In Theory

Relationships in Negotiations
Leonard Greenbaigli

Sovict General Secretary Mikhafl Gorbachev startled l'rcsident Reagan in Septcmbcr 1916 by inviting him to meet lace-to-face In Iceland. ilie reported basis of Gorbachev's appeal was his exasperation with the So1ct and American bureaucracies that had been conducting arms control negotiations. Gorbachev urged that the two heads of state pcrsonally Involve themselves in the process to make some progress toward agreement. Reagan, who Is described by the press as a lwllever In personal diplomaq;' was intrigued, and accepted the opportunity 11e subsequent results of the Iceland summit aside, this dramatic turn of events in the process of negotiation between the superpowers highlights an aspect of negotiations that has yet to be fully explored-the relationship that evolves between negotiators or other key dccislonniakers. This paper obserycs that the theories that guide our thinking about negotiation give too much attention to short-term economic rationallty-ncgotIators striving to maximize the benefit of a transaction-and not enough to what relationships are and how they affect negotIations. One of the reasons relationships have been neglected Is that researchers have deliberately tried to eliminate the effects of relationships. In most laboratory studies of negotiation, the researcher's ideal is to stage a negotiation between strangers, precisely because they begin the negotiation with no pre-existing relationship. Then, the researchers often take steps to prevent relationships bctsveen negotiators from evolving. To accomplish this, they restrict Interaction to basic transaction behaviors-usually bids and counterbids. Researchers with elaborate facilities may go so far as to isolate subjects In remote cubicles, restrict communication to written or transmitted messages, or even eEiniinate the other human subject by means of a preprogrammed response mechanism. 11u result Is ironic: the dynamics of negotiations that Gorbachev identified as crucial if there were to he any hope of real progress In arms control are exactly the dynamics that many researchers have so carefully purged from their laboratory simulations as irrelevant distractions. Experimental social psychologists might protest that I ani not giving them proper credit for the reasons behind their painstaking efforts to expunge relationships from their studies. They would point out that purging relationships from their laboratory simulations is vital If they are to properly determine what other factors are Involved in negotiations. 11elr systematic approach requires them to investigate a limited number of factors at a time, carefully controlling other variables that could affect the results. In this wa these researchers are able
iisor of Management at the Amos itiek School 01 ttusiness AtJmintstra. Leonard Greenhaigh Is tkn at I)artmnt,tli College, lla,u NIl. 03755.

to conclude with coflhIdence that the effects they found arc attril)t,table to the causal variables they in Vestigated, and not to other factors the) did not measun or control. Experimental scial ps'ClR)k)1jy could be forgiven Ibr its oversight if subsequent studies had focused on relati(msllips, hut the field somehow newt got around to studying this important phenomenon In depth.

Cultural Biases Discouraging a Focus OH Relationships

Au ributing researchers' neglect of relationships to their pursuit of rigor doesn't seem to be a frill eXl)lanati(n1 for this Inattention. 'lliis is especially true of researchers In the United States, 1iere a large proportion of the volutlie of thcsc studies originates. It seems likely that SOme of the neglect reflects a cultural bias that undeqilays the Importance of relationships in negotiated transactions.
Perhaps the best evidence of cultural differences in the importance accorded to relationshl1)s can lie fiiund licn we Compare IS, and Japanese corporate contracts. A contract that an American negotiator would be comfortable with would specify precisely what is expected of each party ilic contract Comes illt() existence 00cc an ofler Is accepted, and becomes a set of rules that define the relationship, It Is as if the parties become jointly bonded to thc contract rather thati t each other. Evidence of the primacy of the Contract Is that the Ixirtics are lsa,nd to live up to its exact terms even if one party subsequently encounters un:ttiticipated problems. ilic guiding principle seems to be, "i.ct the Contractor bcwarc," or, If you're not sure the (lea! Is going to be good for })u, don't agree II) It."

Of course, there arc some escape mechanisms. For example, Westinghouse Cotporatloii sold nuclear reactors some years ago along with an agreemctn to supply uranitim fitch at a specified price. Subscqtienthy the price of uranium rose at a rate none of the parties could have anticipated. Westinghouse was able to amend some of the original contract terms with new terms that were cconomi. cally viable. Despite the occasional exception to prevent financial disaster, the basic priticiple is that parties must live up to the terms of an agreement once an offer by one party has been accepted by the other(s). A contract between two Japanese businesses is qualitatively different. It is inexact by Americati standards, to a degree that might make It unenforceable in American courts. in essence, it specifics that the two companies will work together on a particular project. It is understood by both parties that if subsc. (Iulcnt events reveal unanticipated problems for one party or the other, the tcrnis of' the agreement will be renegotiated so that both parties can again benefit from the alliance. Thus, what Japanese negotiators arc really agreeing upon is that there will he a ?ratfonsbiJ, between the companies.

