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Ethical Negotiations

by Phyllis Pollack

From the Blog of Phyllis G. Pollack.

Phyllis  Pollack

      The art of negotiation can present ethical dilemmas. As explained in the April 2008 (Vol. 11, No. 4) issue of Negotiation published by the Program on Negotiation at Harvard Law School, at times, negotiators  will make decisions that clash with their own ethics. Such clashes can arise in a myriad of situations.
 

      For example, a negotiator may attempt to create value at the expense of others. The scenario given describes two pharmaceutical companies settling a patent-infringement suit. As part of the out of court settlement, the defendant company agreed to delay marketing its generic drug while plaintiff agreed to pay defendant a large sum of money for unrelated products. The U.S. Federal Trade Commission filed a complaint against the two companies urging that plaintiff’s payment to defendant was for the purpose of keeping defendant’s generic product off the market. Although the Administrative Law Judge disagreed with this assessment, the Commission, itself, found that the two companies settled (i.e. created value) at the expense of potential consumers of the generic drug.
 

      A second example involves stereotyping some, thereby favoring others. While everyone wants to believe that he/she treats all others equally and favorably, the results of an online test – the Implicit Association Test at http://implicit.harvard.edu/implicit - will reveal that each of us have certain attitudes or biases toward race, gender and other traits. Thus, as much as a negotiator may think she is being “neutral,” the potential for bias and/or favoritism is there. It is something to be mindful about during each negotiation.
 

      A third example is when negotiators ignore conflicts of interest. “Psychological research shows that when decision makers have a motivation to interpret data in a certain way, they are incapable of being truly objective.” (Id. at 3). Conflicts of interest will most often exist when a person is negotiating as an agent for another. In such situations, the interests of the client and those of the agent (i.e., an attorney or real estate broker) will not be in perfect alignment. An example of this is the issue of attorneys’ fees in any litigation. During the mediation, the interest of the attorney on this issue often conflicts with reaching a

      The article then discusses ethics in terms of the behavior of others. It suggests that we should not overlook or forgive unethical behavior by others, because by doing so, we, implicitly, approve such behavior. For example, we should not overlook behavior that would harm us if exposed. The example given is the use of performance – enhancing drugs in Major League Baseball (“MLB”). For many years, the wide use of such drugs was an “open secret,” and never questioned by management or by the union. Why was it overlooked? According to research, “MLB leaders succumbed to motivational blindness, or the common tendency to overlook others’ ethical lapses when confronting the behavior would harm us. . . .” (Id. at 3). Think of the great single season homerun race between Mark McGwire and Sammy Sosa or of Barry Bonds’ chase for the all time homerun record. Each of these brought much attention and revenue to MLB. To confront the issue of steroid use could have jeopardized both. 
 

      Further, we should not excuse those who delegate unethical behavior. Examples are the Chinese factory owners who, to make greater profits, subcontracted out certain parts of their production for  pet food or toys which, ultimately, led to deadly pet food and lead-painted toys. Not only should the subcontractors be held responsible, but the factory owners should also be held culpable.
 

      The final example of an ethical lapse is judging by outcomes rather than by processes. That is, making the result more important than the process and employing the attitude that if the result did not harm anyone, then the fact that an illegal or unethical practice was used is of no moment. Referring to the above example of lead paint in toys, suppose the toys are sold and (1) harmed many small children, or alternatively, (2) harmed no children at all. Should the difference in result dictate our view of what the factory did to increase its profits? It should not.
 

       So. . .while everyone attends mediation with the hope of resolving the dispute, perhaps each of us should keep in mind that settlement should not be reached at the expense of ethics.
   

          . . .Just something to think about.    

Biography


Phyllis Pollack with PGP Mediation uses a facilitative, interest-based approach. Her preferred mediation style is facilitative in the belief that the best and most durable resolutions are those achieved by the parties themselves. The parties generally know the business issues and priorities, personalities and obstacles to a successful resolution as well as their own needs better than any mediator or arbitrator. She does not impose her views or make decisions for the parties. Rather, Phyllis assists the parties in creating options that meet the needs and desires of both sides.  When appropriate, visual aids are used in preparing discussions and illustrating possible solutions. On the other hand, she is not averse to being proactive and offering a generous dose of reality, particularly when the process may have stalled due to unrealistic expectations of attorney or client, a failure to focus on needs rather than demands, or when one or more parties need to be reminded of the potential consequences of their failure to reach an agreement.



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