Power factors and negotiation strategies UDC 005.21:005.574 Milan Stamatović, Nebojša Zakić, Ilija Nikolić UNION university, Faculty of Enterpreneurship, Belgrade The paper explains the major elements of negotiations, key power factors of negotiating skills, the selection of a proper enterpreneurial strategy as well as significant ethic issues.
 Choosing a proper enterpreneurial strategy depends on what one finds more important the basic outcome, the relationship outcome, or both.
 Success in negotiating is a matter of attitude to how the negotiation processes itself is conducted and what is being done to reach optimal results.
 Our aim in this study is to provide guidelines to be used both for the purpose of successful negotiating and of dealing with various situations we might find ourselves in as negotiators.
 1.
 Drfining negotiation There are numerous definitions of negotiations, among which three characteristic examples are listed in this report.
 Gulliver defines negotiating as a process in which two parties, supported by others, attempt to achieve a mutual decision on the issue of dissagreement Š1Ë.
 According to Robinson and Volkov, negotiation is a process in which negotiators lay their objectives at the negotiating table, share information and search for effective alternatives Š2Ë. Duening and Sherrill view negotiating as a process in which two or several parties attempt to reach an agreement in a situation characterised by a certain level of real or possible disagreement Š3Ë.
 As much as these definitions differ in details, they nevertheless share some mutual features: negotiation includes two or more negotiating parties; each of the parties have their objectives which may be incompatible to a smaller or to a larger extent; during some kind of process alternatives are sought for the purpose of reaching an agreement between/among the parties.
 2.
 Elements of negotiation Negotiating normally consists of the following elements: 1.
 Negotiating is primarily a process that includes two parties two persons, two groups, two organizations, or an interpersonal relationship.
 It is most frequently a one-to-one process.
 Negotiation can also be a group process, e.g. planning group whose members jointly work out a strategic plan.
 Negotiating can finally be viewed as a process going on within a sole person an inward debate on how we are going to act. 2.
 The parties interests are incompatible, that is, they disagree about some issue.
 The issue may be a conflict of preferences, disagreement in attitudes on priorities or, most frequently, a conflist as regards resources: disagreement as to who will obtain a certain volume, amount or grant.
 3.
 Negotiating is a predominantly voluntary activity.
 Few negotiators are actually forced to negotiate; it is us who choose to negotiate in the belief that the process will improve our outcomes.
 Negotiations are voluntary in that we can always take it or leave it, however we negotiate in order to improve our outcomes via dialogue and discussion.
 4.
 Negotiations mean management of two types of entities: tangible and intangible assets.
 Tangible assets cover all the real issues to be solved through negotiating and most attention in planning and negotiating is paid to these assets.
 Intangible assets is not so visible, they are rather psychological.
 The psychological goals and aspirations are paid less attention to, although they are sometimes more important.
 Intangible assets may include superiority, better advancing compared to competitor, appear tough and strong, being just to all parties, etc.
 Sound planning in negotiation require that the parties should determine any tangible and intangible assets important for the negotiations, and be careful about what is necessary to do so that intangible assets be efficiently satisfied.
 5.
 Negotiating is a process of giving and taking.
 When the parties envisage negotiations, the starting situations are not the same as those in which the negotiations are terminated.
 Formulating an initial offer is done expecting that both parties will do it, and that they will normally differ in their starting positions; then they will bargain until they reach some points of agreement.
 Finally the parties expect that they come sloser to each other in a kind of expected but not really predictable game, in which different outcomes are possible.
 3.
 Power factors in negotiating There are different ways in which one negotiator can achieve advantage during negotiations.
 The power factor is an element that may significantly increase or reduce the negotiators capability of achieving his goals.
 The following key factors act in such a way.
 (1) the nature and kind of available information; (2) the presence of constitutive boards and their support; (3) time and deadlines; (4) alternatives in reaching the agreement proposed; (5) negotiators personal traits.
 Information.
 In its core, negotiating is an exchange of information.
