J Bus Ethics (2014) 123:669–685
DOI 10.1007/s10551-013-2016-4
Attitudes Toward Ethically Questionable Negotiation Tactics:
A Two-Country Study
Moshe Banai • Abraham Stefanidis •
Ana Shetach • Mehmet Ferhat Özbek
Received: 23 January 2013 / Accepted: 12 December 2013 / Published online: 14 January 2014
Springer Science+Business Media Dordrecht 2014
Abstract Current research has identified five discrete US
negotiation tactics, a traditional one considered to be ethical, and four considered to be ethically questionable.
Scholars have independently used culture to explain how
the endorsement of these five negotiation tactics varies
across nations. They have also independently used interpersonal trust and ethics propensity to explain antecedents
of the endorsement of those five negotiation tactics. This
research combines all those variables into one model that
investigates the influence of horizontal and vertical individualism–collectivism, ethical idealism, and trust propensity on employees’ attitudes toward ethically
questionable negotiation tactics in Israel and Kyrgyzstan. A
survey questionnaire was translated from English to
Hebrew and Kyrgyz, and 615 responses were collected
M. Banai
Zicklin School of Business, Baruch College, CUNY, One
Bernard Baruch Way, New York, NY 10010, USA
e-mail: moshe.banai@baruch.cuny.edu
A. Stefanidis (&)
Department of Management, The Peter J. Tobin College of
Business, St. John’s University, 8000 Utopia Pkway, Bent Hall
326, Queens, NY 11439, USA
e-mail: stefania@stjohns.edu
A. Shetach
Management of Health Systems Department, Max Stern
Academic College of Emek Yezreel, 19300 Yezreel Valley,
Israel
e-mail: shetachf@netvision.net.il
M. F. Özbek
Department of Management, Faculty of Economics and
Administration Sciences, Gumushane University, Gumushane,
Turkey
e-mail: mfozbek@gumushane.edu.tr
from employees in various industries in the two countries.
We empirically confirmed three types of questionable
negotiation tactics discovered in previous one-nation
studies, namely, pretending, deceiving, and lying. Vertical
individualism was found to be positively, and horizontal
collectivism was found to be negatively, related to pretending, deceiving, and lying. Ethical idealism was found
to be negatively related to the endorsement of the lying
tactics, while trust propensity was negatively related to the
pretending tactics. Compared with Israel, employees’
endorsement of ethically questionable negotiation tactics
was significantly higher in Kyrgyzstan. Contribution to
theory and practice is discussed.
Keywords Negotiation tactics Horizontal and vertical
individualism–collectivism Ethical idealism Trust
propensity Israel Kyrgyzstan
Introduction
As business efforts toward higher levels of international
cooperation and integration gain momentum, the various
dimensions of unethical negotiation tactics have attracted
considerable attention from academics and practitioners
alike. In a quest for predictors of individuals’ attitudes
toward unethical negotiation, studies have proposed factors
such as culture (Triandis et al. 2001; Volkema 2004),
personal or demographic characteristics (Kronzon and
Darley 1999; Lewicki and Robinson 1998; Ma 2005;
Volkema 2004), personality (Ma 2005), emotional intelligence (Foo et al. 2004), and problem-solving approaches
(Mintu-Wimsatt et al. 2005).
In the past decade, a number of studies have tested
various
nationalities’
attitudes
toward
ethically
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questionable negotiation tactics using measures that have
been developed in, and are tuned to, the US culture (Triandis et al. 2001; Volkema 1998, 2004; Volkema and
Fleury 2002; Zarkada-Fraser and Fraser 2001). Yet, there
have been studies that emphasize the need for more international evidence, encouraging research on the negotiation
tactics of non-US and non-Western European samples
(Gelfand et al. 2001; Ma 2007). Other researchers advocate
for the development of research tools that would be
appropriate for the study of ethically questionable negotiation tactics in diverse cultures (Erkus and Banai 2011;
Stefanidis et al. 2013).
In this context, the current research focuses on culture,
trust and ethics, as probable explanatory theories for the
endorsement of the use of ethically questionable tactics in
negotiation. Since most research has applied US originated
measures of ethically questionable negotiation tactics, we
have to resort to the same measures of which properties
have been tested and validated. Yet, rather than use them
globally as discreet constructs, we only use their various
items to empirically create new constructs. Erkus and Banai (2011) and Stefanidis et al. (2013) have employed a
similar strategy in their research in Turkey and Peru,
respectively. Yet, their efforts were limited to one country
at a time. We advance this logic and refine the empirical
construct of ethical negotiation strategy and the antecedents of employees’ tendency to endorse ethically questionable negotiation tactics, by testing the model in two
countries, namely, Israel and Kyrgyzstan. Specifically, we
empirically test the influence of horizontal and vertical
individualism–collectivism, ethical idealism, and propensity to trust on employees’ endorsement of ethically
questionable negotiation tactics.
Our motivation to empirically investigate employee
attitudes toward ethically questionable negotiation tactics
by sampling Israeli and Kyrgyz cultures was fueled by
three reasons. First, countries in the Middle East and
Central Asia regions have been in the epicenter of divergent political, economic and social shifts that inevitably
reflect onto business ethics. Second, the two countries have
only sparsely been researched with regard to their negotiation ethics; especially in the case of Kyrgyzstan, business
ethics research has been very limited. Third, imbued within
distinctively diverse historical backgrounds and religious
traditions, Israeli and Kyrgyz businesspeople negotiation
attitudes may display discrepancies, the study of which can
provide finer insights regarding comparative research on
negotiation tactics.
In the next sections, we review the existing literature in
the studied fields. We further present the methodology of
our research, the findings and the conclusions. Implications
for theory and practice, and recommendations for future
research are offered.
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Ethically Questionable Negotiation Tactics
In Volkema’s (1998) cross-cultural study in Mexico and
the United States, participants rated 17 marginally ethical
negotiation tactics. Interestingly, in both countries,
respondents were found to be more likely to use the 17
tactics than they perceived them to be appropriate (Volkema 1998). Regardless of the short-term transient benefits
(Curhan et al. 2006), in the long-run, the adoption of ethically questionable negotiation tactics can cause a negative
climate and cultivate distrust between parties (Tenbrunsel
1998), undermine future negotiations and imperil established business relationships (Reitz et al. 1998), harm
corporate image and public relations (Cramton and Dees
1993), trigger financial loss or jeopardize future business
agreements (Schroth 2008). Negotiators who detect their
counterparts to employ unethical tactics feel less enthusiastic about the success of future negotiations with the same
parties (Boles et al. 2000).
According to Lewicki and Robinson (1998) and Robinson et al. (2000), marginally ethical negotiation tactics
are classified into five groups: traditional competitive bargaining, attacking opponent’s network, false promises,
misrepresentation, and inappropriate information gathering. Although traditional competitive bargaining is considered rather acceptable, the other four tactics have been
deemed as ethically ambiguous (Al-Khatib et al. 2005). For
example, endearing one to the other party, pretending to be
angry or happy, and making high opening demands may be
perceived by some negotiators to be acceptable. In the
original research (Lewicki and Robinson 1998; Robinson
et al. 2000) these tactics have been referred to as ‘‘traditional competitive bargaining.’’ In current research (Erkus
and Banai 2011; Stefanidis et al. 2013) these tactics were
named ‘‘pretending.’’ Yet, misrepresenting facts, paying
members of other groups or faking friendship for information, can be considered ‘‘deceiving’’ and ‘‘lying’’ tactics
that are mostly not acceptable by negotiators.
In view of these assessments, in this research we
examine unethical negotiation tactics on the basis of the
classification of three groups of tactics, namely, ‘‘pretending,’’ ‘‘deceiving,’’ and ‘‘lying’’ (Erkus and Banai
2011). These three groups of tactics, that seem to escalate
in their severity from more to less socially acceptable,
could serve better in cross-cultural negotiation studies,
given that more specific and discrete tactics, such as the
‘‘inappropriate information gathering,’’ are culturally
bound and prone to yield biases in international settings
outside that of the US (Stefanidis et al. 2013).
Since previous research efforts (Erkus and Banai 2011;
Stefanidis et al. 2013) were limited to studying one country,
the inclusion of two countries, namely Israel and Kyrgyzstan, as yet another control variable, should prove to be
Ethically Questionable Negotiation Tactics
significant in generalizing the constructs of pretending,
deceiving and lying cross-culturally. Yet, any potential
differences in the findings in these two countries could also
serve as a byproduct for future propositions about nations’
cultural differences, thereby refining theory of culture. In the
next section we describe the independent variables of our
study, starting with culture, and more precisely, vertical and
horizontal individualism and collectivism.
