Alternative Negotiating Conditions and the Choice of Negotiation Tactics: A Cross-cultural Comparison

Roger J. Volkema Maria Tereza Leme Fleury

ABSTRACT. The growth in international trade in recent years necessitates a better understanding of customs and expectations in cross-cultural negotiations. While several researchers have sought to examine and detail the similarities and differences between select countries, their data have generally been obtained under neutral or unspecified negotiating conditions. However, issue importance, opponent (prowess, ethical reputation), and context (location, confederate awareness, urgency) can play a significant role in the use of negotiating tactics. This paper describes a study comparing the perceptions of one hundred and forty-two current and future business professionals from two emerging trade partners, Brazil and the United States, regarding the appropriateness and likely use of five categories of negotiation tactics under seven challenging or unfavorable negotiating conditions commonly faced by negotiators. The results indicate an overall conditional effect for both attitudes (perceived appropriateness) and intentions (likelihood of use). In addition, while no significant difference in perceived appropriateness was found due to country, there were differences in likely use due to country for six conditions-behaviors. KEY WORDS: Brazil, cross-cultural, negotiation, tactics, United States ethics,

Over the past decade, two important economic alliances have been forged among the countries of North and South America: NAFTA, an alliance involving the United States, Canada, and Mexico, and Mercosur, which joins Argentina, Brazil, Paraguay, and Uruguay. These alliances are intended to promote trade and growth between the participating countries while positioning the

regions strategically in the new global marketplace (de Gouvea Neto, 1998; Dominguez and Brenes, 1997). One of the challenges born from these and other international trade agreements is the need to understand and manage differences in business styles due to cultural and economic factors. Countries from North and South America have typically been described as having differing negotiating styles and ethics (Schuster and Copeland, 1996; Volkema and Chang, 1998). These differences include the importance placed on relationship development, negotiating strategies, decision making methods, spatial and temporal orientations, contracting practices, and illicit behaviors such as bribery (Acuff, 1997). Clearly, not understanding the negotiating conventions and expectations of ones foreign counterpart can lead to surprises, frustrations, and missed opportunities (Adler and Graham, 1989). Much of the research to date on cross-cultural negotiating styles and ethics has focused on benign or unspecified situations in assessing national similarities and differences (Lewicki and Robinson, 1998; Volkema, 1997). Yet each negotiation occurs with a specific opponent, over a specific set of issues, and in a particular location or context that can potentially influence attitudes, behaviors, and outcomes of the negotiation (Brams, 1990; Pruitt, 1981; Turner, 1992). To better understand the dynamics of the negotiating process, situational factors need to be taken into account (Robertson and Ross, 1995). This paper reports on a cross-national study of the differential effects of issues, opponent, and

Journal of Business Ethics 36: 381398, 2002. 2002 Kluwer Academic Publishers. Printed in the Netherlands.

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Roger J. Volkema and Maria Tereza Fleury tional trade would be more efficient and effective. In contrast, the relativist school holds that what is right or wrong should be determined by the individual (individual relativism) or a group of individuals (cultural relativism). Therefore, what is accepted behavior in ones culture (region, nation) would determine the ethical standard, regardless of whether or not this standard is shared by the rest of the world (Srour, 1994). A natural extension of the relativist perspective is the notion that situations dictate what an individual can and should do (Robertson and Ross, 1995). Several researchers have reported, in fact, that individuals will vary their orientation based on situational contingencies (Harrington, 1997; Schminke and Ambrose, 1997; Volkema, 1997). While there may well exist a set of core human values that cut across most cultures, there is also a moral gray area in which cultural differences and situational exigency can create uncertainty and surprise (Donaldson, 1996). Dealing with this uncertainty and surprise requires a justification of the relativist and absolutist perspectives, particularly in cross-cultural transactions. Grace and Cohen (1995) argue that individuals within a society can differentiate between what is and what ought to be, managing the former while striving for the latter. Thus, descriptive and prescriptive (normative) ethical reasoning can co-exist at some level. According to attribution theory, responsibility for ones actions is ascribed to internal or external causes depending upon whether or not the individual behaves differently in different situations (distinctiveness) and whether or not others behave similarly in this situation (consensus) (Kelley, 1973). People attribute an individuals deviant behavior to external conditions or causes if this individual behaves appropriately in other situations and if other people are behaving or would behave likewise under these same conditions. Realizing this phenomenon, individuals who would otherwise seek no advantage through deviant behavior under neutral or favorable conditions might feel emboldened to do so under stressful conditions, knowing that they would not be held accountable (Carr, 1997).

context on perceptions of the appropriateness and likely use of five categories of negotiating tactics or behaviors representing a range of acceptability. The participants in the study were drawn from the two largest countries in North and South America the United States and Brazil countries which are likely to become major trading partners over the coming years. The five categories of tactics/behaviors included: traditional competitive bargaining, misrepresentation of information, bluffing, information collection, and influencing an opponents professional network (Lewicki, 1983; Lewicki and Robinson, 1998). The results of this study have implications for firms preparing their representatives for negotiations, particularly in new or emerging international partnerships, as well as for evaluating the feasibility of a universal code of business ethics.

Background and hypotheses Ethics and negotiation behavior Ethics refers to the moral principles or values that govern a group of people. They distinguish right from wrong, and thereby guide individuals in their personal and professional decision making. Business practitioners, in particular, are frequently challenged to maintain a high ethical standard in the face of increasing competition in the marketplace (Baumhart, 1968; Gellerman, 1986). With the new global economy, this challenge includes dealing with counterparts and competitors whose ethics differ markedly from ones own standards (Acuff, 1997). Two schools of thought have been prominent in the debate over incongruent ethics: the absolutist school and the relativist school (Beauchamp and Bowie, 1997). The absolutists believe that there should be a single set of moral principles. From a business perspective, this might take the form of a universal code of business ethics regarding pollution, bribery, corruption, copyrights, nepotism, etc. (Nelton, 1996; Payne et al., 1997). In theory, if all the nations of the world were operating on the same set of moral principles, businesses and interna-

