CBN Ethical Boundaries & Good Faith 3 — Questions and Answers
Question 1: A negotiator is pressured by their employer to use tactics they believe are unethical. The most professionally appropriate response is to:
- Follow employer instructions since loyalty is paramount
- Comply but document objections in writing
- Raise concerns through internal channels and, if unresolved, consider withdrawing (Correct answer)
- Report the employer to the opposing party
Correct answer: Raise concerns through internal channels and, if unresolved, consider withdrawing
Professional negotiators should voice ethical concerns internally; if unresolved and serious, withdrawing from the engagement is preferable to participating in unethical conduct.
Question 2: Which of the following is an example of an ethically permissible negotiating tactic?
- Creating a false sense of urgency with fabricated competing offers
- Anchoring with an ambitious but honestly held opening position (Correct answer)
- Misrepresenting your cost structure to justify a price
- Threatening consequences you have no intention of following through on
Correct answer: Anchoring with an ambitious but honestly held opening position
Anchoring with a high but genuine opening position is a legitimate tactic; the others involve deception or empty threats.
Question 3: The principle of 'proportionality' in negotiation ethics suggests that:
- Both parties must make equal concessions
- The aggressiveness of tactics should be proportionate to the stakes and context (Correct answer)
- Ethical standards are higher in larger deals
- Only senior negotiators may use hardball tactics
Correct answer: The aggressiveness of tactics should be proportionate to the stakes and context
Proportionality means that the intensity and approach of negotiation tactics should match the stakes and relationship context appropriately.
Question 4: When a negotiator uses a 'nibble' — asking for small extras after agreement — this is ethically problematic primarily because:
- It violates antitrust law
- It exploits psychological commitment and can violate the spirit of the agreed deal (Correct answer)
- It is only acceptable in real estate transactions
- It always constitutes misrepresentation
Correct answer: It exploits psychological commitment and can violate the spirit of the agreed deal
The nibble tactic exploits the other party's sunk-cost bias and commitment, undermining the integrity of the concluded agreement.
Question 5: A negotiator's client instructs them to convey false urgency to the other side. Under professional ethics, the negotiator should:
- Follow client instructions since the client is always right
- Refuse, as making false statements of fact violates professional ethical standards (Correct answer)
- Use vague language that implies urgency without stating it explicitly
- Ask the other party to sign a waiver
Correct answer: Refuse, as making false statements of fact violates professional ethical standards
Professional negotiation codes prohibit knowingly making false statements of fact, regardless of client instructions.
Question 6: Good faith negotiation requires that parties:
- Always reach an agreement
- Make concessions whenever asked
- Engage honestly with a genuine intent to resolve differences (Correct answer)
- Share all confidential information
Correct answer: Engage honestly with a genuine intent to resolve differences
Good faith does not guarantee agreement but requires honest engagement and genuine intent to work toward resolution, not merely going through the motions.
Question 7: Which scenario illustrates a conflict of interest that must be disclosed in negotiation?
- A negotiator who prefers a quick settlement for personal scheduling reasons
- A mediator who has a financial stake in one party's business succeeding (Correct answer)
- A negotiator who has previously worked in the same industry as the counterpart
- A lawyer who has negotiated similar contracts before
Correct answer: A mediator who has a financial stake in one party's business succeeding
A financial stake in one party's outcome creates a material conflict of interest that must be disclosed to maintain neutrality and good faith.
CBN Ethical Boundaries & Good Faith 3
A negotiator is pressured by their employer to use tactics they believe are unethical.
The most professionally appropriate response is to: