
behaviors, rating each behavior on a 7-point Likert scale (for appropriateness:
1 = not at all appropriate, 7 = very appropriate; for likelihood of use: 1 = not
at all likely, 7 = very likely). The tactics consist of a range of behaviors with
respect to ethicality, from generally accepted competitive tactics (e.g., exag-
gerating an offer or demand, hiding one’s bottom line) to tactics involving
the other party’s professional network (e.g., seeking to discredit one’s oppo-
nent with his or her supervisor). The questionnaire indicates that there are
no “right answers” regarding the right or wrong thing to do, so respondents are
encouraged to be candid in their answers. All respondents were assured
confidentiality.
INER 9.2_f8_314-339 10/27/04 9:15 AM Page 322
ETHICALITY IN NEGOTIATION 323
On the final day of the negotiation (following collection of e-mail transcripts),
participants completed a second questionnaire in which they were asked to
indicate how well they thought they had performed in the negotiation and how
well they thought the other party had done (both on 7-point Likert scales,
where 1 = not well and 7 = very well), which tactics they had used (i.e., mis-
representation of factual information, making promises that could not be kept,
exaggerating an opening demand or offer, pretending not to be in a hurry), and
Table 1. Issues, negotiated outcomes, and point values
Issue Negotiated outcome Point value
Logan Telecom. RJW Properties
Cost per square meter $500 900 300
$600 750 450
$700 600 600
$800 450 750
$900 300 900
Renovation of space No rooms renovated 150 250
One room 400 200
Two rooms 500 150
Three rooms 600 100
Utilities included None 100 300
Water/sewer 150 200
Water/sewer/electricity 200 100
Length of lease One year 500 200
Two years 450 500
Three years 300 700
Four years 200 900
Parking available No cars 100 300
One car 300 250
Two cars 500 200
Three cars 600 150
Four cars 650 100
Furnishings None 100 100
Refrigerator/stove 350 150
Advanced payment One month 500 200
Six months 350 600
One year 150 900
Maximum 3700 3700
Minimum 1100 1100
INER 9.2_f8_314-339 10/27/04 9:15 AM Page 323
324 ROGER J. VOLKEMA, DENISE FLECK AND AGNES HOFMEISTER-TOTH
overall how honest they had been and how honest they thought the other party
had been in the negotiation (on 7-point Likert scales, where 1 = not very hon-
est/ethical and 7 = very honest/ethical). The method of asking participants to
report in a post-experiment questionnaire on tactics and information
exchanged has been employed successfully in other studies of bargaining and
negotiation (cf. Boles et al. 2000; Murnighan et al. 1999). All post-negotiation
questionnaires were confidential.
Independent and Dependent Measures
To gain insight into the predictive validity of the “Incidents in Negotiation
Questionnaire,” the 7-point Likert ratings of appropriateness and likely use
were taken for all eighteen tactics, including four focal tactics – pretending not
to be in a hurry (when you were), exaggerating an offer or demand, misrepre-
senting information, and making promises that could not or would not be
kept. These four focal tactics each had the potential of being employed dur-
ing the actual negotiation. Other tactics, such as talking directly to the people
to whom an opponent reports in order to undermine the negotiation or inten-
tionally misrepresenting the progress of negotiations to the press, are tech-
niques could not be affected by participants in this negotiation. Still other
approaches, such as hiding one’s bottom line, could not be easily measured by
third parties reviewing transcripts of the negotiation. Overall measures were
calculated as the sums of the ratings for the four focal tactics as well as for all
eighteen tactics for appropriateness and likely use, respectively (Robinson
et al. 2000). Self-reported use of the four focal tactics was taken from the
post-negotiation questionnaire. In addition, participants also were asked to
indicate on this questionnaire their overall honesty in the negotiation (as pre-
viously detailed).
