Business Workloads 2 Sets

Ethically Questionable Negotiating: The Interactive Effects of Trust, Competitiveness, and Situation Favorability on Ethical Decision Making

Filipe Sobral • Gazi Islam

Received: 16 March 2012 / Accepted: 3 October 2012 / Published online: 16 October 2012

� Springer Science+Business Media Dordrecht 2012

Abstract This study explores the direct and interactive

effects of individual differences in interpersonal trust and

negotiation style on ethical decision-making processes across

commonly faced negotiation situations. Individual differ-

ences influence basic ideas about legitimate negotiating

behaviors, affect behavioral intentions directly, and interact

with the favorability of negotiating situations, resulting in

direct, indirect, and interactive effects on ethical decision-

making processes. Using a sample of 298 participants in

executive education workshops, the study analyzes the rela-

tionship between interpersonal trust, competitiveness, moral

judgment, and behavioral intentions in different negotiating

conditions through a series of structural equation models and

regression analyses. Our results suggest that individual dif-

ference variables exert a significant influence not only on how

managers assess the morality of ethically ambiguous negoti-

ation practices but also directly on their behavioral intentions,

and that this effect changed across specific negotiation situa-

tions. We discuss these results in terms of their usefulness in

explaining ethical decision-making processes in negotiations.

Keywords Negotiations � Ethics � Decision making � Interpersonal trust � Competitiveness

Introduction

Research on ethics in decision making has grown rapidly in

recent years (e.g., Tenbrunsel and Smith-Crowe 2008;

O’Fallon and Butterfield 2005), partially in response to the

recognition of ethical malfeasance and scandals in the

world of business (e.g., Bazerman and Banaji 2004; Solo-

mon 1992). Questionable ethics in management generates

costs for businesses and affects the public legitimacy of

business (Bazerman and Banaji 2004), as well as affecting

social well-being and economic development (e.g., Bird

and Smucker 2007). The empirical study of ethical deci-

sion-making processes, hopefully, can contribute to a more

ethical corporate environment (Goolbsy and Hunt 1992).

Because negotiation processes are both central to orga-

nizational life (Thompson 2010) and open to ethically

questionable behaviors such as deception (e.g., Lewicki

et al. 2010), this area is particularly ripe for ethical deci-

sion-making studies (e.g., Bazerman et al. 2000). As

socially motivated interactions between parties with

divergent interests, negotiations are intrinsically full of

ethical dilemmas (Barry and Robinson 2002; Menkel-

Meadow and Wheeler 2004). While attempting to reconcile

competing interests without sacrificing self-interest, nego-

tiators may feel tempted to adopt defensive, cunning, if not

plainly manipulative and dishonest behavior (Lewicki and

Litterer 1985).

Furthermore, some researchers have suggested that

some forms of unethical behavior may not only be common

in negotiations (Rivers and Lytle 2007; Volkema et al.

2004; Murnighan et al. 1999) but also appropriate and even

necessary for effective negotiating (Carson 1993; Dees and

Cramton 1991; Lewicki and Robinson 1998). While we

recognize that ethical dilemmas are common in negotia-

tions and that individual differences of negotiators can

F. Sobral (&) Escola Brasileira de Administração Pública e de Empresas,

Fundação Getulio Vargas, Praia de Botafogo, 190-506,

Rio de Janeiro 22253-900, Brazil

e-mail: [email protected]

G. Islam

Grenoble Ecole de Management, Grenoble, France

e-mail: [email protected]

G. Islam

Insper Institute of Education and Research, São Paulo, Brazil

123

J Bus Ethics (2013) 117:281–296

DOI 10.1007/s10551-012-1520-2

affect the ‘‘ethical experiences’’ that precede ethical deci-

sion making (Tenbrunsel and Smith-Crowe 2008), few

studies have attempted to examine how individual traits

influence judgments of ethically ambiguous negotiation

practices (Lewicki et al. 2010), and how these occur across

divergent negotiation conditions.

In fact, although situational variables are key to under-

standing ethical choices (e.g., Kish-Gephart et al. 2010),

most ethics research in negotiation has tended to focus on

benign or unspecified situations (e.g., Lewicki and Robinson

1998). Because ethical decisions are made in the context of

specific sets of issues and difficulties, variation in situations

may influence negotiation attitudes and behaviors (Brams

1990; Turner 1992), and therefore need to be explicitly tested

(Robertson and Ross 1995; Volkema and Fleury 2002).

This study uses a person 9 situation interactionist per-

spective to understand both individual and contextual

predictors of ethical decisions in negotiation. We explore

the influences of two personality traits, interpersonal trust

and competitiveness, on moral judgments and ethical

behavioral intentions in negotiation across alternative

negotiation situations. Specifically, using four behavioral

scenarios, we test via structural equation modeling to what

extent trust and competitiveness affect negotiators’ moral

judgments and behavioral intentions of ethically ambigu-

ous negotiation practices in alternative situations present-

ing different challenges.

Our focus on behavioral intentions arises from the obser-

vation that ethical decision-making processes involve an ini-

tial recognition that a particular set of events constitutes an

ethical issue (Hunt and Vitell 1986; Rest 1986). This recog-

nition sets in motion judgment processes regarding a course of

action, which subsequently influence behavioral intentions,

the proximal causes of behavior (e.g., Ajzen and Fishbein

1980; Fishbein and Ajzen 1975). Furthermore, empirical

research has shown that intentions are associated with

behavior particularly in the domain of ethical action (Detert

et al. 2008; Vallerand et al. 1992). Thus, factors influencing

moral judgments and intentions, such as individual and

situational variables, should impact ethical outcomes (Jones

1991; Rest 1986; Rivers and Lytle 2007; Trevino 1986).

Theoretical Background and Hypotheses

Although ethical decision-making models in organizational

contexts have proliferated (e.g., Beu et al. 2003; Hunt and

Vitell 1986; Jones 1991; Rest 1986; Trevino 1986), empirical

findings regarding individual differences in drivers of moral

judgments and intentions in negotiations are scarce (Moore

et al. 2011) and inconsistent (Lewicki et al. 2010), with

research often implicitly relying on the idea that individual

differences influence ethical reasoning (Brown et al. 2010).

Within negotiations, there is evidence that personality predicts

negotiation processes and outcomes (Barry and Friedman

1998), but the nature of these relations is obscured by incon-

sistent empirical results (Wall and Blum 1991). King and

Hinson (1994) argue that such inconsistencies may result from

using personality dimensions conceptually unrelated to

negotiation specifically, such as machiavellianism (Bass et al.