Ncgotlator' Definition of the Relationship

Relationships itcyd to be rtnderstood better by theorists, researchers and practitioners. A stat-fing point in the quest for understanding is to consider ivitat. cx:nil); ft a relationship. Negotiators experience a relationship as sonic sort of lxtndhi'een the parties, a sense of intcrconnectcdness The experience bond is associated with how they define the relationship, what they see to be their specific role in it, and the time horizon they take into account when dealing with each other. ilesc facets (>1 relationships are obviously not independent of each other, but each is worth considering separately because each has implications fir

the adequacy of the existing theories of negotiation. A relationship is subjectively experienced. ilwreforc the nature of tIi relationship depends on each negotiator's somewhat Idiosyncratic view of th bond between the parties. llwee factors affect this view: how negotiators visual ize their interdependence, the tpc ofconimftment the negotiator has made it the other part); and the degree of indebtedness he or she feels. i4sualizlng Inteiilependence. Interdependence is an abstract concept. Ncgo tIators think about interdependence by visualizing something less abstract. Tb tangible imagery they use is known as a guiding metaphor (Greenhalgh, 1987 The choice of metaphor cati make a big diflrence in a negotiator's delinitiot ol the relationship because different metaphors have different Iniphicatioti for the negotiator's sense of duty concern for the other party's interest' obligations, and expectations. Suppose the negotiator thinks about the Interaction with the other party as. chess game. ibis metaphor implies that the objective Is to outwit the opponcti by deceiving, trapping, and then overwhelming him or her. In this scenario, thit other party is viewed as a ruthless competitor who is constantly plotting ways t undermine, dominate, and if possible, eliminate the negotiator. Mall)' scholar have noted, usually uncritically that this metaphor dominates thinking abort international relations. A common alternative metaphor Is to view the negotiation as a debate ii which the person making the best argument wins. The implications of thi imagery arc that the negotiator's objective Is to make the best case for his or bet interests, try to refute rather than accommodate the other party's case, then let an external judge decide who won. People using this metaphor are likely to sec litigation as an obvious mechanism for (healing with disputes. A third metaphor many negotiators use is to visualize the parties as if thrs were a family unit In shiichi they both make contributIons for the good of the unit. help to solve the problems facing It, and value their nwmbersliip in the unit for its own sake, not just from the tangible benefits that can he gained from interacting with the other party It should be obvious that the negotiator's hoice of guiding metaphors is crucial. Because it affects how the)' define the relationship, the chosen metaphor determines ho'rv negotiators behave toward the other party and what hehaior is elicited in response. th,,zniilnwnts. The relationship as defined by negotiators is not only shaped by guiding metaphors, but is also the result of commitments to the other part). Negotiators can he more or less committed to the relationship. Furthermore, the scope of the commitment may range from specific actions to general cnd-statcs and commitments may he Itidependent of interests. Some examples will ill 'isirate the (liverse forms commitments cati take. Whether there is more or hess commitnient to a relationship can often lx seen in the way couples negotiate when the)' experience marital strains. lii sucl cases, the degree of commitment to the relationship is usually reflected In th sacrifices each party will make to save the marriage. When companies becom couples" of sorts-by means of mergers and acquisitions-each party can likewise he more or less committed to the relationship. A how-cominitinctit intereorporate relationship I11I) be evident after a hostile takeover, when the

