MBA Students Have Clear Ideas Of What Is Ethical In Negotiations

COLUMBUS, Ohio -- When two business people are negotiating against each other to secure an important deal, just how far can they go ethically to get the results they want?

A new study suggests that MBA students have clear ideas of which tactics are ethically proper and improper in the course of bargaining. But the students’ views about ethical practices are shaped by their gender, nationality, age, work experience, and perhaps even the university they attend.

“Students seem most comfortable with traditional tactics of tough, competitive negotiation in which you try to gain advantage, but are not completely dishonest,” said Roy Lewicki, co-author of the study and professor of management and human resources at Ohio State University’s Fisher College of Business.

In general, students said it was OK to bluff about the deal you would accept, to inflate your opening demand and to stall negotiations to get a better deal. But they thought it was unethical to use outright lies or bribery to gain an edge.

Women, older students and those with more work experience were less likely than others to accept most bargaining tactics, the study found. Students from the United States and those who identified themselves as “aggressive” were more likely to label bargaining tactics as ethically acceptable.

Lewicki conducted the study with Robert Robinson of the Harvard Business School. Their results were published in a recent issue of the Journal of Business Ethics.

The study was conducted with 320 MBA students at Ohio State’s Fisher College of Business and 736 MBA students at the Harvard Business School. All participated while enrolled in an academic course on negotiation.

The students were asked to evaluate the ethical appropriateness of 18 potential negotiation tactics. They ranked the tactics on a scale of 1 to 7, with higher ratings indicating greater perceived appropriateness.

For example, students gave a relatively high appropriateness score of 5.84 for the tactic “Make an opening demand that is far greater than what one really hopes to settle for.” The low score of 1.99 was given to the tactic “Intentionally misrepresent factual information to your opponent in order to support your negotiating arguments or position.”

Some of the other results:

• Students at Harvard were more likely to embrace most of the bargaining tactics than were Ohio State students. “We expected that Harvard students might be more competitive,” Lewicki said. “This may be due to the different cultures among the student bodies at Harvard vs. Ohio State, or that Harvard may attract students who are more aggressive and competitive.” Along similar lines, students who identified themselves as aggressive -- about 25 percent of the sample -- were more accepting of most bargaining tactics than were those who called themselves cooperative.
• The researchers were somewhat surprised that women MBA students said many bargaining tactics were less ethical than did men. While other studies have shown that women generally have higher ethical standards than men, Lewicki said he believed women in the tough business school culture would be more like men. “This study fits in with others that show women tend to be more cooperative and fair-minded than men. “We found that women were more conservative than men in evaluating which bargaining tactics were appropriate.”
• Students from the United States were more accepting of most bargaining tactics than were students from other countries. “We have a very competitive, individualistic culture in the United States that values each person looking out for him or herself. That means U.S. students may be more likely to accept tactics that will benefit themselves, regardless of what the tactics do for others.”
• In a separate but related study, the researchers found that older people and those who had spent more time in the workforce were less likely to endorse many negotiation tactics. “Work experience and age seem to make people more wary of potentially unethical bargaining practices,” he said.

The fact that so many elements -- like age, gender and nationality -- can affect beliefs about ethical bargaining means that business people need to prepare before entering important negotiations, according to Lewicki. “When you’re entering into a negotiation, particularly with people you don’t know very well, it may be very appropriate to talk about ground rules, to state your expectations,” he said. “You have to set the right tone.”

The results also show the importance of including discussions of ethical issues in business school classes. “Students are very interested in the ethics of negotiations, Lewicki said. “They realize that negotiation is a process where one does not expect complete honesty from your opponent. If you’re completely honest, you lose your bargaining position. But if you’re completely dishonest, there is no basis for effective negotiation. You have to find the proper balance, and that is where the critical ethical judgments come in. Our study has shown that most students understand the line between effective negotiation and less-than-complete candor vs. outright distortions and manipulations of the truth.”

The research was supported by the Hewlett Foundation.