1999) and locus of control (Shapeero et al. 2003).

This study tests how negotiators’ individual differences

relate to moral judgments and intentions in different ethi-

cally salient negotiation contexts, building from a person–

situation interactionist perspective that examines person-

ality traits within diverse morally salient situations.

Specifically, competitiveness and interpersonal trust (Ela-

hee and Brooks 2004; Mintu-Wimsatt 2002) should be key

antecedents of ethical decision-making processes, as dis-

cussed below. Building on Rest’s (1986) model of ethical

decision making, we present the current conceptual model

(see Fig. 1), using personality dimensions to partially

explain ethical decisions in negotiations.

In order to test this model, we examine judgments of

ethically questionable behavior using the Self-Reported

Inappropriate Strategies (SINS) instrument (Robinson

et al. 2000). The SINS strategies, or variations of these

strategies, have been used to examine various correlates

of moral judgment and behavior, including affective

(e.g., Cohen 2010), behavioral (e.g., Volkema et al. 2010),

and cultural (e.g., Ma 2010) variables. However, to our

knowledge, interactive person–situation effects on moral

judgment using the SINS instrument do not exist in the

literature, such that this study allows for the extension of

the SINS approach into unexplored domains.

Moral Judgment and Behavioral Intentions

Moral judgments involve individual’s assessments regard-

ing the ethical acceptability of a given behavior or set of

behaviors (Reidenbach and Robin 1988). As an attitude

variable, judgments should affect behavior by means of

their effects on behavioral intentions, which are predispo-

sitions for adopting given behaviors in a specific situation.

This relationship between moral judgments and behavioral

intentions is suggested, for example, by the theory of rea-

soned action (Vallerand et al. 1992; Beck and Ajzen 1991;

Fishbein and Ajzen 1975) and the theory of planned

behavior (Ajzen 1985, 1991).

The theory of reasoned action holds that it is possible to

predict action by examining people’s reasons and inten-

tions. Behavioral intentions are strongly influenced by

attitudes toward a given action along with the subjective

norms and social pressure associated with actions (Fishbein

and Ajzen 1975). Behavior thus is influenced by intentions

282 F. Sobral, G. Islam

123

that in turn result from attitudes about aspects of the

environment (Fishbein and Ajzen 1975). The theory of

planned behavior argues that both behavioral intentions

and actual behavior result from the combined influence of

individual attitudes, subjective norms, and perceptions of

behavioral control. In the domain of ethical behavior, the

link between intention and behavior has been shown

empirically in multiple studies (e.g., Detert et al. 2008;

Vallerand et al. 1992). In other words, people’s perceptions

regarding their capacity to realize determinate actions

affects, by means of these variables, their intentions and

behavior (Ajzen 1985; Ajzen 1991). As such, it stands to

reason that moral judgments in ethical dilemma situations

would relate to behavioral variables.

In a review of over 100 studies, Kim and Hunter (1993)

conclude that there is consistent empirical support for the

attitude–intention relationship. Applying this logic to moral

judgments and behavioral intentions reinforces the relevance

of studying the antecedents of judgments, thus laying the

groundwork for further empirical predictions, which we

propose further in this article. To first establish the empirical

validity of this relationship, however, we hypothesize that

behavioral intentions are influenced by the moral judgments

regarding ethically ambiguous negotiation practices:

H1 Moral judgments of ethically ambiguous negotiation

practices will be significantly related to negotiators’

behavioral intentions of such practices.

Situational Influences on Ethical Decision Making

in Negotiation

Because negotiations may be described as ‘‘strong situa-

tions’’ (Mischel 1976), they are likely to influence the

attitudes and behaviors of negotiators. Some situations

could justify a negotiator’s willingness to act unethically,

despite previous moral judgments. The direct effect of

situations on intentions would imply a dual-path model of

ethical decisions, whereby such decisions can, but do not

exclusively, result from moral judgment. Conditions which

‘‘strengthen’’ negotiation situations may include issue

importance, challenges from the other party, the nature of

the relationship between parties, power and status differ-

ences, past experiences between the negotiators, and time

pressures (Lewicki et al. 2010; Volkema and Fleury 2002).

For instance, under high stakes, negotiators might feel

more inclined to protect their self-interests by engaging in

questionable behaviors regardless of their ethical beliefs

(Roth and Murnighan 1982; Tenbrunsel 1998). Likewise,

faced with unethical opponents, individuals may take

actions to protect their interests (e.g., Barry and Bateman

1996). Some scholars argue that otherwise unacceptable

negotiation tactics are justified as ‘‘self-defense’’ against

unethical opponents (Carson 1993; Dees and Cramton

1991), based on an attempt to avoid inequities. Further-

more, negative past experiences among negotiators (e.g.,

inflexibility or past failures) may increase the likelihood of

ethically ambiguous negotiation tactics (e.g., Schweitzer

et al. 2002), possibly as a way to reestablish justice or

correct possible past inequities (Glass and Wood 1996).

On the other hand, the nature of the relationship and

relative power between negotiators may also impact posi-

tively ethically ambiguous negotiation practices. For

example, expectations of a long-term relationship may

decrease the likelihood to act unethically by increasing the

long-term consequences of that behavior (e.g., Lewicki and

Spencer 1991). Empirical studies suggest that under high

detection and retaliation risk, individuals raise their ethical

standards (Barnett and Karson 1987; Vitell et al. 1991).

Finally, some authors suggest that negotiators with rel-

atively more power are more likely to use unethical tactics

(e.g., Lewicki et al. 2010). They explain their rationale

with the intoxication theory of power, which holds that

power corrupts the thinking of the powerful (e.g., Keltner

et al. 2003).

Fig. 1 Conceptual model of antecedents of ethical decision making

Ethically Questionable Negotiating 283

123

Although the above rationale involves judgments,

behavioral tendencies can act directly on behavioral

intentions without cognitive intermediation through moral

judgment (e.g., Haidt 2001). That is, while competitive

individuals may judge questionable behavior more toler-

antly, they may also be more likely to act on their com-

petitive tendencies more directly, independently of such

judgments. This is because moral intuitions (e.g., Keltner

et al. 2006; Haidt 2001) can determine reactions both

through and parallel to judgmental processes. In particular,

some evidence suggests that aspects of difficult situations,

such as perceived lack of control over a situation (Detert

et al. 2008), or tiring or depleting situations (Gino et al.

