PREVENTING BETRAYAL AND PROMOTING TRUST: A SOCIAL EXCHANGE ANALYSIS OF STRATEGIC FOCUS IN NEGOTIATION

Transcription

1 Strategic Focus in Negotiation 1 PREVENTING BETRAYAL AND PROMOTING TRUST: A SOCIAL EXCHANGE ANALYSIS OF STRATEGIC FOCUS IN NEGOTIATION Deal-making negotiations can be characterized as social exchanges in which individuals trade both tangible resources such as goods and information, and intangible resources such as favors and esteem. Representing negotiations in this way highlights both the implicit obligation for recipients to return resources, and the possibility that they will betray the relationship and fail to do so. The trustworthiness of the other party is thus central to negotiators strategic choices. To better understand how trustworthiness affects these choices, we develop a typology of relationships based on their representation on the dimensions of relational form, whether negotiators represent outcomes as independent or interdependent, and relational assurance, the likelihood that characteristics of the relationship will promote successful interaction (low or high). Drawing on trust theory, we link each of the four relational types defined by this typology to a specific relational risk, which we characterize as failures in reliability, predictability, integrity or empathy. We then describe four distinct strategic clusters (deterrence, co-ordination, obligation, collaboration) that negotiators use to offset or neutralize these relational risks. DYADIC NEGOTIATION SOCIAL EXCHANGE TRUST NEGOTIATION TACTICS NEGOTIATION THEORY

2 Strategic Focus in Negotiation 2 PREVENTING BETRAYAL AND PROMOTING TRUST: A SOCIAL EXCHANGE ANALYSIS OF STRATEGIC FOCUS IN NEGOTIATION Trust and betrayal are the universal themes that define our relationships. Whenever we form a relationship, we increase our vulnerability to the actions of another person and open ourselves to the possibility of exploitation. Many aspects of our organizational relationships are built on the expectation that favors will be repaid and obligations will be honored. Indeed, organizations and their employees rely on each others willingness to reciprocate favors and obligations. These themes are embodied in organizational constructs such as psychological contracts and organizational citizenship behavior. The twin themes of trust and betrayal characterize any relationship built on social exchange. Social exchange, defined as a reciprocal act of benefit (Molm, Takahashi & Peters, 2000: 1396), is initiated whenever we offer valued resources to another person. Both tangible resources such as goods, services and information, and intangible resources such as favors, status and esteem are valid currency for exchange (Blau, 1964; Flynn, 2003; Flynn & Brockner, 2003; Foa & Foa, 1980; Lawler and Yoon, 1992). The critical feature of exchange relationships is the implicit obligation of the recipient of a valued resource to return resources of comparable value to the giver. Nowhere are the themes of trust and betrayal more closely inter-twined than in dealmaking negotiations. Deal-making negotiations can be characterized as a series of microexchanges, in which individuals offer their opponents concessions, information and esteem with the implicit expectation that such offers will be reciprocated. The risk and uncertainty associated with any social exchange is magnified in negotiation as negotiators attempt to

3 Strategic Focus in Negotiation 3 manage the tension between finding solutions that benefit both parties and those that deliver a greater share of resources to one individual (Malhotra & Murnighan, 2002). While the need to find mutually beneficial solutions increases the salience of trust, the desire to improve personal outcomes increases the salience of betrayal. Consequently, negotiators must manage the dual tasks of promoting trust while preventing betrayal. In managing these tasks, negotiators need to make interpersonal inferences: Drawing on behavioral and contextual information, they need to ascertain the other party s goals and motives. Making interpersonal inferences is necessary for survival in social environments (Reeder, 1993; Reeder & Tramifow, 2005) and provides a mechanism for resolving uncertainty about another person s behaviors. In social exchanges, interpersonal inferences are directed to assessing relational risk, defined as the degree which decisionmakers are concerned with their partners opportunistic behavior in cooperative efforts (Das & Teng, 2001a: p449). Recognizing that betrayal can take many forms, we build on this definition and focus on the category of relational risk rather than the degree of relational risk. We draw on theories of interpersonal perception, social exchange and trust to build the model of strategic focus shown in Figure 1. Our broad argument is that negotiators inferences about the underlying exchange relationship are shaped by two dimensions, relational form and relational assurance. By relational form, we mean whether negotiators represent their outcomes as independent or interdependent. Differences in relational form cue negotiators to attend to information about ability or morality, the two most common dimensions used for interpersonal inferences (Martijn, Spears, Van der Pligt & Jakobs, 1992; Reeder, 1993; Van Overwalle & Labiouse, 2004) By relational assurance, we mean