Alternative Negotiating Conditions and the Choice of Negotiation Tactics With negotiation, it is conceivable that any given encounter or transaction could be treated as an anomaly. That is, an individual would not be held responsible for engaging in an unethical act if he or she normally follows the conventions and practices of society and if other individuals would be expected to behave similarly under these conditions. The longer that challenging conditions prevail and the more segments of society that engage in similar behavior, the easier it is to sustain and justify otherwise anomalous behavior. According to Lewicki (1983; Lewicki and Robinson, 1998), there exists a broad range of negotiation behaviors with respect to ethicality or appropriateness. These include what he calls traditional competitive bargaining behaviors (e.g., exaggerating demands, pretending not to be in a hurry, hiding ones bottom line), which are generally accepted tactics in distributive negotiation, as well as more questionable or ethically inappropriate tactics such as misrepresenting information, bluffing, or influencing an opponents professional network (e.g., encouraging colleagues to defect to your side, paying others for information). There is a host of conditions that could justify using one or more of these negotiating behaviors. These conditions include the importance of the issues (outcome) of a negotiation, the challenges posed by the other party (style, prowess, ethics), and the context of the situation (location, colleague awareness, time pressure). If the issues or outcomes of a negotiation are important, for example, an individual might logically feel more inclined to protect his or her self-interests through hard bargaining or even by engaging in more questionable behaviors (e.g., paying someone for information). Fisher et al. (1991) point out that individuals frequently take hard positions to protect their interests, and there is anecdotal (Filatov, 1995; Lewis, 1989) and empirical (Kelley et al., 1967; Roth and Murnighan, 1982; Tenbrunsel, 1998) evidence that individuals will sacrifice their ethics when the stakes are high. Likewise, the challenges posed by a skilled or disreputable adversary can cause an individual to take actions to protect his or her interests (Barry and Bateman, 1996; Volkema, 1997). Some

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scholars contend, in fact, that a person has a moral right to protect himself/herself when confronted with an unethical opponent, including through the use of otherwise unacceptable behaviors (Carson, 1993; Dees and Cramton, 1991). Such behavior can be justified on the basis of equity theory. If an individual believes that an opponents outcomes, for example, could exceed his or hers due to differences in information disclosure (amount, validity), the individual might choose to alter his or her information amount or content to rectify the inequity (Glass and Wood, 1996). This can occur as reciprocal behavior, or in anticipation of a negotiation with a skilled or unethical opponent. Furthermore, if a negotiator expects never to see the other party again, the risk of retaliation is reduced and the potential for embarrassment or loss of face that accompanies such an encounter is limited (Ben-Yoav and Pruitt, 1984; Clark et al., 1986; Marlowe et al., 1966; Rasmusen, 1989; Shapiro, 1975). The context of a negotiation also can influence the behavior of a negotiator, including the location of the negotiation, presence of constituents or confederates, and time constraints. Certain countries, for example, are known for having tough negotiators (i.e., individuals who make exaggerated first offers, few or slow concessions, and emotional, combative arguments) (Acuff, 1997). If an individual anticipates negotiating in such a disadvantageous environment, he or she may take preemptive actions to protect against potential loss (e.g., bluffing or providing false information). The adage When in Rome, do as the Romans do. reflects the license that many people feel in changing their behavior under such conditions (Adler and Graham, 1989; Weiss, 1994). Much like future contact with a negotiating counterpart, knowing that constituents or confederates are likely to find out the details of a negotiation can influence a negotiators behavior. A number of researchers have found, for example, that managers and other professionals will raise their ethical standards if there is a likelihood their tactics will be detected or revealed (Barnett and Karson, 1987; Morris, Rehbein et al., 1995; Vitell et al., 1991).

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Roger J. Volkema and Maria Tereza Fleury individuals are willing to take to protect their self-interests. In terms of culture, Geert Hofstedes (1980, 1991) seminal work represents one of the few empirical studies of national culture that has implications for ethics and negotiation behavior. Based on nearly sixty thousand surveys of IBM employees in over fifty countries, Hofstede identified four dimensions of culture. (Subsequently, a fifth dimension was added, although this dimension included far fewer countries.) The four dimensions identified by Hofstede were power distance, individualism/ collectivism, uncertainty avoidance, and masculinity/femininity. Power distance refers to the acceptance of differences in power and wealth among people, which is often reflected in limited interaction between social classes and restricted movement from one social class to another. Individualist cultures emphasize the rights and needs of the individual, including self-reliance, freedom, and individual achievement, while collectivist cultures (the opposite of individualist) are oriented more towards family, organizations, and community. Uncertainty avoidance refers to a cultures comfort (or lack of comfort) with uncertainty, risk, and unconventional behavior. Cultures high in uncertainty avoidance have policies, procedures, and rules to stipulate what actions will take place under such conditions, thereby attempting to limit risk and uncertainty. Finally, masculine cultures value assertive, aggressive, competitive behaviors. They typically are concerned with performance and justice. Feminine cultures, on the other hand, value relationship-building, trust, compassion, and quality of life. For the most part, the countries of Central and South America differ markedly from North American countries on these four dimensions. Brazil, for example, ranked high on power distance (fourteenth out of fifty-three countries), low-to-moderate on individualism (tied for twenty-sixth), moderately high on uncertainty avoidance (tied for twenty-first), and low-tomoderate on masculinity (twenty-seventh) in Hofstedes study (Hofstede, 1991). In contrast, the United States ranked low on power distance (thirty-eighth out of fifty-three), very high on

Finally, faced with time pressure in a negotiation, particularly if it is believed to emanate from ones opponent, a negotiator might feel justified in using competitive or questionable behaviors, again to address a sense of inequity. Yukl et al. (1976) found this to be the case, as negotiators engaged in less truthful communication when under high time pressure. Stuhlmacher and Champagne (1997) also found that under time pressure, negotiators were more selective in their exchange of information. Smith et al. (1982) suggest that this occurs because time pressure increases a negotiators perceptions of an opponents toughness, while Baron (1998) contends that it decreases a negotiators perception of opponent honesty. Given these theoretical arguments and empirical results, we would expect both an individuals perceptions of what is appropriate and his/her intentions towards competitive bargaining behaviors (e.g., exaggerating an opening demand or offer) as well as more questionable behaviors (e.g., encouraging others to defect, misrepresenting facts) to change when faced with challenging or unfavorable conditions. Thus, we propose the following: Hypothesis 1. Respondents will perceive competitive or questionable negotiation behaviors as more appropriate under challenging or unfavorable negotiating conditions than under neutral conditions. Hypothesis 2. Respondents will indicate a greater likelihood of using competitive or questionable negotiation behaviors under challenging or unfavorable negotiating conditions than under neutral conditions. Culture and economic conditions In addition to the situational factors mentioned above, cultural and economic differences among countries can moderate perceptual processes. In some cultures, for example, competitive or questionable negotiation behaviors may be more acceptable than in other cultures. Furthermore, economic conditions (unemployment, inflation, uncertainty) can potentially influence the actions