Horizontal and Vertical Individualism–Collectivism
Studies have explored the relationship between Hofstede’s
(1980) individualism–collectivism and House et al.’s (2004)
in-group collectivism dimensions of culture, and the
endorsement of ethically questionable negotiation tactics.
Other studies have explored the relationship between Triandis’ (Probst et al. 1999; Triandis 1995; Triandis et al. 2001)
vertical and horizontal individualism–collectivism dimensions of culture and conflict management styles (Komarraju
et al. 2008). Yet, the relationship between vertical and horizontal individualism–collectivism and the endorsement of
questionable negotiation tactics has been under-researched.
In this study we make an effort to refine theory of culture by
using vertical and horizontal individualism–collectivism as
the explanatory variable of the endorsement of questionable
negotiation tactics in Israel and Kyrgyzstan.
Existing literature suggests that measuring ‘‘horizontal
individualism’’ (HI), ‘‘vertical individualism’’ (VI), ‘‘horizontal collectivism’’ (HC), and ‘‘vertical collectivism’’
(VC) at the individual level can be particularly informative
(Probst et al. 1999; Triandis 1995; Triandis et al. 2001). In
negotiations, although the endorsement of negotiation
tactics varies between collectivists and individualists, there
has been no consensus regarding the relationship between
individualism–collectivism and ethical behavior (Elahee
et al. 2002; Rivers and Lyle 2007; Triandis et al. 2001;
Volkema 1998, 2004). In line with research work that
examines horizontal and vertical aspects of culture (Kaushal and Kwantes 2006; Komarraju et al. 2008), the present
research investigates the relationship between employees’
horizontal and vertical cultural dispositions and their attitudes toward ethically questionable negotiation tactics in
Israel and Kyrgyzstan.
Individualism and Collectivism in Israel
and Kyrgyzstan
Literature search has revealed divergent information about
culture in Israel and in Kyrgyzstan. While Israel was
included in both Hofstede’s (1980) and House et al.’s
(GLOBE, et al. 2004) international research programs, the
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same could not be said for Kyrgyzstan. In the absence of
information about Kyrgyzstan, in order to discuss the Kyrgyz cultural context we resorted to proxies in both studies:
Pakistan in the Hofstede’s study and Kazakhstan in the
GLOBE study. While Kyrgyz people would defy these
comparisons, these two nations are the closest to the Kyrgyz culture, in terms of religion and language. Cultures
emulate each other when they are based on a similar religion (Huntington 1993; Torbion 1982) or on a similar
language (Hofstede 1980; Torbion 1982). Pakistanis are
mostly Sunni Muslims. Kazakhs are predominantly Sunni
Muslims and they generally speak a Turkic language,
similarly to the Kyrgyz people (Central Intelligence
Agency 2013). Also, despite certain variations, Ardichvili
and Kuchinke (2002) have shown that Kyrgyz culture
dimensions are highly inter-correlated with those of the
Kazakh culture.
In Hofstede’s (1980) study, Pakistan scored 14 (out of
100) on Individualism–Collectivism, while Israel scored
54. On Power Distance, Pakistan scored 55 while Israel
scored 13; on Uncertainty Avoidance, the scores were 70
and 81, and on Masculinity–Femininity, 50 and 47,
respectively. In the GLOBE (House et al. 2004) study,
Israel differed from Kazakhstan on the dimensions of
power distance (4.73—on a scale of 5—and 5.31, respectively), and on all aspects of masculinity, namely assertiveness (4.23 and 4.46), gender equality (3.19 and 3.84)
and performance orientation (4.08 and 3.57). There was
also a significant difference on future orientation (3.85 and
3.57, respectively), a dimension on which there were no
scores for the two countries on Hofstede’s samples.
Hofstede (1980) held that it is difficult to determine
whether Israeli culture is individualist or collectivist. In the
literature, Israeli culture has been classified as individualistic and achievement-oriented, and one that emphasizes
autonomy (Izraeli 1994). Yet, Galin and Avraham (2009)
identified differences between Israeli Jews and Israeli
Arabs: Jews displayed lower levels of vertical collectivism
and they emphasized more direct communication than
Arabs did. Variations in the life and values of Jewish and
Muslim workers have also been reported by Sharabi
(2009). Furthermore, in their study among university students, Tifferet and Herstein (2010) found that native
Hebrew speakers were significantly less individualistic
than native Arabic, Amharic, or Russian speakers.
Sanghera et al. (2011) studied the dynamics of the Kyrgyz household culture and referred that, in the post-Soviet
Kyrgyzstan, family and friendship networks constitute a
significant source of economic and emotional support in
exchange for moral commitments and expectations. Ismail
and Ford (2008) found that Kyrgyz leaders sometimes use
their age to their advantage within a culture in which power
sources may derive from seniority.
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Kuchinke and Ardichvili (2002) measured Kyrgyz culture and discovered its partial alignment with the Kazakh
and Russian cultures. Comparing six countries, the authors
referred that Kyrgyzstanis were more individualistic than
the Germans, but less individualistic than the Americans,
and that, surprisingly, in terms of power distance they
ranked considerably lower than both the Germans and the
Americans. Also, Kyrgyzstanis displayed individualism
levels similar to those of the Russians and the Kazakhs
(Ardichvili and Kuchinke 2002). However, immediately
after Kyrgyzstan gained its independence from the Soviet
Union, students of Hofstede’s culture dimensions found
Russians to score low to average on individualism, average
to high on power distance, low on masculinity, and high on
uncertainty avoidance (Bollinger 1994; Elenkov 1997;
Naumov 1996). In general, these results were later confirmed by other researchers (Girlando and Eduljee 2010).
In their comparison among college students, Latova and
Latov (2009) employed the ‘‘Value Survey Module 1994’’
instrument and they found several similarities among the
Kyrgyz, the Kazakh and the Russian cultures. Taking
Turkey as a proxy, the authors observed that Kyrgyz students displayed significantly higher levels of power distance, lower levels of individualism and masculinity, and
noticeably higher levels of uncertainty avoidance.
To sum up, our review indicates that should there have
been scores for Kyrgyzstan on cultural dimensions, it
would have tended to score higher than Israel on collectivism and on power distance, and lower on time orientation. We conclude that, in general, Israelis tend to score
higher on horizontal variables while Kyrgyzstanis tend to
score higher on vertical variables. Yet, prior research
findings support the notion that different degrees of individualism and collectivism can co-exist within the same
cultures, especially within non-homogeneous ones (Earley
and Gibson 1998; Erkus and Banai 2011; Gahan and
Abeysekera 2009; Green et al. 2005; Oyserman et al. 2002;
Singelis et al. 1995; Stefanidis et al. 2013; Triandis and
Suh 2002; Wagner III and Moch 1986).
Potential differences between the scores of Israelis and
Kyrgyzstanis on the dimensions of vertical and horizontal
individualism–collectivism could serve to refine theory of
cross-cultural research. As this is not the purpose of our
study and as we do not possess valid data to take this step,
we carefully adopt the null assumption that there are no
differences between the people’s scores in the two nations
and we rather formulate a set of hypotheses about the
relations between the four cultural dimension, namely,
horizontal and vertical individualism–collectivism and the
tendency to endorse questionable negotiation tactics, in a
sample composed of Israelis and Kyrgyz negotiators.
Horizontal individualists do not emphasize hierarchical
differentiation, while they value independence and
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uniqueness (Triandis and Gelfand 1998). In horizontally
individualist cultures, the levels of corruption are low
(Triandis et al. 2001), because horizontal individualists do
not endorse ethically questionable negotiation tactics
(Volkema 2004). In general, individuals who score high on
horizontal individualism tend not to endorse deceiving
behavior (Triandis et al. 2001).
Hypothesis 1 Israeli and Kyrgyz employees who score
high on horizontal individualism will tend to endorse ethically questionable negotiation tactics less than those who
score low on horizontal individualism.
Vertical individualists value diversity and status, they
try to differentiate from their counterparts (Triandis and
Gelfand 1998), they are competitive, and they desire to be
‘‘the best’’ in order to climb the hierarchy (Triandis and
Suh 2002). Vertical individualists frequently opt for competitive and dominating conflict management styles, they
display deceptive behavior and they tend to employ
unethical negotiation tactics (Kaushal and Kwantes 2006;
Komarraju et al. 2008). Turkish and Peruvian vertically
individualist employees have been reported to endorse
more ethically questionable negotiation tactics (Erkus and
Banai 2011; Stefanidis et al. 2013). We offer the following
hypothesis.
Hypothesis 2 Israeli and Kyrgyz employees who score
high on vertical individualism will tend to endorse ethically
questionable negotiation tactics more than those who score
low on vertical individualism.