4 Strategic Focus in Negotiation 4 the likelihood that characteristics of the relationship will promote a successful interaction. Differences in relational assurance speak to the question of motives (Reeder & Tramifow, 2005), and cue negotiators to assume either harmful or benevolent motives on the part of the other person. Jointly, these dimensions determine which of four relational risks - failures in reliability, predictability, integrity or empathy - is most salient in an exchange relationship (Lewicki & Weithoff, 2000; McKnight, Chervany & Cummings, 1998; Sheppard & Sherman, 1998). In the following sections, we outline how these dimensions shape initial inferences about the likely relational risk, implications for negotiators strategic choices, and, how the interplay of initial inferences and strategic choices affects the revision of initial risk assessments. relational type relational risk strategic focus relational form relational assurance Basis of Risk reliability predictability integrity empathy Strategic Clusters deterrence coordination obligation collaboration Figure 1. A relational model of strategic focus in negotiation. Our framework has several implications for understanding negotiators strategic choices. First, we recognize that strategic choice is shaped not just by the economic aspects of negotiation but also by its relational aspects. Consequently, our theorizing addresses a growing recognition that the relational aspects of negotiation have been neglected by negotiation scholars (Gelfand, Major, Raver, Nishii & O Brien, 2006; Gray, 1994; Kolb, 1993; Wilson & Putnam, 1990). Second, by situating our analysis

5 Strategic Focus in Negotiation 5 of strategic choice within a social exchange framework, we increase our understanding of the temporal aspects of negotiation. We incorporate an exchange horizon into our theorizing, as a means for linking strategic reciprocity to the management of relational risk. Third, by drawing on theories of person perception, we link the trust literature to a broader attributional framework. Fourth, our analysis of relational risk extends social exchange theory, which proposes that characteristics of the relationship affect the level of risk, by proposing that characteristics of the relationship affect the nature of risk that negotiators are exposed to. Finally, by linking relational types to strategic choice, we address the question of what motivates negotiators to select particular tactics. Categorizing Relational Risk Although interpersonal inferences can be made across a range of attributes, our focus is on attributions of trustworthiness. We focus on trustworthiness because of the central role that trust, with the corresponding possibility of betrayal, plays in all social exchange relationships, including negotiation (Battacharya, Devinney & Pillutla, 1998; Mayer, Davis & Schoorman, 1995; Pruitt, 1981; Ross & LaCroix, 1996). Negotiators need to resolve the likelihood that the other party will in some way betray the exchange relationship and, continuing our argument, they also need to determine the form of the betrayal. To do this, negotiators need to assess the trustworthiness of potential exchange partners (Battacharya, Devinney & Pillutla, 1998; Mayer, Davis & Schoorman, 1995; Ross & LaCroix, 1996; Whitener, Brodt, Korsgaard, & Werner, 1998; Yamagishi & Yamagishi 1994). We propose that how negotiators perceive the exchange relationship, at the outset of negotiations, increases the salience a specific relational risk. Our argument reflects an

6 Strategic Focus in Negotiation 6 emerging view of trust that global assessments of trustworthiness are not meaningful. This emerging perspective starts with the recognition that multiple cues can contribute to perceptions of trustworthiness (e.g., Mayer et al., 1995; McKnight et al., 1998). It extends previous models of trustworthiness by adding the assumption that perceived trustworthiness can differ across these cues (Lewicki, Tomlinson, & Gillespie, 2006; Kim, Ferrin, Cooper & Dirks, 2004). Our argument adds to this perspective by identifying the conditions that increase or decrease the salience of a particular trustworthiness cue (for similar arguments see Das & Teng, 2004; Lewicki, McAllister & Bies, 1998; Sheppard & Sherman, 1998). Drawing on trust theory, we identify four sets of cues to trustworthiness. We differentiate these cues based on the evidence used to assess trustworthiness and on their time horizon. In this context, the broader interpersonal perception dimensions of ability and morality map onto the distinction between cognitive and affective trust. These two forms of trust are differentiated by the evidence used to assess trustworthiness: cognitive trust is built on behavioral evidence and perceived competence whereas affective trust is built on perceived values and intentions (e.g., Das &Teng, 2001b; Lewicki & Weithoff, 2000; McAllister, 1995). Second, we differentiate trustworthiness cues based on whether cues provide proximal or distal information about trustworthiness. Following Whitener et al. (1998), we distinguish between assessments of trustworthiness that are based on consistency between words and actions (proximal cues) and assessments that are based on the ability to anticipate future behavior (distal cues). Combining these two dimensions, we identify four cues to trustworthiness: reliability (cognitive, proximal), whether the other person will keep commitments; predictability (cognitive, distal), whether the other person s behavior can be anticipated;