Alternative Negotiating Conditions and the Choice of Negotiation Tactics individualism (first), low on uncertainty avoidance (forty-third), and high on masculinity (fifteenth). Hofstedes four dimensions have implications for the ways in which individuals approach negotiation. The low-to-moderate individualism (collectivism) and low-to-moderate masculinity (i.e., femininity) in Brazil and many other Latin American countries suggest a special concern for relationship building and maintenance (Volkema, 1997). This includes using established networks to initiate business negotiations, expending considerable time up-front in learning about the other party and his/her organization, exchanging gifts and other tokens of friendship and appreciation, accommodating schedules for friends and associates, and trusting negotiations to verbal rather than detailed written agreements (Acuff, 1997; Schuster and Copeland, 1996). When there are surprises during the execution of an agreement, the friendship of the parties rather than a written contract is the mechanism for resolution. The face and honor of both parties are central in relationship-based cultures. In contrast, the high individualism and masculinity of the United States signal a greater likelihood of competitive behavior, including competitive bargaining and negotiation (Acuff, 1997; Hendon and Hendon, 1990). The high power distance and high uncertainty avoidance in many Latin American countries are associated with disparities in wealth and power along with bureaucratic social structures designed to minimize uncertainty and, in effect, preserve the disparity. This combination produces a lack of trust with the unfamiliar and an in-group/ out-group phenomenon in collectivist cultures: People who are members of ones social network are accorded a familial treatment, while outsiders are often viewed with some suspicion or distrust (Carnevale, 1995; DaMatta, 1987). In Brazil, finding ways around the bureaucratic red tape of a high uncertainty avoidance culture often involves the use of ones extended social network (i.e., friends and family employed in organizational bureaucracies, or through friends of friends in such positions), a phenomenon with its own Portuguese nomenclature (jeitinho, which literally means little way).

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While culture undoubtedly plays an important role in determining whether or not negotiators will employ questionable or unethical tactics, culture alone does not determine attitudes, intentions, and actions. Economic conditions also can influence behavior. Survival is a basic human instinct that can motivate individuals to take actions contrary to social customs and habits (Maslow, 1970; Nelson, 1994). These actions can include the use of questionable or unethical behaviors which promote self-interests or personal advantage at the expense of others or the collective good in times of economic hardship (Beeman and Sharkey, 1987). The former Soviet Union is a prime example, where distortions in the systems of supply and exchange accompanied by political instability and judicial ineffectiveness have led to considerable disregard for ethical considerations (Filatov, 1995). As previously described, such behaviors can be quickly justified and attributed to external causes on the basis of the distinctiveness of the behavior and the likelihood of others behaving similarly under identical conditions (Kelley, 1973). Throughout much of the 1980s and early 1990s, the economic conditions of North and South America differed significantly. Consumer price increases in Brazil, one measure of economic conditions, averaged 645.4 percent over the period 19811997 (International Financial Statistics Yearbook, 1999). With the introduction of the plano real in 1995, however, consumer price increases have dropped from 2075.9 percent in 1994 to 66.0 in 1995 to 15.8 in 1996 to 6.9 percent in 1997 to 3.2 percent in 1998. Meanwhile, in the United States consumer price increases have averaged 3.9 percent over this same period, ranging from a low of 1.6 percent in 1998 to a high of 10.3 percent in 1981. This raises some interesting possibilities regarding culture and economic conditions. It is possible, of course, for the culture of a country to favor high standards of ethical behavior while the economic conditions of the country are favorable as well. In such a case, we might expect both attitudes and actions to reflect a concern for ethical behavior. At the other end of the continuum, there may be countries in which

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Roger J. Volkema and Maria Tereza Fleury in competitive bargaining, questionable information collection, or influencing an opponents professional network (the latter two categories of behavior involving third parties). These results also might be attributed to the high inflation in Brazil in the early 1990s, when those data were gathered. Given the dramatic improvement in consumer price increases for Brazil in the late 1990s, from 66.0 percent in 1995 to 15.8 percent in 1996 to 6.9 percent in 1997 to 3.2 percent in 1998, we might expect little or no difference between Brazilian and United States negotiators due to economic adversity. The importance of relationships in Brazil (collectivism), however, suggests that Brazilian negotiators would be less inclined to take advantage of the other party, particularly where loss of face might occur, while the individualism and masculinity of the United States suggest a more competitive approach. Thus, we propose the following: Hypothesis 3. Given the aforementioned cultural differences, Brazilian respondents will perceive competitive or questionable negotiation behaviors to be less appropriate than will United States respondents under challenging or unfavorable negotiating conditions. Hypothesis 4. Given the aforementioned cultural differences and comparable economic conditions, Brazilian respondents will indicate a lower likelihood of using competitive or questionable negotiation behaviors than will United States respondents under challenging or unfavorable negotiating conditions.

both culture and economic instability support a more liberal interpretation of ethicality. As a result, both attitudes and behaviors would likely reflect this condition. It is also possible, however, for the culture and economic conditions of a country to contradict one another (for example, the culture may demand high moral and ethical behavior, but a chaotic economic situation promotes unethical behavior). Which factor will prevail in such an environment, or will individuals distinguish between what is appropriate (based on culture) and what they will actually do (based on economics)? Getz and Volkema (1999) have argued that economic conditions predict bribery and corruption, and that culture and bureaucracy moderate this relationship. That is, economic conditions (inflation, unemployment, uncertainty) have a direct bearing on bribery and corruption, and cultural characteristics can increase or diminish this relationship. Like culture, bureaucracy is a necessary though not sufficient condition for corruption to occur. While this model may have a certain face validity, it is also possible to imagine the economic misfortunes of a country becoming ingrained in the culture if the adversity persists. Unfortunately, few empirical studies have been conducted to examine these models, and there have been fewer studies involving Latin American countries. Grahams (1983) early work comparing Brazilian, United States, and Japanese negotiating styles found Brazilians gaining higher profits when they were able to hide their motives and disguise their tactics, while United States negotiators were more easily victimized by deceptive opponents. These findings occurred in negotiations involving dyads from the same country and during a time when consumer price increases in Brazil were considerably higher than those found in the United States (101.7% vs.10.3% in 1981, 100.5% vs. 6.2% in 1982, and 135.0% vs. 3.2% in 1983). In a study of ethical perceptions, Volkema (1999) found Brazilian respondents to indicate a greater likelihood of misrepresenting information and bluffing than did United States respondents (behaviors which involve ones negotiating opponent), but no more or less likely to engage

