Importance Of Trust In Negotiation Process

Why Trust is Important in the Negotiation Process

Discuss about the Cross Level Process Theory of Development.

Fells (2016, p. 29) states that “trust is easily over-estimated, and is fragile”, however, trust is a very important entity for facilitating the negotiation process. This is because trust is an expectation that the opposite party will act in a beneficial manner rather than an exploitative manner. A lot of emphasis is put as well in order to build trust, particularly in case of co operative negotiation. However, according to Fells (2016), trust is easily estimated and can be fragile as well. Since reciprocity is a feature of many social interactions including negotiation, it is very essential to understand which party will provide a proper reciprocation. Trust plays a very important role in understanding which party will reciprocate positively (Ott et al. 2016). The essay addresses the reason why trust is an important consideration for project negotiation. It also analyses the Fells’ statement, about fragile nature of trust.

Trust is an important consideration of an effective negotiation process since it is very important to build a reputation that would make other interested in negotiation process. However, one of the key factors of successful negotiation is trust. Use of any negotiation style, techniques or tricks will not be fruitful for a negotiator, if the opposite party does not trust the negotiator. Same works in the other way round as well. A negotiator should never enter into the negotiation process with a person who he/she does not trust. The lack of trust on the opposite party indicates that the negotiator considers his/her opposite party as a potential thief.  Therefore, it can be said that there are multiple components that ensures a successful negotiation and trust is one such component (Cardoso et al. 2013). In negotiation, trust also relates to the thinking of behavioural ethics. This is because the level of trust between the two negotiating parties determines the quality of agreement that they are likely to achieve in the negotiation process. However, in order to build trust reciprocity is equally important.  Negotiation is a process that involves a lot of critical thinking. However, there is a widespread agreement among the different scholars that indicates not only critical thinking but also trust plays an important role in effective negotiation (Lyon, Mšllering and Saunders 2015). However, it is very essential to understand the importance and the influence, trust has on the process of negotiation. It is important to analyse whether trust is preconditioned for negotiation as well. Trust is very important for negotiation as it serves as a goal and strategy in the negotiation.

Impact of Trust on Negotiation Process

In order to understand why trust is very important in the process of negotiation, it is important to understand what trust is.  Trust is generally defined as an expression of confidence a person has on another person. This confidence includes a belief that one person will not be risked, harmed or injured by the action of the opposite party. Trust can therefore be defined as the bedrock of negotiation. However, this concept of trust often acts as a precondition for trust. This is mainly because in different situation, presence of trust is often indispensible for the different parties to negotiate (Ting?Toomey 2015). For example, in Chinese business circle, personal trust is very important for the business people in making an investment for the business.

On the other hand, the concept of trust is generally culture and context specific and therefore, considering trust to be a must needed component in any type of negotiation will definitely be an over statement. An extreme example can be cited in this matter such as in a situation where a person will have to negotiate with the hostage takers, there is unlikely that there will be trust between the negotiating parties.

However, it is baseless to comment that trust is not at all important fir a negotiating process as it definitely possess some value in the process of negotiation. This is because a win-win situation of negotiation can only be achieved if a negotiator has a trust on the opposite party and vice versa. This is necessary as trust enables the negotiation parties on developing and preserving their relationship.

Trust is important for any negotiation process as it serves as a strategic means of relationship building. Trust can offer the integrative potential to the negotiation parties so that they work collaboratively in achieving joint benefits.  In the commercial partnership trust is very important as the trusted parties are more likely to share more information and there is more possibility that the opposite party will abstain themselves from the taking any competitive advantage. A trusted party is expected to exchange favours in the long run as well.

Trust based negotiation strategies are not necessarily harmful, similar to the power tactics. Commitment of a trust based relationship is more likely to be advantageous for the negotiator as well. This is because when a person finds someone trustworthy enough, he/she is more likely to conceive consistent good impressions of the person. Humans are more prone to the halo effect, due to which a positive characteristics of an individual generally dominates the other views on that person. Therefore, it can certainly be said that the trust based strategies has a positive effect in the negotiation process.

Types of Trust-based Negotiation Strategies

One of the important examples of trust is identification based trust that is grounded based on the empathy with the desires and intention of the opposite party. This type of trust is expected to exist among friends and is the base of development of friendly ties or friendly negotiation (Olekalns and Adair 2013). One of the major requirements of this type of trust based negotiation is proper communication. However, trust may not always give a positive result since trusting someone in certain situation might result in presence of risk based manipulation or exploitation.

Another important trust based strategies that is used in the negotiation process is deterrence based trust that is mainly related to the consistency in the behaviour of an individual (Pruitt 2013). In this trust based negotiation, people are expected to follow what they have promised earlier. However, this type of behavioural consistency can be sustained by certain threats of distrust if the promises are not kept. Therefore, this definition of the trust is somewhat paradoxical as it has a strong connotation of the power relation. Therefore, in comparison to the identification based trust, deterrence based trust is more expensive to maintain.

Therefore, it can be concluded that trust definitely plays an important role in the process of negotiation since trust is a base of the relationship between the two involving parties in a negotiation process. However, although trust is an important component of negotiation and can provide a certain advantage in the negotiation process, it is not mandatory for the negotiators to have a mutual trust on each other. Trust is certainly important for a negotiation process since it helps in developing a healthy and a friendly relationship between the negotiators (Korobkin 2014). This in turn reduces certain risk in the negotiation process, the major one of which being the opposite party taking a competitive advantage over the other party. Trust is definitely important in order to execute a negotiation process in a legal way. A trusted negotiator is more likely to crack a deal in comparison to the negotiator who is not trusted. Therefore, trust is very important in productive negotiation process.

