Why We Need Trust in Negotiations

Applications

Contributor / Jeanne Brett

DeWitt W. Buchanan, Jr., Professor of Dispute Resolution and Organizations
Professor of Management & Organizations
Director of Dispute Resolution Research Center
Kellogg School of Management / Negotiations

Part 1 / Signaling Trustworthiness (0:00)
Establishing trust in negotiations depends on each side showing an element of vulnerability. In cultures defined by a high level of trust, becoming vulnerable by revealing what is important happens quickly and creates reciprocity allowing an agreement to emerge based on each partner’s priorities.

Part 2 / Positive Outcomes with More Trust & Vulnerability (1:30)
Two people arguing over an orange, for example, might want something very different from it—the rind or the juice. In negotiations, both parties can often have what they want as long as there is sufficient trust to reveal their true interests and underlying motivations.

Transcript

BUMPER: Signaling Trustworthiness

I’d like to distinguish between swift trust and slow trust. Swift trust means I don’t know you — I may not even know you by reputation — but I assume you’re a professional. I assume that you are benevolent; I assume that you’re trustworthy.

And I signal that information to you. And then you come back to me, usually, by reinforcing me and indicating that, yeah, I made the right call about you. It’s hard to not fulfill someone’s trusting expectations of you.

In slow trust, there’s no assumption that the other party is trustworthy. In slow trust, it’s slow; it takes time to develop trust. What that means is, people have to have experience with each other, gain familiarity with each other and have that experience where I make myself a little vulnerable and you don’t take advantage of me.

Slow trust builds slowly over time. Swift trust happens quickly. One is just more efficient than the other in negotiations. So, it’s understandable that many people are reluctant to take the swift-trust risk.

BUMPER: Positive Outcomes with More Trust & Vulnerability


Two sisters are both in the kitchen; they’re both cooking; and they have need for an orange. And they only have one orange.

So, the sisters get into a fight: “I want the orange.” “No, I want the orange; you can’t have the orange.” And there’s no solution because half an orange is not going to satisfy either sister.

They get nowhere until they take that single issue of who gets the orange and say, “Why do you want the orange?” And then they learn that one sister wants the orange for the rind, and the other sister wants the orange for the juice.

Now, if they had just taken half an orange, neither one of their recipes would have come out, but by finding out why they wanted the orange — those are those interests in negotiations — they were able to both win, if you will.

What happens is, in negotiations — even if it looks like it’s a single issue, or many negotiations are multi-issue — what you have to understand is where the other party is coming from, what’s motivating the other party and what’s most important to the other party.

You’re not going to get everything you want in negotiation; you’re too interdependent for that. But if you find out what’s more important to the other party that’s somewhat less important to you, then you can begin to make a trade-off.

So, why do negotiators need to trust? Because as soon as I start revealing what’s important to me, you have the opportunity to take advantage of me.

So, I have to trust you that you won’t take advantage of me, which means we coach negotiators to share a little information about interests and priorities and ask for some information — comparable information — in return.

And then you can get this reciprocity going — sharing information — understand where the other party is coming from, make those trade-offs and build high-quality agreements, like the two sisters and the orange.

Keep up with the latest insights on trust

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How Culture Affects When Negotiators Cooperate

How Culture Can Influence Whether Negotiators Cooperate: Key Findings

Research
Contributor / Jeanne Brett
Jeanne Brett Negotiations Swift Trust,Reciprocity,Institutions and Context BUMPER: Trust and Social Sanctions

There are really three key papers to understand culture and negotiation strategy in the role of trust in that relationship. The first one is one that identifies swift trust, and this is Meyerson, Weick, and Kramer’s work.

They were looking at film crews. And their observation was, these film crews coalesced very quickly and used a lot of cooperative behavior. They were assuming that the other parties in the team were professional, competent, and trustworthy.

BUMPER: Swift Trust in Negotiations

When we take a look at negotiation research and we think about Meyerson, Weick, and Kramer’s work, we see a lot of similarities between the film crews that they studied and negotiations.

In the first place, negotiators come together and they typically don’t know each other. When they’re putting together a new business deal, they don’t have a history. They may have some reputation that goes in front of them, but they don’t have a personal history.

Meyerson and her colleagues propose that to get trust going, people have to wade in; they can’t just sit back and wait for the other party to act in a trustworthy manner. But the way to get trust going is to initiate trust, and then that global norm of reciprocity kicks in and people trust back.

BUMPER: Trust and Social Sanctions

I want to talk about Toshio Yamagishi’s research. He was studying Japanese and American participants and putting them in social dilemmas. Now, a social dilemma is a multiparty prisoner’s dilemma.

