Business Essentials: Fairness at the Negotiating Table

But what is justice, everyone responds differently.

Many very different aspects of the negotiations were in the spotlight in business and research. For a long time, equity was treated with neglect, although this issue is of great importance. Because when we talk about justice, each one understands something different. What is fair and what is unfair is subject to the highest degree of subjectivity. What is fair to me may be unfair to you. The only sure thing is that at the end of each agreement, everyone checks that the result is fair.

Suppose you own a company together with a business partner. Both get along well, business has been excellent for years, but in reality they both want to do something different. So you decide to sell the company. When you two started the business, your business partner put in twice as much time as you did because he still had to work full time to support his family. Your business partner was and is financially independent, single, and received nominal compensation for the extra time he spent. The profit from the sale of the business would be a nice extra income for your business partner, but you need it badly. How is the profit of the sale divided? Which solution would be fair? There are three criteria of fairness that negotiators often invoke:

Equality (in this case, a 50/50 profit split), Fairness (a split in proportion to contributions that would favor your partner), and > >need (a division you and your family would prefer).

Psychologist D. Messick has found that people often choose below these fair standards, depending on the level of their particular egotistical desire for more. That is, our greed determines how we define justice in a given situation.

When you split up your business, it may be tempting to prioritize your family's needs and neglect your partner's time and energy. Of course, your partner will see the situation exactly the other way around. It is very likely that the two will end up fighting.

Prof. M.H. Bazermann (Harvard) found that professional arbitrators consult a fourth dimension of justice: maintaining the status quo. Many organizations resolve conflicts by resisting radical change. For example, your annual bonus probably represents a percentage increase over last year's salary, with last year's total salary being the status quo. But what if your salary wasn't fair last year? So the organization simply institutionalized a past injustice.

In negotiations, you should always address the issue of fairness from the start. Early in the process, the questions arise “when would a settlement be fair to you? What would that be based on? it can save you a lot of trouble towards the end of the negotiation. In addition, it shows vision of the future and an honest interest in a solution that is viable for both parties.

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ISMAN & Partner is a management consultancy that supports national and international corporations, medium-sized companies and start-ups, organizations and institutions in complex processes of negotiation and conflict resolution. Founded in 2015 by Calin-Mihai Isman, negotiation and mediation experts support managers and employees in sales, purchasing, M&A, recruitment, human resources or IT.

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