 This information is directed and organized so as to convince the other party to see it the way we do.
 It does not suffice that we just declare (or require) that we want something, we have to be able to state why we want it and use convincing arguments to support our claim.
 Therefore, successful negotiators try to predict which information they will need in any possible situation and they prepare thoroughly.
 The better the preparation, organization and use of information, the better the chances that the party will have a more convincing case.
 Although the real nature of information planning (which particular information will be needed) changes from one negotiation session to another, the following preparation of information is usually required in order that a favourable outcome be produced: Defining goals: What do we want to achieve?
 What are our goals?
 Defining information required to support our goals: How can we build a convincing case that will be in favour of our goals?
 Which facts and figures do we need?
 Defining information required to challenge the other partys arguments: Can we predict what they will want?
 How can we challenge the arguments they are going to produce?
 After we have offered our arguments, how are they going to answer?
 What can we do to refute their arguments or their attempts to undermine our position?
 How shall we define our initial claim and our limitations?
 If we prepare information carefully, we may make wise decisions as to which extent our claim will be taken as reasonable, having in mind that we will have to make concessions, but that we achieve our goal.
 Negotiators should collect information on their counterparty, their goals, style, reputation, etc.
 In any interaction, especially the competitive one, the more we get to know about or opponent, the better our predictions of his behaviour will be.
 A better preparation, predicting the necessary information in order to successfully discuss the position or challenge the other party help increase our power most.
 Constitutive board and organizational support.
 In a large number of business negotiations the individual does not negotiate only for himself.
 The goals and purposes are set together with other individuals and groups that will benefit from winning or lose if the negoriations are not terminated in our favour.
 A constitutive board is a group to which the negotiators belong and whose interests they promote or protect.
 Constitutive boards play two important roles in negotiations.
 Firstly, they help us define our goals, tell us what is acceptable and what is not as regards the initial offer, goal or final purpose.
 Secondly, constitutive boards evaluate our achievement after we have returned from negotiations.
 They judge us on the basis of what we have achieved and they award or punish us accordingly.
 The role of constitutive boards may be summarised as follows: As their direct experience about the other party is rather limited, constitutive boards tend to believe that the goals set for the negotiations are not difficult to achieve.
 It appears that constitutive boards are almost always unreasonable and expect more than can be achieved.
 As they usually do not hear the other partys arguments directly, constitutive boards do not see the reason to change their initial claims.
 Thus the negotiators often find it more difficult to persuade their constitutive boards which goals can reasonably be achieved than to persuade the other party about the nature of their goals.
 Hence, the negotiators always have to point out to their boards what is it that is possible and reasonable in negotiations, otherwise the expectations may slip the control.
 Constitutive boards appreciate and award a well done job, as well as criticize and punish the results contrary to expected.
 The boards efforts are directed towards forcing the negotiator to do his best to achieve the set goals.
 The boards also manage the negotiator in that they manage his authority, his capability of doing the job himself.
 Although those who are authorised to contract business themselves are thought to have more power, the negotiator usually does not find an absolute authority advantageous!
 All negotiators may be exposed to intense pressures from the part of the other party to agree; a negotiator who has to consult his constitutive board always has a safety gauge protecting him from yielding to unreasonable pressures.
 When a negotiator has a constitutive board that set reasonable goals to him and supports him in discussions, the negotiator is very powerful.
 In case the constitutive board does not support the negotiator or severely limits his authority, or when the negotiator enjoys absolute authority, his power decreases significantly.
 Time and deadlines pressure.
 Negotiating is basically a time limited activity.
 As a popular saying provides, work fills the time available, so the negotiations fill the time available.
 This means that the majority of concessions are made towards the end of negotiations.
 The reasons for this are numerous: the parties fail to create a programme, they lose a sense of time, they argue for too long, etc.
 The most important reason, however, is that the deadline is a welcome excuse for making concessions.