Method Participants A total of one hundred forty-two individuals participated in this study, seventy-two from Brazil and seventy from the United States. Respondents were drawn from across organizations and industries in order to reduce any within-

Alternative Negotiating Conditions and the Choice of Negotiation Tactics company bias. The respondents ranged in age from 24 to 51 (mean age, 35.3 years), and 55.6% of the respondents were male.

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Procedure Each participant was asked to complete an eightpage questionnaire, each page containing the same five negotiation behaviors. These behaviors were drawn from five categories of negotiation behavior originally identified by Lewicki and Robinson (1998) and subsequently verified in a separate factor analysis by Volkema (1999). The categories represent a range of categories/behaviors with respect to acceptability (Friedman and Shapiro, 1995; Lewicki et al., 1997), and include: 1) traditional competitive bargaining, 2) information collection, 3) bluffing (i.e., misleading intentions), 4) misrepresentation of information (i.e., misleading arguments), and 5) influencing an opponents professional network. One behavior was selected from each category to insure a manageable and acceptable questionnaire for prospective respondents. Behaviors were selected on the basis of low variance in rated appropriateness and likely use, as reported in prior studies. The five behaviors were: exaggerating an opening offer or demand, feigning friendship for information, promising good things will happen (when you know you cant or wont deliver), misrepresenting facts to an opponent, and encouraging others to defect to your side. Respondents began by rating each of the five behaviors under neutral or unspecified conditions, indicating the appropriateness of each behavior (attitude) and how likely they would be to use the tactic or behavior (intention) on 7point Likert scales (see Attachment A for sample first page). Each successive page began with a brief description of a situation or condition (seven conditions total), and respondents were again asked to rate the same five behaviors in terms of appropriateness and likely use. Separate pages were used for each condition in order to discourage within-subject comparative assessments of ratings. The seven conditions included issue importance, the opponent (negotiation

prowess, ethical reputation, long-term relationship potential), and the context (foreign location, confederates awareness, urgency). For example, the second page began with the declarative statement, You are about to negotiate for something that is very important to you (in boldface). Thus, each respondent rated the same five behaviors for all scenarios or conditions. This approach of using conditional statements to evaluate ethical frameworks has been used most recently by Schminke and Ambrose (1997) in their work on ethics in business and nonbusiness settings. The questionnaire was entitled Incidents in Negotiation Questionnaire, and contained no mention of ethics. Furthermore, the questionnaire indicated that there were not right answers, and participants were encouraged to respond candidly. All responses were confidential, as participants were assured anonymity. The questionnaire was translated from English to Portuguese, and then back to English by another party, to ensure an accurate translation for purposes of cross-cultural comparisons. Questionnaires were administered in their respective countries in 199798.

Analysis Since each participant was asked to rate five behaviors under varying conditions, repeated measures MANOVAs were conducted for the perceived appropriateness and likelihood of use. Ratings of perceived appropriateness, for example, for each of the five negotiation tactics for the eight conditions (the unspecified condition plus the seven challenging or unfavorable conditions) represented within-subject measures in this design, while country, gender and age were the between-subjects factors. Gender and age were included as between-subjects factors since each has been found to moderate ethicality in prior research (Anton, 1990; Barnett and Karston, 1989; Betz et al., 1989; Deshpande, 1997; Kohut and Corriher, 1994; Ruegger and King, 1992; Terpstra et al., 1993; Tyson, 1990). Provided significant MANOVA results are found for within-subject measures, Rosenthal

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Roger J. Volkema and Maria Tereza Fleury ness of behaviors at 2.83 (SD = 2.09) and the likelihood of using the behaviors at 3.24 (SD = 2.16). Respondents from both countries saw exaggerating an opening demand as the most appropriate of the five behaviors (Brazil: 3.95, SD = 1.86; United States: 4.72, SD = 2.03) as well as the behavior they would be most likely to use (Brazil: 3.92, SD = 1.95; United States: 4.85, SD = 1.97). For Brazilians, promising good things will happen when you know you cant (or wont) deliver those good things was deemed the least appropriate (1.69, SD = 1.26) and the behavior least likely to be used (1.65, SD = 1.29). This is consistent with the importance of relational development and harmony in a collectivist culture, discussed previously. Respondents from the United States indicated that misrepresenting facts to an opponent was the least appropriate (1.61, SD = 1.23) and least likely to be used (2.15, SD = 1.70). The results of the repeated measures MANOVA for perceived appropriateness revealed significant differences for both within-subject variables: the five behaviors/tactics (F-value for Wilks lambda = 93.04, p < 0.001) and the eight negotiating conditions (F-value for Wilks lambda = 18.37, p < 0.001). Thus, there were significant differences in ratings among the five behaviors or tactics, and there also were significant differences in ratings across the eight negotiating situations or conditions. The between-subjects effects for country and gender were not significant, although the covariate age was significant (t = 3.01, p < 0.01). The coefficient for the covariate age was negative, indicating that age of respondents was inversely related to the perceived appropriateness of behaviors (consistent with prior research on age and ethics). Given the significant results for the eight negotiating conditions, follow-up analyses (paired t-tests) were conducted according to Rosenthal and Rosnow (1985) to determine the source of this significance. Comparing perceived appropriateness under each of the challenging or unfavorable conditions with perceived appropriateness under the unspecified condition, twenty-one of the thirty-five comparisons were significant (see Table I), as advanced in Hypothesis 1. The condition that produced the greatest effect was the

and Rosnow (1985) suggest that subsequent paired-samples t-tests can be conducted to determine the source of this significance. More specifically, these tests can compare the unspecified condition with each challenging or unfavorable condition (issue importance, opponents negotiation prowess, opponents ethical reputation, long-term relationship potential, foreign location, confederates awareness, urgency). Where country is a significant between-subjects factor, analyses of variance were conducted to compare the change in appropriateness or likely use under each of the challenging or unfavorable conditions with the appropriateness or likely use under the unspecified condition for each behavior, with country as the independent variable.