If you know about prisoner’s dilemmas, you know that they put the two prisoners in separate interrogation rooms, and they offer each of them a deal to squeal on the other. And if nobody squeals, everybody gets a light sentence. And if both people squeal on each other, they both get a really heavy sentence.

But the best outcome would be, is if I squeal on you and you don’t squeal on me.

A social dilemma is the same phenomenon, only there are multiple parties.

And what Yamagishi did is he put his experiment and he varied in two dimensions. He measured his participants’ level of trust, and he had high-trusting participants and low-trusting participants.

And then he put them in a situation of no sanctions or a situation of sanctions. By sanctions, what he was doing is he was giving them money to do the experiment, and if they failed to cooperate, the money would be taken away from them.

And he found that among the Japanese, in the no-sanction condition, cooperation was extremely low; in the high-sanction condition, cooperation was high—particularly there were no differences between high and low trusters in the sanctioning condition, but in the no-sanction condition, the high trusters were willing to cooperate more than the low trusters.

Yamagishi then went and did the same study using American participants. And the first thing he found was that American participants overall were more trusting on a trust scale than his Japanese participants.

But he still sorted them into high- and low-trust groups, and he still had the no-sanction condition and the sanction condition.

But here, he found that the Americans in the no-sanction condition, regardless of whether they were high trusters or low trusters, they cooperated. They also cooperated in the sanctioning condition.

And so, Yamagishi stepped back. He was, I think, very surprised at what his research showed at first. And then he had to figure out how to interpret it.

And his interpretation was that the sanctioning condition cued the Japanese participants to the kind of environment that they lived in, in their everyday social interactions because, in Japan, there are strong norms for cooperative behavior, there is social monitoring and social sanctioning for failure to cooperate.

What Yamagishi argued is that when you take away that monitoring and sanctioning, the Japanese participants had no basis for predicting or expecting the counterparties in this social dilemma to behave cooperatively.

And so, in a defensive posture, they competed in order to defend themselves.

When he looked at the American data again and started to interpret the American data, he says, “The US culture is very different.” He said, “The US culture is much more open; there’s much less monitoring and sanctioning.”

And he said, “These American participants, they have an internal moral compass. And so, they don’t have to be cued by the context to know whether to cooperate or not to cooperate; they cooperate on the basis of their internal moral compass.”

Now, Yamagishi explained his results with a cultural concept called “collectivism versus individualism.”

In individualist cultures, people’s self-identity is a function of their accomplishments. In collectivist cultures, people’s social identity is a function of whether or not they are adequately, in the eyes of others, fulfilling their social roles.

BUMPER: Cultural Tightness and Looseness

Michele Gelfand is another cultural psychologist, and she came along and said, “Hmm, I don’t think so. I don’t think it’s collectivism and individualism that’s explaining Yamagishi’s results.” She says, “I think it’s something called cultural tightness–looseness.”

She defines cultural tightness–looseness very similarly to the way Yamagishi described the differences between Japanese and US culture. She says, “In a tight culture—strong social norms, lots of monitoring, lots of sanctions for failure to fulfill those social norms. And in a loose culture,” she says, “norms are looser. There’s more flexibility; there’s more improvisation in social interaction in everyday life.”

So, Michele Gelfand and her colleagues collected data from 33 countries, and they correlated it with a whole lot of other psychological variables, but they also correlated it with data about history, geography in these countries.

And what they found is that tight cultures have a profile—they have a cultural profile—that is very different from the cultural profile of loose cultures.

And so, the way to understand culture and negotiation strategy is to understand both trust in that culture and to understand whether that culture is a tight culture or a loose culture.
Negotiation Across Cultures Depends on Trust

Negotiating Across Cultures Depends on Trust: A Psychologist’s Perspective

Foundations
Contributor / Jeanne Brett
Jeanne Brett Negotiations Definitions,Swift Trust,Communication,Reciprocity, Institutions and Context I study culture and negotiation strategy, and trust is a very important concept for researchers like me. We define trust pretty much the way people in other disciplines define trust—with an emphasis on benevolence and integrity.

What we find is that negotiators who trust use strategy in a way that allows them to negotiate high-quality agreements. What they do is they share a little information about their own interests and priorities and they ask for information from their counterpart about their counterpart’s interest and priorities.

Now, an interest in negotiation—that concept—refers to the reason underlying why negotiators are asking for what they want. So, it’s the reason why you’re asking for what you’re asking: why do you want that? It answers the “why” question.