 Each party may state their arguments and points of view for an infinitely long time; without a deadline, the parties will continue to hesitate and put things off in order to exhaust each other.
 However, when there is a deadline, the parties may use it to make concessions.
 Moreover, postponing may be useful for convincing your board that you stuck as long as you could before you were forced to make a major concession.
 When both parties have the same deadline or neither has it, the power of deadline is balanced.
 However, when one party has a deadline, and the other does not, it is the party that does not, that has an advantage.
 The reason for that is that the party that does have a deadline feels pressure to move towards reaching the agreement, whereas the party that does not have a deadline does not feel a pressure at all; as a reasult, the latter may postpone things and set an unreasonable time pressure upon the former.
 Options towards reaching the agreement.
 The fourth factor is the power to have more than one alternative.
 People always negotiate as if the outcome they wish to achieve were the only possible outcome; consequently, they entirely devote themselves to the process, doing whatever it takes to complete the task.
 This is a nonproductive negotiation behaviour; in an emotion-heated negotiation we become too eager to get a contract only to gain a feeling of psychological success from concluding the negotiations.
 Psychologists call this process of excessive eagerness a falling into a trap.
 In such a situation we feel as if we depended on the desired goal.
 We act like this because we are emotionally engaged; because we cannot withdraw in the face of obligations that are usually publicized, without fearing we will appear weak and silly to others; and because we invested so much time, money and energy so we cannot afford to withdraw.
 Good options (for a possible agreement in negotiations) give us power, since they liberate us from these dynamics.
 We no longer have to insist in order that we should reach an agreement at any price.
 If we have a good option, we will have no reason to feel desperate; if the job fails, we still have a chance to get back to that idea.
 Similarly, good options act as alternative to a final solution or limitations.
 If we have a good option, we should continue negotiating only if we expect to gain an even better option.
 Fisher and Ury call this the best alternative to a negotiated agreement BATNA (hereinafter we will use the term best alternative) Š5Ë.
 The best alternatives enable us to tell the other party how to shape their offers, as the job discussed must be better than our best alternative in order that we should accept it as attractive; it is also a powerful tool to persuade the other party that the job has to satisfy our needs.
 Personal power.
 The negotiators also have some personal qualities that can make them more powerful.
 These include: Pesuasiveness.
 Good negotiators have to stick to their attitudes and to create arguments in a way that they are persuasive.
 Good logic, good communication skills (eye contact, clear voice) and a strong personal committment to goals enhances persuasiveness.
 Consistency.
 Good negotiators are consistent.
 At the beginning they do not accept no as an answer.
 A negotiator must be careful not to become a pest, however, he must take care not to withdraw only because the first answer to his claim was no.
 Consistency helps good negotiators to discover that there are many perhaps, it is possible or it depends, behind the initial no.
 Integrity and character.
 Successful negotiators are reputable for their reliability, honesty and principles.
 If our character and motivation are doubtful, people will refuse to negotiate with us since they fear we will cheat them or that we will fail to fulfill our obligations.
 On the contrary, if we are reputed for high integrity, people will want to negotiate with us since they know we are truthful, that the offer is fair and that we will stick to the agreement.
 Each of these factors can either increase or decrease the success of negotiating.
 The negotiators who feel powerless should study how each factor acts in the coming negotiations and work out the ways to either increase theiw own power or reduce the power of the other party.
 4.
 Choosing negotiating strategy Savage, Blair and Sorenson propose two questions that condition the choice of the strategy.
 According to these authors, prior to choosing a negotiating strategy, the manager should take into account his own interests as well as interests of the organization Š4Ë.
 These interests will shape the answers to two basic questions: (1) Is the basic outcome very important for the manager? (2)
 Is the relationship outcome important for the manager?
 These two critical questions should be dealt with separately.
 All the outcomes may appear very important in one moment, however, a decicion must be made on how high a priority these questions really have in negotiations.
 Similarly, we must decide upon the importance of relationships between the negotiators.