Horizontal collectivists emphasize empathy, sociability,
and cooperation (Triandis et al. 2001), and they prefer to
socially comply with the other members of their groups
(Triandis and Gelfand 1998). In conflict situations, they
choose cooperative, accommodating, and compromising
conflict management styles (Komarraju et al. 2008). Horizontal collectivists tend to score low on the endorsement
of ethically questionable negotiation tactics (Erkus and
Banai 2011; Stefanidis et al. 2013). Therefore, we offer the
following hypothesis.
Hypothesis 3 Israeli and Kyrgyz employees who score
high on horizontal collectivism will tend to endorse ethically questionable negotiation tactics less than those who
score low on horizontal collectivism.
Vertical collectivists tend to be submissive to authority
and to accept that, within the hierarchy, some group
members are more important than others (Triandis and
Gelfand 1998; Triandis and Suh 2002). Respect toward
business structure may lead lower rank employees to
comply with unethical actions (Robertson et al. 2008).
Vertical collectivists prefer avoiding and competitive
conflict management styles (Kaushal and Kwantes 2006;
Ethically Questionable Negotiation Tactics
Komarraju et al. 2008), and they display high levels of
deception (Triandis et al. 2001). In Peru and Turkey, vertically collectivist employees were found to endorse more
ethically questionable negotiation tactics (Erkus and Banai
2011; Stefanidis et al. 2013). Thus, we offer the following
hypothesis.
Hypothesis 4 Israeli and Kyrgyz employees who score
high on vertical collectivism will tend to endorse ethically
questionable negotiation tactics more than those who score
low on vertical collectivism.
Ethical Idealism
Ethical idealism has been identified as a determinant factor
of individual ethical decisions (Rawwas et al. 1995). Forsyth et al. (2008) wrote: ‘‘Ethics position theory (EPT)
maintains that individuals’ personal moral philosophies
influence their judgments, actions, and emotions in ethically intense situations. When describing these moral
viewpoints, the theory stresses two dimensions: idealism
(concern for benign outcomes) and relativism (skepticism
with regards to inviolate moral principles)’’ (p. 813). In
their study among 29 countries, the authors concluded that
exceptionist ethics are more common in Western countries,
subjectivism and situationism in Eastern countries, and
absolutism and situationism in Middle Eastern countries.
Israeli managers have been reported to rate themselves
as highly ethical and clearly more ethical than their
American peers (Izraeli 1988). A later study by Sims and
Genez (2004) compared Israeli, Turkish, US, Western
Australian, and South African attitudes toward business
ethics and found that ethics comprised a moderately strong
component of Israeli business environment, a finding not
very significantly different from that in their Turkish
sample. Schwartz (2012) investigated the state of business
ethics in Israel, interviewing 22 senior Israeli corporate
executives. When compared with the U.S. or Europe, most
of the respondents stated that Israeli firms and their agents
were not as ethical in business as their American and
European counterparts.
In Grimes’ (2004) international survey of college students, the author observed that in most transition economies, including Kyrgyzstan, students’ standards of honesty
were significantly lower than those of American students.
Particularly in Kyrgyzstan, the self-reported incidence and
detection of academic cheating were high, but Kyrgyz
students rated cheating as rather ethically wrong and
moderately acceptable. Cokgezen (2004) refers that nowadays unethical and corrupt practices in Kyrgyzstan prevail
more than during the Soviet era. He primarily employs
specific political and cultural factors to explain the fact
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that, in Kyrgyzstan, corruption is pervasive and higher than
in many transition economies.
Ethical behaviors may vary depending on individuals
and situations (Sobral and Islam 2013; Tsalikis and LaTour
1995). High levels of idealism have been associated with
ethical decision-making (Robertson et al. 2008; Vitell et al.
1993). According to Banas and Parks (2002), high-idealists
tend not to accept unethical behaviors. Also, Al-Khatib
et al. (2005) and Perry and Nixon (2005) indicate that
individuals who value highly idealistic ethics practice less
unethical behaviors. In negotiation, Aquino (1998) and AlKhatib et al. (2008) showed that highly idealistic ethical
standards can be a strong predictor of employees’ perceptions about unethical negotiation tactics, such as deceiving
and lying. In general, employees who score high on ethical
idealism do not endorse ethically questionable negotiation
tactics (Erkus and Banai 2011). Therefore, employees’
ethical idealism levels may influence attitudes toward
ethically questionable negotiation tactics.
Hypothesis 5 Israeli and Kyrgyz employees who score
high on ethical idealism will tend to endorse ethically
questionable negotiation tactics less than those who score
low on ethical idealism.
Trust Propensity
Trust is a key variable in business negotiation ethics
(Bazerman and Neale 1992; Butler 1999; Ross and LaCroix 1996). According to Rotter (1967), trust refers to the
generalized expectancy that the word, promise, oral or
written statement of an individual or group can be relied
on. The need to base relationships on trust is a basic human
aspiration.
Aryee et al. (2002) found that trust in the organization is
related to work attitudes and job satisfaction. Mishal and
Morag (2000), who addressed the issue of negotiating agreements in the Arab–Israeli peace process, wrote: ‘‘Contracts
and trust are ends of a continuum on which negotiations… are
based’’ (p. 523). In Israel, Tzafrir (2005) recognizes that trust
represents a significant variable that influences managerial
decisions and organizational productivity.
In negotiation, interpersonal trust has been found to
increase cooperation and expedite information-sharing
(Butler 1995), to encourage problem-solving behaviors
(Mintu-Wimsatt et al. 2005) and to increase earnings
(Olekalns et al. 2007). Negotiators who detect unethical
behaviors tend to have lower levels of trust toward their
negotiating counterparts (Boles et al. 2000), and they
choose more competitive negotiating behaviors (Kimmel
et al. 1980). High perceived levels of trust tend to decrease
deception in negotiation and to promote fair trade
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(Olekalns and Smith 2009). In intra- and cross-cultural
negotiations, business peoples’ high levels of trust have
been associated with the likelihood of disapproving ethically questionable negotiation tactics (Elahee et al. 2002;
Elahee and Brooks 2004).
Van Dyne et al. (2000) showed that individuals’ propensity to trust others, or their levels of general trust,
positively affects organizational citizenship. Rotter (1971)
concluded that individuals with high trust propensity tend
to display significant dispositional tendency to behave in an
honest and moral manner. Colquitt et al. (2007) emphasized the positive effects that trust propensity has on good
organizational citizenship and the negative effects it has on
making threats against others. Rotter (1980) pointed out
that individuals who score higher on trust propensity are
less likely to lie and cheat. General trust was corroborated
as a predictor of pretending tactics in Goelzner et al.’s
(2011) research. Lastly, Sobral and Islam (2013) discovered that higher level of interpersonal trust is associated
with less acceptability of ethically ambiguous negotiation
tactics. Hence, the following hypothesis is offered.
Hypothesis 6 Israeli and Kyrgyz employees who score
high on trust propensity will tend to endorse ethically
questionable negotiation tactics less than those who score
low on trust propensity.
Research Methodology
M. Banai et al.
Five hundred individuals who negotiated inter-organizationally (with suppliers, customers, etc.) were asked to
participate. We collected 293 usable responses, corresponding to a response rate of 58.6 %. Therefore, our
aggregate sample response rate was 41 %.
Respondents were diversified in terms of their socioeconomic status, their educational background, and their
professional hierarchical ranking. In our Israeli sample, the
mean age was 36 years. 56.8 % of the participants were
males, 40.7 % held an undergraduate university degree,
and 28.3 % a graduate degree. 97.8 % stated that Hebrew
was the primary language that they spoke at home. On a
scale of 1–10, where 1 is the lowest organizational rank
and 10 is the highest, the respondents’ average rank was
6.33. In our Kyrgyz sample, the mean age was 31.2 years.
Among the respondents, 36.9 % were males and 58 % had
completed their undergraduate university studies. Their
average organizational hierarchical rank was 5.79. Seventy-two percent of the participating Kyrgyzstanis indicated Kyrgyz as their primary language, while 28 %
answered that Russian was the spoken language at their
homes.
The collected data were analyzed in a series of stages.
Following the screening of the data, we conducted factor
analyses in order to evaluate the employed measures
(Johnson and Wichern 2007). We then calculated the mean
values and standard deviations of the studied variables.
Analyses of variance, correlations and hierarchical
regression were used to test the research hypotheses (Hair
et al. 1998).
Data Collection and Analysis
Reliability and Validity
Based on the review of the existing literature, we compiled
the research constructs into a self-administered questionnaire. The questionnaire was translated from English to
Hebrew and Kyrgyz, and back-translated to English, with
the assistance of three bilingual reviewers. The validity of
the constructs was confirmed by inviting ten Israeli and ten
Kyrgyz employees to participate in the pilot test of the
questionnaire. Having addressed the comments of the
respondents, certain translated questionnaire items were
revised.