2011) can lead individuals to bypass moral judgments and

act unethically. Similarly, Rest (1986) emphasizes that

moral action involves identification of an issue as morally

relevant, a cognitive process that could be compromised by

demanding situations.

Based on the above, we would expect ethically ques-

tionable behavioral intentions to increase under challeng-

ing or unfavorable negotiation conditions (unethical

opponent or negative past experiences), and for this effect

to be independent of moral judgments regarding the gen-

eral ethicality of the actions in question. Also, under

favorable negotiation conditions (long-term relationship

and higher relative power), intentions should remain con-

sistent with moral judgment. This implies both a direct

effect of situation on ethical behavioral intentions, and a

moderation effect of situation on the relationship between

moral judgment and behavioral intentions, such that judg-

ment should be more strongly associated with intentions in

favorable negotiation situations. Thus,

H2 Challenging or unfavorable negotiation conditions

will increase behavioral intentions to use ethically

questionable negotiation practices compared to favorable

conditions.

H3 The effects of moral judgments on behavioral inten-

tions will be stronger in favorable or neutral negotiation

conditions than in challenging or unfavorable conditions.

Individual Differences and Ethical Decision Making

Although ethical attitudes, intentions, and behaviors

may be related to a wide variety of individual difference

variables (e.g., Bass et al. 1999; Reiss and Mitra 1998), we

selected competitiveness and trust variables as important

predictors of the ethical decision-making process in

negotiation for two reasons. First, because both of these

variables are fundamentally interpersonal in nature and

involve questions of how people view interaction dynam-

ics and partners, they should be particularly important

variables in ethical situations that involve consideration of

other parties (c.f. Detert et al. 2008). Second, because

negotiating situations are marked by issues of cooperation

versus competition, and involve beliefs about the trust-

worthiness of partners, these two individual difference

variables are particularly relevant to understand negotiation

situations. Below, we elaborate on these rationales, which

lead to our main effect and interactive hypotheses.

Competitiveness

Competitiveness in negotiating can be defined as a rela-

tively stable personally trait based on individuals’ levels of

cooperativeness versus competitiveness (Gilkey and

Greenhalgh 1986) that determines behavioral patterns and

responses in conflict situations (Shell 1999). These rela-

tively stable attitudinal styles reflect the relative weight of

self- versus other- related concern, as summarized in the

dual concerns model (Thomas 1976; Pruitt 1983). This

model emphasizes that relative self-concern leads to a

focus on winning versus problem solving. Although much

has been written on conflict resolution styles (e.g., Thomas

and Kilmann 1974; Rahim 1983), a broad consensus has

formed around the stability of cooperative versus compet-

itive general styles (e.g., Craver 2003; Walters et al. 1998).

Cooperative negotiators tend to weigh the interests of all

parties involved and rely on objective parameters to guide

discussion (Craver 2003). Tending to behave in a friendly

and sincere manner, they more openly share information,

rarely using threats and are sometimes willing to make

unilateral concessions (Craver 2003). Competitive negoti-

ators, on the other hand, take an adversarial stance and

attempt to maximize their own outcomes (Thomas and

Kilmann 1974). They do not feel uncomfortable in com-

petitive environments, tending to use power to impose

solutions preferable to themselves (Dawson 2001) and

sometimes proposing unrealistically high claims backed

with threats (Craver 2003). Competitive styles also involve

less informational and interpersonal openness, ignoring

alternatives that might benefit the other parties (Craver

2003; Dawson 2001).

Because cooperative and competitive styles are concep-

tually linked to issues of personal versus mutual benefit,

disclosure versus non-disclosure, and altruism versus ego-

ism, they seem highly relevant to ethical decision making.

Surprisingly, with a few notable exceptions, little empirical

work has explored the relations between negotiation style

and ethical decisions in organizational contexts (e.g., Lew-

icki and Robinson 1998; Sankaran and Bui 2003). Sankaran

and Bui (2003) linked competitiveness to lower ethical

standards and Lewicki and Robinson (1998) found that self-

rated competitive negotiators used more ethically ambigu-

ous tactics than cooperative negotiators. Thus, preliminary

284 F. Sobral, G. Islam

123

existing results support the idea that negotiating style relates

to ethical decisions. If competitive negotiators are more

likely to tolerate ethically ambiguous behaviors (Lewicki

and Robinson 1998), and if such behaviors can, in some

circumstances, help maximize individual outcomes (Carson

1993; Dees and Cramton 1991), then higher levels of com-

petitiveness should lead to less strict judgments of ethically

ambiguous courses of action. Because moral judgments are

affected by motivated cognition (e.g., Haidt 2001), com-

petitive negotiators may be motivated to view ‘‘hard’’

negotiation tactics as morally acceptable, even if such tactics

involve ethical dilemmas. Thus,

H4a Competitiveness will be positively associated with

judgments of moral acceptability of ethically ambiguous

negotiation practices.

As argued in the previous section, the situational context of

negotiations should also impact the way in which predictors

operate on moral intentions, such that difficult or draining

situations should lead to a stronger direct effect on unethical

choices, bypassing to an extent judgmental processes (Gino

et al. 2011; Detert et al. 2008; Rest 1986). Thus, we believe

that in challenging or unfavorable negotiation situations, a

stronger direct link between the individual predictors of eth-

ical choices and intentions will emerge. This implies that

negotiation conditions’ favorability will moderate the link

between competitiveness and behavioral intentions.

H4b Competitiveness will interact with situation to

predict intentions to engage in ethically questionable

negotiation tactics, such that competitiveness will be more

strongly related to behavioral intentions under unfavorable

or challenging negotiation conditions.

Interpersonal Trust

Interpersonal trust, or the ‘‘generalized expectancy held

by an individual that the word, promise, oral, or written

statement of another individual or group can be relied

upon’’ (Rotter 1980, p. 1) has important effects on inter-

personal processes, such as negotiation (Lewicki et al.

2010), by affecting future expectations and subjective

norms regarding social interactions. Such expectancies

explicitly include ethically relevant features. Individuals

who do not expect to be treated with honesty, candor, and

consideration, for example, may be less likely to impose

these norms on themselves (e.g., De Cremer et al. 2010;

Zhang and Epley 2009). Thus, unethical behavior such as

distorting or manipulating information or infringing social

norms may be the result of defensive behavior resulting

from lack of interpersonal trust (Rotter 1980).