acquiring company strips the acquired company of Its cash, fires people and makes other short-term cuts in expenses to give the acquired company favorblc Iluanclal ratios, then resells it. ('lids scenario, I realize, sot,nds more like corporate rape than corpor.tte marriage, but it does illustrate a low-commitment relationship.) In contrast, the acquisition may he a friendly one that acconiplishcs VCEti(Ih intcgrati(nl br both companies and thereby meets complementary needs. liotli parties in this case are likely to be tTh)te highlycommitted to the relationship. In addition to the variability one would expect In the intensity of the c'flnmttment, there Is considerable variability in its scope. A limited-scope c nitinitmeut would be to a specific action. ilic negotiator l)romises to do something-say, to sell spare parts at cost-and becomes committed to (10 it even if the agre(-ment is not legally enforceable and is contrary to the negotiators interests. lids t}l)e of commitment is narrowest in scope when the negotiator does no less and no more, than the specific action promised. Broader In SC0C would be a commitment to achieve a certain end-state; for example, to provide an It & I) group with the resources necessary to develop a new technology Such a commitment wuuld he broad in scope because the nature and amount of rcsoin'cs ncedcd by the R & I) group are unlikely to be known in advance. Since the notion of commitment to a relationship is so important in understanrlttig tl,c broad range of negotiated solutions to disputes, It is amazing that :ilinost nothing has been written about this topic. Commitment provides a prrsj)cctive that is quite dillercnt from the way most economists, social psychologists, and legal researchers focus on negotiations, First, a lack ofconimitrncnt can make administerIng a labor contract or verifying a nuclear disarmament treaty a nightmare; and even whcn enforcement is feasible, practitioners strongly prefer high-intcnslt; high-scope commitment, Second, commitment explains economically irrational behavh ,r whccby people often make and honor agreements even when doing so has negative utility. 11111(1, the potio0 of commitment to a relationship limits the usefulness of il" "best ahlrrnative to a negotiated agreement" (BATNA) concept. Inherent in the BALNA idea is the assumption that negotiators will walk away from an agreement if there is a higher-utIlity alternative outside the relationship. This concept, in my opinion, assumes that either the parties' conimitnient to the relationship is zero, or that the parties factor In the cost of sacrificing the relat ionsliip when assessing the utility of ofl'ers. Both assumptions seem unrealistic when applied to day-to-day negotiations in the real world. Imagine, for instance, a dispute between a svoman and her husband. He wants her companionshIp in social and leisure events, but she is too busy with her medical practice. 'lie BATNA concept assumes the husband will seriously (-onsi(kr meeting his social needs outside the marriage when evaluating hcr counterotFers Examples involving others with whom one frequently negotiates show' similar shortcomings of the IIIVFNA concept-for example, negotiations with one's boss, children, key customers, social organizations, and any other entity to which one has a strong, ongoing relationship. Indebtedness. Negotiators' feelings of indebtedness toward the other party have an efFect beyond the way the relationship is visualized and the negotiator's commitment to It. Psychologists and sociologists who have evolved the Exchange illeorypoirn

of view have noted that In ongoing relationships, as contrasted with briefenco ters, there is a sense of cumulative, mutual indebtedness that bonds the part togetliet One person may express this by saying of his negotiating partner, has done so much for me over the years." The social bonding that results fo such a complex, mutually-beneficial exchange relationship can result in a "i' feeling that deemphasizes self-Interest and zero-suni thinking, and is the Cause eoncessionary behavior that might be considered economically irrational. 11e history of exchange between the parties may of cotirse, have negati rather than liositise cotisecttences for the l)arties' dehinition of the relationsh Conflict escalation occurs when one party perceives an inibalatiec in hostile at lids principle is internalized at an early age. Ekr instance, the child engaged ii playground fight might say, "You kicked me and pulled my hair; all I did was hi you." Both children know the conflict is unstable in the two-for-one sccnan The one child feels the need to slap the other, and the other child may so acquiesce to It in order to restore the balance of exchange. The equal harm principle is preserved in the thinking of adults, sod i that 1! history of negative exchange may also be a crucial factor in shaping tin negotiators conceive of the relationship. In extreme cases of long-term mutti hostility, the relationship may he poisoned to the point of precluding the rcsol tion of specific disputes through negotiation. As examples, the conflicts Northern Ireland and the Middle East maybe unresolvable through ncgotiatk. as a result of their long histories of negative exchange. lids enmity happens I social units smaller than cultures. Representatives of rival corporations, or union and management within a corporation, can experience similar levels o bitterness and hostility. Families can get into feuds with other families. Atio individuals can become sworn enemies for life. Irrespective of the size of the party involved, the result is apparent economic Irrationality, in that the parties engage in self defeating behavior in order to deny benefits to the other party Whether positIve or negative, the history of exchange-along with anticipated future exchange-needs to be taken into account in a comprehensive theory of negotiation. The theory should recognize that the objective value or harm of a negotiator's actions Is less important than how these actions are subjectively e.tpeiienced by the other party In the case of positive exchange, the raw utility of benefits received would be modified by the receiving parts attributions of why the benefits were given; For example, lithe giver Is perceived to have had no choice, such as when a pay raise is given to a subordinate because Congress increased the minimum wage, then the receiver of the benefit may feel no obligation to reciprocate the benefit. Similarly, a favor that represents a big sacrifice for one person incurs a greater obligation than does the same favor from someone who could supply it with little sacrifice. In the case of negative exchange, harm Inflicted acei(Iently may not arouse the need for retribution. Likewise, the pain one person experiences from a harmful act is likely to be perceived as more severe than the pain that person imagines is experienced by an equivalent but qualitatively different harmful act inflicted on another person. For example, in the playground exaniple cited earlier, the child who was bitten may consider hits ordeal as equivalent to the kick andthe hair-pulling given In return, whereas the biter considers her act to have