Actual behavior for each negotiator (Logan Telecommunications and RJW
Properties) was determined by three individuals independently reviewing
printed transcripts of the e-mail negotiations. These individuals, who did not
know the value of the negotiated outcomes at the time of their review,
identified incidents of the four focal tactics. Using the Estimate-Discuss-
Estimate approach (Nutt 1992), their independent assessments were compared
and any differences were resolved through discussion. An overall measure of
ethicality for each participant was determined by adding the occurrences of
these questionable or unethical behaviors across categories. For exaggerating
an offer or demand, only those offers/demands that were outside the specified
range shown in Table 1 were counted as exaggerated offers.
To determine the influence of ethics on performance, several measures of
outcome were taken. Perceived outcomes were based on self-assessments
INER 9.2_f8_314-339 10/27/04 9:15 AM Page 324
ETHICALITY IN NEGOTIATION 325
recorded on the post-negotiation questionnaire, where subjects were asked to
indicate how well they thought they had done in the negotiation and how well
they thought the other party had done (as previously detailed). Perceived dif-
ferential outcome was the difference in these point values (self minus other),
while perceived joint outcome was calculated as the sum of these values.
Actual outcome was measured by totaling the point values for each of the
seven issues negotiated (Table 1). Given that the simulation allowed for both
differential and joint outcomes, the difference in scores between an individual
and his/her counterpart (differential outcome) was calculated, as well as the
sum of their scores ( joint outcome).
Analyses
Hypotheses 1–3 were tested using regression analyses, while Hypothesis 4 was
tested using discriminant analysis. Since perceived and actual ethical behav-
ior of the other party in the negotiation might influence the outcomes predicted
by Hypotheses 2 and 3, these variables were included as independent variables
in these analyses. Due to dependency concerns with data from negotiating
dyads (e.g., highly correlated outcome measures within dyads), only out-
come data from Logan Telecommunications representatives were analyzed in
testing hypotheses (Kenny 1995).
Results
From the “Incidents in Negotiation Questionnaire,” respondents indicated that
pretending to be in no hurry was the most appropriate of the four focal tactics
(mean = 5.94, SD = 1.39), followed closely by exaggerating an offer or
demand (mean = 5.52, SD = 1.44), misrepresenting information (mean =
3.85, SD = 2.15), and making promises that could not or would not be kept
(mean = 2.15, SD = 1.37) (Table 2). Of these four tactics, participants indicated
that they would be most likely to pretend to be in no hurry (mean = 5.21, SD
= 1.75), followed by exaggerate an offer or demand (mean = 5.15, SD = 1.52),
misrepresent information (mean = 3.88, SD = 1.98), and make false promises
(mean = 1.79, SD = 1.02). As these numbers suggest, participants generally felt
that it was more appropriate to use each tactic than they indicated they were
likely to do (supported by t-tests at the .05 level for pretending to be in no
hurry, and at the .10 level for exaggerating an offer or demand and for making
false promises.)
Consistent with findings reported elsewhere (cf. Volkema 1997), the corre-
lations between attitudes (appropriateness) and intentions (likely use) were all
INER 9.2_f8_314-339 10/27/04 9:15 AM Page 325
326 ROGER J. VOLKEMA, DENISE FLECK AND AGNES HOFMEISTER-TOTH
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INER 9.2_f8_314-339 10/27/04 9:15 AM Page 326
ETHICALITY IN NEGOTIATION 327
significant. Specifically, the correlation for pretending to be in no hurry was
.43 (p < .05), the correlation for exaggerating an offer was .71 (p < .001), the
correlation for misrepresenting information was .85 (p < .001), and the corre-
lation for making a promise that could not or would not be kept was .65
(p < .001). The correlation between attitudes and intentions for all eighteen tac-
tics in the questionnaire was .70 (p < .001).
Eight of the thirty-three focal participants (24.2%) indicated on the post-
negotiation questionnaire that they had pretended not to be in a hurry (mean
= .24, SD = .44), while twenty-four participants (72.7%) felt that they had
exaggerated an offer or demand during the negotiation (mean = .73, SD = .45).