Stable individual differences on trust can be established

as, throughout negotiations, actors confirm or revise their

initial expectations given the social behaviors of others

(e.g., De Cremer et al. 2010; Eden and Shani 1982). This

can lead to stable individual trust levels, as self- confirming

prophesies occur when trusting individuals, beginning with

expectations of openness, are likely to affect others in such

a way as to confirm these initial expectations, and vice

versa.

Trust has consistently been shown to be related to

interpersonal negotiation processes (Thompson 2010; Ross

and Lacroix 1996) such as expectancies of honesty and

openness of negotiating partners (Olekalns and Smith

2009; Fells 1983) and cognitive processes related to open

and collaborative negotiation approaches (Butler 1999;

Mintu-Wimsatt 2002). High-trust negotiators do not

believe that shared information will be used opportunisti-

cally and to their detriment by the other parties, and are

thus more willing to be open and honest (Butler 1995).

Kimmel et al. (1980) also link trust to informational

exchange between parties, and less use of pressure tactics,

as compared to low-trust negotiators (Butler 1995; Kimmel

et al. 1980).

Several authors have argued that trust and ethics are

intimately related, maintaining that trust is a principal

driver of ethical behavior (e.g., Brien 1998; Hosmer 1995;

Kaptein 2011). Within negotiations, trust may be particu-

larly related to ethical behavior, because of the inherent

uncertainty and vulnerability associated with bargaining

situations (e.g., Bazerman et al. 1998). Some research

suggests that interpersonal trust inversely relates with the

perceived acceptability of ethically ambiguous negotiation

tactics, particularly those involving active deception (Ela-

hee and Brooks 2004). As such, we can hypothesize that

interpersonal trust will be negatively related to the moral

judgments of negotiators toward ethically questionable

tactics.

H5a Interpersonal trust will be negatively associated

with the judgment of moral acceptability of ethically

ambiguous negotiation tactics.

Similarly to competitiveness, trust should also act

directly on intentions, particularly where individuals do not

believe that others will apply ethical standards to their

behaviors, and challenging situations create the conditions

for bypassing moral judgment (Gino et al. 2011; Detert

et al. 2008, Rest 1986). Greater interpersonal trust should

lead actors to exhibit fewer opportunistic behavioral ten-

dencies, or tendencies to behave in ways that push the

limits of ethicality (Olekalns & Smith, 2009). Low trust

individuals, however, are likely to anticipate unethical

behavior, and thus feel less pressure to reciprocate or to

consider their own ethical standards, moving directly to

behavioral intentions that favor ethically ambiguous tac-

tics. As such, we believe that in challenging or unfavorable

Ethically Questionable Negotiating 285

123

negotiation situations, a stronger direct link between

interpersonal trust and behavioral intentions will emerge.

This means that situation will interact with trust to predict

intention to act unethically.

H5b Interpersonal trust will interact with situation to

predict intentions to engage in ethically questionable

negotiation tactics, such that trust will be more negatively

related to behavioral intentions under unfavorable or

challenging situations.

Method

Sample and Procedures

The sample was drawn from participants who were com-

pleting their MBA studies in São Paulo and Rio de Janeiro,

Brazil. Questionnaires were administered in Portuguese and

the translation and back-translation procedure was employed

to ensure accuracy of meaning. In order to encourage candid

responding and reduce social desirability bias, participants

were informed that the completion of these questionnaires

was entirely voluntary and that responses were anonymous.

Furthermore, the participants were informed that there were

no inherently right or wrong answers.

The final sample consisted of 298 participants, repre-

senting a response rate of 74 %. Within the sample 61 %

was male and 39 % was female, with an average age of

36 years and average professional tenure of 13 years. They

came from a wide variety of industries and positions within

their organizations, including team member (36 %),

supervisor or coordinator (37 %), middle manager (19 %),

and senior manager (8 %).

Measures

Moral Judgment

Moral judgment was measured using five behaviors from

Robinson et al.’s (2000) Self-Reported Inappropriate Strat-

egies (SINS) instrument. This instrument is based on a tax-

onomy of five categories of ethically ambiguous negotiation

practices: (1) competitive tactics; (2) distortion of informa-

tion; (3) bluffing; (4) manipulating the other party’s network;

(5) fraudulent obtaining of information. One representative

behavior was selected from each category: (1) exaggerating

an opening offer or demand, (2) misrepresenting facts to an

opponent, (3) promising good things will happen (when you

know you can’t or won’t deliver), (4) encouraging others to

defect to your side, and (5) feigning friendship for infor-

mation. Respondents were asked to evaluate behaviors rep-

resentative of each of these categories, using a 7-point Likert

scale varying form ‘‘totally acceptable’’ to ‘‘totally unac-

ceptable’’. Behaviors were selected on the basis of low var-

iance in rated appropriateness and likely use, as reported in

prior studies (e.g., Volkema and Fleury 2002). Past empirical

research has supported the conceptual and empirical struc-

ture of this instrument, and it is considered a valid and

reliable instrument (e.g., Robinson et al. 2000). The

Chronbach’s a in this study was 0.76.

Negotiation Situations

In order to test situational effects on behavioral intentions, we

developed four short vignettes illustrating typical scenarios

representing different negotiation conditions. Separate pages

were used for each scenario to discourage within-subject

comparative assessments of ratings. The four scenarios

included unethical reputation of the other party, long-term

relationship potential, negative past experiences between

parties and positive power asymmetries (see Table 1 for a

detailed description of each scenario). These four scenarios

reflected both favorable (long-term relationship and higher

relative power) and unfavorable (unethical reputation and

negative past experiences) negotiation conditions, based on

Lewicki et al. (2010) and Volkema and Fleury (2002).

To determine whether the scenario manipulation influ-

enced participants’ sense of negotiation favorability, we

conducted a pilot test on a similar demographic sample

(n = 42), and asked participants to rate how favorable they

would consider each of these negation conditions. A post

hoc Bonferroni test, after a significant ANOVA result

(F[3,164] = 39.73, p \ .001), revealed that both scenarios classified as favorable conditions (M = 4.21, SD = 1.21

and M = 3.89, SD = 1.03) were perceived as more favor-

able negotiation conditions than the two unfavorable sce-

narios (M = 2.67, SD = 1.27 and M = 2.44, SD = 1.15),

indicating that the manipulation worked as intended.