inflicted the same pain as the hair-pulling and therefore still owes retribution for the kick. These complicating factors are a nuisance from the standpoint of building simple theories. However, they are vital in understanding negotiators' percep10)115 of the balance ofexchangc and therefore in understanding how the sense of obligation affects the definition of the relationship.

Negotiators' Experienced Roles

'Flic preceding section explored various facets of how negotiators define the terms of their relationship with the other party This section explores how they (leuine their owiyFoles in the Interaction. Negotiators primarily take on one of tlIr('v possible roles: a principal negotiating for his or her own interests; t reprcsentathv of sonic constituency who is negotiating for the constituency's interests; or some other social role not immediately relevant to the ccononiic consequences of the transaction-sucl) as a friend, watchdog, devil's advocate, authority figure, reference group member, expert, or the like. Role posture can have a strong effect on the experienced relationship. The vast majority of research on negotIations involves Interactions between principals. When one or 1)0th negotiators are acting as representatives of sonic constituency whose interests are at stake, the dynamics ol the transaction-and the relationship-become more complex. Scholars, most notably Richard \Valtun and Robert McKersie (1965), have described the complexities involved in negotiating as a representative. However, comp;u-atively little empirical research has been done to explore systematically the dynamics of transactions between and among represcntativcs-an(I even less on the dynamics of relationships between and among rcpreseptatives, Negotiators acting in the role of the representative are likely to experience less ego involvement than they would if they were acting as principals. As a result, one would expect negotiations among representatives to proceed toward ceotlomically rational solutions with less risk of being sidetracked by fiice-savlng pn.blems, taking affront at extreme bids, or other hazards of high ego involvement. However, the role of representative also affords the negotiator the option of complicating the interaction by tactics based on the constituency's (alleged or real) ultimate decision-making role. llicse tactics are described in the popular press and range from polite Intransigence ("I'd like to, but they will never agree to it") to sophisticated halt-and-switch techniques ("Due to new developments at headquarters, they can no longer deliver the precise package we agreed to yesterday; however, I've convinced them to put together a package l)r OU that's -ven better for )JL?t needs"). Principals are likely to have more qualms and less credibility In usIng such tactics, which, it should be noted, may produce shortterm rconomic benefits but do so at the expense of the relationship. Roles other than principal or representative can produce different dynamics in the transaction, and may shape the relationship. Suppose Joe is negoriatitig with Sue, a long-time friend, over the price of some antique furniture she wants to buy Joe can either deal with Sue in her role as friend or essentially treat their friendship as irrelevant in the transaction and negotiate "at at-ms length." In the at-ins-length case, he would be dealing with her in her role as principal, and the outcome of their negotiation would presumably be determined largely by Its economic rationality Alternatively, Joe can deal with Sue primarily in her role as

friend, in which case the outcome would be influenced by their hIstory 0% exchange, commitment to the relationship, and other factors less relevant to economic rationality than to the relationship itself, Other roles change the experienced relationship in different ways. In a watchdog role, the negotiator seeks to control outcomes in a way that is consistent with whatever values are intended to he preserved by assuming this role-such as conserving environmental quality, avoiding racist or sexist discrimination, or maintaining the status quo. in direct contrast is someone who is pla)lng the devil's advocate role (no? just claiming to be pla)ing the role in order to avoid being held responsible fo views the other party finds offensive). Devil's advocates take positions that an contrary to their Interests or beliefs in order to test an apparently wise course u action against alternatives, just to be sure of the wisdom. 'l'he important point it both thes' cases is that neither the watchdogs nor the devil's advocates act it accordance with their roles as principals. Some other social roles are assumed because of the power they bestow ot the negotiator who assumes them. Negotiators can be more or less subtle ii signalling tile power roles they are assuming. Considcr the following examples roles taken for their po'vcr advantages: "As the person who pays the bills aroum here .,"; 'We ought to set a good example for younger managers ..... ; "Spcakin from the perspective of someone who Is going to vote on your tenure case ii three years.. Assumed role is important In negotiations because it shapes how negotia tots experience the relationship. The farther the experienced role gets from th principal role, the more that nodels of bargaining based on the economk rationality of the transaction have to be modillcd to maintain their explanatori power.