 Each negotiation has relationship outcomes as well as the basic relations of negotiations the way we negotiate now will affect the quality of our relationships in the future.
 The relationship is measured by factors such as: the extent of mutual independence (to what extent we depend on the behaviour of the other party if we wish to achieve our own results); time span between the relationship (whether we predict to work together for a longer period in the future); the level of friendship we feel towards the other party and the correctness and ease of communicating with the other party.
 Duening and Sherrill point out that basic outcomes and relationship outcomes are not mutually exclusive, however, deciding in favour of one category as dominant in relation to the other will affect the choice of negotiating strategies Š2Ë.
 According to Savage, Blair and Sorenson Š4Ë, there are basically four main negotiating strategies, depending on what we find important basic outcomes or relationship outcomes, and these are presented in Figure 1.
 Open inferiority.
 The strategy to be followed when the parties are seriously concerned with their relationship and the basic outcome is of lesser importance is the open inferiority.
 According to this strategy, we give in in negotiating essential issues to make the oter party happy, that is, we give them what they want and keep and improve our relationship.
 Other terms for this strategy are cessions or even flattering.
 Why should a negotiator choose this straegy?
 There may be a number of reasons: The negotiator is not really concerned with basic issues, but wants the other party to give him something else.
 The negotiator is willing to trade the possible basic outcomes in the present negotiations for a greater advantage in the future negotiations.
 The negotiator cares deeply about the relationship and does not wish to increase tensions by a possible conflict about current issues.
 Some negotiators find inferiority a difficult strategy since it looks lowly and degrading.
 However, experienced negotiators will agree that in some cases it is by all means advisable to let the other party win and thereby save the relationship and the opportunity for a later moment, when the stakes are much more important and attractive.
 Strategy 1 STEADY COLLABORATION Both outcomes important Situation 1 Basic outcome very important : YES Relationship outcome very important: YES Strategy 2 OPEN INFERIORITY Priority given to relationship outcome Situation 2 Basic outcome very important : NO Relationship outcome very important: YES Strategy 3 FIERCE COMPETITION Priority given to basic outcome Situation 3 Basic outcome very important : YES Relationship outcome very important: NO Strategy 4 ACTIVE EVASION OF NEGOTIATION Neither outcome is important Situation 4 Basic outcome very important : NO Relationship outcome very important: NO Figure 1.
 Four negotiating strategies Active evasion.
 The strategy to be followed when neither the basic outcome nor the relationship is important is known as active avoidance.
 Using this strategy in some circumstances, the negotiator may conclude that little can be achieved in negotiating essential (basic) issues and that the relationship is not worth wasting effort on.
 The plain refusal to negotiate is the most aggressive form of evasion; other forms are more agreable, politer and socially more acceptable, e.g. when we do not show much concern or do not complain but concentrate on things that can hardly be more productive.
 Competitive strategy (fierce competition).
 The competitive strategy is implemented when the negotiator is concerned with the outcome, rather than the relationship with the other party.
 It is followed when one is willing to do anythuing to achieve his goals.
 The competitive strategy (I win you lose) is usually implemented in the following circumstances: (1) the negotiator has short-term goals and has to achieve the best possible contract now, no matter what happens in the future; (2) the negotiator believes that the goals of the two parties are basically disparate, i.e., the more the other party gets, the less remains for me; (3) the negotiator believes that the other party is probably competition oriented, which justifies, even makes it necessary that he should resort to fierce competition to protect himself; (4) when the inexperienced negotiators are told to negotiate, they will probably acquire some or all the qualities of a classic competitive negotiator.
 The competitive strategy requires that certain points in the bargain range be defined.
 These points are the following: The first point is the target point that marks where the negotiator would like to conclude the negotiations.
 For example, if the aim is to purchase a second-hand vehicle, the target point will be the amount of money one would normally be willing to spend.
 Suppose that RSD 250,000 were enough to by an appropriate car.