Table 1 Negotiation scenarios

1 You are participating in a negotiation with a prospective client of

your company. Before the negotiation you find out that the

other party has a reputation for being dishonest.

2 The Alfa company is a regular supplier of your company, with

whom you have had a long term, solid relationship for several

years. You are responsible for negotiating a contract for the

supply of materials for a new product.

3 You are negotiating a project with the Beta company. However,

in previous negotiations, Beta has proven to be very rigid and

inflexible, preventing the parties from closing any deals.

4 You are a regional manager of a large company, negotiating with

a representative from the Gama company, a small transportation

company. Sources have confirmed that this contract is

extremely important to Gama, while your company has other

options available.

286 F. Sobral, G. Islam

123

Behavioral Intentions

In order to measure behavioral intentions, respondents

were presented with action possibilities with regards to the

above scenarios, and indicated how likely they would be to

use each ethically ambiguous negotiation tactic described

before on a 7-point Likert scale for each of the four

vignettes. Thus, each respondent rated the same five

behaviors for all scenarios or conditions. Vignettes provide

a useful tool that is widely used in ethical decision-making

research to measure behavioral intentions (O’Fallon and

Butterfield 2005), and allow investigators to standardize

decision situations while at the same time simulating a

realistic situation (e.g., Alexander and Becker 1978; Weber

1992). In the current sample, the Cronbach’s a in each scenario varied from 0.73 to 0.84, showing reliable mea-

surement consistency within scenarios.

Interpersonal Trust

Interpersonal trust was measured with a 4-item scale

adapted from Rotter (1967). The scale used a 7-point Likert

scale format, varying from ‘‘completely disagree’’ to

‘‘completely agree. The Cronbach’s a in this study was 0.82.

Competitiveness

Competitiveness was measured with a 4-item scale adapted

from Ryckman et al. (1996). The scale used a 7-point

Likert scale format, varying from ‘‘completely disagree’’ to

‘‘completely agree. The Cronbach’s a in this study was 0.87.

Data Analysis

The data from the ethical decision-making processes in the

four negotiation conditions were analyzed via single- and

multi-group structural equation modeling (SEM), appro-

priate given the nature of our data and hypotheses because

it allows examination of direct and indirect relations

between endogenous and exogenous latent constructs in

different conditions. At the single-situation level (i.e., for

each scenario separately), we first tested for divergent

validity and unidimensionality of the items between moral

judgment and intention. Second, we compared our pro-

posed versus full structural models to determine the best-

fitting model. Next, we tested a multi-group model (i.e.,

across situations) to establish measurement invariance

across situations. In other words, to show validity of our

measurement, we needed to ensure that the measures

worked similarly in each scenario. We present the results

of these measurement equivalence tests at both situation

and multi-group levels in ‘‘Appendix.’’ This model also

allowed us to test structural invariance of relationships

across situations, thus allowing us to examine situational

differences. Finally, after establishing the metric equiva-

lence and relationships among variables, hierarchical

multiple regressions were conducted to test the moderating

effect of the situation on these relationships.

Results

Situational Level Analysis

After the recommended first step of establishing the metric

equivalence of our measures across situations (Vandenberg

and Lance 2000), the network of relationships among

constructs was evaluated separately for each alternative

scenario. Table 2 presents information about descriptive

statistics and correlations for all constructs in the dataset.

We followed a nesting approach in which models are

sequentially compared to one another (Anderson and

Gerbing 1988). Three nested models were estimated: (1) a

null model in which the relationships among observable

constructs are set to zero (error terms free; the null model

serves as a baseline for comparing the other nested struc-

tural models; (2) the original model as depicted in Fig. 1;

(3) a full model (or saturated model) that allows for paths

from competitiveness and interpersonal trust to behavioral

intentions (c2,1 and c2,2)—relationships presented in Fig. 1

Table 2 Means, standard deviations, correlations and reliabilities

Variable M SD 1 2 3 4 5 6 7

1. Interpersonal trust 3.96 1.18 (0.82)

2. Competitiveness 4.35 1.35 -0.09 (0.87)

3. Moral judgment 3.36 1.00 -0.16** 0.24** (0.76)

4. Behavioral intention—Scenario 1 3.87 1.30 -0.25** 0.20** 0.65** (0.77)

5. Behavioral intention—Scenario 2 3.18 1.16 -0.21** 0.14* 0.59** 0.57** (0.84)

6. Behavioral intention—Scenario 3 3.78 3.36 -0.25** 0.15* 0.65** 0.78** 0.62** (0.73)

7. Behavioral intention—Scenario 4 3.33 1.22 -0.20** 0.21** 0.60** 0.62** 0.69** 0.61** (0.81)

N = 298; * p \ .05; ** p \ .01; alpha coefficients in the diagonals

Ethically Questionable Negotiating 287

123

with dashed lines. If these paths significantly improve v2 fit and are statistically significant, it implies that richer spec-

ifications of the original model are tenable. Table 3 pre-

sents the v2 fit comparisons among the nested models. The v2 fit of the original model was significantly better

than that of the null model across samples. The original

model’s values on the three fit indices (goodness-of-fit

index, GFI; comparative fit index, CFI, and root mean

square error of approximation, RMSEA) were moderately

high, ranging from .93 to .96 for GFI, .93 to .99 for CFI,

and .029 to .067 for RMSEA, implying good model fit.

Furthermore, all path estimates, representing the particular

relationships between variables, were statistically signifi-

cant. Additionally, no difference in fit between the original

and full models was found. Although the fit of the original

model was generally good and the paths mostly supported,

the full model (i.e., with the c2,1 and c2,2 paths directly relating trust and competitiveness with behavioral inten-

tions) offered a stronger representation of the relationships

among constructs than did the original model, with higher

fit indices than the original model and a direct, statistically

significant, relationship between trust and behavioral

intention in two of the four alternative conditions tested

(c2,2 path). Therefore, the full model was preferred over the original model.

Multi-group Level Analysis

By examining the equality of relationships across different

situations, we can assess the generalizability or difference

in the model’s relationships across alternative conditions.