In Israel, the participants were employees and management executives from various manufacturing, services and
trade companies of both the private and the public sectors
in different areas of the country. One thousand questionnaires were randomly distributed to employees who testified that they negotiated inter-organizationally. Participants
were asked to complete the questionnaires and return them
directly to the authors. The achieved sample included 322
usable responses, establishing a response rate of 32.2 %. In
Kyrgyzstan, we randomly approached employees of the
wholesale and retail industries in the capital city, Bishkek.
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We undertook several procedures in order to ensure the
reliability and validity of our research. In addition to pretesting the consistency of the pilot questionnaire, we
assessed the internal reliability of all used scales employing
Cronbach’s Index (Churchill 1979). All Cronbach alpha
coefficient renders were acceptable (Nunnally 1967) and in
line with those reported in prior studies (Erkus and Banai
2011; Forsyth 1980; Mayer and Davis 1999; Singelis et al.
1995; Stefanidis et al. 2013).
We evaluated the magnitude of the common method
bias employing the post hoc diagnostic Harman single
factor test (Podsakoff and Organ 1986). We did not observe
any unusual variations in the collected responses: no single
factor emerged, nor did a single factor account for the
majority of the covariance in the measured variables. We
further implemented a number of procedural remedies for
common method bias (Podsakoff et al. 2003). In particular,
all respondents were informed that their answers were
anonymous, that there were no right or wrong answers, and
that they should complete the questionnaire as honestly as
Ethically Questionable Negotiation Tactics
possible. Also, we psychologically separated the measurement of the predictor and criterion variables by interjecting into the questionnaire two managerial attitudes
constructs. This way we gave participants the impression
that the measurement of the predictor variables was not
connected with the measurement of the dependent variables. Overall, we considered common method variance
limited and the validity of our measures robust.
Finally, to control for the development of response
patterns, we reversed a number of anchor scales in different
parts of the questionnaire. Our confidence in the validity of
the collected responses was later reinforced by the finding
that our results were in line with those of previously published literature.
Measures
In this research, the dependent variables were the three sets
of ethically questionable negotiation tactics, while the
independent variables included horizontal and vertical
individualism–collectivism, ethical idealism and trust propensity. The control variables included gender, age, rank,
education, and country. The variables’ measures are
described below.
Ethically Questionable Negotiation Tactics
To measure questionable negotiation tactics we employed
17 questions from Lewicki et al.’s (2006) classification of
negotiation tactics and Fulmer et al.’s (2009) emotion
management tactics. We invited participants to recall a
negotiating situation very important to them and their
business, and to rate negotiation tactics indicating the
degree to which they thought each tactic was ethically
appropriate. A seven-point Likert-type scale was used to
indicate responses that ranged from 1 = not at all appropriate to 7 = very appropriate. Sample items from the used
scale included: ‘‘In return for concessions from the other
party now, offer to make future concessions that you know
you will not follow through on’’ and ‘‘Make an opening
demand that is far greater than what you really hope to
settle for.’’
To validate the structure of the construct, we conducted
factor analysis on the 17 items that referred to the ethically
questionable negotiation tactics (Johnson and Wichern
2007). The three-factor solution that provided the best fit
explained 51.61 % of the overall variance. The first factor,
named ‘‘Pretending,’’ included four items and explained
16.59 % of the variance; the second factor, named
‘‘Deceiving,’’ included four items and explained 15.44 %
of the variance; and the third factor, named ‘‘Lying,’’
included five items and explained 19.58 % of the variance.
The internal degree of reliability of the construct was
675
confirmed with the use of the Cronbach’s Alpha test. The
Cronbach’s Alpha coefficients of the three components
were .77, .66, and .65, respectively. The factors structure
and items are presented in Table 1.
Horizontal and Vertical Individualism–Collectivism
We measured participants’ individualism and collectivism
orientations employing Singelis et al.’s (1995) 32-item
construct. Participants were asked to indicate their agreement or disagreement with the provided statements on a
nine-point Likert-type scale (1 = strongly disagree,
9 = strongly agree). Sample items from the used scale
included: ‘‘If a co-worker gets a prize, I would feel proud’’
and ‘‘When another person does better than I do, I get tense
and aroused.’’
In line with the literature on individualism–collectivism
(Triandis and Gelfand 1998), we performed factor analysis
on the 32 items (Johnson and Wichern 2007). The extraction of the factors (Chiou 2001) rendered a four-factor
solution that accounted for 53.30 % of the total variance.
Horizontal individualism included five items and explained
12.98 % of the variance; vertical individualism included
four items and explained 11.67 % of the variance; horizontal collectivism included five items and explained
14.50 % of the variance; and vertical collectivism included
five items and explained 14.15 % of the variance. The
Cronbach’s Alpha coefficients of the four components were
.71, .73, .74, and .74, respectively. Table 2 presents the
factors structure and items.
Ethical Idealism
A six-item construct adopted from the ‘‘Ethics Position
Questionnaire’’ (Forsyth 1980) was employed to measure
ethical idealism. The degree of idealism of the respondents
was assessed on a five-point Likert scale (1 = strongly
disagree, 5 = strongly agree). Sample items from the scale
included: ‘‘The existence of potential harm to others is
always wrong, irrespective of the benefits to be gained’’
and ‘‘One should not perform an action, which might in any
way threaten the dignity and welfare of another individual.’’ The performed factor analysis rendered a single
factor, named ‘‘Ethical Idealism,’’ which included all six
items and explained 55.24 % of the total variance. The
Cronbach’s Alpha reliability coefficient of the construct
was .84.
Trust Propensity
Respondents’ tendency to trust others was measured
employing the 8-item ‘‘Propensity to trust’’ scale found in
Mayer and Davis (1999), and originally derived from
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676
M. Banai et al.
Table 1 Factor analysis matrix of the negotiation tactics variables
Component
Lying
Promise that good things will happen to the other party if s/he gives you what you want, even
if you know that you cannot (or will not) deliver these things when the other’s cooperation
is obtained
.83
In return for concessions from the other party now, offer to make future concessions that you
know you will not follow through on
.73
Intentionally misrepresent information to the other party in order to support your negotiating
arguments or positions
.62
Strategically express anger toward the other party in a situation where you are not really angry
.60
Pretend to be disgusted at the other party’s comments
.60
Convey a false impression that you are in absolutely no hurry to come to a negotiated
agreement, thereby trying to put time pressure on your opponent to concede quickly
Pretending
Deceiving
.75
Make an opening demand that is far greater than what you really hope to settle for
.70
Make an opening demand so high/low that it seriously undermines the other party’s confidence
in his/her ability to negotiate a satisfactory settlement
.63
Get the other party to think that you like him/her personally despite the fact that you do
not really
Gain information about the other party’s negotiation position by cultivating his friendship
through expensive gifts, entertaining, or personal favors
.54
.72
Act as if the decision of the other party is one of agreement even though they have not
expressed agreement yet
.70
Overwhelm the other party with so much information that they have trouble determining
which factors are important and which are merely distractions
Use a tight unnecessary deadline to get a quick agreement from the other party
.58
Eigenvalue
Percent of variance
.57
4.22
1.47
1.02
19.58
16.59
15.44
n = 615. Extraction method: principal component analysis. Rotation method: varimax with Kaiser normalization
Rotter’s (1967) work. Participants self-reported agreement
or disagreement with regard to their levels of general trust
toward other individuals. Levels of general trust ranged
between 1 = strongly disagree (minimal levels of trust)
and 5 = strongly agree (maximal levels of trust). Sample
items from the scale included: ‘‘Most experts tell the truth
about the limits of their knowledge’’ and ‘‘Most repair
people will not overcharge people who are ignorant of their
specialty.’’ The factor analysis yielded a one-factor solution which included six items and explained 49.96 % of the
total variance. The Cronbach’s Alpha reliability coefficient
of the construct was .80.
Control Variables
Participants reported several demographic characteristics,
such as their industry of employment and their spoken language at home. Four of these variables served as control
variables in our study: gender, age, hierarchical rank and
education. We measured age and education in years, and
hierarchical rank within the organization on a ten-point scale.
Last, we used country (Israel and Kyrgyzstan) as a
control variable to identify potential differences between
123
the responses of the study’s participants in these two
countries.
Results
Table 3 reports aggregate means, standard deviations and
Pearson correlations for the study’s variables. ‘‘Pretending’’ tactics received the highest score (Mean = 4.33,
SD = 1.17), ‘‘Deceiving’’ tactics followed (Mean = 3.67,
SD = 1.26), while ‘‘Lying’’ tactics received the lowest
score (Mean = 2.89, SD = 1.25).