A Negotiator's 'lime Horizon

ilie third mor factor that influences relationships is the time hori7.on that i salient to the negotiator. A transaction can be viewed by the negotiator as a singk episode or as just one event in a long-term series of interactions.Thcse alterna live viewpoints make a big difference in how the negotiation unfolds and in tix type of model needed to understand the negotiation. An episodic iew occurs when negotiators trcat the Immediate transactiol as a one-time deal (irrespect is-c of whether they in bet will go on inft-racl ing will the oilier party). ho mi this p('Ispecl he, the 'ust antI lulutt ii the tulat ito nitip ii i not considered. Negotiators whose definition of the sittiation Is strongly shapet by sports metaphors tend to see transactions as "gan1cs' in which anything th:t happened in previous "games" Is irrelevant. Thus, an episodic view precludes negotiator from feeling Indebted to the other party, and even close friends m: tind the rich and complex history of exchange disregarded. flccausc the future also irrelevant (next time, it's a "new game") in the context olan episodic vie' negotiators choose tactics without fear of repercussions, and negotiations ni; degenerate into competitive decisionmaking aimed at maximizing scIf-interc or worse, beating the opponent even if this does not maximize self-interest. 'The perspective is quite different when negotiators keel) the long-ten relationship in focus. In addition to taking into consideration the history exchange and showing restraint in their choice of tactics, negotiators with thi

view experience less urgency to maximize their gain in the current transaction. 'I1eir generosity in this dispute will obligate the other party to reciprocate in the next dispute, therefore their concessions are viewed as investments rather than tiiuecovenihte ksses.

REFERENCES Greenhaigh, 1. (1987). 'n)e case against winning in ncgaliathns." NtotiahinlJoUP1Ud3: 167- 173. New 'tt,rk: Wton, R. and McKersk, B. (1965). A be/xu*ru( theory ( kthvr ?wgo:kllKrnsfl sk-(;rw-IliiI.

Trust in Relationships
'Ilie preceding discussion explored various dimensions of relationships. All of these are important because they Influence a negotiator's summary assessment of the relationship. This assessment is made not only in terms of the benefit (or "utility") to be derived from the relationship, hut also in terms of hurt. The bargaining theory available to us does not do justice to the importance of trust. In the mjority of studies, the trust variable is accommodated, if at all, simply as a predictive factor used to discount the expected value of various outcomes obtainable from the other party Thus, the theory might hold that a negot latt,r would be indifferent between a low-expectation, high.iiltie outcome and a high-expectation, low-value outcome. Indeed, laboratory simulations can he staged In such a tightly constrained manner that negotiators will make choices that support such theories, l)tIt these studies do not seem to go fir in enriching our understanding of trust and its role in negotiations. In real-world negotiations, trust is a much richer concept. In practical terms, trust in%)lves the extent to which a negotiator honors commitments, nornis, and principles of fairness. 'frost applies bilaterally (or multilaterally in the case of multiparty negotiations): there is the extent to which a negotiator is willing to live up to the trust placed in him or her, and the negotiator's trust in the otlwr party. ihist embodies a negotiator's summary judgments about the nature and strength of the relationship. It Is affected by-and in turn, affects-all of the facets of relationships discussed above. Ihist is what Gorbachev and Reagan needed to establish in the Iceland meeting. Without it, verification becomes of paramount concern in the arms control agreement they both sought, and both sides need to impose surveillance requirements the other cannot tolerate. Thist is also precisely what makes a Japanese contract viable. A negotiator's trust In the other party arises from his or her assessment of how the other party conceives of the relatiuship in terms of commitment, expcrienc(d role, indebtedness, and perceived Interdependence. Negotiators are therefore vigilant in seeking clues to the other party's trustworthiness during interactions. In fact, a large part of "getting to know" or "developing rapport with" the other part)' involves developing trust and learning the limits of the ctlicr party's trustworthiness. 'frost is a vitally important factor in real-world negotiations. And, as with commitment, negotiation theory and research literature pays little attention to this crucial factor. Until we develop more comprehensive theories, we must remain keenly aware of the limitations of thinking about negotiations in terms of the economics of the imme(liate transaction, rather than in terms of how that transaction fits into the broader relationship between the parties.