Fifteen individuals (45.5%) indicated that they had misrepresented informa-
tion, from one to three times (mean = .73, SD = .91). One person indicated that
he/she had made a promise that could not or would not be kept (mean = .03,
SD = .17). On a scale from one to seven, where seven means very honest/eth-
ical, participants indicated a mean honesty in their negotiations of 6.12 (SD =
1.02). Their mean perceived honesty of the other party was 4.81 (SD = 1.94).
Thus, overall the thirty-three representatives of Logan Telecommunications
felt that they had been more honest than their negotiating counterparts at RJW
Properties (t = 3.29, p < .01).
In terms of actual behavior (as determined from transcripts), two individu-
als (6.1%) pretended to be in no hurry (when they actually were in a hurry),
while ten individuals (30.3%) were found to have exaggerated an offer or
demand. Twenty-four (72.7%) misrepresented information, from one to ten
times (mean = 2.67, SD = 2.57). No one was found to have made a promise
that could not be kept. Overall, twenty-seven (81.8%) of the thirty-three
participants representing Logan Telecommunications used at least one of the
four focal tactics. These overall numbers were comparable for those individ-
uals representing RJW Properties – twenty-five (75.8%) used at least one of
the tactics.
There were sizeable correlations between several of the self-reported behav-
iors and actual behaviors. The correlation between participants’ perception of
pretending to be in no hurry and their actual use of this tactic was .45 (p < .01),
while the correlation between perceived misrepresentation of information
and actual misrepresentation was .53 (p < .001). The correlation between per-
ceived exaggeration and actual exaggeration, while positive (.11), was not
significant. (The fact that more individuals reported exaggerating offers than
were actually counted is likely due to the fact that only offers or demands that
were outside the specified ranges shown in Table 1 were counted as exagger-
ated offers, while some individuals may have exaggerated within a specified
range for a given issue.) Overall, participants’ perceptions of their honesty
were highly correlated with actual use of these tactics (r = –.52, p < .01). That
INER 9.2_f8_314-339 10/27/04 9:15 AM Page 327
328 ROGER J. VOLKEMA, DENISE FLECK AND AGNES HOFMEISTER-TOTH
is, the more honest a participant judged himself/herself to be in this negotia-
tion, the less he or she actually used these questionable or unethical tactics in
the negotiation.
The correlations between participants’ specific attitudes and their actual
behavior and between intentions and actual behavior were all positive, but
at best marginally significant (Hypothesis 1). The only significant findings
were for exaggerating an offer (attitude: r = .32, p < .10) and misrepresenting
information (attitude: r = .31, p < .10; intentions: r = .33, p < .10). However,
participant’s ratings for all attitudes and all intentions were significantly cor-
related with actual behavior for all tactics (attitude: r = .48, p < .01; intentions:
r = .35, p < .05).
In terms of performance, twenty-two of the thirty-three pairs of negotiators
completed their negotiations. For those reaching an agreement, the scores for
the negotiators representing Logan Telecommunications ranged from 2550 to
3000, with a mean of 2777.27 (SD = 119.25), while the scores for their coun-
terparts (representing RJW Properties) ranged from 2400 to 3050 (mean =
2675.00, SD = 183.71). The differential outcome for the focal participants
ranged from 400 to 600 (mean = 102.27, SD = 284.30). The joint outcome
ranged from 5300 to 5700 (mean = 5452.27, SD = 122.94).
Regression analyses revealed that the “Incidents in Negotiation Question-
naire” did predict both self-reported and actual behavior (Table 3). With
appropriateness and likelihood of use of the four focal tactics as the indepen-
dent variables, participants’ appropriateness ratings for the sum of the four tac-
tics were positively associated with actual unethical behavior (b = .32, p < .10)
as well as with perceived unethical behavior (b = .42, p < .05). Participants’
ratings for general appropriateness of tactics (all eighteen tactics) were posi-
tively associated with actual unethical behavior (b = .48, p < .01) and posi-
tively associated with perceived unethical behavior (b = .34, p < .05).