Although trust is an important component of an effective negotiation, trust is fragile as well. This is because trust can be broken in every single minute. One wrong glance from a trusted person may result in the break of the trust and that is the main problem with trust. Once trust is broken, it is very hard for the person to gain the trust of the opposite party. Trust i very difficult to be earned over the time and therefore, it is described as fragile. On the other way round, trust is defined as a fragile entity since once a person earns someone’s trust; he gets tremendous freedom (Vanneste, Puranam and Kretschmer 2014). This freedom might be the cause of something that is not foreseen. However, once this trust is lost, it will be very difficult for the person to gain the trust back. Therefore, it is very important to know and understand which person can be trusted as the closest of the persons can betray, while a stranger can be helpful as well. Since trust provides an extreme power in the negotiating or any other process, it can be a risky process as well. Trust is a key to the simplified process of negotiation and therefore it is very fragile as well. An identification based approach of negotiation or negotiation on friendly ties, if breaks, may result in huge loss of both the negotiating parties (Schilke and Cook 2013). It might take years to build trust and can take a second to break and therefore it is termed as a fragile component. However, trust is an important base of negotiation and therefore, this risk is often taken in the negotiation process. If the trust works, the negotiation yields a positive result. However, if the trust breaks, the entire negotiation may fail. There is a thin line of separation between trust and distrust and therefore, trust is described as a fragile component. This is because trust is a confidence a person has on the other person and it takes no time in breaking that confidence. Trust is a very important component of building a relationship and therefore, it is described as fragile. Trust can be described as a mirror, which if broken can never be fixed. Mutual respect is an important component of trust and therefore, it takes time to build a trust on someone (Kong, Dirks and Ferrin 2014). Any wrong move or intention of a trusted person can result in break of the trust that might have taken years to build. Trust can therefore be described as the powerful tool for the negotiation that results in achieving a positive outcome in a negotiation process.

Conclusion

Therefore, it can be concluded that trust although is fragile, is an important commodity in the negotiation process. Trust is generally fragile because it can be easily broken and once broken cannot be rectified or gained. Gaining a person’s trust takes a he amount of time and therefore it proves to be an important component of negotiation (Rojot 2016). It is fragile since it takes less than a second for a person to break someone’s trust, which might have taken years to build. Trust is not only an important commodity of negotiation, but also a very important commodity of building a good relationship among the negotiating parties and therefore, it holds a very important place in an active negotiation process (Prowse 2012). The fragile nature of trust has to be kept in mind before entering into an identification based negotiation process or in an effective negotiation since in case the trust is broken; it is very difficult to get an effective result of the negotiation process.

Conclusion

Therefore, from the above discussion, it can be concluded that trust is an important component of the effective negotiation process. A trusted negotiation eliminates the risk of any dispute that might arise between the negotiation parties in the later stages of negotiation. The major components of an effective negotiation are trust, power and ethics out of which, trust is a fragile component. Since it is fragile, it is one of the most important components of the negotiation process. The essay discusses the importance of trust in an effective negotiation process and why is trust very much fragile. Reciprocity is one of the main components of an effective negotiation and an expected reciprocation can be gained only from a trusted party. This is because trust is an expectation that the opposite party will act in a beneficial way rather than in an exploitative manner. Trust is fragile as a lot of emphasis is needed to be placed while building a trust and in creation of a co operative negotiation.

References

Cardoso, H.L., Urbano, J., Rocha, A.P., Castro, A.J. and Oliveira, E., 2013. Ante: Agreement negotiation in normative and trust-enabled environments. In Agreement technologies(pp. 549-564). Springer, Dordrecht.

Fells, R. 2016. Effective Negotiation: From Research to Results. [ebook] Available at: https://books.google.co.in/books?id=0vnUCwAAQBAJ&printsec=frontcover#v=onepage&q&f=false [Accessed 9 Apr. 2018].

Kong, D.T., Dirks, K.T. and Ferrin, D.L., 2014. Interpersonal trust within negotiations: Meta-analytic evidence, critical contingencies, and directions for future research. Academy of Management Journal, 57(5), pp.1235-1255.

Korobkin, R., 2014. Negotiation: Theory and strategy. Wolters Kluwer Law & Business.

Lyon, F., Mšllering, G. and Saunders, M.N. eds., 2015. Handbook of research methods on trust. Edward Elgar Publishing.

Olekalns, M. and Adair, W.L. eds., 2013. Handbook of research on negotiation. Edward Elgar Publishing.

Ott, U.F., Prowse, P., Fells, R. and Rogers, H., 2016. The DNA of negotiations as a set theoretic concept: A theoretical and empirical analysis. Journal of Business Research, 69(9), pp.3561-3571.

Prowse, P., 2012. Effective Negotiation: From Research to Results–By Ray Fells. Industrial Relations Journal, 43(1), pp.85-86.

Pruitt, D.G., 2013. Negotiation behavior. Academic Press.

Rojot, J., 2016. Negotiation: from theory to practice. Springer.

Schilke, O. and Cook, K.S., 2013. A cross-level process theory of trust development in interorganizational relationships. Strategic Organization, 11(3), pp.281-303.

Ting?Toomey, S., 2015. Identity negotiation theory. The international encyclopedia of interpersonal communication.

Vanneste, B.S., Puranam, P. and Kretschmer, T., 2014. Trust over time in exchange relationships: Meta?analysis and theory. Strategic Management Journal, 35(12), pp.1891-1902.