Results Overall, respondents rated the appropriateness of the five behaviors under all conditions at a mean value of 2.68 (SD = 1.96) and their likelihood of use at 2.85 (SD = 2.04) on 7-point scales (Table I). The behavior that was perceived to be the most appropriate and the most likely to be used was exaggerating an opening demand or offer (4.33, SD = 1.98 and 4.38, SD = 2.02, respectively). This behavior was followed by encouraging others to defect to your side (2.90, SD = 1.98 and 3.12, SD = 2.04, respectively), feigning friendship for information (2.34, SD = 1.74 and 2.50, SD = 1.86, respectively), and misrepresenting facts to an opponent (2.01, SD = 1.53 and 2.23, SD = 1.70, respectively). Promising good things will happen when you know you cant (or wont) deliver on those good things was perceived to be the least appropriate and least likely behavior to be used of these five behaviors (1.79, SD = 1.38 and 2.01, SD = 1.62, respectively). The means and standard deviations for these behaviors and conditions, broken down by country, are shown in Table II. Brazilian respondents rated the overall appropriateness of these behaviors at 2.53 (SD = 1.81) and the likelihood of using the behaviors as 2.47 (SD = 1.84), while United States respondents rated the appropriate-

TABLE I Means (and standard deviations) for conditional perceptions of appropriateness and likely use of five negotiation behaviorsa Behavior Exaggerate opening demand Encourage others to defect Feign friendship for information 1.99 (1.50) 2.16 (1.60) 2.69 (2.06)*** 2.79 (2.13)*** 2.96 (1.90)*** 3.16 (2.04)*** 2.23 (1.60)** 2.57 (1.93)*** 2.78 (1.74)* 2.49 (1.84)** 2.22 (1.67) 2.32 (1.74) 2.39 (1.72)*** 2.48 (1.81)* 1.99 (1.42) 2.04 (1.51) 2.90 (1.98) 3.12 (2.04) 2.34 (1.74) 2.50 (1.86) 1.92 (1.36) 2.28 (1.63) 2.83 (2.13)*** 3.04 (2.21)*** 2.09 (1.52) 2.31 (1.70) 2.04 (1.49) 2.35 (1.65) 1.99 (1.46) 2.40 (1.80) 1.87 (1.47) 2.03 (1.58)* 1.68 (1.14)* 1.75 (1.32)*** 1.63 (1.16)** 1.71 (1.20)*** 2.01 (1.53) 2.23 (1.70) Misrepresent facts to opponent Promise good things will happen 1.59 (1.14) 1.79 (1.35) All behaviors

Condition

1. Unspecified App. Use App. Use App. Use App. Use App. Use App. Use App. Use App. Use 4.33 (1.98) 4.38 (2.02) 3.80 (1.93)*** 3.80 (1.98)*** 3.71 (1.93)*** 3.82 (2.00)*** 2.37 (1.67)*** 2.49 (1.82)*** 2.51 (1.70)* 2.60 (1.80)** 4.45 (1.98) 4.49 (1.86) 2.51 (1.86)* 2.73 (1.93) 4.13 (2.00)* 4.16 (2.08) 3.06 (2.04)* 3.41 (2.08)*** 4.30 (1.95) 4.44 (2.06) 3.16 (2.01)*** 3.45 (1.99)*** 4.69 (1.92) 4.69 (1.95)* 3.03 (2.07) 3.21 (2.08) 5.14 (1.90)*** 5.22 (1.95)*** 3.78 (2.37)*** 4.12 (2.33)***

App. Use

4.40 (1.88) 4.38 (1.91)

2.80 (1.70) 2.94 (1.74)

2.54 (1.84) 2.71 (1.89) 2.51 (1.99)*** 3.39 (2.31) 2.60 (2.03)*** 3.55 (2.34) 1.98 (1.42)*** 2.95 (2.03) 2.20 (1.66)*** 3.11 (2.09) 1.77 (1.32)* 2.05 (1.65)** 2.70 (1.93) 2.97 (2.05) 1.70 (1.31) 2.64 (1.94) 2.15 (1.77)*** 2.92 (2.06) 1.73 (1.28) 1.91 (1.51) 1.54 (1.13) 1.69 (1.40) 1.53 (1.02) 1.67 (1.28) 1.79 (1.38) 2.01 (1.62) 2.56 (1.94) 2.69 (1.97) 2.34 (1.73) 2.45 (1.85) 2.29 (1.69) 2.37 (1.77) 2.68 (1.96) 2.85 (2.04)

2. Opponent has reputation as unethical negotiator

3. Country known for skilled negotiators

4. Very important negotiation

5. Time deadline

6. Opponent has reputation as very good negotiator

7. Future business relations with opponent

Alternative Negotiating Conditions and the Choice of Negotiation Tactics

8. Colleagues will learn negotiation details

All conditions

Statistical significances for t-tests comparing each challenging or unfavorable condition with unspecified condition. * p < 0.05, ** p < 0.01, *** p < 0.001.

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TABLE II Means (and standard deviations) for conditional perceptions of appropriateness and likely use of five negotiation behaviors by countrya Behavior Exaggerate opening demand Encourage others to defect Feign friendship for information 1.68 (1.11) 1.61 (1.15) 2.31 (1.76) 2.71 (1.80) 2.57 (1.93) 2.53 (1.96) 4.17 (2.30) 4.66 (2.15) 2.42 (1.80) 2.39 (1.80) 3.67 (2.15) 4.06 (2.02)* 3.89 (1.88) 3.89 (2.00) App. Use 4.73 (1.94) 5.01 (1.97)* 2.93 (1.92) 2.94 (1.89) 3.39 (2.08) 3.97 (1.96) 2.81 (2.20) 3.06 (2.27) 2.38 (1.52) 2.35 (1.59) 3.56 (2.06) 4.00 (2.13) 1.89 (1.25) 1.86 (1.42) 2.57 (1.85) 3.30 (2.12) Misrepresent facts to opponent Promise good things will happen 2.28 (1.47) 2.29 (1.61) 1.54 (1.14) 2.27 (1.67) 3.32 (2.17) 3.22 (2.23) 2.33 (1.97) 2.86 (2.19) 2.46 (1.64) 2.29 (1.61) 1.71 (1.28) 2.33 (1.79) 2.51 (1.67) 2.42 (1.62) 1.56 (1.09) 2.27 (1.69) 1.44 (1.05) 1.47 (1.09) 1.73 (1.23) 2.11 (1.52) 2.47 (1.94) 2.28 (1.85) 2.54 (2.04) 2.93 (2.17) 1.75 (1.11) 1.69 (1.24) 2.21 (1.65) 2.73 (1.86) 1.71 (1.26) 1.60 (1.11) 1.83 (1.38) 2.51 (1.97) All behaviors