Priorities refer to, what issues are more important, and what issues are less important? Negotiators who trust and share information about interests and priorities, learn about the interests and priorities of their counterpart are able to trade things off and create high-quality agreements.

But of course to do that, you have to make yourself a little vulnerable because you’re sharing information that the other party could take advantage of. And so, the key question in our research is, who trusts and why?

BUMPER: Trust across Cultures

And one answer to that question is culture. I’d like you to take a look at the chart that plots World Values Survey trust data by regions of the world.

The World Values Survey is run by a group of scholars that collect data from a representative sample of about a thousand people within a nation, ages 18 to 80.

And they come back every two or three years.

Their trust question is, “Most people could be trusted—yes or no?” And so, what you see in the chart is the percentage, averaged by nation, of people who say, “We can trust other people.”

Before we look too carefully at the data in the chart, there are two things we need to address. One is, this is a single-issue question. And behavioral scholars like myself don’t like single-issue questions; they worry about reliability.

But because we have data from these nations, collected with this exact same question over many, many different years, you can look at the reliability across time.

And when you look at the reliability of the trust question, it’s over .90 on average across time. So, the question is reliable.

The other potential threat to validity of this question is that people in different cultures interpret trust differently when they ask a question, “Can people in your culture be trusted?”

But again, scholars have looked at this question, they ask people, “What do you believe in? What do you believe trust means?” and they get consistently the same answer over and over again—integrity and benevolence.

So, if we take a look at the data, you might infer—from seeing that trust is relatively high in the West and in East Asia, and relatively low in South Asia and in the Middle East and in Latin America—that East Asians and Westerners are going to be using a lot of strategy that shares information, and people in Latin America and in the Middle East and South Asia aren’t.

And you’d only be half right.

It turns out that the research on negotiation in the West shows a lot of information sharing, a lot of cooperative behavior, but we don’t see the same thing in East Asia.

And the question again is, why?

BUMPER: Swift Trust

It turns out, in the West, negotiators seem to use something that we call “swift trust.” And the idea of swift trust was coined by some researchers, Meyerson, Weick, and Kramer.

And they were studying film crews. They looked at film crews and they said, “These are people who come together to do a highly interdependent job. They frequently don’t know each other—maybe by reputation, but they haven’t worked together in the past.

But they come together and they coalesce very rapidly and they are very cooperative. And why does that happen?” these researchers asked.
And they said, “It happens because they assume the other is a professional. They assume that the other is trustworthy.”

And as soon as you signal that you think someone else is trustworthy, that has two or three implications. One is, they would have to be a cad not to follow up and step up to your expectations of trust.

But the other is, you’re signaling something about yourself—that you’re willing to make yourself vulnerable to the other party and believe that they are trustworthy.

In negotiation research, we see very much the same thing in our North American and Northern European data. Negotiators come to the table and make the assumption that the counterpart is trustworthy.

And they then go in and ask questions, get a little information about those very important interests and priorities, offer a little information in return. And in that counterpoint–point–counterpoint, they begin to justify the assumption of trust that they made in the first place, and they begin to solidify that trust because they have behavior that they see of the other party.

BUMPER: Trust and Social Sanctions

So, let’s take a look at the data from East Asia. Consistently, in study after study, we find East Asians are extremely competitive in negotiation. And this, of course, is not what we would expect, looking at the trust data.

A really good answer to the question of why the East Asians do not seem to act in a trustworthy fashion in negotiation was given by Toshio Yamagishi, a Japanese psychologist.

He was studying social dilemmas. Now, a social dilemma is a multiparty prisoner’s dilemma. It’s a commons problem in economics.

The tension in a social dilemma is that if all the parties cooperate, everyone shares a larger piece of the pie, a larger set of resources. If, however, everyone competes, they share a smaller set of resources.

What it means is, for you, if you compete and the rest of us cooperate, you do really well, but we do very poorly. And what Yamagishi found is that his Japanese students in a social dilemma situation would cooperate as long as there were sanctions for failure to cooperate, or competition.

When he removed the sanctions, the Japanese students competed like crazy. Yamagishi then repeated his research in the United States with American students.

And he found, first of all, that the American students were much higher trusting than the Japanese were and that they would cooperate in both the situation where there were sanctions, but they would also cooperate pretty much at the same level in situations in which there were no sanctions.

So, Yamagishi explained his results by looking at Japanese society. And what he described Japanese society is a society that’s very tightly controlled by social norms, by social monitoring, and by social sanctioning.

And he said what happened then in his research is that when monitoring and sanctioning was missing, in the situation of a social dilemma, the Japanese students competed.