The correlation analysis revealed several relationships
between the independent variables and the ethically questionable negation tactics. Hypotheses 1–6 were tested using
three-step hierarchical regression analyses. In the first step,
the control variables gender, age, rank and education were
entered, while the independent variables were included in
the second step of the analyses. In the third step, we entered
the country variable. We reviewed the correlation coefficients between the independent variables (Hair et al. 1998),
and we assessed the risk of multicollinearity employing the
Tolerance and Variance Inflation Factor (VIF) diagnostics.
Ethically Questionable Negotiation Tactics
677
Table 2 Factor analysis matrix of the individualism–collectivism variables
Component
Vertical
collectivism
Before taking a major trip, I consult with most members of my
family and many friends
.75
I would do what would please my family, even if I detested that
activity
.72
We should keep our aging parents with us at home
.68
I would sacrifice an activity that I enjoy very much if my family
did not approve of it
.65
Children should be taught to place duty before pleasure
.54
Horizontal
collectivism
If a co-worker gets a prize, I would feel proud
The well-being of my co-workers is important to me
.80
.70
It is important to maintain harmony within my group
.68
If a relative were in financial difficulty, I would help within my
means
.60
I feel good when I cooperate with others
.58
Horizontal
individualism
I am a unique individual
.74
I enjoy being unique and different from others in many ways
.70
When I succeed, it is usually because of my abilities
.63
What happens to me is my own doing
.62
I prefer to be direct and forthright when in discussion with people
.57
Vertical
individualism
Competition is the law of nature
.79
When another person does better than I do, I get tense and aroused
Without competition, it is not possible to have a good society
.72
.68
It annoys me when other people perform better than I do
.66
Eigenvalue
Percent of variance
3.92
2.76
1.95
1.50
14.50
14.15
12.98
11.67
n = 615. Extraction method: principal component analysis. Rotation method: varimax with Kaiser normalization
The VIF values were low (VIF \ 2.16) for high levels of
tolerance (Tolerance [ .46). The results of the hierarchical
regression analyses for the ‘‘Pretending,’’ ‘‘Deceiving,’’
and ‘‘Lying’’ negotiation tactics are presented in Table 4.
The first step of the regression analysis on the
‘‘Pretending’’ tactics provided a statistically significant
model (F = 17.29, p B .001). Age and rank explained
10.0 % of the total variance of the endorsement of
‘‘Pretending’’ negotiation tactics. The deriving model
from the second step of the hierarchical regression was
also statistically significant (F = 11.77, p B .001).
Employees’ age, VI, HC, VC, and ethical idealism significantly explained 15.0 % of the total variance. The
third step of the regression analysis provided a statistically significant model (F = 11.05, p B .001). Employees’ age, hierarchical rank, VI, HC, VC, ethical
idealism, trust propensity and country significantly
explained 15.0 % of the total variance. The coefficients
of the VI (b = .16, p B .001), VC (b = .08, p B .10)
and country (b = .10, p B .10) variables were positive,
while the coefficients of the age (b = -.19, p B .001),
hierarchical rank (b = -.08, p B .10), HC (b = -.08,
p B .10), ethical idealism (b = -.08, p B .10) and trust
propensity (b = -.09, p B .05) variables were negative.
These findings suggest that vertical individualists and
vertical collectivists tend to endorse pretending negotiation tactics more. Older employees, high-rank employees, horizontal collectivists, those who score high on
ethical idealism and on trust propensity tend to endorse
pretending negotiation tactics less. Also, Kyrgyz
employees tend to accept the pretending negotiation
tactics more than their Israeli peers.
With regard to the ‘‘Deceiving’’ tactics, the first step of
the regression analysis was significant (F = 20.02,
p B .001). Age and education explained 11.0 % of the total
variance. The second step of the regression also provided a
statistically significant model (F = 20.93, p B .001), with
the independent and control variables explaining 25.0 % of
the total variance. The third step hierarchical regression
model was also statistically significant (F = 22.48,
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123
2.89
6.94
6.06
7.27
6.26
3.87
2.83
3. Lying
4. Horizontal Individualism
5. Vertical Individualism
6. Horizontal collectivism
7. Vertical collectivism
8. Ethical idealism
9. Trust propensity
.50
2.23
2.72
11.86
.50
.74
.79
1.75
1.87
1.31
1.26
1.25
1.26
1.17
SD
.18**
-.10**
-.24**
-.31**
.03
.01
-.13**
.10*
.25**
-.16**
.12**
.39**
.48**
1.00
1
.42**
-.22**
-.22**
-.31**
.04
.25**
-.06
.22**
.30**
-.21**
.16**
.52**
1.00
2
.53**
-.26**
-.17**
-.25**
.06
.34**
-.14**
.21**
.21**
-.29**
.17**
1.00
3
.28**
-.10*
.03
-.15**
.06
.22**
.16**
.32**
.33**
.15**
1.00
4
.17**
-.07
-.17**
-.23**
.13**
.11**
.00
.16**
1.00
-.08
5
-.18**
.06
.16**
.18**
-.02
.07
.26**
.21**
1.00
6
c
b
a
0 = Israel, 1 = Kyrgyzstan
1 = the lowest rank, 10 = the highest rank
* Correlation is significant at the .05 level (2-tailed); ** correlation is significant at the .01 level (2-tailed)
0 = male, 1 = female
n = 615
.48
14. Countryc
6.07
15.00
b
33.73
13. Education
12. Rank
11. Age
.53
3.67
10. Gendera
4.33
2. Deceiving
Mean
1. Pretending
Variable
.52**
-.12**
.03
.00
.12**
.36**
.21**
1.00
7
.11**
-.02
.14**
.13**
.19**
.22**
1.00
8
.53**
-.18**
-.08
-.07
.10*
1.00
9
Table 3 Descriptive statistics and correlation analysis matrix between negotiation tactics, individual attitudes, and demographic variables
.20**
-.07
-.12**
-.13**
1.00
10
-.20**
.30**
.59**
1.00
11
-.10**
.27**
1.00
12
-.29**
1.00
13
1.00
14
678
M. Banai et al.
-.35
-.00
Education
.00
-.08
-.61
-.19
-.78
-.01
-.09*
.12***
.11***
R2
Adj. R2
Countryc
Trust propensity
Ethical idealism
Vertical collectivism
.16***
-.05
.18***
.00
-3.32
.19***
-.19***
Education
-.05
-.19***
Horizontal individualism
-.04
-.13***
Rankb
-5.25
Vertical individualism
Horizontal collectivism
-.01
-.25***
b
b
Age
Second step
t
17.29***
First step
Gendera
Variable
F statistic
DR
.10***
Adj. R2
2
.10***
R2
Countryc
-.06
Trust propensity
.25***
.26***
4.10
-1.24
4.55
4.89
-4.92
.04
-2.31
.32
-4.19
-1.40
t
11.77***
.06***
.15***
.16***
-1.37
-1.91
-.08W
Ethical idealism
3.82
-2.70
2.86
.16***
-.11**
.12**
Horizontal collectivism
Vertical collectivism
1.10
.01
-1.59
-4.16
t
Vertical individualism
.05
–
-.02
-.20***
Horizontal individualism
Deceiving
-1.74
-.08W
Rankb
-.09
-5.44
-.01
-.26***
Age
b
b
t
Second step
First step
Pretending
Gendera
Variable
Table 4 Hierarchical regression analyses on questionable negotiation tactics in Israel and Kyrgyzstan
-.85
1.72
.27***
.06
.28***
.29***
5.34
1.52
-1.17
.08W
-.04
5.08
-2.80
-.53
-1.35
-.76
-3.62
-2.11
t
11.05***
.01W
.15***
.19***
-.11**
-.02
-.05
-.03
-.16***
-.08*
b
Third step
1.85
.17***
-2.02
.10W
-1.88
-1.87
1.71
3.86
.90
.34
-1.74
-3.91
t
-.09*
-.08W
-.08W
.08W
.16***
.04
.01
-.08W
-.19***
-.03
b
Third step
Ethically Questionable Negotiation Tactics
679
123
123
t
.56
.10***
16.50***
F statistic
c
b
a
W
0 = Israel, 1 = Kyrgyzstan
1 = The lowest rank, 10 = the highest rank
0 = Male, 1 = female
p B .10; * p B .05; ** p B .01; *** p B .001
n = 615; standardized regression coefficients are reported
–
2
DR2
Adj. R
R2
.09***
.29***
Countryc
Trust propensity
.15***
-.17***
Ethical idealism
Vertical collectivism
-.29***
Horizontal collectivism
28.69***
.22***
.31***
.32***
7.80
-4.53
4.02
-7.87
2.16
1.71
.08*
.58
Vertical individualism
.03
.07W
-.18
-4.94
.13
-2.19
Horizontal individualism
Education
.14***
20.93***
-3.85
-.01
-.20***
Rankb
.00
-.10*
t
t
-.14***
-.18***
-3.64
b
b
.02
Second step
First step
Lying
20.02***
–
b
b
t
Second step
First step
Deceiving
Age
Gender
a
Variable
F statistic
DR
2
Variable
Table 4 continued
-.03
.08*
.04
-.09*
-.00
-.06
.37***
.16***
-.16***
.00
-18***
b
Third step
b
Third step
.03*
-.91
22.48***
34.55***
.07***
.38***
.39***
7.97
4.03
-4.61
.14
-4.88
2.40
.95
-2.52
-.05
-1.34
t
t
680
M. Banai et al.
Ethically Questionable Negotiation Tactics
p B .001). The independent and control variables
explained 28.0 % of the total variance. The coefficients of
the VI (b = .19, p B .001), VC (b = .08, p B .10) and
country (b = .27, p B .001) variables were positive, while
the coefficients of the HC (b = -.11, p B .01), gender
(b = -.08, p B .05), and age (b = -.16, p B .001) variables were negative. Female, older and horizontal collectivist employees tend to endorse deceiving negotiation
tactics less, while vertical individualists and vertical collectivists tend to endorse deceiving negotiation tactics
more. Kyrgyz employees accept deceiving negotiation
tactics more than Israeli employees.