7 Strategic Focus in Negotiation 7 integrity (affective, proximal), the belief that the other party will negotiate in good faith, and empathy (affective, distal), the expectation that the other party can anticipate our needs because we have shared values (Lewicki & Weithoff, 2000; McKnight, Chervany & Cummings, 1998; Sheppard & Sherman, 1998; Whitener et al., 1998). Failures in the exchange relationship occur because the other party behaves unreliably or unpredictability; or, because the other party lacks integrity or empathy. In the following sections, we elaborate on how combinations of relational form and relational assurance increase the salience of one of these four relational risks. We then consider the strategic actions that negotiators take to limit their exposure to each of these risks. Assessing Relational Risk in Negotiation In this section, we describe two factors that shape negotiators judgments about the trustworthiness of their opponent, relational form and relational assurance (McKnight et al., 1998; Sheppard & Sherman, 1998; Yamagishi &Yamagishi, 1994). Relational form refers to how negotiators perceive the outcome structure, that is, as independent or interdependent. Relational assurance refers to negotiators assessment of whether the situation implies benign behavior from the other party. While some theorists treat these two sources of information as defining the two ends of a continuum, we propose that form and assurance are distinct dimensions that combine to increase or decrease the salience of specific trusting beliefs (for similar arguments see Das & Teng, 2004; Lewicki, McAllister & Bies, 1998; Sheppard & Sherman, 1998). These relational attributes provide important information about the other party, particularly the risks that their relationship is exposed to. We propose that the relational risks that characterize an exchange relationship generate the motivational basis for negotiators' strategy choices.

8 Strategic Focus in Negotiation 8 Relational form. Although negotiators are reliant on each other for their outcomes, not all individuals recognize this mutual dependence. Instead, negotiators differ in whether they perceive their outcomes to be independent, determined by their own actions, or interdependent, determined by the actions of both parties in the exchange relationship (Deutsch, 1982; Kelley & Thibaut, 1978; Molm, 2003; Sheppard & Sherman, 1998). As we go onto elaborate, the representation of exchange outcomes as either independent or interdependent cues different representations of the exchange relationship (Flynn, 2005) and affects the salience of cognitive and affective trust. Negotiators who represent exchange outcomes as independent focus on their personal outcomes and view the exchange relationship as one in which they stand apart from the other negotiator. This perspective cues a representation of the underlying process as one of negotiated exchange, that is, one in which trades are made explicit and immediate (Flynn, 2005; Lawler, 2001; Parks & Rumble, 2001; Molm et al., 2000) and motivates an emphasis on the transactional aspect of the negotiation (Gelfand et al., 2006). As a result, cognitive trustworthiness increases in salience and negotiators attention is directed to the behavioral commitment of the other party, defined as their willingness to continue the transaction (Molm et al., 2000). To test for behavioral commitment, negotiators look for evidence of the other party s reliability and predictability. Conversely, the most salient relational risks are unreliability and unpredictability, implying that negotiators who represent outcomes as independent will select strategies that offset these risks (Flynn, 2005; Jones & George, 1998; Lewicki & Weithoff, 2000; McAllister, 1995; Molm et al., 2000; Parks & Rumble, 2001; Sheppard & Sherman, 1998).

9 Strategic Focus in Negotiation 9 When negotiators represent their outcomes as interdependent, they focus on joint outcomes and view the exchange relationship as one in which both parties work together. This perspective cues a representation of the underlying process as one of reciprocal exchange, that is, one in which trades are implicit and delayed (Flynn, 2005; Parks & Rumble, 2001; Molm et al., 2000) and motivates an emphasis on the relational aspects of the negotiation (Gelfand et al., 2006). As a result, affective trustworthiness increases in salience and negotiators attention is directed to the affective commitment of the other party, defined as their desire to strengthen the relationship (Lawler, 2001). This commitment is provided by evidence of integrity and empathy. Negotiators who represent outcomes as interdependent will select strategies to offset the risks associated with failures of integrity or empathy (Flynn, 2005; Jones & George, 1998; Lewicki & Weithoff, 2000; McAllister, 1995; Molm et al., 2000; Parks & Rumble, 2001; Sheppard & Sherman, 1998). Whether negotiators represent their relationship as independent or interdependent will be affected by variables such as identity orientation (Brewer & Gardner, 19xx; Flynn, 2005), how individuals perceive themselves in relationship to others; social motives, whether individuals are predisposed to focus on personal or collective gain (De Dreu, Weingart & Kwon, 2000); and culture, whether individuals approach the exchange relationship from an individualistic or collectivist perspective (e.g., Gelfand et al., 2006). Relational Assurance. Most trust scholars assert that, at the start of relationships, trust is neutral (or zero ; Lewicki et al., 2006). We propose that conditions at the start of negotiations can trigger departures from this neutral starting

