A632.4.4.RB - Deception in Negotiations
During the course of negotiations, people often misrepresent
information to gain at least a temporary advantage. For example, a seller may
fabricate existence of another interested buyer or a buyer may misrepresent the
price and availability of an item from a different vendor. Reflect on
deceptions in negotiations and describe four ways to reduce your vulnerability
to deception during negotiations. Relate an example of a recent negotiation in
which you were misled and one in which you may have overstated a claim. In the
case of the overstatement, how far would you have gone, or did you actually go,
to leverage your position?
I am terrible at negotiations. I don’t like it when people misrepresent
themselves or their products so I’m continuously skeptical when people start
trying to sell me on something or negotiate for something. I also know that we
hate in others the things we hate in ourselves so I have to honestly reflect on
if I do this too. When I was in retail, my job was all about selling. I used to
work for Dillard’s in the children’s shoes department. I was maybe 19 at the
time and I knew that in order to sell those expensive Stride Rite shoes to new
parents I had to be savvy. No one was going to buy $30 shoes for their infant
from some wide-eyed teenager! (Or so I thought.) This was back in 1993 – before
Google – and I thought the best way to influence the parents was to learn how
the human foot develops. This way I could scientifically explain why a shoe was
better or worse for a baby’s little foot. I would negotiate the purchase with
my facts and data – not shiny shoes or sparkly laces. I learned a lot about
feet in general and my sales were pretty good. The plan had worked. In sales,
the technique is to always show your “Cadillac” merchandise first. You always start
out with the top of the line in the hopes that the customer will just agree
with everything you say and buy the $1000 TV instead of the equally performing
$400 TV.
Hoch talks about the ways to protect ourselves against
deception by first preparing your questions, evaluating motivations, increasing
the costs of deception, considering the setting, and avoiding overconfidence.
Starting with being prepared – isn’t that a cardinal rule of the Boy Scouts or
something? Always be prepared? Coming to the negotiation table prepared is
something I never do. I always just wing it. My sister was always complaining
about how much overtime she had to work. She was exhausted and over-worked with
no monetary rewards. She actually figured out how to split her work statement
into two separate positions, one being a lead position, the other more clerical.
She took it to her bosses, negotiated for the lead and the lead pay and
actually got it. I would have given it to her too. She had basically done all
the heavy lifting and got them the reasoning and backing to hire a second
person. She took the initiative to change what was wrong and basically got
herself promoted to a position she custom made for herself. I’m still
astonished at the moxie this took. I also have a friend who when she was
leaving a marketing firm negotiated her own exit strategy – they wanted her to
sign a non-compete clause that would have rendered her non-hirable for any
position above an assistant. She had studied law in college as a minor and got
them to agree to her terms. She is now the VP of a big marketing firm in
Seattle. (We both started out as florists in Tacoma – look at us now! Ha!) These
women were prepared when they sat at the negotiation table. I’m usually just
glad they don’t fire me. What is that all about?
Second is to evaluate motivations – what is motivating each
person in the negotiation? When I was selling shoes, my motivation to learn
more about how feet grew was money. I earned a base pay but after so many
sales, I earned a commission. The more shoes I sold, the more money I had. I
was making $7 an hour so I tried to sell A LOT of shoes. When my husband and I
go to buy a vehicle, I know that his motivation is to pay as little as possible
for the vehicle, the sales person’s motivation is the opposite. My husband
loves a good negotiation - he also always comes prepared. Understanding the
motivation of the negotiating parties is important so that you know what you
want the outcome to be. Is someone going to lose money or reputation if they
lose the negotiation? Those things can be heavy motivations to go all in on a
negotiation. It makes a person get desperate and desperate people will say
anything to not lose.
Third is to increase the cost of deception. Back to the
sales example, if a car salesman sells me a car that he promises is perfect and
runs well but when I get up to go to work the next day it doesn’t start and the
exhaust falls off in the driveway, he has committed fraud. There is a law that
says he can’t do that. He will lose the sale and his reputation by selling me a
lemon. The law was there to increase the cost of deception. When we negotiate
terms, we have to have boundaries and things like the lemon law or even the
non-compete clauses help to bring the negotiating parties on somewhat level
ground.
The fourth is consider the setting for the negotiation. Are
you at a disadvantage because the negotiation is taking place via
teleconference and it is going to be at 2am your time – a time when you are
normally asleep? Are you going to be at your best? What media is being used?
Email? Telephone? Most diagnostic cues for detecting deception are non-verbal,
and different media…will influence whether or not negotiators will use
deception. (Hoch, et al., 2001) When I am working with my suppliers, it is
always either over the phone or via email or text. I have never met any of them
in person before. We have to trust each other equally. I have to trust them
when they say an outside processor is down and that’s why the parts will be
late. I also have to trust them when they say they’ve shipped something. They
have to trust me that when I say I need something I actually need it and am not
just trying to cover my rear. They have to trust that they will be working
overtime in their factories because I honestly need a second issue part and not
because I was too lazy to order it on time.
And the last thing – avoiding overconfidence. This comes
back to the sales tactics; if something seems too good to be true – it usually
is. Those guys on late night home shopping networks are so excited and
confident about their {insert product/service here} stuff that they will make
it seem unbeatable at any price. Besides, that’s what Amazon and Amazon reviews
are for. When I’m in a meeting and someone comes in who is over confident and
even cocky about what they are presenting, I’m always skeptical. If their
process is 100% fail proof then why are they having to work so hard to get it
approved? What is the catch? Why are we being directed to look at the big green
floating head and not the man behind the curtain? Recently, I volunteered to drive my co-worker to the team’s
volunteer day at a food pantry. As we were leaving the parking lot, she asked
if I needed direction to the highway. I assured her that, “Oh I know the way to
I-26 from here, don’t you worry.” Well, I didn’t know that we needed to head
southbound on I-26 and not northbound. She will not let me forget that – it was
hilarious actually – in my overconfidence I neglected to find out which
direction we needed to go!
After honestly reflecting on this reflection blog, I can see
that all of this makes me a terrible negotiator. When going to talk to my boss
about our raises, I usually just take what they give me. I don’t look at
industry standards or bring my documented successes to the discussion – I’m
just glad to be getting a raise. When I go to buy a vehicle on my own, I will
take whatever price they offer first and just be happy that I’ll have a
reliable vehicle. (Which is why buying vehicles is now my husband’s job.) I
think the problem is that I don’t believe in myself enough to overstate things
when I’m in a negotiation situation – at least when it comes to my work or my
raises. I don’t barter or haggle. I’m not confident enough at all to do those
things. I wish I was! If anything, I understate things in order to avoid having
to disappoint people. I try not to miss represent myself or my abilities.
I try to stay realistic. I try my hardest to just do my best every day. I wish
I was a better negotiator but not a shady one. The only thing I’m selling is my
abilities these days – I can’t overstate that because I’m the one who has to
walk the talk!
References:
Hoch, S. J., Kunreuther, H., Gunther, R. E., & Wharton
School. (2001). Wharton on making decisions. New York: Wiley.
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