But he described the United States culture as much looser in terms of norms, monitoring, and sanctioning.
And he said, “Look, the Americans have an internal moral compass that directs them to be cooperative. They don’t need and don’t expect the external controls that are characteristic of the Japanese society.”

If we take a look a look again at the trust chart and look at the Middle East and South Asia and look at Latin America, we see pretty uniformly low trust. And that would predict that we would have a lot of difficulty in negotiations—not a lot of information sharing, not a lot of high-quality agreements.

There’s much more limited negotiation data in the Middle East, South Asia, and Latin America. But it shows not a lot of cooperation, not a lot of trust, at least in the Middle East and in South Asia.

But the Latin American data are more interesting. The Latin American data show much more complexity.

For example, in some data that I have from Brazil—in fact, I’ve collected data from Brazilian managers several different times over the past 10 years—I get a lot of cooperation, a lot of information sharing, and really high-quality outcomes.

In some Spanish data, we saw that when the Spanish were negotiating with each other, they weren’t sharing information and they got low-quality outcomes; compared to the US negotiators, when they’re negotiating with each other, using more information sharing, getting higher-quality outcomes. You see that difference in trust.

But what was interesting, in the next part of the data, is when the Spanish were negotiating with the Americans. And there, the Americans continued to share information, ask for information, and the Spanish started to do that too.

And they got a lot more insight about what was important, more and less important, to their counterparts, and they negotiated much better deals in the intercultural negotiations with the Americans than they did in the intracultural negotiations with other Spanish counterparts.

So, looking at all this data, my research team concluded that trust isn’t enough to explain the relationship between culture and negotiation strategy. Taking our cue from Yamagishi’s research, we turn to some more recent work in cultural psychology by Michele Gelfand.

BUMPER: Cultural Tightness and Looseness

Michele Gelfand studies a concept that she calls “cultural tightness–cultural looseness.” And it’s very similar to the way Yamagishi described Japanese culture versus American culture.

A tight culture, according to Michele Gelfand, is one where there are strong social norms, there is monitoring of social norms, there is sanctioning of failure to conform to social norms.

And maybe it would help to have a little story to explain what that might look like if you’ve never been in Japan or East Asia.

One of my executive education students said, “I’ve got a story, professor.” He said,

“My wife and I were living in Japan. I was an expat working for an American company over there. And we decided we wanted that full cultural experience, so we rented a house in a Japanese community, not an expat community.”

And he said, “Our first major challenge was figuring out how to properly sort our recyclables because it’s very strict in Japan.”

And he said, “We tried really hard to get everything in the right bag. And then the recycle truck was coming the next night, and we would put everything out where it was supposed to be. And then we would see our neighbors coming out of their homes, going through our recycle bags, resorting it so that it was correct.”

The neighbors thought it was important for the neighborhood that the recycling be done appropriately. So, here’s a very strong set of norms, monitoring, and sanctioning.

They didn’t really sanction directly this expat couple, but the expat couple was sufficiently embarrassed that they kept working on getting their recycling right.

So, Michele Gelfand and her colleagues, all around the world, collected cultural tightness–looseness data from participants—these were mostly teachers and university students.

They asked a series of questions about how culture operated, and how tight those norms were, how much sanctioning and monitoring was going on.

So, you see in this chart how those same countries fall out on cultural tightness–looseness. These are all the same nations that we show in the trust scale. And what do you see?

We see that Western culture is a loose culture (that’s no surprise), East Asian culture is a tight culture (that’s no surprise), the Middle East and South Asia are also a tight culture, but those interesting Latin Americans are a loose culture.

So, what we have in Latin America, and maybe the way to explain what we see in the negotiation data in Latin American, is that Latin Americans live in a loose culture.
That means they can’t assume on a day-in, day-out basis, they can’t predict other people’s behavior. They don’t have expectations the way the tight-culture East Asians or Middle Easterners do.

What they have to do is navigate a loose culture and navigate a low-trust, loose culture. What do they do? They certainly don’t engage in swift trust—that assumption that everyone else is trustworthy.

What they do is they build slow trust; their focus is on building relationships. And they do all the things—getting to know you as a person, learning about your family, finding commonalities in interests in sports, in interests in food—to get a relationship going with you that has nothing to do with a negotiation.

But if they can build a common path with you personally, they build a relationship to be able to negotiate cooperatively.

And so, my colleagues and I think that there’s more to culture and negotiation strategy than just trust. It’s that interface between trust and cultural tightness–looseness that accounts for how negotiators in different parts of the world use strategy.
Judging trust and trustworthiness is important in all aspects of our lives even grocery shopping.