10 Strategic Focus in Negotiation 10 point. For example, structural assurances such as regulations and sanctions are known to engender high levels of trust (Battacharya et al., 1998; Bigley & Pearce, 1998; Ross & LaCroix, 1996; Yamagishi, 1992; Yamagishi & Yamagishi, 1994). We argue that differences in the degree of relational assurance can similarly engender either trust or suspicion. By relational assurance, we mean the belief that features of the relationship will promote a successful interaction (Lewis & Weigert, 1985; McKnight et al., 1998). As we go on to argue, differences in relational assurance cue different patterns of information search and motivate negotiators to focus on preventing harm or promoting benefit (Das & Teng, 1998; Higgins, 2005; McKnight et al., 1998). Low relational assurance cues expectations of harmful intentions, resulting in skepticism, wariness and vigilance (Das & Teng, 1998; Eisenberger, Lynch, Aselage & Rohdieck, 2005; Lewicki et al., 1998; Olekalns & Smith, 2005). Consistent with a focus on harm, negotiators are likely to focus on prevention and to approach the negotiation with increased sensitivity to negative outcomes (Higgins, 2000; Foster & Higgins, 2005; Lee & Aaker, 2004). Negotiators are more concerned about exploitation and the potential for loss, focus on their lower limits, and operate on a short time horizon (Foster & Higgins, 2005; Galinsky et al., 2005; Pennington & Roese, 2003). Consequently, low assurance triggers concerns about immediate intentions, leading negotiators to search for confirmation that the other party will keep commitments (reliability) and negotiate in good faith (integrity). Overall, low relational assurance and the associated prevention focus establish a negative cycle in which negotiators are vigilant and monitor for potential harm.

11 Strategic Focus in Negotiation 11 High relational assurance cues the assumption of good intentions, resulting in confidence and faith in the other person (Eisenberger et al., 2004; Lewicki et al., 1998; Olekalns & Smith, 2005). Consistent with the assumption of good intentions, negotiators are likely to focus on promotion, and to approach the negotiation with an increased sensitivity to positive outcomes (Higgins, 2000; Foster & Higgins, 2005; Lee & Aaker, 2004). Negotiators focus on the potential for gains and their upper limits, and operate on a longer time horizon (Foster & Higgins, 2005; Galinsky et al., 2005; Pennington & Roese, 2003). Consequently, high assurance alleviates immediate concerns about the interaction and focuses negotiators on anticipating either future behavior (predictability) or needs (empathy). Overall, high relational assurance and the associated promotion focus establish a positive cycle in which negotiators anticipate benefits and opportunities, and consequently engender further trust. Whether negotiators assess the relationship as having low or high levels of assurance will be affected by variables such as the reputation of the other party; the continuity of the relationship, whether negotiators expect the interact with each other in the future; and, the degree of commitment to the relationship, the extent to which the other party is able to satisfy his or her needs from alternative sources (e.g., Elangovan & Shapiro, 1998). Summary. In this section we identified the triggers (relational form, relational assurance) that alert negotiators to a specific relational risk. We argued that relational form affects the salience of cognitive and affective trust, whereas relational assurance affects negotiators initial trusting stance. Figure 2 summarizes the interaction between relational form, relational assurance and relational risks. Our analysis links the risk of

12 Strategic Focus in Negotiation 12 unreliability to an independent relational form and low assurance; the risk of unpredictability to an independent relational form and high assurance; the risk of lapses in integrity to an interdependent relational form and low assurance; and, the failure to anticipate needs to an interdependent relational form and high assurance. In the following section, we describe the strategic implications of these relational risks. Relational Assurance low high Relational Form interdependent independent failures of reliability failures of integrity failures of predictability failures of empathy Fig 2. Relational Risk as a Function of Relational Form and Relational Assurance Responding to Relational Risk in Negotiation Negotiating relationships can fail in multiple ways. Opportunistic betrayal lies at the heart of this failure and is a key source of relational risk (Das & Teng, 2001). We identified four ways in which negotiators can betray the exchange relationship, based on their representation of the relationship along the dimensions of form and assurance. In each case, opportunistic betrayal is elicited when negotiators believe that the benefits of betrayal outweigh the relationship costs of betrayal (Elangovan & Shapiro, 1998; Lewicki & Weithoff, 2000). To reduce or eliminate relational risk, negotiators need to change the other party s cost-benefit ratio. Negotiators can do this either by increasing the costs of