Therefore, the higher the perceived appropriateness of questionable or uneth-
ical tactics, the more questionable or unethical tactics the individual thought
he or she employed in the negotiation and the more tactics he or she actually
did employ, consistent with Hypothesis 1. In addition, participants’ ratings of
general appropriateness were negatively associated with perceived honesty in
the negotiation (b = –.30, p < .10). That is, the higher the perceived appropri-
ateness of the tactics from the questionnaire, the less honest the participant per-
ceived himself/herself to be in the negotiation.
These results also suggest a relationship between participants’ perceived
honesty and their actual unethical behavior, with the latter also potentially
affected by the other party’s perceived or actual behavior. When actual uneth-
ical behavior was regressed on perceived honesty of self and other as well as
actual unethical behavior of other (Table 4), the perceived honesty of self was
INER 9.2_f8_314-339 10/27/04 9:15 AM Page 328
ETHICALITY IN NEGOTIATION 329
found to be negatively associated with actual unethical behavior of self (b =
–.48, p < .01) while actual unethical behavior of the other party was found to
be positively associated with actual unethical behavior of self (b = .38, p < .05).
Thus, the more honest the negotiator perceived himself/herself to be in the
negotiation, the fewer questionable or unethical tactics the individual
employed during the negotiation. The lack of a significant correlation between
perceived honesty of self and the other party (r = –.01) suggests that partici-
pants did not necessarily project their own ethicality onto their negotiating
counterpart. However, the positive relationship between actual unethical
behavior of the two parties suggests that unethical behavior might breed sim-
ilar behavior from the other party.
Table 3. Results of regression analyses of actual and perceived behavior on the Incidents in
Negotiation Questionnairea
Predictor variable Actual unethical Perceived unethical Perceived honesty
behavior behavior of self
Four focal tactics
Appropriateness .32⊥ .42* –.09
Likely use –.05 .00 –.19
All eighteen tactics
Appropriateness .48** .34* –.30⊥
Likely use .03 .01 –.13
Adjusted R2 .08 .21 .15 .09 .01 .06
F 3.59⊥ 9.49** 6.67* 4.14* 1.17 3.11⊥
a n = 33
⊥ p < .10, * p < .05, ** p < .01, *** p < .001
Table 4. Results of regression analysis of actual behavior on the perceived honesty of self and
honesty of othera
Predictor variable Actual unethical behavior
Perceived honesty of self –.48**
Perceived honesty of other .08
Actual unethical behavior of other .38*
Adjusted R2 .36
F 9.74***
a n = 33
⊥ p < .10, * p < .05, ** p < .01, *** p < .001
INER 9.2_f8_314-339 10/27/04 9:15 AM Page 329
330 ROGER J. VOLKEMA, DENISE FLECK AND AGNES HOFMEISTER-TOTH
As a follow-up analysis, the first use of a questionable or unethical behav-
ior was examined for each representative, Logan Telecommunications and
RJW Properties (i.e., location in the sequence of e-mail messages sent by a
party where the first use of a focal tactic occurred). In twenty-two (66.7%) of
the negotiations, both parties used one or more tactics, in eight cases (24.2%)
only one party used a focal tactic, and in three cases (9.1%) neither party used
one of these tactics. In those cases where both parties employed one or more
focal tactics there was a high correlation between stages of first use (r = .64,
p < .001), suggesting that the first incidence of a questionable or unethical
behavior on the part of one negotiator was followed quickly by reciprocal
behavior on the part of the other negotiator. Furthermore, the earlier a Logan
Telecommunications representative used a questionable or unethical behavior
in the sequence of e-mail messages exchanged, the more unethical the RJW
representative was overall (r = –.40, p < .05), and the earlier the RJW repre-
sentative used a questionable or unethical behavior, the more unethical the
Logan Telecommunications representative was overall (r = –.36, p < .10).