The first step of the regression analysis on the ‘‘Lying’’
tactics provided a statistically significant model (F = 16.50,
p B .001). Age and education explained 9.0 % of the total
variance. The second step regression model was statistically
significant (F = 28.69, p B .001), with the independent and
control variables explaining 31.0 % of the total variance.
The third step of the regression analysis provided a statistically significant model (F = 34.55, p B .001). The education, VI, HC, ethical idealism, trust propensity, and country
variables explained 38.0 % of the total variance. The coefficients of the VI (b = .08, p B .05), trust propensity
(b = .16, p B .001), and country (b = .37, p B .001) variables were positive, while the coefficients of the HC (b =
-.18, p B .001), ethical idealism (b = -.16, p B .001), and
education (b = -.09, p B .05) variables were negative.
These findings suggest that vertical individualists and those
who score high on trust propensity tend to endorse lying
negotiation tactics more. Horizontally collectivists, ethically
idealists and more educated employees tend to accept lying
negotiation tactics less. Kyrgyz employees endorse lying
negotiation tactics more than their Israeli peers.
Based on these findings, the anticipated inverse relationship between HI and ethically questionable negotiation
tactics (hypothesis 1) was not corroborated. We confirmed
strong support for the second hypothesis: VI explained all
three ethically questionable tactics. Hypothesis 3 which
referred to the relationship between HC and negotiation
tactics was also corroborated. The observed relationships
pattern for VC and questionable negotiation tactics variables offers modest support for hypothesis 4. The hypothesized relationship between ethical idealism and tactics
(hypothesis 5) was strongly supported for the most extreme
lying negotiation tactics. Lastly, hypothesis 6, which held
that trust propensity can explain negotiation tactics was
modestly supported.
Discussion
This research has contributed to the refinements of four
grand theories, namely, negotiation, ethics, trust, and
681
culture. First, the study confirmed previous studies’ (Erkus
and Banai 2011; Stefanidis et al. 2013) ranking of negotiation tactics based on an escalating degree of severity,
namely, ‘‘Pretending,’’ ‘‘Deceiving,’’ and ‘‘Lying.’’ Moreover, as previous studies measured the three constructs in
one country this study has validated the use of these constructs in cross-cultural research. The five US discrete
questionable tactics offered by Lewicki and Robinson
(1998) could not be aggregated and therefore could not be
used to create a scale to measure the severity of the
respondents’ questionable ethics severity. The empirical
classification of those tactics into ‘‘Pretending,’’ ‘‘Deceiving,’’ and ‘‘Lying’’ provides researchers with a possibility
to aggregate the results of the various items and use them
on a scale. This tool has the potential to better explain
theory of ethically questionable negotiation tactics by
comparing attitudes cross-culturally.
Overall, the deceiving and lying tactics are less
acceptable by the participating respondents. ‘‘Deceiving’’
tactics, such as time pressure, have been reported to be
considered rather ethically questionable in other cultures
(Elahee et al. 2002; Volkema 2004), while ‘‘Lying’’ tactics,
such as false promises, are regarded as the most ethically
questionable (Al-Khatib et al. 2005; Volkema 2004).
Second, while previous studies have used Hofstede’s
(1980) and House et al.’s (2004) individualism–collectivism dimensions of culture as antecedents of conflict management styles, in this study we have found vertical
individualism and horizontal collectivism to best explain
the tendency to endorse questionable negotiation tactics. In
our sample, the propensity for the endorsement of pretending, deceiving and lying questionable negotiation tactics was higher for those employees who scored high on
vertical individualism. Vertical individualists are competitive, they care about the maximization of their earnings
(Triandis and Suh 2002) and they are likely to favor more
unethical negotiation tactics (Robinson et al. 2000; Komarraju et al. 2008). Vertical individualists were found to
endorse more deceiving negotiation tactics, a pattern previously observed in the study of Turkish negotiation tactics
(Erkus and Banai 2011). Strong support for these outcomes
has also been offered by the work of Triandis et al. (2001)
and Stefanidis et al. (2013).
Horizontal collectivism explained better the endorsement of the more severe tactics of deceiving and lying.
Horizontal collectivists regard cooperation as an essential
component of negotiation (Triandis et al. 2001), and they
prioritize cooperative and ethical negotiation (Erkus and
Banai 2011; Komarraju et al. 2008). In line with the literature, in this study we found that higher levels of horizontal collectivism are inversely associated with the
endorsement of questionable negotiation tactics. Moreover,
horizontal individualism and vertical collectivism were not
123
682
found to be good predictors of the endorsement of questionable negotiation tactics for the Israeli and Kyrgyz
participants.
Third, our results strongly corroborated the expected
influence of ethical idealism levels on the endorsement of
the severe lying questionable tactics. Those employees who
scored high on ethical idealism tended to endorse less lying
negotiation tactics. Ethically idealistic individuals have
been previously reported to opt for significantly less
unethical practices (Al-Khatib et al. 2005; Banas and Parks
2002; Erkus and Banai 2011; Perry and Nixon 2005).
Fourth, and interestingly, we did not identify a consistent
relationship between trust propensity and the endorsement
of questionable tactics. The anticipated inverse relationship
(Elahee et al. 2002; Elahee and Brooks 2004) was only
validated for the pretending negotiation tactics. Moreover,
general trust was positively associated with the lying tactics. An explanation that could be offered is that there is no a
priori trust in business negotiations. Negotiators walk into
the negotiation episode with a zero-sum game attitude (Lax
and Sebenius 1986; Walton and McKersie 1965) and
therefore they do not display trust toward others. Thus, the
respondents’ stand was to adopt the old Mediterranean
attitude, which is best expressed in the Hebrew saying
‘‘respect and suspect’’ (kabdehu ve’hashdeu) while assuming the opening negotiation positioning, and leave further
judgment and consequent trust for a later stage in the
negotiation. Longitudinal or laboratory studies would have
the potential to confirm this explanation.
Fifth, a significant finding, albeit a by-product of our
research, has been the influence of the respondents’ age and
education on the acceptance of tactics. Rising age and
years of education are associated with the endorsement of
more ethically questionable negotiation tactics. Several
explanations have been offered in the literature with
respect to the influence of negotiators’ demographic characteristics on the adoption of unethical negotiation
behaviors (Eweje and Brundon 2010; Kronzon and Darley
1999; Lewicki and Robinson 1998; McDonald and Kan
1997; Weeks et al. 1999; Volkema 2004).
Last, regarding our control variable country, we observed
that Kyrgyzstanis endorsed the ‘‘Pretending,’’ ‘‘Deceiving,’’
and ‘‘Lying’’ negotiation tactics more than the Israelis. These
findings appear to follow prior sporadic observations about
negotiation practices in the two countries (Cokgezen 2004;
Cormier 2007; Desivilya and Eizen 2005; Drory and Ritov
1997; Kolpakov 2001). Further, these differences may carry
some important implications for theory of culture, and hence,
we suggest this topic for further research. A study about the
relationship between culture, trust, and ethics that would
look into cross-cultural differences among a number of
countries has the potential to refine these three theories and
validate them cross-culturally.
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M. Banai et al.
Implications, Limitations, and Future Research
The ethical conduct in business settings has been an essential
topic of interest for scholars and practitioners. The present
study significantly contributes to the global negotiation ethics
literature. First, the conceptualization of ethically questionable negotiation tactics into ‘‘Pretending,’’ ‘‘Deceiving,’’ and
‘‘Lying,’’ along with the employment of negotiators’ cultural
and other individual attributes as predictors of those tactics,
can serve as a model for the study of unethical negotiations
allowing for cross-cultural comparisons.