13 Strategic Focus in Negotiation 13 betrayal or increasing the benefits of maintaining trust (Cook & Cooper, 2003). Although costs and benefits can be economic, in line with our focus on social exchange, we consider how negotiators alter the relational costs and benefits of betraying or maintaining trust. Negotiators alter the perceived costs and benefits of betraying the exchange relationship (and reduce relational risk) by building commitment to the relationship. Commitment provides a mechanism for controlling the other party s behavior and ensures that the other party will not betray the relationship (Das & Teng, 1998 Yamagishi & Yamagishi, 1994). This commitment may be behavioral, focused on maintaining the interaction, or affective, focused on building liking and respect (Kollock, 1997; Lawler, 1992; Lawler & Yoon, 1992; Molm et al., 2000; Yamagishi, Cook & Watabe, 1998). We propose that behavioral commitment is linked to the exchange of tangible goods such as resources, concessions and information, whereas affective commitment is linked to the exchange of intangible goods such as positive affect, respect and identity maintenance (Foa & Foa, 1982; McCabe & Smith, 2003). Negotiators use influence tactics and tactical reciprocity to build commitment. These tactics can be viewed as ex ante deterrents, that is, behaviors that minimize the incentives for opportunism (Das & Teng, 1998). Our model of strategic focus implies that the choice of influence tactics and patterns of tactical reciprocity need to be customized to address the specific relational risk that negotiators encounter. This specific risk is determined by the combination of relational form and relational assurance that defines the exchange relationship. In keeping with our emphasis on the social exchange relationship, we focus on how negotiators strategic choices are shaped by perceived relational risks.

14 Strategic Focus in Negotiation 14 The relationship between strategies and substantive outcomes is addressed elsewhere in the negotiation literature (e.g. De Dreu et al., 2000; Weingart & Olekalns, 2004). Tactical choices. Negotiation tactics describe the behaviors that individuals employ as they move towards their goals (Weingart & Olekalns, 2004). Drawing on Yukl & Tracey s (1992) classification of influence tactics, we differentiate between influence tactics that are transactional and those that are relational. In the context of negotiation, transactional tactics focus on behavioral commitment. Their goal is to test the resolve of the other party or to gain information, and the principle currencies for exchange are tangible resources such as goods and information. Tactics such as intimidation, legitimating, pressure, threats and rational persuasion are associated with testing or building behavioral commitment. Relational tactics focus on affective commitment. Their goal is to test the other party s identity or to build a shared definition of the situation, and the principle currencies for exchange are intangible resources such as love and status (Foa & Foa, 1982; Lawler, 1992; Pruitt, 1981). Tactics such as ingratiation, personal appeals, promises, consultation, collaboration and inspirational appeals are associated with testing or building affective commitment and affective trust (Cook & Cooper, 2003; Kim et al., 2005; Lawler, 1992; Lawler & Yoon, 1992; Yukl & Tracey, 1992; Yukl, Chavez & Seifert, 2005). Differences in relational form cue negotiators to select either transactional or relational influence tactics. An independent relational form increases the salience of behavioral prediction, specifically assessments of ability. Negotiators favor transactional influence tactics as a means to build commitment to deal-making and neutralize failures in reliability or predictability. An interdependent relational form cues concerns about morality and increases the salience of shared goals and liking. To prevent failures of

15 Strategic Focus in Negotiation 15 integrity or empathy, negotiators select relational influence tactics to build affective commitment. Differences in relational assurance determine whether negotiators attempt to motivate short- or long-term compliance. Low relational assurance cues local information processing and focuses negotiators on strategies that build short-term commitment as a means for protecting against failures of reliability or integrity. High relational assurance cues global information processing and focuses negotiators on strategies that develop longterm commitment as mechanism for promoting predictability and empathy (Foster & Higgins, 2005; Pennington & Roese, 2003). As shown in Figure 3, this results in four distinct strategic clusters. Influence Tactic Horizon proximal distal Influence Tactic Category relational/affective transactional/behavioral intimidation legitimation pressure promises ingratiation personal appeals information exchange rational persuasion consultation collaboration inspiration appeals Figure 3. Summary of Influence Tactics Tactical reciprocity. Reciprocity binds individuals to each other by signaling a common purpose or vision. Tactical reciprocity occurs when negotiators match each others behaviors, for example when information from one party elicits information from the other (Brett, Weingart & Olekalns, 2004; Putnam, 1990; Putnam & Jones, 1982; Olekalns & Smith, 2000). How and when negotiators reciprocate each others tactics serves two functions. First, reciprocity shapes the other party s behavior by reinforcing the use of some strategies, while ignoring the use of others. Second, deviations from strict

