Consider a business dispute based on real events that could happen to any one of us.
Characters
Evelyn: sister
Fred: brother-in-law
You are the founder of a small, privately owned research and development company in Silicon Valley. You recently learned that your joint venture partner, the giant Bikuta Corporation of Japan, has secretly developed a competing product which it is now selling under its own name in the Chinese market. This “new” product is essentially a knockoff of the design you licensed to Bikuta (along with essential know-how) two years ago. There is no doubt in your mind that Bikuta has violated your contract, which provides that Bikuta will manufacture and distribute only your product “worldwide” for five years—and pay you a license fee of 15 percent of sales.
When you confront Bikuta's president, he is unremorseful. He says your original design does not “fit” the Chinese market and that Bikuta owes you nothing for Chinese sales. He also wants to renegotiate your 15 percent royalty rate, which he suddenly claims is too high.
You feel stunned and betrayed. Bikuta thinks nothing of stealing your know-how, ignoring its contractual obligations, and trying to bully you into accepting less than you are due. You are also angry with yourself for being so trusting.
Any businessperson can identify with this case. The gut says “Do battle!” and “It would be unworthy to negotiate.” But what's the wise thing to do— financially, morally, rationally? In the face of a bully, do you fight or negotiate? The tension between conflicting moral and pragmatic demands is central to this dilemma. By the time you finish reading it, I hope my framework will give you a new and useful way to think not only about Bikuta, but about all those situations in which you will have to decide whether to bargain with the Devil.
Avoiding Common Traps
Here we want to say why intuitive judgments are not always wise. Fred's perspective reflects a number of traps, or cognitive distortions, that commonly lead us to refuse to negotiate when we probably should. These “negative” traps are in the left-hand column below, and they are by far the more common response when we are in conflict with an enemy. But a second set of traps, listed in the right-hand column, can have the opposite effect, causing us to negotiate when maybe we shouldn't.
Evelyn's perspective reflects some of these “positive” traps.
| # | Negative Traps Promoting Refusal | Positive Traps Promoting Negotiation |
| a | Tribalism | Universalism |
| b | Demonization | Contextual rationalization and forgiveness |
| c | Dehumanization | Rehabilitation and redemption |
| d | Moralism/Self-righteousness | Shared fault and responsibility |
| e | Zero-sum fallacy | Win-win |
| f | Fight/Flight | Appeasement |
| g | Call to battle | Call for peace/Pacifism |
a)
Tribalism involves an appeal to a group identity, where you see your own side—the in-group—as familiar and reliable, while the other side is an out-group that should be distrusted and disfavored. The group identity rests on shared characteristics such as family or kinship structures, language, religion, race, ethnicity, or a common history. In our example, Fred perceives Bikuta as a member of a foreign tribe— the Japanese—who are different, don't think the way “we” Americans do, and who are not to be trusted. At the opposite extreme is the trap of universalism. This presumes that people are all essentially the same and underestimates the importance of differences created by culture, history, and group identity. In Evelyn's words, “People are people.
Any businessman wants to make money for his company.”
b) Demonization is the tendency to view the other side as “evil”: not just guilty of bad acts, but fundamentally bad to the core. Fred sees Bikuta's actions—secretly opening a factory in China, manufacturing a competing stent, and asking for a reduction in the license fee—as revealing his underlying character. Evelyn's perspective reflects the opposite extreme: contextual rationalization. She suggests that Bikuta's behavior is best understood as the product of external pressures and thus can be easily forgiven.
c) Dehumanization involves seeing the enemy as being outside the moral order, less than human. Said to be a central process in prejudice, racism, and discrimination, this trap justifies treating the “other” as an “object.” Fred's characterizations of the Japanese lean in this direction. More extreme examples can easily be found. In 2008, Imam Yousif al-Zahar of Hamas characterized Jews as “the brothers of apes and pigs” before calling them a people “who cannot be trusted” and “have been traitors to all agreements.” The opposite trap might involve a belief that all people are capable of change and deserve an opportunity for rehabilitation and redemption. In Evelyn's words,
“Give Mr. Bikuta a chance to do the right thing.”
d) Moralism and self-righteousness create a tendency to see the other side as entirely at fault while you are innocent and worthy. Fred feels Bikuta is completely to blame, has purposely and flagrantly violated the joint venture agreement, and deserves moral condemnation. The opposite trap is the tendency to assume that in every conflict there is fault on all sides and that the burden of responsibility should be shared. Evelyn suggests that while Bikuta may be at fault, you are partially responsible as well for not being more attentive to Bikuta's desire to enter the Chinese market.
e) The zero-sum trap involves seeing the world in terms of a competition: what one side wins, the other side must lose. Conflict is seen as purely distributive: anything that benefits your enemy is necessarily bad for you. Reducing the license fee, according to Fred, can only help Bikuta and hurt you. One sees this trap everywhere. In divorce disputes, for example, spouses often argue over the allocation of money, or timespent with the children, as if more for one spouse can't possibly be good for the other. The opposite trap is the naïve assumption that win- win is always possible, that the pie can always be expanded so that both sides are better off. Evelyn suggests that if joint venture sales will be expanded by reason of lower license fees, both you and Bikuta could be better off economically. She may (or may not) be right.
f) The fight/flight trap involves seemingly opposite behaviors, but both are automatic reactions and relate to “hot cognition.” In the face of intense conflict, you may:
(1) unthinkingly charge into battle or,
(2) at the other extreme, flee, conceding what is important to you in the hope of avoiding a fight. Fred obviously wants to fight. Evelyn wants neither to fight nor to flee, but she is perhaps inclined toward appeasement. Better to negotiate with Bikuta and make concessions, she argues, than fight a possibly losing legal battle.
g) The final trap, the call to battle, involves a political figure, business executive, or family member mobilizing his or her “troops” for a fight in a righteous mission against evil. This call uses the language of war and will often rhetorically draw upon demonization, tribalism, dehumanization, and moralism. While the leader inevitably claims his motivation is only to do what is best for the group as a whole, the call to battle often serves the leader's own political interests as well. Far less common is the opposite extreme, a call for peace, based on the premise that almost any conflict can be avoided or ended through sensible peace-seeking initia-tives. The call for peace may invoke notions of universalism, forgiveness, redemption, and shared responsibility.
Tags: Negotiation,Book Summary,
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