Differentiating Trust and Trustworthiness: A Sociologist’s Perspective

Foundations
Contributor / Bruce Carruthers
Bruce Carruthers Sociology Government,Institutions and Context,Legal Guarantees,Reputation Management,Social Psychology,Vulnerability As a social scientist, I’m very interested in trust as it concerns people because really society, human cooperation, human coordination, all of the activities that we do together, really depend on trust.

And you might kind of wonder, well, trust sounds a bit like faith? You know, we’re just going to take people on faith.

And don’t we have a bunch of ways of coordinating our activity and making sure that the left hand knows what the right hand is doing, and I can figure out what’s going on vis-a-vis my employer or all the people that I interact with — and don’t we have a bunch of formal coordination devices like contracts or instructions or standard operating procedures?

Why aren’t those good enough? Why do we have to go beyond that and trust people? And there’s a couple of reasons for this. And one of them is that, as wonderful as these formal devices are, they really do have limits.

And one of the reasons is that contracts and other instructions, lists, standard operating procedures, all of these devices — they’re always incomplete; that is, the world is more complicated and unpredictable than we can anticipate.

And so, stuff will happen that will effect whatever it is you’re doing with these other people. It will have an impact on your ability to execute whatever it is you’re trying to do, and it’s not going to be in the contract what’s up.

You might think to yourself, “Well, maybe trust isn’t such an issue if we go to the marketplace.” Let’s think about markets and capitalism and self-interest and competition — maybe that’s a world in which contracts and other formal devices will be sufficient.

And once you’ve got an airtight contract, you don’t have to worry about the personal character or the trustworthiness of the people you’re dealing with, because you’ve got a good contract and you hired a good lawyer.

So, the most famous person who thought about this sphere, of course, was Adam Smith in his famous book The Wealth of Nations, which really did talk about the virtues of capitalist production and competitive markets and so forth.

And I think it’s very telling that before he wrote The Wealth of Nations, Adam Smith wrote a book on The Theory of Moral Sentiments.

And in this previous book, he posited that people are linked through strong bonds of sympathy and empathy and trust, and that on top of this, we’re able to have markets and capitalism and all that kind of fun stuff.

It was clear to me (and I think clear to Smith) that some measure of some baseline, some foundation of trust is very important even in social settings where we might think that the issue of trust can be solved or avoided.

You might want to ask, when does trust arise? I’ve talked about it as kind of ever-present — it’s all over the place. But really, there’s two elements that drive trust situations.

One of them is uncertainty, and the other is vulnerability — that is, people are uncertain about what others are going to do (they don’t know what’s going to happen in the future), and they’re vulnerable to what those other people do to the extent that their interests and those other people’s actions are intertwined.

So, the trick for dealing with a trust situation is really addressing these two key elements: either trying to deal with uncertainty by acquiring more information and learning (or trying to figure out) what is likely to happen in the future.

…Or by managing your vulnerabilities and thinking about ways to mitigate or reduce the impact (or the potential harm) that others’ actions, future actions, could have on your interests.

So, this kind of sets up a generic recipe book for how to deal with trust situations. How do people trust?

People rely on a lot of heuristics, rules of thumb, to decide who is trustworthy and who is not, and that distinction is really important because you can’t go through the world trusting everyone, and you can’t function in the world if you trust no one.

And so, what you have to do at the simplest level, is kind of put everyone into two bins: there’s people that are trustworthy; there is people who are not. And you want to be able to trust the trustworthy and avoid those who are not trustworthy

I’m going to offer a couple of distinctions that help clarify the discussion of trust. And one of them is the difference between trust and trustworthiness. And this really speaks to who is doing the trusting and who is being trusted.

One party trusts the other, and the other party may or may not be trustworthy — that is, they deserve the trust. But someone who is trustworthy may not be trusted, and someone who is trusting may end up trusting someone who is not trustworthy.

So, these two things have to be kept separate. Another distinction is the distinction between generalized and relational trust.

Generalized trust really speaks to the question of how you deal with strangers. Do you trust abstract institutions? Do you trust the average citizen that you might run into on the street?

That kind of a thing — where you’re really dealing with someone with whom you have no relationship and about whom you have no prior information. What kind of ambient or generic level of trust do you have?

Relational trust is, what happens after you start to get to know someone? What happens after you start to develop a social relationship?

You have a history together; you have contracts; you have prior transactions. That is a very particular and non-anonymous form of trust, and it is really driven by the nature of the interaction that you have with that individual.