Outcomes (actual and perceived) were regressed on attitudes, intentions,
perceived honesty, and actual behavior (Table 5). The more questionable or
unethical tactics a party used (b = .37, p < .10) and the less honest he/she
thought the other party was in the negotiation (b = –.51, p < .05), the higher
the negotiator’s score (the former consistent with Hypothesis 2). The more
unethical the other party, the greater the differential outcome (b = .40, p < .10)
and the smaller the joint outcome (b = –.62, p < .01). These results suggest that
the perceived or actual ethicality of the other party was a better predictor of
actual outcomes than the ethics of the principal party (although, as previously
noted, unethical behavior by one party appears to promote similar behavior by
the other party).
The participant’s perception of the honesty of the other party and the actual
unethical behavior of the other party were the only variables significantly asso-
ciated with perceived outcomes. The more honest the other party was per-
ceived to be, the better the negotiator perceived he/she did in the negotiation
(b = .30, p < .10) and the better the negotiator perceived the other party did in
the negotiation (b = .64, p < .001). In addition, the more honest the other party
was perceived to be (b = –.58, p < .001) and the more unethical the other party
actually was (b = –.29, p < .10), the smaller the perceived differential outcome
(i.e., the difference between his/her perceived performance and the perceived
performance of the other party). Finally, the more honest the other party was
perceived to be, the larger the perceived joint outcome (b = .55, p < .001).
However, there was no support for a relationship between actual unethical
behavior of the Logan Telecommunications negotiators and perceived out-
comes (Hypothesis 3).
As previously noted, eleven pairs of negotiators were unable to reach an
INER 9.2_f8_314-339 10/27/04 9:15 AM Page 330
ETHICALITY IN NEGOTIATION 331
agreement in the allotted time (a period of two weeks, which appeared sub-
stantial for completing the negotiation). To determine if the ethics of the sub-
jects might have played a role in predicting whether or not an agreement was
reached, a discriminant analysis was performed, with agreement/no agreement
as the dependent variable, and the mean score for appropriateness of tactics
(attitude), mean score for likely use of tactics (intentions), perceived honesty
during the negotiation, perceived honesty of the other party during the nego-
tiation, and actual ethical behavior of each party during the negotiation as the
predictor variables. The analysis yielded a significant function (canonical
correlation = .54; Wilks’ lambda = .71; p < .01) involving two variables –
likely use of tactics and perceived honesty of the other party. The more likely
the use of competitive or unethical tactics, the greater the likelihood that no
agreement would be reached. In addition, the less honest the other party was
perceived to be, the greater the likelihood that no agreement would be reached.
The function correctly classified 78.1% of all cases into their original groups,
which exceeds the threshold suggested by Hair et al. (1998). In addition,
Press’s Q was significant (Q = 10.1, p < .01), supporting the efficacy of the
function. Strictly speaking, however, this result did not support Hypothesis 4,
which predicted that the more questionable or unethical tactics an individual
employed, the greater the likelihood of not reaching an agreement.
Table 5. Results of regression analyses of outcomes on attitudes, intentions, perceived honesty,
and actual behaviora
Predictor variable ___Actual outcome____ _____Perceived outcome______
Self Differential Joint Self Other Differential Joint
Attitude/intentions
(Incident in Negotiation
Questionnaire, 18 tactics)
Appropriateness .25 .04 –.18 –.20 –.08 –.07 –.15
Likely use .11 .01 –.14 –.15 –.03 –.16 –.09
Perceived honesty
Self .00 .02 .04 .09 .02 .05 .06
Other –.51* –.25 –.26 .30⊥ .64*** –.58*** .55***
Actual unethical behavior
Self .37⊥ .15 –.03 .03 .07 .06 .06
Other .06 .40⊥ –.62** –.04 .21 –.29⊥ .11
Adjusted R2 .20 .12 .36 .06 .40 .28 .28
F 3.66* 3.80⊥ 12.64** 2.89⊥ 21.23*** 7.11** 13.25***
a For actual outcomes, n = 22; for perceived outcomes, n = 33.