Second, business ethics and negotiation have been very
sporadically and unsystematically studied in the Middle
Eastern and Central Asian regions. Thus, our research
framework and results provide a noteworthy vehicle for
further exploration of the dynamics of ethical negotiations in
other cultures that share analogous social, cultural, economic
and political similarities with those of Israel and Kyrgyzstan.
Third, our work extends the questionable negotiation tactics
research in Israel, and it pioneers the discussion about
unethical negotiations in Kyrgyzstan. Thus, international
business executives who negotiate with Israeli and Kyrgyz
employees could benefit from our results taking into consideration the several dimensions outlined in our study. In
particular, negotiators in these two countries should be
vigilant toward their counterparts’ vertical individualism,
horizontal collectivism and ethical idealism levels as
potential predictors of the adoption of unethical tactics.
Further, the role of negotiators’ age and education as predictors of the propensity to use questionable tactics should
not be neglected.
Despite the theoretical and practical contributions of our
work, this research is not without limitations. First, we did
not investigate respondents’ actual negotiation behavior.
Instead, we explored employees’ perceptions about preferred negotiation tactics, their attitudes toward ethical
behavior, and their levels of general trust. Consequently,
the reported results may deviate from real-life behavior in
the Israeli and Kyrgyz business contexts. As a means for
attenuating this issue, future scholars could collect real-life
data employing observation as a complementary method.
Second, our samples of employees in Kyrgyzstan and
Israel present a number of specificities. For instance, the
Kyrgyz sample included employees from the wholesale and
retail industries employed in Bishkek, the country’s capital
region. Thus, the reported results do not uniformly describe
the social and cultural aspects of the Israeli and Kyrgyz
business contexts, but they rather explain the antecedents of
the ethical negotiation propensities of the participants. The
generalization of the research outcomes could be further
strengthened if the testing of the proposed variable relationships was extended to other, equally or more heterogeneous,
samples.
Ethically Questionable Negotiation Tactics
Last, even though data collection in Middle East and
Central Asia bears several challenges, many of which we
faced and addressed in our research, the confirmation and
validation of our findings rests with testing their applicability in other regional cultures. Previous scholars have
identified several similarities or differences of other cultures in the region with those of Israel and Kyrgyzstan
(Ardichvili and Kuchinke 2002; Cokgezen 2004; Forsyth
et al. 2008). In conclusion, our research corroborated the
significance of the horizontal and vertical aspects of individualism and collectivism, as well as the importance of
ethical idealism, age and education in Israeli and Kyrgyz
negotiators’ attitudes toward unethical tactics. The validation of the direction and intensity of the discovered relationships in a larger number of cultures would potentially
yield a further refined theory about ethically questionable
negotiation tactics.
Acknowledgments We would like to thank two anonymous
reviewers for their insightful comments.
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permission.
Outsourcing
Outsourcing Negotiations: Skills and Tactics
By Marcelo Halpern
O
utsourcing negotiations are fundamentally different from negotiations for typical buy-sell, supply,
or periodic service agreements. These differences have
implications for both the nature of the agreement to
be negotiated and the behavior and tactics that may be
usefully employed by the negotiating team.
What Makes Outsourcing
Negotiations Different
The differences in outsourcing negotiations fall into
three major categories: (1) the relationship between the
parties, (2) the essential nature of the services to the customer’s business, and (3) the level of required technical
understanding.
Outsourcing Is a Long-Term Relationship
Outsourcing transactions typically create long-term,
mutually dependent relationships between the parties.
During the term of the outsourcing, which typically
stretches for many years, the customer is dependent
on the outsourcer for delivery of a significant business
function.The outsourcer, of course, is dependent on the
customer for payment, but in addition requires cooperation and assistance to integrate the outsourced services
with retained services and with third party vendors.
What all this means is that the post-negotiation
relationship must be protected, built, and preserved
throughout the negotiation process. Therefore, the
people who will be responsible for the post-contract
relationship should be insulated from the inevitable
arguments and harsh positions that may arise during the
negotiations. They can be in the room, but should strive
to be the “reasonable voice” and not take hard positions. Aggressive and provocative negotiating positions
should be left to the lawyers and other negotiators who
typically disappear after signing. When in doubt, take a
break, discuss the issue with the team and, if necessary,
blame the lawyer for taking the unpopular position.
Marcelo Halpern is a Partner at Perkins Coie LLP resident
in the firm’s Chicago Office. He is a member of the firm’s
Technology Transactions and Privacy practice group and focuses
his practice on licensing, outsourcing, and other forms of complex
commercial transactions involving technology and intellectual
property. Mr. Halpern can be reached at mhalpern@perkinscoie.com
or +1.312.324.8535. © 2013 Marcelo Halpern, Perkins Coie LLP.
All rights reserved.
Volume 30 • Number 3 • March 2013
Outsourcing Is Highly Leveraged—
Termination May Not Be an Option
An outsourcing relationship becomes a central part
of the day-to-day operations of the customer’s business. In general, the customer is giving up the ability to perform the outsourced service internally and is
wholly dependent on the vendor to deliver that function. Rapid termination of the relationship may not
be a realistic remedy as it would leave the customer
without the ability to fulfill its business needs until a
replacement provider is in place. As a result, an attorney negotiating an outsourcing agreement cannot simply rely on exit or termination rights if the transaction
does not pan out as planned and the timeframes for
disentanglement could become critical elements of the
negotiation.
Instead of relying on termination rights, outsourcing agreements and other long-term relationship
transactions require additional consideration of performance incentives and alternative remedies in the event
the relationship sours. For example, instead of simply
proceeding to termination, an outsourcing agreement
may provide for informal dispute resolution procedures that recognize the fact that the relationship must
be fixed if at all possible and thus strive to create processes and incentives for the parties to resolve issues
rather than look to each other for damages. Because
the nature of these transactions often imposes a level of
mutual dependency on each of the parties, the negotiators should be mindful of including incentives and
positive remedies in the agreement, rather than relying solely on termination rights that cannot be used
unless the parties’ relationship has become irretrievably damaged.
Technical Understanding Is an Essential
Part of the Negotiation
Whether a deal involves information technology
outsourcing or business process outsourcing, it does
not make sense without a technical understanding of
how the parties will work together with each other’s
technology and with other providers. Frequently, the
attorneys negotiating the transaction must rely on the
client’s technical and business teams for that support.
However, many highly technical people and engineers,
brilliant though they may be in their respective fields,
are notoriously poor negotiators.They are a critical part
of the negotiation team and should be represented in
The Computer & Internet Lawyer • 1
Outsourcing
the room, but it is incumbent on the attorneys and professional negotiators to spend time with the technical
and business teams outside of the negotiating room to
understand the outsourced services and their role in the
business.
Bear in mind that the technical team may not fully
understand how management intends to deploy or use
the outsourcer in the context of the transaction and
may not be privy to all of the long range strategic considerations that are guiding the negotiations. To that
end, they may need to be carefully managed both inside
and outside the negotiation room to avoid inadvertent
disclosures that could impact the negotiations or the
nature of the deal.
Negotiation Toolkit
While negotiation of outsourcing agreements
involves some of the special considerations described
above, it is important to remember that outsourcing
arrangements are still agreements that must be negotiated like any other agreement. As such, while being
mindful of the unique considerations required for an
outsourcing transaction, it is equally important to adhere
to good, basic negotiating techniques when negotiating
such agreements.
Basic Tools of Negotiation
Bargaining
Bargaining, as used in this article, is not the same as
negotiation. Bargaining generally is a single issue or a
one-time interaction, such as purchasing an item when
the “negotiation” is primarily just bargaining over the
price of the item. However, bargaining has a place in
more complex negotiations as a subset of the overall process and a method for resolving a subset of the
issues under negotiation. Although it often is derisively
referred to as “horse trading”—“you give me this, and
I’ll give you that” or “your number is X and my number
is Y, let’s just split the difference”—it can be a useful way
to get certain types of issues closed.
Persuasion
Persuasion is focused on convincing the other
party that your position is the correct one—getting
them to come around to your way of thinking. This
is far more difficult and nuanced than bargaining,
but can address much more complex issues. A person who is persuaded by your point of view is more
likely to work with you toward a creative solution
that addresses your problem. The key to persuasion
is understanding the other party’s psychology and
needs (whether real or perceived), and adjusting your
2 • The Computer & Internet Lawyer
approach accordingly. This may include appealing to
facts, logic, self-interest, emotion, or a sense of principle. While this may sound like a recipe for giving
in to the other side, that is a very superficial view of
the process. Remember that one of the other party’s
needs is to get a deal done and they should understand that it will not get done if your side’s needs
are not satisfied. That can be a powerful persuasion
tool to get something that is important to you and
less important to them. Many of the best negotiations
and outcomes are achieved when the parties recognize that the other side’s needs are as important to the
negotiated result as achieving their own goals. The
concept of “win-win” negotiations has become an
overused and often abused cliché, but particularly in
the types of long term relationships that are exemplified by outsourcing transactions, that is exactly what
the parties should be trying to achieve.