 The amount may be determined on the basis of savings and earnings, by determining the type of car that is required and selecting those cheaper than RSD 250,000, or on the information that someone bought his car at the price that amounts to this.
 Although a better planning of the target point leads to a greater willingness to stick to it during negotiations, any valid argument may lead to setting a reasonable target point.
 The second point is the resistance point.
 This is the ultimate point the negotiator will never go beyond.
 For example, the negotiator decided that he would under no circumstances spend more than RSD 300,000 to buy a car.
 This is his resistance point.
 The advantage of the resistance point, especially the one set in advance, is that it enables the negotiator to resist being drawn into the business he will later be unhappy about.
 The third point is the presence of the best alterna tive (BATNA).
 The difference between this one and the resistance point is that the best alternative means an agreement resorted to in case the outcome of the current negotiations has not been reached, whwreas the resistance point is the one at which we abandon the negotiations.
 The best alternatives offer a solution we may insist on if the negotiations do not advance the way we planned.
 A very successful strategy is to cherish an appropriate best alternative and to insist that the other party either consent or offer a more viable option in order that we conclude a deal.
 If we know that we can purschase a second best car at RSD 270,000, we have to insist that the other party sell their car at a price lower than RSD 270,000, or we will decide in favour of our best alternative.
 The last defined point is the initial offer, which is the negotiators initial position: the first offer or claim.
 Starting with an offer and gradually making cessions, the negotiator expects to move from the starting point towards the goal.
 This point is most difficult to define, since it depends on the circumstances in which we negotiate, rather than on what we want or are able to pay.
 In Table 1 we assume that the negotiator decided upon the starting amount of RSD 200,000.
 Table 1 Bargain scope definition the buyers standpoint (in 000) Initial offer Target point Best alternative Resistance point RSD 200 RSD 250 RSD 270 RSD 300 These four points make the negotiators bargain range.
 In terms of this range, we are in a position to discuss the essence of the competitions negotiating (Table 1).
 The bargain range spreads from the initial offer, where the negotiator starts with the initial offer, to the resistance point, beyond which the negotiator will not go.
 In most negotiations we start negotiating knowing only our own points.
 We may even be ignorant of the other partys initial offer.
 If, for example, the price of the car is shown on the car, it is the sellers initial offer; however, if an on sale advert is displayed, or if we bid without seeing it beforehand, we do not have any other information except our plan.
 Therefore, the more information we collect on the initial offer, on the target point and on the other partys resistant point, the more intelligently we will plan our own range.
 Similarly, it is obvious that we should plan our own target points and the resistance points in advance, so that we could be confident of our planning and understand that we might have to change these estimations when we obtain information on the others. an initial offer should be made that leaves the negotiator space to make cessions, at the same time offering an agreement that is equal, if not better, to someones target point.
 Thus one buyer would spend RSD 250,000 for a second-hand car, but is willing to pay up to RSD 300,000 for an appropriate car, and he will certainly not grudge to pay RSD 280,000!
 In order to do this, the buyer has to know how little he can offer and not offend the seller.
 Unfortunately, the practice does not offer a rule to this; rules differ largely from one negotiation to another and from one industry to another.
 If there is an active market for any kind of goods or services (such as cars or starting salaries for the employees), the market has probably defined a generally acceptable initial range.
 It is important that the negotiator is familiar with the negotiation range, if possible.
 A significant disturbance of range may cause major problems: a dramatically high or low initial offer will cause the loss of credibility.
 In order to learn more on the generally accepted range at any market, we should ask people who have already negotiated similar matter, read articles on the topic or ask an experts advice.
 Collaboration strategy.
 The strategy to follow when both the basic and the relationship outcomes are important is the one dealing with a consistent collaboration (I win you win).
 The negotiator wishes to achieve a favourable basic outcome, as well as ensure that the relationship retains open communication, the trust and the willingness of the parties to stay through the negotiations.
 The parties often view the negotiation situations as the problems to be solved, rather than the confrontation arguments.
