Trust Critical to Optimal NegotiationsNew research claims that negotiators who are less trusting often engage in counterproductive behaviors that lead to poor outcomes.

While the research centered on how people from different cultures negotiate in different ways, it also can be applied to what is happening in Washington, D.C., these days with the lack of trust between the two political parties resulting in a legislative logjam.

“At the end of the day, this isn’t so much about culture as it is about the central issue of trust — how negotiators from any society should develop more of a trust-based approach that helps produce understanding, insight, and joint gains for the parties on both sides of the table,” said Brian Gunia, Ph.D., who is an assistant professor at the Johns Hopkins Carey Business School.

“Whether it involves executives in India discussing business deals or members of the United States Congress addressing the budget deficit, the goal of negotiating should be beneficial outcomes and strong relationships. Negotiators will only achieve that when they trust one another and thus exchange enough information to achieve beneficial results all around.”

For the paper, recently published in the Journal of Applied Psychology, Gunia and his co-authors conducted three studies with MBA students and business managers in the U.S. and India. The MBA students were asked a series of questions about how they would define trust and how willing they would be to extend trust during a negotiation. The business managers held simulated negotiations over the sale of rerun rights for a cartoon TV series.

The U.S. and India offer an instructive contrast between bargaining styles and how trust governs negotiations, according to the researchers. Gunia and his colleagues note that the United States and many other Western nations can be described as “loose” cultures, while India and other Eastern countries are referred to as “tight” cultures.

In the “loose” cultures of the West, negotiators generally assume their counterparts are trustworthy until they prove otherwise. This assumption leads them to share information in a way that produces mutual insight and, ultimately, mutual benefits.

In the “tight” cultures of the East, negotiators generally assume their counterparts are untrustworthy until they show otherwise, as trust there is typically vested in rules rather than individuals. This leads them to spend more time exchanging and substantiating offers than in understanding the needs of their counterparts, a strategy that can diminish potential gains, according to the researchers.

The results of the three studies confirmed these descriptions and how they applied to the American and Indian participants, researchers said.

American negotiators said they would trust (and did trust) more than Indian negotiators, achieving better outcomes as a result. Americans saw trust as a natural element of the bargaining process, while Indian negotiators registered doubt about their counterparts’ intentions.

“It seems likely that these beliefs and values are functional within each culture and resistant to change,” the authors noted in the paper.

“Nevertheless, our results highlight the importance, for Indian and American managers and their counterparts, of understanding negotiators’ cultural orientation toward trust. The practical question that arises is how negotiators tending toward low trust, which may include Indians and others from tight cultures, can avoid leaving joint gains on the table.”

A possible answer, according to the researchers, is “to train negotiators to signal their own trustworthiness and to analyze whether their counterparts are reciprocating.” Also, low-trust negotiators can be taught to signal their priorities implicitly through offers, rather than through an explicit discussion requiring trust.

Such lessons could prove useful even in a “loose” culture like America, Gunia noted.

“Just look at the recent talks in Congress over the deficit,” he said. “There we’ve seen how the lack of trust between the two major political parties has created a take-it-or-leave-it mentality that has led nowhere, as opposed to a more open approach in which the goals of each side could be stated and openly discussed.”

Source: Johns Hopkins University