The Ethics of Negotiation: Deception and Consequences

Introduction

As per Lewicki, Saunders & Minton (2003), employing an unethical tactic in business negotiation can have serious consequences. The incident at the British Petroleum (BP) Texas refinery on March 24, 2005 serves as a poignant example of this, demonstrating the effect of an immoral negotiation method that tragically caused the loss of life for 15 contract workers.

According to Lewicki et al 2003, ethical behaviour refers to standards of conduct that encompass honesty, fairness, responsibility, and trust. These standards are universally applied and determine the morality of a specific action.

Es (1955) argues that proponents of the 'absolutist' perspective adhere strictly to a defined notion of what is morally right or wrong. On the other hand, those taking a 'relativist' stance believe that ethical behaviour is contingent on the context and lacks a fixed definition of right and wrong.

Throughout history, there have been numerous instances of unethical behavior. This includes the atrocities committed in Nazi Germany in 1945, as well as more recent events in the Balkans and Rwanda.

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It is important to acknowledge that these instances did not involve any form of negotiation.

In addition to historical examples, unethical behavior has also been observed within modern society's negotiation processes. These cases encompass a wide range of significant unethical business practices, along with smaller and more common unscrupulous business dealings.

Examples of significant unethical business practices include the recent failure of safety provisions at the BP Texas refinery, an incident involving Patrick's wharf workers, and a dispute over asbestos compensation by Hardie's.

Research on ethics and negotiation primarily focuses on the notion of truth, as discussed by Lewicki et al (2003).

The definition of truth gives rise to controversial inquiries, including "what constitutes a lie?" and "are there situations in which withholding the truth is considered acceptable or needed?" (Lewicki et al 2003: pp.167)

Recognizing the significance of ethical negotiation, it is essential to distinguish between acceptable and unacceptable behaviors in order to address the need for deception caused by competition. Negotiators must understand the potential repercussions of their actions, as deviating from ethical standards can lead to undesirable consequences.

The main focus is on discussing ethics in negotiation.

The use of deceptive behaviors in negotiation is understandable due to the power that information holds. The party who can acquire high-quality information or utilize it more effectively will gain a significant advantage over their opponent (Lewicki et al 2003). Deceptive behavior allows negotiators to manipulate information for their own benefit (Es, 1955). For example, negotiators frequently provide false or misleading information to shape how their opponent perceives, prefers, and prioritizes (Lewicki et al. 2003). Additional forms of deceptive behavior include bluffing, exaggerations, and concealment.

The lack of accountability for one's actions is a significant concern in relation to unethical behavior during negotiations (Byrnes, 1987). Often, negotiators attempt to justify their use of unethical behavior by shifting the focus onto the other party. For example, a negotiator might perceive the opposing side as employing a competitive approach, leading them to believe that using unethical tactics is necessary for self-defense. Other justifications that serve one's own interests include: believing that the desired outcome justifies any means, asserting that the behavior was inevitable, and claiming that the behavior was appropriate given the circumstances (Lewicki et. al. 2003).

Typically, negotiations encompass aspects of distributive bargaining, wherein information is withheld and exaggerated offers are presented (Friedman & Shapiro 1995). Even negotiators who aim to cooperate are reluctant to establish an entirely reliable and truthful negotiating atmosphere. They must strike a balance that demonstrates their integrity while safeguarding their bargaining stance (Byrnes, 1987). The extent of information revealed will vary depending on the circumstances.

According to Lewicki et. al. (2003), unethical behavior during negotiations can have both positive and negative outcomes, while Byrnes (1987) argues that the desire to deceive creates a moral dilemma for negotiators, leading to guilt and discomfort after the negotiation process. Failing to adhere to ethical conventions in negotiations can harm a party's reputation with its constituents, the opposition, and the public, as stated by Lewicki et. al. (2003). Byrnes (1987) further suggests that this can have long-term consequences for future relations between the parties and negatively impact future disputes and negotiations.