Condition

1. Unspecified U.S.A. Brazil U.S.A. Brazil U.S.A. Brazil U.S.A. App. Use App. Use App. Use 4.14 (1.80) 4.15 (1.98) 5.26 (1.89) 5.24 (1.77) App. Use 5.43 (1.85) 5.56 (1.90) App. Use 4.86 (1.92) 4.89 (1.95) 3.39 (2.38) 3.60 (2.39) App. Use 4.69 (1.89) 4.73 (1.83) 2.90 (1.69) 3.44 (1.76)

Brazil

App. Use

4.13 (1.85) 4.04 (1.93)

2.69 (1.73) 2.44 (1.57)

2.44 (1.75) 2.37 (1.75) 2.63 (1.93) 3.05 (1.96) 3.32 (2.24) 3.30 (2.27) 3.46 (2.38) 3.81 (2.39) 2.63 (1.78) 2.58 (1.85) 3.28 (2.21) 3.67 (2.18) 2.59 (1.80) 2.54 (1.82) 2.81 (2.05) 3.41 (2.18)

Roger J. Volkema and Maria Tereza Fleury

2. Opponent has reputation as unethical negotiator

3. Country known for skilled negotiators

4. Very important negotiation

5. Time deadline U.S.A. Brazil U.S.A. Brazil U.S.A. Brazil U.S.A. App. Use App. Use App. Use 4.72 (2.03) 4.85 (1.97) 3.26 (2.06) 3.73 (2.05) 3.95 (1.86) 3.92 (1.95) 2.56 (1.84) 2.52 (1.84) 2.03 (1.47) 1.96 (1.48) 2.66 (1.93) 3.06 (2.04) 4.33 (2.13) 4.44 (2.01)* 2.87 (1.90) 3.20 (1.97) 2.39 (1.67) 2.53 (1.72) App. Use 3.28 (1.56) 3.18 (1.76) 2.17 (1.40) 2.01 (1.40) 1.61 (0.99) 1.57 (1.10) 1.96 (1.34) 1.85 (1.23) 1.30 (0.82) 1.57 (1.16) 2.39 (1.68) 2.31 (1.70) 1.61 (1.23) 2.15 (1.70) App. Use 4.09 (2.07) 4.34 (2.07) 2.66 (1.82) 3.03 (2.01) 2.70 (1.84) 3.07 (1.94) 1.41 (0.89) 1.74 (1.38) App. Use 3.35 (1.73) 3.32 (1.80) 2.10 (1.48) 1.97 (1.44) 2.08 (1.55) 1.90 (1.47) 1.93 (1.29) 1.76 (1.26) App. Use 5.04 (2.00) 5.14 (1.81)* 3.04 (2.08) 3.46 (3.08) 2.57 (1.95) 2.83 (1.99) 1.46 (0.97) 1.83 (1.33) 1.80 (1.33) 2.14 (1.61) 1.36 (0.74) 1.29 (0.86) 1.73 (1.40) 2.10 (1.70) 1.51 (1.01) 1.53 (1.16) 1.54 (1.05) 1.81 (1.38)* 1.69 (1.26) 1.65 (1.29) 1.90 (1.50) 2.38 (1.83) App. Use 3.88 (1.78) 3.85 (1.69) 2.00 (1.45) 2.01 (1.46) 1.88 (1.28) 1.82 (1.30) 2.28 (1.74) 2.22 (1.77) 1.67 (1.25) 1.68 (1.37) App. Use 4.17 (2.09) 4.31 (2.10) 3.36 (2.07) 4.03 (2.01) 2.38 (1.83) 2.97 (2.06) 1.56 (1.06) 2.36 (1.88) 1.83 (1.52) 2.66 (2.00) 2.70 (2.08)** 3.28 (2.16) 2.34 (1.70) 2.32 (1.71) 2.78 (2.13) 3.08 (2.13) 2.16 (1.54) 2.05 (1.55) 2.52 (1.90) 2.86 (2.04) 2.11 (1.42) 2.03 (1.47) 2.49 (1.92) 2.71 (1.97) 2.53 (1.81) 2.47 (1.84) 2.83 (2.09) 3.24 (2.16)

Brazil

App. Use

4.10 (1.93) 4.00 (2.07)

2.78 (1.97) 2.81 (1.98)

2.18 (1.66) 2.01 (1.45)

2.42 (1.66) 2.43 (1.74)

1.58 (1.07) 1.63 (1.22)

2.61 (1.88) 2.58 (1.90)

6. Opponent has reputation as very good negotiator

7. Future business relations with opponent

8. Colleagues will learn negotiation details

All conditions U.S.A.

Brazil

Alternative Negotiating Conditions and the Choice of Negotiation Tactics

Statistical significances (ANOVAs) are shown for changes from unspecified condition to challenging or unfavorable condition by country. * p < 0.05, ** p < 0.01, *** p < 0.001.