 In order to succeed in achieving the result and simultaneously retain the relationship, the parties will often have to sacrifiy some of the core issues, in order to protect and retain the relationship.
 According to Fisher and Ury, behind the opposing positions lie not only the conflict, but also mutual and coinciding interests.
 We tend to assume that, since the other partys negotiators position is opposite to ours, their interests must also be opposite.
 In a large number of situations, however, the investigation into the outcome issue will reveal the existence of many more interests that are mutual or that coincide than the opposite ones Š5Ë.
 The method, which these authors Š5Ë termed principle based negotiation may be summarised into the following key points: 1.
 People separating people from the problems; 2.
 Interests focusing on interests, rather than to a position; Getting information on the other partys initial offer, his target points and the resistence points make the basic part of strategic development.
 For example, when the initial offer is determined, experience tells us that such 3.
 Choices creating different options before decid ing on what to do and 4.
 Criteria make sure that the results be founded on objective measurements.
 The principle based negotiation approach is similar to that described by Menkel-Meadow Š6Ë in which she opposes the advantages derived from the problem solving approaches to the limitations included into the negotiating strategies based on competition, where the supreme principle is maximizing of individual profit on account of somebody others, which are claimed by this author to be based on wrong hypotheses.
 Thus negotiations that stress collaboration may be reduced to two basic approaches to the collaboration process the approaches that view negotiations as a solution to a mutual problem and the model of principle based negotiation, designed by Fisher and Ury.
 The main concepts of successful principle based negotiations and problem solving are the following: (1) one party should try to understand the real problems of the other party; (2) either party should grant free flow of information; (3) one party should devote themselves to finding the best solution to the problem, the one that satisfies the needs of both the parties involved.
 Having in mind that both parties agreed to fulfill the obligations they consented to, and on the basis of the model devised by Fisher and Ury Š5Ë, we highlight the following key points in collaboration strategy: Separating people from problems.
 When the goals of the negotiating parties stand opposite to each other or then they are in conflict, the parties tend to see things distorted.
 Our ideas, needs and expectations are considered right, those posed by the other party are wrong.
 Moreover, we generalize our positive or negative attitudes towards people according to how we view their goals and activities.
 Successful collaborative negotiations require that we should be capable of separating personalities from processes, so as to communicate correctly with the other party and thus achieve an adequate share of expectations and attitudes.
 Fisher and Ury Š5Ë maintain that we should be polite to people, but strict to problems treat people with respect, but to be strict in our approach to problem solving and ensure that everybodys goals and endeavours be included and united.
 Focusing upon needs and interests, rather than upon positions.
 The difference between the position and interest is best expressed as the difference between what we want and why we want it.
 In their initial statements the negotiators define their positions: statement on claims, positions and the target points of the agreement.
 This mutual statement usually makes the negotiations look conflicting, or, at best, that the parties cannot achieve more than just a compromise.
 However, when it comes to the interests, the parties may find that their hidden needs, values and interests are not really in serious conflict and that it is possible to find a mutually acceptable solution.
 Interests can be identified by asking the other party about their position; you learn why they want what they say they want.
 You should also put the same questions to yourselves if you want to share these interests with the others.
 Creating different options for mutual gain.
 The negotiators should create a mutual statement showing their interests, since this statement will be a problem to be solved.
 The next step is to find possible alternative way to solve problems or state some or all interests.
 The ways to create options are numerous.
 A sudden idea is a technique used when a problem should be solved and the parties differ in their views to a desired solution; the parties are encouraged to offer alternative solutions, without discussing, evaluating or appreciating the quality of any of them.
 Streching a pie is used when the negotiation deals with the allocation of limited resources; here we are concerned with how to provide a larger quantity of resources so that, in case the parties have to share them, they be divided in such a way that either party gets more than 50 percent.
 A non-specific compensation is a procedure where one party gets something that is not necessarily part of negotiation package, but is enough to state the needs and interests and allow the other party to achieve theirs.
 Insisting on applying objective criteria.
 A very important element in collaborative strategy is to create a good selection of options, finding ways to reduce the range of the options.
 The parties may reduce the list of options using a defined scoring system, by which a majority of options are eliminated and only the best remain.
 These options should be evaluated on the basis of a type of objective criteria to classify which solutions are of best quality, which of them will suit both parties, etc.
 If the parties can reach an agreement on which criteria should be used, they are close to closing an agreement.
 If the choice of alternatives is expected to be very problematic, the more reason there is to opt for developing and applying criteria for solutions evaluation before the very optional solutions are discussed and evaluated.
 In this type of negotiations the parties should make effort to draw a clear agreement, which calls for precisely recording the solutions and their implementation plan.
 It usually happens that when the parties try to make a draw in a precise language and plan, the hidden disagreements and ambiguities surface.
 In this phase of negotiations it may prove practical to use a unique text procedure where one negotiator records the precise language and the text of the agreement.
 The draft of the agreement is then exchanged between the parties until they have agreed upon the language, the deadlines, the terms, etc.
 A similar result can be achieved if the parties negotiate in a room that is equipped with a board or a computer screen.
 The process of recording their work brings to surface possible ambiguities; thus the ambiguities are being cleared and the probability of problems arising as parties proceede in fulfilling the agreement will be reduced.
 5.
 Negotiators ethics In a competitive and ethically imperfect world business people face serious ethic challenges.
 According to Cramton and Dees Š7Ë, a Macchiavellian gap between what is being done and what (ideally) should be done is a reality in business negotiations.
 A Macchiavellian answer surely makes thins worse, however, a purely moralistic (or philosophical) one will probably be ineffective.
 It is necessary to search for various ways of narrowing this gap and building trust and openness.
 Evaluating negotiating strategy must include ethics.
 Here we can ask some relevant questions: what causes unethical behaviour, which type of unethical behaviour may a negotiator encounter and why the ethic standard should be part of the process.
 What causes unethical behaviour.
 Causes of unethical behaviour are probably numerous.
 Risking to oversimplify the matters, we list the most frequent factors motivating unethical bahaviour: Competition.
 The very nature of competition forces people to act in a way that will take them to the competitive edge, even when this edge is beyond the boundaries of the rules.
 The rules of adequate and inadequate behaviour should be established and clear to the parties and be approved of by the parties, i.e., the negotiatiors agree to play by those rules.
 The negotiations are especially sensitive to ambiguities, once the negotiators are generally expected to be legitimately unethical in their affort to satisfy their interests.
 Thus it is expected that, e.g., from time to time the negotiatiors bluff their intentions or avoid telling the whole truth when stating their end point.
 A tough part for new negotiators is drawing a separation line between legitimate and illegitimate dishonesty!
 Satisfying ones ego and greed.
 In an environment in which the parties are motivated to satisfy their own interests, feed their own ego and show their good image to important public (looking successful, powerful, wealthy, etc.), ethical standards may often be upset.
 We distort the rules to go ahead, we deny having acted incorrectly, we hide our errors, refuse to take responsibility for them or correct them.
 We are concerned with social approval and recognition rather than with the rules we violated in order to reach the position we are at.
 Although sociologists claim that the me-generation is gone, their traces are present in our struggle to satisfy our ego, regardless of the rules.
 Restoring justice.
 A negotiator may believe that he was misused and that he has to resort to revenge.
 By this logic, the other party has already gained some competitive and tactical advantage, and our negotiator has to take drastic steps to regain some power and control.
 Lying and cheating in negotiations are often motivated by the claim that the other party has already done the same; although logics says that two wrong things do not amount to one right, emotional satisfaction resulting from the act of revenge often prevails.
 Short-term prospects.
 What negotiators criticize most frequently is that in their activities they share a shortsighted, short-termed focus.
 The goal to be successful in a short time period results in their tending to neglect long-term relationships.
 Competitive behaviours are more appropriate to short-term, individual negotiations, however, if used in long-term relations, they threaten to upset and destroy them.