Thus, multi-group models were also estimated to determine

whether the strengths of relationships among constructs

varied across negotiation conditions. To examine the

invariance of structural paths, constrained and uncon-

strained models were estimated via the multi-group pro-

cedure suggested by Bollen (1989). To briefly summarize

this procedure, individual relationships are separately

examined across samples first, and if they are each found

invariant across samples, then the relationships (gamma

paths) are collectively tested for invariance. The invariance

of these paths is then used as a basis to assess the invari-

ance of individual relationships within samples (beta

paths). If the latter are also invariant, the most strenuous

test of the model is performed in which all gamma and beta

paths are collectively tested for invariance. The differences

between constrained and unconstrained models were not

significant. Furthermore, the constrained model, in which

all gamma and all beta paths are declared invariant, had a

v2 value of 597.30 (df = 356). The unconstrained model, in which all gamma and beta paths are allowed to vary, had

a v2 of 611.98 (df = 381). The difference between these two models was not significant (vdiff

2 = 14.69, df = 25),

suggesting that the model relationships are applicable and

invariant across groups. In other words, this result suggests

that the strength of the relationships between the proposed

constructs is homogeneous across situations. The estimated

structural parameters are present in Table 4.

Results presented in Table 4 suggest that, following

hypothesis 1, behavioral dispositions are strongly related to

Table 3 Model comparisons

1. Unethical reputation 2. Long-term relationship 3. Negative experiences 4. Higher relative power

v2 fit

Null model (df = 66) 963 841 855 793

Original model (df = 48) 91.3 73.3 57.8 101.1

Full model (df = 46) 86.7 70.0 54.1 96.4

Note At 2 df, a v2 difference of 5.99 or greater implies a statistically significant difference at the .05 level. Thus, the original model is better fitted than the null model in all scenarios. Between the original and full models, there is no difference in fit. However, the full model is preferred

because of its parsimony

Table 4 Structural parameters

Paths 1. Unethical

reputation

2. Long-term

relationship

3. Negative

experiences

4. Higher relative

power

Competitiveness ? moral judgment (c1.1) 0.22** 0.24** 0.23** 0.23**

Interpersonal trust ? moral judgment (c1.2) -0.26** -0.26** -0.25** -0.25**

Competitiveness ? behavioral intention (c2.1) 0.06 0.00 0.00 0.08

Interpersonal trust ? behavioral intention (c2.2) -0.15* -0.10 -0.15* -0.11

Moral judgment ? behavioral intention (b2.1) 0.67** 0.59** 0.71** 0.56**

* p \ .05; ** p \ .01. All coefficients are standardized and numbers are rounded to two decimal places

288 F. Sobral, G. Islam

123

moral judgment across all scenarios (0.56 \ b2,1 \ 0.71, all p’s \ .01). These results are consistent with the atti- tude–intention link as suggested in the theories of reasoned

action and planned behavior (Ajzen 1985, 1991; Fishbein

and Ajzen 1975). The structural models tested are also

consistent with our explanations of the effects of individual

differences on ethical negotiation judgments and behaviors.

Across scenarios, competitiveness (0.22 \ c1,1 \ 0.24, p \ 0.01) was positively related to moral judgments of ethically questionable tactics, suggesting that such actions

are viewed more favorably by competitive negotiators,

corroborating Hypothesis 4a. Conversely, interpersonal

trust was consistently negatively related to moral judgment

across scenarios (-0.25 \ c1,2 \ -0.26, p \ .01), sug- gesting that greater trust is associated with less accept-

ability of the ethicality of ambiguous behaviors, supporting

Hypothesis 5a. Additionally, in two of the four scenarios, a

direct, statistically significant association was found

between interpersonal trust and behavioral intentions

(-0.10 \ c2,2 \ -0.15, p \ .05). Thus, our results suggest that, under certain unfavorable negotiation conditions,

interpersonal trust is negatively related to behavioral

intentions through moral judgments, and also directly

related (see Fig. 2). Competitiveness, on the other hand,

while indirectly related to intentions through moral judg-

ment, did not show a significant direct relationship with

the willingness to use ethically ambiguous negotiation

practices.

Moderation Effects of the Situation

The above results apparently suggest an interaction

between the situation and the individual variables, espe-

cially with moral judgment and interpersonal trust. To

investigate these moderating effects, multiple regression

analyses were conducted. The results are shown in Table 5.

Model 1 shows the individual variables predicting

behavioral intentions, while model 2 adds the direct effects

Fig. 2 Structural regression model—Scenario 1—opponent with unethical reputation

Table 5 Regression results predicting behavioral intention

Model 1 Model 2 Model 3 Model 4 Model 5

Individual effects

Interpersonal trust -.17** -.17** -.17** -.09** -.17**

Competitiveness .03 .03 .03 .03 .02

Moral judgment .59** .59** .55** .59** .59**

Situational effects

Situation favorability .24** .08 .21** .24**

Interaction effects

Judgment 9 situation .16*

Trust 9 situation -.07*

Competitiveness 9 situation .03

R 2

.39** .44** .46** .45* .44**

DR2 .05** .02*a .01*a .00a

* p \ .05; ** p \ .01, one-tailed regression coefficient tests, F tests for R2 significance. All coefficients are standardized and numbers are rounded to two decimal places. Situational favorability was computed as a dummy variable (0 favorable situation and 1 unfavorable situations) a

Change in R 2

over Model 2

Ethically Questionable Negotiating 289

123

of the situation. We note that dummy variables for different

negotiation conditions were created (0 for favorable and 1

for unfavorable negotiation situation). Results suggest that

the favorability of the situation reduces the willingness to

use ethical ambiguous negotiation tactics (b = 0.24, p \ .01). When negotiation conditions are unfavorable, such as facing an unethical opponent, the intention to

behave unethically is significantly higher than in favorable

situations, such as negotiating within a long-term rela-

tionship, thus corroborating Hypothesis 2. This direct

influence of the situation on behavioral intention may be

the case because, when under pressure or threat, individ-

uals may act in ways that do not conform to their normal

attitude structures (Rucker et al. 2004).

In models 3–5, the hypotheses arguing that situation

favorability moderates the effects of other individual

variables were tested by entering interaction variables. All

variables in the moderated regressions were centered by

subtracting their mean value, which reduces potential col-

linearity problems. The product terms were entered indi-

vidually in models 3–5 to test for moderated effects.

Regarding these interaction effects, a statistically sig-

nificant interaction between moral judgment and situation

favorability show that the effect of judgment on behavioral

intention varies across situations, as proposed by Hypoth-

esis 3. However, this effect was in the opposite direction as

hypothesized, indicating that the judgment–intention rela-

tionship is stronger (and more positive) in unfavorable

situations (b = 0.16, p \ .05), which suggests that partic- ipants tend to be more consistent with their moral judgment

in situations that pose some sort of threat than in positive or

favorable situations. In other words, the tendency for

someone who judges deception to be acceptable would be

more likely to plan deceitful behaviors in an unfavorable

negotiation than in a favorable situation.