Case study: BP Texas Refinery

The tragic loss of 15 contract workers' lives at the BP Texas refinery serves as a stark example of the consequences that arise from taking an unethical approach in negotiations. Even after facing numerous criticisms from OSHA, fines, and prior safety incidents, BP chose not to make any concessions during workplace safety negotiations (Laredo Morning Times, 2005).

Over the past ten years, BP-owned plants have experienced eight incidents resulting in fatal accidents. The Texas City explosion was one of these incidents and marked the third fatal accident to occur specifically in Texas City. This has sparked a renewed debate on the conflict between financial interests and ethical considerations, particularly regarding BP's approach to safety concerns during negotiations with workers. Olsen (2005) strongly critiques BP's track record, emphasizing the ethical implications of their decision-making.

According to Klinger (2005), BP's largest refinery in Texas is also the third-largest in the US in terms of finances. It has a daily processing capacity of 460,000 barrels of crude oil, satisfying 3% of America's petrol demand. However, an analysis of industry statistics, news accounts, and accident reports reveals that BP surpasses other US refining companies in fatalities. Since 1995, there have been 22 deaths in BP refineries, accounting for over a quarter of all refinery-related deaths in the country. In contrast, Exxon Mobil Corp., a major competitor to BP in the US market, has recorded significantly fewer deaths - only one-tenth compared to what was reported in BP refineries (Jordan, 2005).

The Texas City plant has consistently experienced safety problems, with the company's management failing to prioritize safety. Although the union attempted to address these issues and secure compensation for faulty equipment during previous negotiations with BP, they were unsuccessful in improving working conditions.

Before the accident at Texas City, BP's poor track record led to their inclusion on an internal federal watch list of companies that were not prioritizing employee safety. This was due to a previous explosion in Texas City in September 2004, which resulted in the death of two pipe fitters and injury to a third individual. The explosion occurred when pressurized, superheated water was released from a check valve. As a result, BP faced a fine of $109,500 from OSHA, which included seven serious violations and a willful citation for their failure to relieve trapped pressure within a pipe (Laredo Morning Times, 2005).

According to BP spokesman Hugh Depland, an explosion occurred in the ventilator stack that was being restarted after extensive maintenance. The explosion caused the death of 15 people and injured another 70 individuals. Depland emphasized that safety is a priority for BP and that significant upgrades have been made at Texas City in recent years. These upgrades include increased safety reviews by all members of the leadership team, an enhanced safety team for all employees, and the establishment of a full-time safety audit team (Olsen, 2005).

According to a report from Laredo Morning Times (2005), the issue may have arisen because BP officials potentially overlooked overall system safety while emphasizing individual worker safety. Although the number of minor injuries may have decreased, there were underlying problems that were ignored, such as an outdated ventilator stack that emitted liquid and gas before igniting.

According to Olsen (2005), a responsible company would thoroughly investigate all accidents, incidents, and near misses and commit to fixing any issues found and following through until completion. In the case of BP, they identified a problem with the ventilator stack years ago but failed to address it. Despite being the largest refinery of BP, the Texas plant has a poor safety record and consistently faces fines, indicating that management is disregarding this problem. It can be assumed that the management's continuous negligence towards this issue is driven by the high oil prices in the US and global markets, with a focus on profitability rather than ethical considerations. However, such behavior cannot be justified. The matter is currently being further investigated by OSHA.

According to Olsen (2005) and Laredo Morning Times (2005), it is suggested that the lack of strength in the workers' union movement at BP refineries is responsible for recurring accidents and deaths. As previously mentioned, the refinery's plant workers were represented by the Paper, Allied-Industrial, Chemical and Energy Workers International Union (PACE), but their efforts to improve safety conditions were unsuccessful. The evidence provided by Olsen (2005) and Laredo Morning Times (2005) confirms that there has been a continuous increase in accidents and deaths at BP refineries in recent years. This has led the union to adopt a more assertive approach in order to address and resolve this issue.