16 Strategic Focus in Negotiation 16 reciprocity convey information about the potential exploitability of the other party. When negotiators fail to reciprocate competitive behaviors as soon as the occur, they create the impression that they are exploitable; when they fail to reciprocate cooperative behaviors as soon as they occur, they signal a hostile environment in which they may act exploitatively (Parks & Rumble, 2001). We develop these ideas about reciprocity in the context of relational risk by focusing on two aspects of reciprocity, valence and exchange horizon. Reciprocity can be positively or negatively valenced. Positive reciprocity, which describes rewarding behavior, focuses on the return of favors. It signals negotiators intentions to reward favors and honor obligations, and increases the perceived benefits of maintaining trustworthiness. Negative reciprocity, which describes punishing behavior, focuses on the return of harm or retaliation (Blau, 1986; Eisenberger et al., 2005; Gallucci & Perugini, 2001, 2003). It signals negotiators intentions to retaliate harmful behavior, and increases the perceived costs of betrayal. Relational assurance affects the use of positive or negative reciprocity. High relational assurance cues the assumption of good intentions and directs negotiators to positive reciprocity as a means for promoting and strengthening trust. Conversely, low relational assurance cues the assumption of harmful intentions and triggers negative reciprocity as a means for protecting themselves against betrayal and exploitation. Reciprocity also differs in the time frame over which favors and obligations are returned, that is, its exchange horizon (Das & Teng, 2002; Flynn, 2005; Molm et al., 2000; O Connor, 1999; Parks & Rumble, 2001). The exchange horizon for reciprocating favors and obligations can be immediate, in which case both parties to an exchange receive their benefits simultaneously, or it can delayed, in which case the timing of reciprocation

17 Strategic Focus in Negotiation 17 remains uncertain (Flynn, 2005; Molm et al., 2000). In negotiation, this implies that matching behavior is delayed by one or more speaking turns. Whereas immediate reciprocity demonstrates an intention to honor an exchange relationship; delays in reciprocity alert negotiators to the potential that the other party may betray the relationship. An independent relational form increases the salience of immediate reciprocity whereas an interdependent relational form increases tolerance for apparent violations of trust, failures in delayed reciprocity (Jones & George, 1998; Kim et al., 2005; Kollock, 1997; Lawler & Yoon, 1992; Lewicki & Stevenson, 1998; Parks & Hulbert, 1995). Relational Assurance low high Deterrence Coordination Influence Tactics Transactional/proximal Influence Tactics Transactional/distal Relational Form interdependent independent Reciprocity Negative, immediate Obligation Influence Tactics Relational/proximal Reciprocity Negative, immediate Positive, delayed Reciprocity Negative, delayed Positive, immediate Collaboration Influence Tactics Relational/distal Reciprocity Positive delayed, Positive immediate Figure 4. Summary of Strategic Clusters Relational Risk and Strategic Focus In the preceding section, we linked relational form and relational assurance to influence tactics and patterns of reciprocity. In this section, we expand our discussion of tactical choices and tactical reciprocity and identify the strategic focus that negotiators adopt when faced with one of four relational risks: failures in reliability, predictability, integrity or empathy. Drawing on the tactical goals identified by Lawler

18 Strategic Focus in Negotiation 18 (1992), we link these risks to a strategic focus on deterrence, coordination, obligation and collaboration, respectively (Figure 4). Before describing these strategic clusters, we note that the dimensions of relational form and relational assurance can either reinforce or attenuate negotiators interpersonal inferences. Independence/low relational assurance and interdependence/ high relational assurance work together. In the first case, the self-focused orientation of negotiators increases concerns about exploitation which are further heightened by the expectation that the other person has harmful motives. Similarly, interdependence reduces concerns about exploitation and these concerns are further offset by the expectation that the other party has good intentions. These relationships align, respectively, with descriptions of a distrusting or a trusting stance (e.g., Lewicki et al., 1998). The other two relational forms provide negotiators with conflicting information about the goals and intentions of the other party. In the case of independent form/high assurance, concerns about exploitation are offset by the assumption of a benevolent motive; in the case of interdependent form/low assurance the stronger relational focus is offset by the assumption of harmful intentions. The competing cues that negotiators encounter establish conditional trust, that is, a trust but verify stance (e.g., Jones & George, 1998; Lewicki et al., 1998). Deterrence (failure in reliability). Negotiators are sensitive to failures of reliability when they represent the relationship as independent with low assurance. Faced with this combination of relational attributes, negotiators assume that the other party has harmful motives. This increases the salience of prevention-focused actions and negotiators select tactics that pre-empt betrayal (Lewicki et al., 1998). This cluster