A statistically significant interaction effect between

interpersonal trust and situation favorability was also found

(b = -0.07, p \ .05), meaning that in difficult or unfa- vorable situational contexts, interpersonal trust will have

a stronger (and more negative) impact on behavioral

intentions to engage in ethically questionable negotiation

tactics, as suggested by Hypothesis 5b. However, no sup-

port was found for an interaction between competitiveness

and situation as proposed by Hypothesis 4b.

Discussion

The above results broadly support the interactionist per-

spective proposed as applied to ethical decision making in

negotiations, with both individual and situational differ-

ences bearing on ethical decision-making processes.

Furthermore, we found interactive effects of situation with

regards to judgments and interpersonal trust when pre-

dicting intentions. Although across hypotheses we found

mixed support, our results suggest that personality and

situations should be studied jointly in the context of

behavioral ethics.

With regards to disentangling the distinct effects of

situations and individual differences, the data support a

relationship between moral judgments and behavioral

intentions, consistent with the theory of reasoned action

(Fishbein and Ajzen 1975) and the theory of planned

behavior (Ajzen 1985, 1991). Behavioral dispositions,

across negotiation situations, were largely explained by

moral judgments. However, results show that specific cir-

cumstances of the situation may also influence people’s

behavioral intentions toward the use of ethically ques-

tionable tactics. This means that in certain conditions,

someone may adopt a behavior that deviates significantly

from his or her moral judgment.

We found that in unfavorable or challenging situations,

negotiators are more willing to use ethically ambiguous

negotiation tactics. This relationship may result from

individuals’ attempts to restore justice and correct inequi-

ties among negotiators (Glass and Wood 1996) or a

defensive mechanism that allows communication while not

overexposing oneself socially (Strudler 1995). Strudler

(1995) notes the practical advantages of limited forms of

deception in negotiations when actors do not know or trust

one another, given that limited deception may allow people

to enter into negotiations that would otherwise be too risky,

and allows them to limit the risks that they face in practice.

Some scholars even argue that individuals are morally

justified in such self-protective behavior when facing an

unethical opponent (Carson 1993, 2005; Dees and Cramton

1991).

The direct effects of situation on behavioral intentions

confirm our predictions, and are consistent with some

existing empirical work. For example, negotiators some-

times chose unethical outcomes when facing an unethical

opponent or someone that in the past was revealed to be

inflexible or overly competitive, negotiators are more

likely to use some ethically ambiguous negotiation tactics

(Barry and Bateman 1996; Schweitzer et al. 2002). Alter-

natively, under favorable conditions, negotiators are less

willing to adopt ethically questionable courses of action.

For instance, when negotiations occur in the context of

long-term relationships, actors recognize the risk of using

questionable behaviors, and tend to opt against their use

(Lewicki and Spencer 1991), a finding that is corroborated

in our study.

Surprisingly, although an interaction effect emerged,

with the situation favorability having a significant moder-

ating effect on the influence of moral judgment on

behavioral intention, this effect was in the opposite

290 F. Sobral, G. Islam

123

direction as hypothesized. In other words, the judgment–

intention relationship was stronger in unfavorable or

challenging situations, and more de-coupled in favorable

situations. Although not hypothesized, two possible

explanations may account for this effect. First, even if

individuals do not find certain deceptive behaviors uneth-

ical, they may refrain from engaging in such behaviors if

the situation does not demand it, leading to a de-coupling

of judgment and intention in such situations. Second,

because favorable situations such as high power have

been empirically associated with both automatic cognition,

behavioral disinhibition, and ethically dubious behavior

(for a review, see Keltner et al. 2003), situations of higher

relative power in negotiation could both augment the

likelihood of choosing questionable actions and bypass the

moral judgmental processes that would normally inhibit

such choices. Because these mechanisms are post hoc

conjectures, however, future research is needed to empiri-

cally verify such mechanisms.

In addition to situational variables, we find that indi-

vidual differences matter in understanding ethical decision-

making processes in negotiation. Respondents with higher

interpersonal trust are less tolerant in their judgments of the

morality of given actions. Rotter (1980) explains that this

effect may result from the belief by high-trust individuals

that people are generally honest and trustworthy, and thus

will be less likely to consider deceiving, withholding, or

similar behaviors as justified in a negotiation context. We

also find that competitive individuals have greater toler-

ance for ethically questionable behaviors, judging such

behaviors less harshly. Carr’s (1968) suggestion that

competitive individuals see negotiations as a zero-sum

game, in which the objective is maximization of utility for

the self, could explain the current findings. Under such a

view, framing questionable behaviors as acceptable opens

up important resources to maximize negotiation gains.

Some authors have gone as far as to suggest that honest

negotiations are not negotiations at all, as selective com-

munication and outright lying are inherent to the negotia-

tion process (e.g., Peppet 2002; White 1980). For these

authors such behaviors, in the service of one’s client, are not

only acceptable but also may be required or commendable in

organizational and legal settings (Peppet 2002).

We note that, for both situational and individual dif-

ference variables, we observe direct effects on behavioral

intentions, independently of moral judgment. Contempo-

rary views of moral decision making (e.g., Reynolds et al.

2010; Haidt 2001) recognize the automaticity of much of

moral decision making, with judgment no longer consid-

ered a prerequisite for ethical behavior. A recent meta-

analysis of ethical decision making (Kish-Gephart et al.

2010) calls for increased research on the direct effects of

personal and situational variables on ethical choices,

without the intermediation of ethical judgments. In contrast

to ‘‘ethical calculus’’ views, which frame choices as

resulting purely from deliberative judgment, they empha-

size the need for ‘‘ethical impulse’’ research, where choices

result directly from personal and situational factors. This

study’s results corroborate and confirm this need, and take

a step toward building on such views. Specifically, our

results found direct effects of situation, and both direct and

indirect effects of individual variables, suggesting that

ethical choices result from a hybrid of ‘‘ethical calculus’’

and ‘‘ethical impulse’’ processes.

In this study, we found a direct effect of interpersonal

trust on behavioral intentions in two of our four scenarios,

which supported an interactionist perspective of the

decision-making process in negotiation (Trevino 1986).