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392

Roger J. Volkema and Maria Tereza Fleury when under a time deadline, and less likely to misrepresent facts to an opponent when the opponent has a reputation as a very good negotiator. As a result of the significant between-subjects effect for country, analyses of variance were conducted to compare the change in likelihood of use under each of the challenging or unfavorable conditions with the likelihood of use under the unspecified condition for each behavior, with country as the independent variable. There were six significant results, generally consistent with Hypothesis 4 (see Table II). United States respondents indicated a change in likely use from 3.44 to 4.06 for encouraging others to defect when in a country known for its skilled negotiators, while the change went from 2.44 to 2.39 for Brazilian respondents (F1, 139 = 6.03, p < 0.05). United States respondents also indicated an increase (4.73 to 5.01) while Brazilian respondents indicated a likely decline (4.04 to 3.89) for exaggerating an opening demand when the negotiation was seen as very important (F1, 140 = 6.82, p < 0.05). When there was a time deadline, United States respondents indicated a change from 2.11 to 2.70 for promising that good things will happen, while the change for Brazilian respondents only went from 1.47 to 1.63 (F1, 139 = 7.32, p < 0.01). When an opponent had a reputation as a very good negotiator, United States respondents were more likely to exaggerate an opening demand (change from 4.73 to 5.14), while the change for Brazilian respondents went from 4.04 to 3.85 (F1, 140 = 13.15, p < 0.05). Finally, when colleagues will learn the details of a negotiation, there were significant changes for two behaviors: For exaggerating an opening demand, Brazilian respondents indicated a larger decline (from 4.04 to 3.18) in likely use than did United States respondents (from 4.73 to 4.44) (F1, 140 = 11.75, p < 0.05), and for promising that good things will happen, Brazilians likely use actually increased slightly (from 1.47 to 1.53) while the United States respondents indicated a decline from 2.11 to 1.81 (F1, 140 = 4.07, p < 0.05).

prospect of facing an opponent with a reputation as an unethical negotiator. The perceived appropriateness was significantly higher than under the unspecified condition for all five behaviors (p < 0.001 for each behavior). When there was a time deadline, respondents indicated that exaggerating an opening demand was less appropriate (presumably because of the extra time that it would require) and respondents saw encouraging others to defect as less appropriate when the opponent had a reputation as a very good negotiator. When future business relations with an opponent were likely or colleagues would learn the details of a negotiation, behaviors were generally seen as less appropriate. The exception was feigning friendship for information, which was seen as more appropriate when future business relations were probable. The results of the repeated measures MANOVA for likelihood of use also were significant for both within-subject variables: the five behaviors/tactics (F-value for Wilks lambda = 66.67, p < 0.001) and the eight negotiating conditions (F-value for Wilks lambda = 21.77, p < 0.001). Therefore, there were significant differences in ratings among the five tactics, as well as significant differences in ratings across the eight negotiating situations or conditions. The between-subjects effect for country was significant (F1, 133 = 18.85, p < 0.001), although the between-subjects effect for gender was not significant. The t-value for the covariate age again was significant (t = 3.11, p < 0.01). As with perceived appropriateness, the coefficient for the covariate age was negative indicating an inverse relationship to likelihood of using these behaviors. Follow-up paired t-tests comparing likely use under each of the challenging or unfavorable conditions with likely use under the unspecified condition resulted in twenty-two significant findings (as proposed in Hypothesis 2), and nineteen of these were the same as those found for perceived appropriateness (see Table I). In addition to those nineteen similarities, respondents indicated that they were more likely to exaggerate an opening demand when negotiating in a country known for its skilled negotiators, more likely to promise good things will happen

Alternative Negotiating Conditions and the Choice of Negotiation Tactics Discussion Respondents indicated that exaggerating an opening demand or offer a traditional competitive bargaining tactic (Lewicki, 1983; Lewicki and Robinson, 1998) was the most appropriate and most likely to be used behavior of the five behaviors under all conditions, including the unspecified condition. This held for Brazilian as well as United States respondents. The order for Brazilian respondents under the initial, unspecified condition exaggerate an opening demand, encourage others to defect, misrepresent facts to an opponent, feign friendship for information, and promise good things will happen was identical to that reported by Volkema (1997) in his study of Brazilian perceptions of seventeen tactics/behaviors which included these five behaviors. Thus, behaviors that could affect the long-term relationship between the negotiators feigning friendship for information and promising things one cannot or will not deliver were deemed least appropriate. The order for United States respondents for perceived appropriateness was exaggerate an opening demand, encourage others to defect, feign friendship for information, promise good things will happen, and misrepresent facts to an opponent, while for likely use the order was exaggerate an opening demand, encourage others to defect, feign friendship for information, misrepresent facts to an opponent, and promise good things will happen. These rankings are identical to those reported by Lewicki and Robinson (1998) in their study of over three hundred MBA students taking courses in the United States. In terms of situational influence, the current study found considerable flexibility in respondents perceptions of appropriateness and likely use of each of the five behaviors under challenging or unfavorable conditions. The condition producing the greatest change was facing an opponent with a reputation as an unethical negotiator, as respondents indicated significant increases (p < 0.001) in all five behaviors for both appropriateness and likely use. In addition, three other conditions facing a very important negotiation, being in a foreign country known for its skilled negotiators, and having a time

393

deadline also led to increases in the perceived appropriateness and likely use of many of the behaviors. These results are consistent with Glass and Woods (1996) equity theory of human behavior, which suggests that an individual can feel justified in taking uncharacteristic action in anticipation of an unfair situation. Generally speaking, the prospect of future business relations with an opponent and the possibility of colleagues learning the details of a negotiation (including tactics) resulted in decreases in appropriateness and likely use. The most noteworthy exception concerned feigning friendship, which increased significantly for appropriateness and likely use when faced with future business relations. This underscores the perceived importance of maintaining a sense of relationship in on-going negotiations, even if it is a false impression. The decline in likely use when colleagues may learn the details of a negotiation is consistent with the importance of maintaining face and reputation in a business environment. While no significant difference was found in perceived appropriateness due to country, a significant difference was found for likelihood of use. Those differences appeared most frequently with one behavior exaggerating an opening demand. United States respondents indicated a greater likelihood of using this behavior than did Brazilian respondents when the negotiation was very important or when the opponent had a reputation as a very good negotiator, and Brazilians indicated a significantly larger drop in use than did United States respondents when colleagues would learn the details of a negotiation. United States respondents also were more likely than Brazilian respondents to make promises they could not keep when faced with a time deadline, but were less likely to use this behavior than were Brazilian respondents when colleagues might learn the details of a negotiation. The former is consistent with Grahams (1985) finding that Brazilians make fewer promises in their negotiations. Finally, United States respondents were more likely than Brazilian respondents to encourage others to defect when in a country known for skilled negotiators.

