Relationships, Trust and Reputation in Negotiations: slides to accompany lecture.

1. 10-1 Relationships, Trust and Reputation in Negotiation

2. Four Key Dimensions of Relationships

3. 10-3 Key Elements in Managing Negotiations within Relationships Reputation Trust

4. 10-4 Key Elements in Managing Negotiations within Relationships Reputation Perceptual and highly subjective in nature An individual can have a number of different, even conflicting, reputations Influenced by an individual’s personal characteristics and accomplishments. Develops over time; once developed, is hard to change. Negative reputations are difficult to “repair”

5. 10-5 Key Elements in Managing Negotiations within Relationships Trust “An individual’s belief in and willingness to act on the words, actions and decisions of another” Three things that contribute to trust Individual’s chronic disposition toward trust Situation factors History of the relationship between the parties

6. Key Elements in Managing Negotiations within Relationships Two different types of trust: Rules (Calculus-based trust) Individual will do what they say because they are rewarded for keeping their word or they fear the consequences of not doing what they say Relationship (Identification-based trust) Identification with the other’s desires and intentions. The parties effectively understand and appreciate each other’s wants; mutual understanding is developed to the point that each can effectively act for the other.

7. 10-7 Key Elements in Managing Negotiations within Relationships Trust (cont.) Trust is different from distrust Trust is considered to be confident positive expectations of another’s conduct Distrust is defined as confident negative expectations of another’s conduct – i.e., we can confidently predict that some other people will act to take advantage of us Trust and distrust can co-exist in a relationship

8. Building a Win Win Relationship Transform personal conflict into task conflict ( Interests vs. positions) Agree on a common goal or shared vision Find a shared problem or shared enemy Focus on the future

9. How to Build Trust Similarity-attraction effect (same boat) Mere exposure (affinity) Physical presence Reciprocity Schmoozing Flattery Self-disclosure

10. How to Avoid Mistrust Breaches or defections Miscommunication Poor pie expansion Threats Focusing on the “bad apple” False representations

11. How to Fix a Breach of Trust Arrange a personal meeting Put the focus on the relationship Apologize Let them vent Do not get defensive Ask for clarifying information Test your understanding Formulate a plan Think about ways to prevent a future problem Do relationship check-up at a scheduled date

12. 10-12 Actions To Manage Different Forms of Trust in Negotiations How to increase calculus-based trust Create and meet the other party's expectations Stress the benefits of creating mutual trust Establish credibility; make sure statements are honest and accurate Keep promises; follow through on commitments Develop a good reputation How to increase identification-based trust Develop similar interests Develop similar goals and objectives Act and respond like the other Stand for the same principles, values and ideals ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved McGraw-Hill/Irwin

13. Actions To Manage Different Forms of Trust in Negotiations How to manage calculus-based distrust Monitor the other party’s actions Prepare formal agreements Build in plans for “inspecting” and verifying commitments Be vigilant of the other’s actions; monitor personal boundaries How to manage identification-based distrust Expect disagreements Assume that the other party will exploit or take advantage of you; monitor your boundaries regularly Verify information, commitments and promises of the other party Minimize interdependence and self-disclosure “The best offense is a good defense”

14. Recent Research on Trust and Negotiation Good news about trust and negotiation behavior: Many people approach a new relationship with an unknown other party with remarkably high levels of trust Trust tends to cue cooperative behavior Individual motives also shape trust and expectations of the other’s behavior Greater expectations of trust between negotiators leads to greater information sharing Greater information sharing enhances effectiveness in achieving a good negotiation outcome

15. Recent Research on Trust and Negotiation Did you know: Trust increases the likelihood that negotiation will proceed on a favorable course over the life of a negotiation Face-to-face negotiation encourages greater trust development than negotiation online Negotiators who are representing other’s interests, rather than their own interests, tend to behave in a less trusting way

16. 10-16 Key Elements in Managing Negotiations within Relationships Justice Can take several forms: Distributive justice The distribution of outcomes Procedural justice The process of determining outcomes Interactional justice How parties treat each other in one-to-one relationships Systemic justice How organizations appear to treat groups of individuals ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved McGraw-Hill/Irwin

17. Repairing a Relationship 10-17 Diagnostic steps in beginning to work on improving a relationship: What might be causing any present misunderstanding, and what can I do to understand it better? What might be causing a lack of trust, and what can I do to begin to repair trust that might have been broken?

18. 10-18 Repairing a Relationship Diagnostic steps (cont.): What might be causing one or both of us to feel coerced, and what can I do to put the focus on persuasion rather than coercion? What might be causing one or both of us to feel disrespected, and what can I do to demonstrate acceptance and respect?

19. 10-19 Repairing a Relationship Diagnostic steps (cont.): What might be causing one or both of us to get upset, and what can I do to balance emotion and reason? ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved McGraw-Hill/Irwin