Compromise
It should go without saying that compromise is an
essential part of negotiations. In fact, negotiation essentially is the art and science of achieving compromise.
The trick is not in the compromise itself, but rather in
knowing when not to compromise. Many negotiations
go wrong when one side or the other compromises (or
is forced to compromise) on something that goes to
the heart of the business deal and that party’s reason for
doing the deal. When that happens in an outsourcing
negotiation, whether or not it is recognized at the time,
both sides have lost.
The trick is not in the compromise
itself, but rather in knowing when not
to compromise.
Suppose, for example, that an outsourcing customer
has exacted a compromise on service levels that put the
vendor in a situation in which the vendor is no longer
able to make money on the transaction. If that compromise stays in the deal (and is not offset by something
else), it is virtually inevitable that the vendor will try
to “claw back” to profitability later in the relationship
or be faced with the prospect of an “efficient breach”
in which the vendor is better off breaching the agreement and facing the consequences than continuing to
lose money while staying in the relationship. The threat
of an efficient breach can quickly turn into a mutually
assured destruction scenario that forces the parties to
litigate or to re-negotiate at a point in time when the
negotiating leverage is vastly different from what it was
at the start of the relationship.
Volume 30 • Number 3 • March 2013
Outsourcing
Core Negotiation Skills
Listening
It is something we have been told since we were
children, but it bears repeating in the context of
negotiation—you have to stop talking in order to really
listen. In the heat of negotiations, people have a
tendency to start formulating their response before the
other person has finished speaking. As a result, they can
miss important verbal and behavioral cues as to what the
other side wants or needs to accomplish in the negotiation. Sometimes, particularly in a heated exchange,
progress can be made simply by letting the other person know that you have heard and understand the other
person—even if you are not prepared to accept the
person’s position or offer a compromise.
When you listen to the other party’s position, it is
important to:
(i) Pay attention and not interrupt (another thing
we have been told since we were children). Also
remember that starting to plan your response is a
form of interrupting;
(ii) Pay attention to “how” the position is being presented. The speaker may provide important verbal
and/or non-verbal cues that can help you understand
more deeply and precisely the position being stated;
(iii) Listen for what is not said. Sometimes what is
not expressed is more important than what is
expressed; and
(iv) Repeat back and ask questions (without interrupting). This serves two purposes: first, it allows you
to make sure you understand the speaker’s position, and second, and perhaps more importantly,
it demonstrates to the speaker that you have been
listening.
Questioning
Questioning can be as important as listening.
Questions can be open-ended or exploratory, which are
intended to simply acquire information that may (or may
not) be relevant to closing an issue. Closed or rhetorical
questions may be used to make a point, while leading
or pressurized questions may be aimed at boxing in
the other party’s position or persuading them to accept
yours. Be careful about asking “loaded” questions that
the other party may feel are aimed at making them look
foolish. You rarely benefit in a negotiation from making
the other party look bad or feel bad, and it can just as
often backfire.
Volume 30 • Number 3 • March 2013
Questions also can take the form of stories and
scenarios that explore the consequences of pursuing
different paths to closure of an issue. This can be very
valuable in helping to uncover the hidden consequences
(intended or not) of the other party’s position. Those
questions may take the form of “so, just to explore this
a bit further, if we were to accept your position, what
would happen if …”.
Emotion and Humor
Emotion is more often effective in its absence than
in its expression. In other words, the party that is better at controlling its emotions at the table is more often
in control of the negotiation. While a well-timed and
carefully controlled emotional outburst (generally an
angry outburst) occasionally can be effective to make a
point, it can completely backfire and cost you credibility, and, ultimately, negotiation leverage. It is a dangerous
card to be played and should not be used unless you are
very confident as to how it will be received. Anger also
loses its potency as a tool when used too often. This
author has been involved in negotiations in which one
of the negotiators had an angry outburst approximately
once each day; we all learned to just wait it out, ignore
it, and move on with the negotiation as if nothing had
happened. So, vent and fume all you want with your
team outside of the negotiation room or over drinks
at the local pub, but check your emotions at the door
when you walk into the negotiation.
The party that is better at controlling
its emotions at the table is more often
in control of the negotiation.
Humor likewise is a dangerous tool for negotiations,
but less dangerous and often more effective than anger.
Well-timed humorous comments can help defuse tension in the room, put things into perspective and build
camaraderie and trust between the parties. However,
poorly timed attempts at humor when people are being
very serious or are having trouble controlling their
emotions can backfire. It is best to stay away from sensitive personal comments, no matter how humorous
you think they may be, unless the subject of the remark
already has opened the door and indicated that he or
she has a sense of humor about it. Even self-deprecating
humor, while most often harmless, can be dangerous as
it can undermine your own authority.
Always remember that the other people around the
negotiation table, no matter how professional or emotionally removed they may appear to be, are still people
with their own histories and sensitivities. Treat them,
The Computer & Internet Lawyer • 3
Outsourcing
and their emotions, with respect and it will go a long
way toward making the negotiations run more smoothly.
the other side will find that information in the course
of their own preparations and you should be prepared
to counter it.
Preparation
Preparation is key to a successful negotiation.
Unfortunately, in a world of deadlines and commitments, not to mention a desire to keep legal fees in
check, preparation time often gives way to the desire
to get together and “start hammering out the issues”
with the other side. After all, you cannot report any
progress on the deal if you are just sitting in a room
with your own team preparing rather than negotiating,
right?
Nothing could be further from the truth. Inadequate
preparation leads to delays, disconnects, and missed
opportunities. If the negotiating team is not in sync on
the issues, facts, needs, and strategies, the negotiation
will take far longer and the probability of achieving the
best possible result for all parties diminishes. Preparation
starts at the top with the business leaders setting the
tone and leadership for the team and all of the members
of the team—those people who will be at the table and
those who will be supporting them from outside the
room—working together to brainstorm, research, strategize, and structure the negotiations. More often than
not, the party that better prepares achieves the upper
hand in the negotiation and in the results (remember a
win-win situation still leaves a lot of room for disparity
in result).
Know the Facts
They say that knowledge is power and that is certainly true in negotiations. Take the time to do the
research. What is “market” for transactions of this
sort—not just in terms of price, but also in structure,
length of the agreement, legal terms, and industry
culture? What has the other party done in prior deals?
What legal constraints may impact the transaction?
What are the cost and savings drivers? What external
influences could impact the relationship in the future
(e.g., disruptive technologies or market conditions)?
What is the sensitivity of the business case for changes
in the business deal? What is each party’s history of
success or failure in connection with transactions of
the sort being contemplated? What makes this transaction unique so as to justify deviations from “market”
transactions?
In the fact-finding phase, it is important to look for
objective information from industry experts or other
sources and not rely on anecdotal evidence. Also, be
ready to share information with the other side. Facts
that may be damaging to your side’s position can be
especially important to uncover. You should assume that
4 • The Computer & Internet Lawyer
It is easy for people caught up in
negotiations to forget the distinction
between what they truly “need” and
what they simply “want.”
Document these facts as a team and be prepared to
question them, defend them, or attack them as may be
necessary in the course of the negotiations. Additional
fact-finding also may be necessary during the course of
the negotiations.
Know Your Client and Its Interests
It seems self-evident that you need to understand the
business drivers, context, preferences and limitations of
your client. However, particularly in the role of attorney, consultant, or professional negotiator, you may not
be brought into the transaction until the client “thinks”
it already has gotten a handle on these issues—though
often the client has not clearly articulated or understood
what those interests are.
Articulating and documenting the business needs of
the organization is not easy. It is important to explore
the hidden interests of the company that might influence positions. Is the company anticipating or planning
for future growth or shrinkage? Are there cultural issues
within the company that would influence the structure of the transaction one way or the other? Is there
general “buy-in” within the company for doing this
transaction or will it need to be “sold” internally as the
negotiations progress? Are there political pressures on
certain decisionmakers to behave in certain ways or to
“save face” with this transaction?
Once the client’s interests have been articulated and
documented, it is important to take the time to test those
positions. Whenever possible, quantify the value of each
position. Often people will hold onto an issue, whether
instinctively or emotionally, without recognizing that the
actual value of the issue in the overall scope of the transaction is negligible.Which of these positions are truly “must
haves” versus “nice to haves”? It is easy for people caugh...
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