⊥ p < .10, * p < .05, ** p < .01, *** p < .001
INER 9.2_f8_314-339 10/27/04 9:15 AM Page 331
332 ROGER J. VOLKEMA, DENISE FLECK AND AGNES HOFMEISTER-TOTH
Discussion
As reported elsewhere (Boles et al. 2000; Murnighan et al. 1999; O’Connor
and Carnevale 1997; Scouller 1972), the use of questionable or unethical tac-
tics in negotiating is a common phenomenon. In this study, approximately 80%
of the participants were found to use one or more of the four focal tactics. The
tactic that was used most frequently was misrepresenting information, which
was used by over 70% of the participants. In general, these percentages are
somewhat higher than the numbers reported in previous studies, which may
be due to the medium employed in this study – electronic mail – and the fact
that most of the dyads represented cross-cultural negotiations. At least one
study has suggested that the use of unethical tactics increases when negotia-
tions occur via electronic mail, due in part to the inability of the other party to
read nonverbal cues which can give away intentions to deceive (Valley et al.
1998). In addition, Volkema and Fleury (2002) report that the likelihood of
unethical behavior increases when an individual is negotiating with someone
from another country, particularly a country known for its skilled negotiators.
The “Incidents in Negotiation Questionnaire” was found to be modestly pre-
dictive of perceived (self-reported) and actual behavior. While there were
some marginally significant relationships between perceived appropriateness
or likely use of specific tactics and the actual use of those tactics, the measure
of general appropriateness (all eighteen behaviors) was the best predictor of
actual ethical behavior. Prior research on the linkages between attitudes,
intentions, and behavior has reported significant correlations between spe-
cific attitudes or intentions and specific behaviors, and between general
attitudes or intentions and general behaviors (Ajzen 1988). The somewhat
weak finding for the former (specific-to-specific linkages) might be an artifact
of only four tactics from the questionnaire having applicability to this partic-
ular simulation. The positive link between the measure of general appropri-
ateness and actual ethical behavior is encouraging as regards the predictive
utility of the questionnaire.
The likely use of questionable or unethical tactics, the actual use of those
tactics, and the perceived honesty of the other party were the critical variables
in predicting outcomes. The use of questionable or unethical tactics by a
party was positively associated with a party’s performance, while the per-
ceived honesty of the other party was negatively or inversely associated with
the negotiator’s score. Thus, a negotiator did better relative to others repre-
senting Logan Telecommunications when he/she used these questionable tac-
tics and when he/she presumed the other party was using these tactics. In
addition, the use of questionable or unethical tactics by the other party was
associated with lower joint outcomes.
INER 9.2_f8_314-339 10/27/04 9:15 AM Page 332
ETHICALITY IN NEGOTIATION 333
There appears to be a reciprocating effect involving the use of questionable
or unethical tactics, as early use by one party was associated with early use by
the other party. In addition, timing appeared to influence frequency of use, as
the earlier one party used one of these four tactics, the more the other party
used questionable or unethical tactics. As already noted, exaggerating an offer
or demand was only coded as such if the offer or demand was outside the
specific ranges shown in Table 1. Since exaggeration is often one of the
first tactics employed by negotiators, going beyond specified ranges may
have sent a signal to the other party that future unethical behavior was likely
(prompting not only reciprocation but escalating use of questionable or un-
ethical tactics).