 A short-sighted, short-term focus many negotiators use often makes them resort to competitive or even unethical tactics in order to ensure an instant advantage.
 Usual types of unethical behaviour.
 Here we list a number of unethical behaviours that may be encountered in negotiations: Selective disclosing and exaggerating.
 Giving emphasis to one side of the case while neglecting the other.
 Incorrect presentation.
 The negotiator is deliberately dishonest in relation to a desired agreement or resistance point.
 Forgery.
 Giving false information.
 Misleading.
 The previous behaviours are similar to misleading in that a logics is created that makes the other negotiator draw wrong conclusions.
 In its stronger forms, misleading may turn into fraud, when negotiators confirm the facts, the events or the work which are, simply, false.
 Deliberate and direct evil doing.
 This is the worst distortion of ethics and may include serious offence, such as: spying on the other party, stealing their documentation, besmirching them by lying about them or obstructing their work in order to prevent them to compete successfully.
 Implementing ethical principles in negotiation.
 The negotiators have to understand their own ethic standards and limitations.
 Ethical reasoning must include the following factors: The negotiator has to realize that other factors of unethical behaviour may affect everybody, even most honest people.
 Competition, greed, opportunity to gain advantage, especially when we forget that what we are doing now may punish us in the future, distort our efforts in various ways.
 Negotiators have to define their limitations in advance.
 They must develop their own beliefs, a set of principles defining what they will and what they will not do!
 This personal code is generally shaped by personal standards of honesty and integrity, by religion and philosophy and often by painful consequences of their own or somebody others unethical conduct.
 Negotiators have to realize that defining ethical boundaries in conflicts or in negotiations is not absolute.
 As we said above, a certain amount of legitimate dishonesty is often considered appropri REFERENCE Š1Ë Gulliver P., Disputes and Negotiations: A CrossCultural Perspective, Academic Press, New York, Š2Ë Robinson W., Volkov V., Supporting the Negotiation Life Cycle, Communications of the ACM, 41(5), 95-102, 1998 Š3Ë Duening T. N., Sherrill W. W., Entrepreneurism, Atomic Dog, Cinncinati, 2006 Š4Ë Savage G.T., Blair J.D., Sorenson R.L., Consider both relationships and substance when negotiating strategically, Academy of Management Executive, 3, 37-47, 1989 Š5Ë Fisher R., Ury W., Patton B., Getting to Yes: Negotiating Agreement Without Giving in, Houghton Mifflin Books, 1991 Š6Ë Menkel-Meadow, C., Toward another view of legal negotiation: the structure of problem solving, UCLA Law Review, 31(4), 754-842, 1984 Š7Ë Cramton P. C., Dees G. J., Promoting honesty in negotiation: an exercise in practical ethics, Business Ethics Quarterly, Volume 3, Issue 4.
 1993 ate in negotiations.
 There are no generally adopted ethical codes to help negotiators define what is appropriate and what is not (such as those valid for lawyers or some other professions).
 Most negotiators seem to agree that slight exaggeration and selective disclosure (stressing positive features over negative and not disclosing the end point) are acceptable and within ethical boundaries of negotiations, however, more serious violation of ethics may be inappropriate and less acceptable.
 It is an ethical challenge in negotiations not to disclose too much, but not to hide the truth and distort the rules in a way to destroy the trust and relationships between the parties either.
 Conclusion The paper focuses upon the key aspects of negotiations in business relations.
 The following basic components must be taken into consideration when planning and executing any kind of negotiations: Understanding major elements of negotiating cor rectly.
 Role of key power factors in negotiating.
 Importance of basic outcomes as well as relation ship outcomes for both parties.
 Ethical principles and their implementation in ne gotiating.
 The above four categories will strongly affect the type of strategy the negotiating parties will select.
 Successfull negotiators understand that these factors contribute to firm agreements and try to manage them in a given strategic planning and execution. 