394

Roger J. Volkema and Maria Tereza Fleury typically found in the United States (Hendon and Hendon, 1990; Hofstede, 1991). Similarly, time deadlines could cause United States negotiators to be more inclined to make promises that could not or would not be kept. The overall findings regarding the influence of situational factors on attitudes and intentions have obvious implications for training and preparation of organizational representatives in international negotiations. Attention must be given to assessing the conditions faced by ones negotiating counterpart, and how those conditions might affect choice of tactics. There are several measures that a negotiator can take to counter adverse conditions (e.g., discussing long-term business opportunities, mentioning common business associates), which can easily be introduced in training and preparation. In addition, these findings have potential implications for efforts to develop a universal code of business ethics. Not only would behaviors likely change under most challenging or unfavorable conditions, but attitudes regarding the appropriateness of behaviors as well. This appears to be true for the full range of behaviors examined in this study. Therefore, efforts to establish such a code must take into consideration the potential affect that socio-economic upheaval could have on the attitudes and behaviors of a country, and the ripple affect this might have on other countries facing international negotiations with representatives from those countries. The results and interpretations of this study must be viewed, of course, within the context of the studys design and its inherent limitations. We chose to examine a cross-section of negotiation behaviors under eight conditions. These five behaviors, while drawn from five different categories of negotiation behavior, represent a subset of the many tactics that negotiators have been known to employ (see Lewicki and Robinson, 1998; Schatzki, 1981). In addition, there are undoubtedly other conditions that might be examined, along with combinations of conditions (e.g., negotiating with a time constraint in the country of an opponent known as skilled and unethical). For practical purposes (the page length of the questionnaire, for example),

There were two conditions that had no country-effect on the likely use of any of the five behaviors facing an opponent with a reputation as an unethical negotiator, and the possibility of future business relations with an opponent. This suggests that these two conditions affect representatives of the two countries similarly: In the case of the former, the perceived appropriateness and likely use of the behaviors increased, while in the case of the latter condition perceived appropriateness and likely use generally declined (except for feigning friendship). These findings have implications for negotiators generally, and for Brazilian and United States negotiators specifically. Independent of country, situational factors can have a dramatic affect on ones perceptions of appropriate behavior and likely use of competitive or questionable tactics. A reputation as an unethical negotiator was the most powerful moderator of attitudes and intentions in this study. It may be possible to offset these and other adverse situational effects, however, if the other party believes there will be future business relations and by mentioning friends and associates the negotiators have in common (and who, therefore, could learn about questionable or unethical behavior). Furthermore, the results of this study indicate that these situational affects on attitudes and intentions are likely to be most significant for younger negotiators. Perhaps because of the overall impact of these conditions, there were no significant differences due to country on perceived appropriateness and only six specific differences found for likelihood of use. United States respondents felt more comfortable exaggerating an opening demand or offer, especially when the negotiation was very important and the other party had a reputation as a very good negotiator. While both Brazilian and United States respondents would be less likely to use this traditional competitive bargaining tactic when colleagues would learn the details of a negotiation, United States respondents indicated a significantly smaller decline in use. This seems to indicate a difference in behavior under competitive circumstances, a difference that is consistent with the higher masculinity (assertiveness, aggressiveness, competitiveness)

Alternative Negotiating Conditions and the Choice of Negotiation Tactics we chose to limit the survey to these behaviors and conditions. Furthermore, we chose to measure attitudes (appropriateness) and intentions (likely use), not actual behaviors. While there have been a number of studies examining the links between attitudes, intentions, and behaviors, with some general evidence of a link between intentions and behaviors (for a metaanalysis, see Kim and Hunter, 1993) and one study actually linking attitudes and intentions regarding unethical negotiating behavior with actual behavior (Volkema, 2000), additional research involving actual behaviors is needed.

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This research represents an early first step in the study of cross-national ethicality in negotiation, and the factors that can influence perceptions and outcomes. In the coming years, the importance of understanding and managing these negotiations will continue to grow with the globalization of markets. The more we can understand the relationship between various moderating conditions and negotiator attitudes and behaviors in differing cultures and economic conditions, the more effective and efficient cross-national negotiations can become.

Attachment A
Incidents in negotiation questionnaire Listed below you will find a number of negotiating tactics. There are no right answers as to what is the right or wrong thing to do, so please be candid in your answers. You are about to enter into a negotiation. Please think about each tactic, and then rate each one on the following two scales. a. How appropriate is the tactic to use in this situation? 1 not at all appropriate b. 2 3 4 somewhat appropriate 5 6 7 very appropriate

How likely would you be to use the tactic in this negotiation? 1 not at all likely 2 3 4 somewhat likely 5 6 7 very likely

(If you have any need to explain your answer or comment on a tactic, feel free to do so in the margin or at the end of the questionnaire.) You are about to enter into a negotiation. Please rate the following behaviors along the two scales. 1. Make an opening demand that is far greater than what one really hopes to settle for. a. Appropriate (17)? _____ b. Likely (17)? _____

2. Gain information about an opponents negotiating position by cultivating his/her friendship through expensive gifts, entertaining, or personal favors. a. Appropriate (17)? _____ b. Likely (17)? _____

3. Promise that good things will happen to your opponent if he/she gives you what you want, even if you know that you cant (or wont) deliver those good things when the others cooperation is obtained. a. Appropriate (17)? _____ b. Likely (17)? _____

4. Intentionally misrepresent factual information to your opponent in order to support your negotiating argu ments or position. a. Appropriate (17)? _____ b. Likely (17)? _____

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5. Talk directly to the people who your opponent reports to, or is accountable to, and try to encourage them to defect to your side. a. Appropriate (17)? _____ b. Likely (17)? _____

Categories of ethical behavior in negotiation Traditional Competitive Bargaining (Question #1) Information Collection (Question #2) Bluffing (Question #3) Misrepresentation of Information (Question #4) Influencing an Opponents Network (Question #5)

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Roger J. Volkema and Maria Tereza Fleury

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Roger J. Volkema Kogod School of Business, American University, 4400 Massachusetts Ave., NW, Washington, DC 20016, U.S.A. E-mail: volkema@american.edu Maria Tereza Leme Fleury Fundacao Instituto de Administraco, Faculdade de Economia, Administracao e Contabilidade, Universidade de Sao Paulo, Sao Paulo SP 05508-900, Brazil. E-mail: mtfleury@usp.br