The perceived honesty of the other party was the primary variable
significantly related to perceived outcomes. The more honest the other party
was perceived to be, the better a negotiator perceived he/she did compared to
others representing Logan Telecommunications, the poorer the individual
perceived he/she did in competition with the other party (differential outcome),
but the better the individual perceived he/she did in cooperation with the other
party ( joint outcome). Interestingly, the more honest the other party was per-
ceived to be, the better the negotiator perceived the other party did in the nego-
tiation. Conceivably, the other party’s perceived honesty led to an increase in
exchange of valid information, or accommodation on certain issues.
There were two variables that were most effective in differentiating between
negotiations that reached agreement and negotiations that did not reach agree-
ment – likely use of questionable or unethical tactics (as measured by the
“Incidents in Negotiation Questionnaire”) and the perceived honesty of the
other party. The more likely the use of these tactics and the less honest one’s
counterpart was perceived to be, the greater the likelihood that the parties
would not reach an agreement. It is important to note, however, that the rating
of the other party’s honesty occurred at the conclusion of the negotiating
period (when it was clear no agreement would be reached). Therefore, it is con-
ceivable that the respondent was seeking to explain or justify the failed nego-
tiation by placing blame elsewhere. In future research, this perception might
be measured at several points throughout the negotiation, to determine if per-
ceptions change when it first appears that no agreement will be reached.
The significant positive relationship found between subjects’ self-reported
behavior and actual behavior is also worth noting, as such findings have not
always been reported by researchers. In general, restricting the recall of an
event to a short and recent reference period and providing specific recall cues
can help improve recall (Gilbert, Fiske and Lindzey 1998). However, indi-
viduals still may choose to misreport events when social capital is at stake. The
high correlation between self-reported behavior and actual behavior found in
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334 ROGER J. VOLKEMA, DENISE FLECK AND AGNES HOFMEISTER-TOTH
this study may be due to the fact that participants knew transcripts of their
exchanges would be available to others (e.g., the researchers) for verification.
While this finding requires further study, it suggests one way of increasing the
validity of self-report data of this type, where the issue is more one of honesty
in reporting than accuracy in reporting behaviors.
These findings have some direct implications for practitioners. First, as
reported in prior research, the use of questionable or unethical tactics is com-
monplace among negotiators (approximately 80% in this study used at least
one such tactic), although some tactics may be considered more acceptable
than other tactics. Thus, it is not unreasonable to assume that the other party
in a negotiation will use a questionable or unethical tactic, especially misrep-
resentation of information (which was the tactic used most frequently). The
use may actually increase when a medium such as electronic mail is employed
(rather than face-to-face negotiations, where nonverbal cues can be read).
Second, an individual’s general attitude/intentions towards the appropriateness
and use of questionable or unethical tactics will likely translate into actual use
of such tactics. Therefore, the extent to which another party’s general attitude
or intentions towards tactics can be ascertained prior to the negotiation (e.g.,
through demographic information, reputation, etc.) or early in the negotiation
(e.g., through background and anecdotal exchanges) could be valuable in
predicting the degree of unethical behavior. Third, the use of questionable or
unethical tactics will likely result in reciprocal behavior on the part of the other
party, and the earlier such tactics are employed, the more unethical the other
party is likely to be. Fourth, the more likely one is to use questionable or uneth-
ical tactics and the less honest the other party is perceived to be, the greater the
likelihood that no agreement will be reached. This could be costly if a viable
agreement is lost due to inaccurate perceptions of the other party. Whether or
not someone can easily project honesty while in fact acting unethically is
important to this finding. An ad hoc correlation analysis of participants’ per-
ceptions of the other parties’ honesty and the other parties’ actual unethical
behavior was in the expected direction (r = –.26) but not statistically significant
(p = .15). Fifth, perceived outcomes matter, since many times negotiators do
not know how they actually performed relative to their counterpart; a decision
to engage in future negotiations with the same party must therefore be based
on perceptions. Furthermore, based on the findings of this study, one’s per-
ceived performance (differential and joint) is likely to be tied to the perceived
honesty of the other party. The more honest the other party is perceived to be,
the less the negotiator’s differential advantage is perceived to be and the
larger the joint outcome is perceived to be. Finally, the use of questionable or
unethical tactics by a negotiator and the perceived dishonesty of the other party
can positively influence the negotiator’s actual performance. Exaggerating an
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ETHICALITY IN NEGOTIATION 335
initial offer, for example, is both a generally accepted tactic and a tactic that
can directly affect outcome by serving as an anchor around which a final set-
tlement is reached. Cramton and Dees (Cramton and Dees 1993; Dees and
Cramton 1991), in fact, argue that a negotiator has a moral right to exagger-
ate an initial offer, since the other party will assume this was the case in any
event and demand the negotiator compromise on a sincere initial offer.