Effective Strategies for Negotiating

A heated negotiation happened between BP and its contractors, who are the primary workforce at the Texas BP refinery, several weeks prior to the fatal explosion. As stated by Olsen (2005), the workers contended that they were employed in an outdated temporary operating unit without any warnings or evacuation protocols. Moreover, as substantiated by Wheelwright (2003), the workers claimed that their privileges as independent contractors did not include compensation for workplace injuries. Although BP aimed to address the workers' concerns regarding occupational health and safety measures, as reported by Olsen (2005), they seemed unwilling to allocate a significant amount of time and resources to reinstall safety mechanisms and procedures starting from scratch.

The contractor union working for BP had knowledge of BP's inadequate safety history and employed aggressive strategies by taking a severely strict first position. Additionally, the union partnered with a third-party company that evaluates and communicates workplace safety protocols and dangers. The union issued a warning about conducting an inspection of the most deficient areas of the facility and revealing this information to the press.

The union addressed the core of this sensitive issue, using the poor safety record as proof that BP has consistently made mistakes. According to the Laredo Morning Times (2005) and Olsen (2005), BP has been accused of deliberately breaking safety regulations, postponing problem-solving, and concealing investigation reports of past incidents. These facts suggest that BP has a tendency to prioritize quick fixes for worker satisfaction and to minimize workplace disruptions. This approach is also observable in their negotiation strategies.

BP found themselves cornered by the union's relentless and accurate criticisms, forcing them to reconsider their approach to safety measures. This, as noted by Lewicki et. al. (2003), is a direct outcome of the aggressive strategy employed by the union. Consequently, BP resorted to employing unethical negotiation tactics as defined by Lewicki et. al. (2003). According to Olsen (2005), BP had initially received a report alerting them to the risks associated with the temporary operating unit. However, they made the decision to conceal this information from the union.

The workers' claims of unsafe working conditions were deemed exaggerated and lacking substantial evidence by BP negotiators. They suggested the creation of an improved safety team for all staff members and a full-time safety audit team to conduct more thorough safety evaluations. However, the implementation of these teams was delayed, as noted by Olsen (2005) and Laredo Morning Times (2005), and did not happen before the explosion that tragically claimed 15 lives.

Conclusions and Recommendations

In the discussion on ethics, it was noted that BP used unethical methods to resolve the dispute. These tactics included bluffing, exaggeration, and concealment of information. The main aim of BP was to minimize disruption and satisfy workers in the short term, showing their prioritization of desired results regardless of the means employed. Although some may argue that BP negotiators succeeded in their objective, it is evident that due to their lack of urgency and failure to prioritize worker safety, the negotiation had a disastrous overall outcome.

A suggestion arises from the previously mentioned work of Byrnes (1987). It entails achieving a positive sentiment during negotiations. Continuous instances of deception and falsehoods, which result in loss of life, will generate an atmosphere of mistrust. Consequently, this will cause disturbances within the workforce and prompt the opposing party to employ aggressive tactics in future negotiations. By implementing one of Walton & McKersie's (1965) significant negotiation strategies known as attitudinal structuring, which promotes open and honest communication and the exchange of safety reports and progress updates between parties, the union can gain confidence that BP will take action to rectify any unsafe work environments.

The understanding between the parties will enable BP to focus on the occupational health and safety aspects that workers genuinely appreciate. This is different from the reports by Olsen (2005), which suggested that BP was solely emphasizing "don't strain your back" and "don't get dirt in your eyes". By doing so, BP aims to garner worker support and minimize disruptions within the workforce. However, for this recommendation to be effective, BP must be willing to invest the necessary resources in developing these programs. In case BP truly aims to enhance their safety record and reduce accidents and fatalities at their plants, establishing an open and reliable mode of communication with the workers is the initial step in rectifying their previous mistakes.