19 Strategic Focus in Negotiation 19 of tactics differs from the remaining three because it stems from a distrusting stance. It is strongly focused on self-protection and there are limited opportunities for negotiators to update their inferences about the other party. Negotiators tactical goal is to test the other party s short-term commitment to the transaction and to punish the other party for failures of reliability, or to deter exploitation through failures of reliability. Negotiators implement a deterrence strategic focus by selecting tactics aimed at gaining immediate compliance and preventing immediate exploitation. Compliance tactics focus on increasing the transactional costs of betrayal by the other party. Negotiators reciprocate these tactics immediately, to signal that they cannot by exploited by the other party (Parks & Rumble, 2001). This negative reciprocity also acts as a deterrent to the other party, by increasing the costs of continuing to use these tactics. Collaboration (failures in empathy). When the negotiating relationship is characterized by interdependence and high assurance, negotiators assume that the other party has benevolent motives. Negotiators recognize potential gains and opportunities, increasing the salience of promotion focused activities. Although negotiators operate from a trusting stance, they remain alert to possible failures of empathy. Negotiators tactical goal is to foster a shared view of the situation by strengthening interdependence and identifying opportunities (Lewicki et al., 1998) through collaboration. Negotiators implement a collaborative strategic focus by selecting tactics aimed at gaining long-term compliance and preventing long-term exploitation. Influence tactics focus on increasing the relational benefits of maintaining trust by building affective commitment. This relational type generates the greatest

20 Strategic Focus in Negotiation 20 tolerance for delayed reciprocity. Positive reciprocity is delayed in the opening stages of the negotiation but, as the negotiation progresses, negotiators will increasingly search for evidence that the other party is not betraying trust. Consequently, negotiators will shift their exchange horizons, moving from delayed positive reciprocity in the early stages of the negotiation to immediate positive reciprocity in the later stages of the negotiation (e.g., Parks & Hulbert, 1995; Parks & Rumble, 2001). Coordination (failures in predictability). An independent relational form combined with high relational assurance cues the relational risk that the other party will not act predictably (violate expectations). The two relational attributes are incongruent, attuning negotiators to maintaining their relationship while preventing betrayal. While negotiators are focused on benefits, an independent relational form moves negotiators to a neutral state, that is, they assume the absence of benevolence while simultaneously remaining open to new opportunities (Higgins, 2000; Lewicki et al., 1998). In this relational form, positive information about the other party is more diagnostic than negative information, that is, negotiators search for evidence of the other party s predictability (Lee, Aaker & Gardner, 2000; Reeder & Brewer, 1979). Negotiators tactical goal is to gain information. The potential for failures in predictability cues a co-ordination strategic focus. Negotiators implement this strategic focus by selecting tactics that build long-term transactional commitment. Negotiators will operate on two time horizons. The focus on opportunities associated with high relational assurance means that negotiators will be attuned to the use of spillover of tactics from the collaboration cluster. In order to strengthen the relationship, these tactics will be reciprocated immediately when they occur.

21 Strategic Focus in Negotiation 21 Negotiators will also be alert to the introduction of tactics from the deterrence cluster, which signal attempts to exploit them. They will, however, delay reciprocating these tactics to limit relationship damage. Negotiators faced with the risk of unpredictability will be slow to anger (Parks & Rumble, 2001). Obligation (failure of integrity). The combination of an interdependent relational form and low relational assurance cues the relational risk that the other party will not act in good faith. The two relational attributes are incongruent, attuning negotiators to preventing betrayal while maintaining their relationship. While negotiators remain focused on harm, an interdependent relational form moves negotiators to a neutral state, that is, they assume the absence of malevolence while remaining vigilant to the possibility of betrayal (Higgins, 2000; Lewicki et al., 1998). In this relational form, negative information is more diagnostic than positive information, that is, negotiators search for evidence that the other party has harmful intentions. Negotiators tactical goal is to gain information. The potential for failures in predictability cues a co-ordination strategic focus. Negotiators implement this strategic focus by selecting tactics that build long-term transactional commitment. Negotiators will operate on two time horizons. The vigilant focus associated with low relational assurance means that negotiators will be attuned to the use of transactional influence tactics. In particular, negotiators will be attuned to spillover of tactics from the deterrence cluster, and will take immediate action to signal that they are not exploitable. Conversely, their greater emphasis on affective commitment means that negotiators will concurrently attempt to strengthen their relationship by reciprocating

22 Strategic Focus in Negotiation 22 relational influence tactics. We expect that the more vigilant focus associated with this relational form will result in immediate negative reciprocity to protect against betrayal. Because interdependence increases tolerance for delayed reciprocity, negotiators will rely on delayed positive reciprocity to strengthen relational obligations. Negotiators faced with the risk of failures in integrity will be slow to love. Implications for Theory and Practice. Our central argument is that how negotiators perceive the underlying relationship shifts their focus to one of four strategic clusters. Viewed from a social exchange perspective, negotiators attempt to maintain a favorable exchange relationship in which trades are fair and the other party is discouraged from opportunistic exploitation. To do this, they must manage the relational risk associated with any exchange. We proposed that the specific risks that negotiators encounter are a function of relational form and relational assurance. This has several implications for negotiation theory and practice. First, like several other authors, we have shifted the focus from negotiation outcomes to the negotiating relationship (Gelfand et al., 2006; Kolb, 1993). We extend existing frameworks by linking representations of the underlying relationship to different relational risks, and consequently different kinds of tactical choices. For negotiators, a clear implication is that the strategies they use to build commitment and ensure compliance must be adapted to the relational form that characterizes their negotiation. Supporting this argument, Lee, Aaker and Gardner (2000) found that individuals with an independent selfconstrual were more open to promotion-focused messages whereas individuals with an interdependent self-construal were more open to prevention-focused messages. To

23 Strategic Focus in Negotiation 23 effectively persuade the other party, negotiators must strive for congruence between influence attempts and relational form. Our framework also has implications for trust-building actions. Focusing on exchange horizons, we argued that relational types will increase sensitivity to differences in exchange horizons. This argument extends negotiation theory in two ways. First, past theory and research has focused exclusively on immediate reciprocity. This focus on immediately proximate speaking turns has ignored the possibility that, under certain circumstances, negotiators may tolerate one of two kinds of delay: Delays in which negotiators reciprocate after two or more speaking turns have elapsed and delays in which immediate reciprocity is deferred until the later stages of the negotiation. Second, we have differentiated positive and negative reciprocity and argued that the two kinds of reciprocity can occur concurrently albeit over different exchange horizons. For negotiators, the implication is that perceived trustworthiness may be affected by mismatches between relational type and exchange horizons. Consistent with this argument, Parks and Rumble (2001), demonstrate that social motives affect individuals reactions to immediate or delayed reciprocity. Although we have focused on the strategic clusters that offset or neutralize relational risks, it is clear that the perceived relational type is not static. As negotiators obtain more information about the other party, it is possible for the relational type to shift. Jones and George (1998), for example, propose that trust is dynamic and it is possible to shift between conditional and unconditional trust (also, Lewicki & Bunker, 1996). Although McKnight et al. s (1998) theorizing implies that initial relational types will trigger either a positive or a negative self-confirming cycle, negotiation theory and research

24 Strategic Focus in Negotiation 24 suggest that interruptions can bring about shifts in trust and strategy (Brett, Shapiro & Lytle, 1998; Brett, Weingart & Olekalns, 2004; Druckman, 2001, 2004; Harink & De Dreu, 2004; McGinn, Ciano & Lingo, 2004; Olekalns & Smith, 2005; Olekalns, Brett & Weingart, 2003). An implication of such interruptions is they have the capacity to shift perceptions of relational type. Negotiators would benefit from a greater understanding of how and when to interrupt negotiations in order to shift relational types or to prevent unintentional shifts. Our framework also offers the possibility for reconciling seemingly contradictory findings in the negotiation literature. Considerable attention has been given to the role of social motives in shaping negotiators strategic choices (see De Dreu et al., 2000, for a meta-analysis). Although there are consistencies across studies, there are also some puzzling contradictions. Negotiators goals do not always affect their strategic choices in consistent ways. One explanation for the contradictions that have emerged is that, in focusing on social motives, researchers have captured only one of the dimensions that define negotiation relationships, relational form. Including relational assurance as a second dimension may resolve some of the apparent discrepancies. Finally, we linked relational assurance to the broader literature on regulatory focus. To date, only one study has considered how regulatory focus affects negotiations (Galinsky et al., 2005). Yet the concept of regulatory focus has provided a powerful, unifying framework for understanding the motivational aspects of behavior. It thus clearly moves beyond the more usual cognitive approach to negotiation and incorporates a motivational component to negotiators behavior. This shift in perspective fits well with the view that negotiators seek to meet not only outcome goals, but also relational and identity goals

25 Strategic Focus in Negotiation 25 (Wilson & Putnam, 1990). The link between a prevention focus and a distrusting orientation, and a promotion focus and a trusting orientation has the potential to increase our understanding of both trust/distrust and negotiators strategic choices. Conclusion Representing negotiation as a form of social exchange highlights the central role of trust in negotiation. We identified social and behavioral controls that help negotiators manage the specific relational risks associated with four different relational types. These types are defined by relational form, which affects the salience of conditional or unconditional trust, and relational assurance, which cues either a distrusting or trustful orientation to the other party. On the basis of relational type, negotiators shift strategic focus to ensure fair trade and limit opportunistic betrayal.

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