As with all research, there are several caveats that must be offered regard-
ing this study and our findings. First, it should be pointed out that this negoti-
ation took place entirely via electronic mail. While this medium has its benefits
in terms of data analysis and has been employed effectively elsewhere (Tinsley
et al. 2002), as already noted the use of questionable or unethical tactics may
vary depending on the medium and its richness (Daft and Lengel 1986;
Daniels 1967; Tinsley et al. 2002). Remote media, such as telephone and elec-
tronic mail, can induce greater competition between negotiators where trust
and honesty appear lacking (Paese, Schreiber and Taylor 2003). In addition,
as an asynchronous form of communication that is not always reliable, elec-
tronic mail introduces other issues that can complicate the development of rap-
port and trust between parties. Before generalizing beyond this medium,
further study is clearly warranted. Although electronic mail may be used
increasingly in negotiations over the coming years, the parties frequently
have some face-to-face contact as well, and other media such as video con-
ferencing have begun to emerge. In one study, preliminary face-to-face con-
tact was found to mitigate the likelihood of deadlocks in e-mail negotiations
(Shell 2001). Researchers need to recognize that other media (or combination
media) might influence ethical behavior and outcome.
It should also be pointed out that the parties in this negotiation were from
many different cultures (as is the case in most multinational organizations
these days) and had had no prior contact or the guarantee of future contact.
These factors also can affect the extent to which a party employs questionable
tactics (Volkema and Fleury 2002), and how individuals perceive the actions
(or inactions) of the other party. It is easy for a cycle of mistrust and hostility
to emerge under such conditions, which in turn can reinforce the tendency to
view oneself as good and the other party as bad or evil (Hopmann 1996).
Innocuous behaviors, such as gift-giving, extended socialization, and flexible
time orientation, which are often more common in the business practices of
non-Western cultures, suddenly become suspect (Donohue and Hoobler 2002;
Schuster and Copeland 1996). With the continued globalization of markets and
the reliance on technologies such as electronic mail to negotiate agreements
(particularly when challenging economic times limit travel), these factors
will become increasingly important.
A growing number of studies have reported the use of questionable and
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336 ROGER J. VOLKEMA, DENISE FLECK AND AGNES HOFMEISTER-TOTH
unethical tactics in both actual and simulated negotiations. These tactics are
employed in the public sector as well as the private sector, between nations as
well as multinationals. To fully understand the negotiation process, the use and
impact of these tactics needs to be better understood. This study represents one
of the first to examine some of these issues. Beyond replication, future research
needs to examine the intentions with which invalid information is employed.
Invalid information may provide a means of checking another party’s knowl-
edge base, uncovering the other party’s settlement range, determining a coun-
terpart’s negotiating style (e.g., cooperative, assertive), building rapport and
perceived trust, or countering another party’s dishonesty, among other pur-
poses. At the same time, we must recognize that many tactics that are per-
ceived as unethical in one culture might be seen as acceptable practice in
another culture (Puffer and McCarthy 1995; Schuster and Copeland 1996).
Indeed, being polite may be more important than telling the truth in some cul-
tures (Faure 2002). Future research, therefore, might seek to isolate intentions
in order to better understand their influence on behavior and performance.
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