Chapter 09 – Relationships in Negotiation
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Chapter 9
Relationships in Negotiation
Overview
In this chapter, we will focus on the ways these past and future relationships impact present
negotiations. Our treatment of relationships will come in two major sections. First, we examine
how a past, ongoing, or future relationship between negotiators affects the negotiation process.
This discussion considers general assumptions that have been made about the theory and practice
of negotiation—assumptions that have not taken into account any relationship between the
parties—and provides a critical evaluation of the adequacy of negotiation theory for
understanding and managing negotiations within relationships. We present a taxonomy of
different kinds of relationships and the negotiations that are likely to occur within them. We also
broadly describe research studies that have examined negotiation processes within existing
relationships. Second, we look at three major themes—reputations, trust, and justice—that are
particularly critical to effective negotiations within a relationship.
Learning Objectives
1. The adequacy of established research for understanding negotiation within relationships.
2. Key elements in managing negotiations within relationships
I. The Adequacy of Established Approaches to Research for Understanding Negotiation
Within Relationships
A. The adequacy of established research for understanding negotiation within relationships.
Aspects of relationships that could change our understanding of negotiation strategy and
tactics:
1. Negotiating within relationships takes place over time.
2. Negotiation is often not a way to discuss an issue, but a way to learn more about the
other party and increase interdependence.
3. Resolution of simple distributive issues has implications for the future.
4. Distributive issues within relationship negotiations can be emotionally hot.
5. Negotiating within relationships may never end.
a. Parties may defer negotiations over tough issues in order to start on the right foot.
b. Attempting to anticipate the future and negotiate everything up front is often
impossible.
c. Issues on which parties truly disagree may never go away.
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6. In many negotiations, the other person is the focal problem.
7. In some negotiations, relationship preservation is the negotiation goal, and parties
may make concessions on substantive issues to preserve or enhance the relationship.
II. Negotiations in Communal Relationships
1. Studies have shown that compared to those in other kinds of negotiations, parties who
are in a communal-sharing relationship:
a. Are more cooperative and empathetic
b. Craft better quality agreements
c. Perform better on both decision making and motor tasks
d. Focus their attention on the other party’s outcomes as well as their own
e. Focus more attention on the norms that develop about the way that they work
together
f. Are more likely to share information with the other and less likely to use coercive
tactics
g. Are more likely to use indirect communication about conflict issues and develop a
h. May be more likely to use compromise or problem solving as strategies for
resolving conflicts
III. Key Elements in Managing Negotiations within Relationships
A. Reputation
1. Reputation is a “perceptual identity, reflective of the combination of salient personal
characteristics and accomplishments, demonstrated behavior and intended images
preserved over time, as observed directly and/or as reported from secondary sources”
a. Reputations are perceived and highly subjective in nature.
b. An individual can have a number of different, even conflicting, reputations
because she may act quite differently in different situations.
c. Reputations are shaped by past behavior.
d. Reputation is influenced by an individual’s personal characteristics and
accomplishments.
e. Reputations develop over time; once developed, they are hard to change. Early
experiences with another shape our views, which we bring to new situations in the
form of expectations. These expectations are then confirmed or disconfirmed by
the next set of experiences.
f. Other’s reputations can shape emotional states as well as their expectations.
g. Negative reputations are difficult to “repair.”
B. Trust
1. Recent research on trust and negotiation
a. Many people approach a new relationship with an unknown other party with
remarkably high levels of trust (Kramer, 1994; Myerson et. al, 1996).
b. Trust tends to cue cooperative behavior (Butler, 1995, 1999).
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c. Individual motives also shape both trust and expectations of the other’s behavior
(Olekalns, Lau, and Smith, 2002).
d. Trustors, and those trusted, may focus on different things as trust is being built
(Malhotra, 2004).
e. The nature of the negotiation task (distributive versus integrative) can shape how
parties judge the trust (Malhotra, 2003).
f. Greater expectations of trust between negotiators leads to greater information
sharing with the other party (Butler, 1999)
g. Greater information sharing tends to enhance effectiveness in achieving a good
negotiation outcome.
h. Distributive processes lead negotiators to see the negotiation dialogue, and critical
events in the dialogue, as largely about the nature of the negotiation task
(Olekalns and Smith, 2001).
i. Trust increases the likelihood that negotiation will proceed on a favorable course
over the life of a negotiation (Olekalns & Smith, 2001, 2005).
j. Face-to-face negotiation encourages greater trust development than negotiation
online (Naquin and Paulson, 2003).
k. Negotiators who are representing others’ interests, rather than their own interests,
tend to behave in a less trusting way (be less trustworthy), and tend to expect that
the other will be trusting (Song, 2004).
2. Trust repair
a. Since trust and positive negotiation processes and outcomes appear to be so
critical, we should comment on ways that broken trust can be repaired in order to
return negotiations toward a more productive direction.
b. Recent studies have also shown that following a period of untrustworthy behavior,
trust is more likely to be repaired if the trust violation was not accompanied by
deception.
C. Justice
1. Justice can take several forms:
a. Distributive justice is about the distribution of outcomes.
b. Procedural justice is about the process of determining outcomes.
c. Interactional justice is about how parties treat each other in one-to-one
relationships.
d. Systemic justice is about how organizations appear to treat groups of individuals
and the norms that develop for how they should be treated.
2. The issue of fairness is beginning to receive some systematic investigation in
negotiation dynamics.
3. Justice issues are also raised when individuals negotiate inside their organizations,
such as to create a unique or specialized set of job duties and responsibilities.
4. Rather than making things more fair, negotiated exchanges may serve to emphasize
the conflict between actors who are blind to their own biases and inclined to see the
other party’s motives and characteristics in an unfavorable light although we have
identified these forms of justice as separate entities, they are often intertwined.
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D. Relationships among reputation, trust and justice
1. Trust, justice, and reputation are all central to relationship negotiations and feed each
other.
E. Repairing a relationship
1. Fisher and Ertel (1995) suggest the following diagnostic steps in beginning to work
on improving a relationship:
a. What might be causing any present misunderstanding, and what can I do to
understand it better?
b. What might be causing a lack of trust, and what can I do to begin to repair trust
that might have been broken?
c. What might be causing one or both of us to feel coerced, and what can I do to put
the focus on persuasion rather than coercion?
d. What might be causing one or both of us to feel disrespected, and what can I do to
demonstrate acceptance and respect?
e. What might be causing one or both of us to get upset, and what can I do to
balance emotion and reason?
Summary
In this chapter, we explored the way that existing relationships shape negotiation. Much of
negotiation theory and research is based on what we have learned in experimental research
settings, consisting of two negotiating parties who don’t know each other, don’t expect to deal
with each other in the future, and are engaged in a market transaction over price and quantity.
Yet much of the professional negotiations conducted in business, law, government, communities,
and international affairs occur in a context in which the parties have a past (and future)
relationship and in which their relationship strongly affects the negotiation process.
In addition, we cannot assume that negotiators are involved only in arm’s-length market
transactions about the exchange of fees for goods and services. Many negotiations concern how
to work (and live) together more effectively over time, how to coordinate actions and share
responsibilities, or how to manage problems that have arisen in the relationship. In this chapter,
we evaluated the status of previous negotiation research—which has focused almost exclusively
on market-exchange relationships—and evaluated its status for different types of relationships
particularly communal-sharing and authority-ranking relationships. Within relationships, we see
that parties shift their focus on price and exchange to also attend to the trust between the parties
and questions of fairness, and to build strong positive reputations. We argue that most
negotiations occur within these relationship contexts, and future work must attend to their unique
complexities.