Steel Products

Ethics and Your Business: Negotiation’s Golden Rule

Written by Tim Triplett

Negotiations in the steel business can often become contentious as both parties seek to win the best price and terms. Some experts say ethical negotiating is not only the right thing to do, it’s also more likely to achieve the desired outcome.

As academics Reitz, Wall & Love wrote, unethical bargaining can reap one-time benefits, but in the long run can damage relationships, sully reputations and close the door on future transactions.

Lies, deception, manipulation of information and puffery are common, but questionable, tactics in many negotiations.

To lie, to make a statement that is untrue about some material aspect of the transaction, is clearly unethical. But what about deception, an act or statement intended to mislead the other party about the negotiator’s intent? Or nondisclosure of important information that could benefit your opponent? Or exploiting information provided by your opponent by using it against them or sharing it with others?

While not outright lying, being deceptive and exploitative shows a lack of good faith and is likely to backfire on you, especially if you hope to do business with the other party in the future. Even puffery— exaggerating the value of some factor so that conceding it later yields a disproportionate return—is considered a questionable tactic by many ethicists.

Experienced negotiators may be thinking, so what’s left? Ethics experts say neither party to a negotiation is required to disclose personal information that could harm their case. For example, they do not have to disclose how much they are willing to pay, though they should not lie about it. They do not have to disclose the true value of a product to a buyer who is ignorant or misinformed. Let the buyer beware. And it is not wrong to maximize your payoff at your counterpart’s expense, as long as it is achieved in an ethical manner.

As the Golden Rule of negotiation goes, negotiators should pursue their own interests only as far as they would want opponents to pursue theirs.

Editor’s note: Have you ever faced an ethical dilemma in your business? How did you handle it, and what was the outcome? Share your experience with SMU’s readers by emailing We promise to keep your identity confidential.

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