Specifically, less trusting individuals were more disposed

to use ethically questionable tactics, depending on the sit-

uation, even when their moral judgments remained nega-

tive. Key situations in this respect included dealing with

reputedly dishonest partners (Scenario 1) and with partners

with whom they shared a past marked by competition or

intransigence (Scenario 3). According to equity theory

(e.g., Glass and Wood 1996), such behaviors may work to

reestablish interpersonal justice and a sense of equity. Yet,

within the context of stable relations (Scenario 2) less

dispositionally trusting individuals still reveal a greater

willingness to use questionable tactics. In such cases, rather

than compensation for transgressions on the part of the

negotiation partner, it may be that less trusting people seek

opportunistic options even when the situation does not call

for such action, a tendency consistent with the arguments

of Cramton and Dees (1993). For these authors, trust is a

necessary condition for ethical behavior in negotiations,

and when it is lacking opportunistic and immoral behaviors

will result. Our results allow us to take a dynamic view of

ethical decision making, in which individual and situa-

tional factors interact to both indirectly and directly predict

ethical decisions.

As a secondary contribution, we note the novelty of

using multi-group measurement invariance models to

describe, at different levels, the complex relationships

between individual and situational factors and ethical

decisions. While such models are recommended frequently

in the psychometric and cross-cultural psychology litera-

tures (e.g., Zyphur et al. 2008; Cheung 2008; Vandenberg

and Lance 2000; Van de Vijver and Poortinga 2002), we

contribute methodologically by applying such models to

within-culture scenario research, where each situation is

treated as a contextual group within a nested model.

This method allowed us to look at both individual and

situational factors simultaneously, attempting to disentan-

gle their separate effects on judgments and behavioral

intention.

Ethically Questionable Negotiating 291

123

Despite these substantive and methodological contribu-

tions, some important limitations remain. For instance,

while our multi-group analyses varied situation, macro-

level variables like national culture could have an impor-

tant impact on ethics in negotiation. Specifically, some

literature has shown empirically that deceptive negotiation

practices are more prevalent among Brazilian samples than

US or Japanese samples (Graham 1983; Volkema and

Fleury 2002). Similarly, past research using the SINS

instrument has also noted differences in attitudes and

behavior across cultures on this specific measure (e.g., Ma

2010; Al-Khatib et al. 2008). Thus, while we do contribute

to understanding a less-studied population of Latin Amer-

ican managers, the specific relationships among the vari-

ables might be expected to show variability across societal

contexts. Additionally, because the individual difference

variables tested (interpersonal trust and competitiveness)

are conceptually very closely related to negotiation-related

practices, more general personality variables, such as Big

5 1

variables (e.g., Costa and McCrae 1988), might show

weaker relationships. Further research should thus widen

the scope of our attempts toward broader contexts and

individual differences. Methodologically, while our ana-

lytical procedure is an innovation in this area, some

problems do remain with regards to construct measurement

and inclusion.

Finally, future research should go beyond behavioral

intentions to measure concrete behavioral outcomes, as a

natural extension of the theoretical perspective presented

here. Future research should also extend our exploration of

behavioral intentions to actual expressed behavior, and to

the extent possible, to post-behavioral outcomes. Although

studies in ethical decision making have found that inten-

tions and behaviors are highly correlated constructs (Detert

et al. 2008), they predict behavior only imperfectly (Fish-

bein and Ajzen 1975). At the same time, for ethical per-

spectives to take root in negotiation practices, it is

important to show how decision making affects the mate-

rial, psychological, and social outcomes of negotiations.

In this study, we have ended our story at the decision to

act. Continuations of this story would do well to look at

action’s consequences.

Conclusion

In the ethical decision-making literature, moral judgment

has often been used as a proxy for behavior, assuming the

centrality of moral reasoning for ethical choices (e.g.,

Kohlberg 1969; Rest 1986). More recently, however, the-

oretical and empirical literature has stressed that situational

and dispositional factors are important direct precursors to

ethical decisions (Haidt 2001; Kish-Gephart et al. 2010).

We explore some of these complex situational and indi-

vidual influences as both direct and indirect precursors for

ethical choices, concluding that ethical decision-making

processes in negotiations are affected by both person and

situation, and that these effects work both directly and

through judgment influences.

While we examine two important individual difference

variables, interpersonal trust and competitiveness, as well

as situational factors representing typical negotiation con-

ditions, future research should explain and confirm our

theoretical generalizations by exploring related but diverse

sources for opportunistic versus collaborative behavior. For

example, while trust may affect ethical behavior through its

influence on opportunism or defensiveness, because both

mechanisms may be operating, it is difficult to distinguish

the two effects. Other individual difference variables, such

as self-esteem (e.g., Cameron et al. 2010), might affect

defensiveness but not opportunism, whereas variables such

as aggressiveness (e.g., Vasquez et al. 2007) might do the

inverse. By expanding the array of personality variables

that affect ethical outcomes, research not only accumulates

findings but also progresses in delineating the mechanisms

by which ethical choices arise.

Our results thus highlight the need to further explore the

mechanisms by which personal and situational variables

interact in explaining ethical decision processes. Three

important streams might be examined in this regard, fol-

lowing some contemporary moral psychology theory (e.g.,

Reynolds et al. 2010; Haidt 2001; Chugh et al. 2005).

Studies of moral judgment might use recent work on the

bounded nature of ethical reasoning (Chugh et al. 2005) to

explore how, among the wide array of techniques available

to negotiators, certain ones become salient as objects for

ethical judgment. Studies of direct, non-judgment-medi-

ated effects might use recent work on moral intuition (e.g.,

Reynolds et al. 2010; Keltner et al. 2006; Haidt 2001) to

examine how individual personality traits lead to ethical

intuitions prior to moral reasoning, thus explaining direct

effects. Finally, the importance of traits such as trust and

competitiveness is not only that they characterize individ-

uals but also that they characterize social styles. The social

nature of moral judgment and intentions, long hidden by a

strong cognitivist paradigm (e.g., Krebs and Denton 2006;

Lapsley 1996), has recently reemerged (Turiel 1998),

combining individual dispositions, social processes, and

situational pressures. Future work should attempt to add

important social processes to the individual-level model

that we test in this study.

1 The Big 5 variables refer to the five-factor structure frequently used

to categorize personality variables (e.g. Costa and McCrae 1988).

Because of the general nature of these variables, linkages to specific

negotiation behaviors may be weaker than for more ‘‘finely’’

categorized individual difference variables.

292 F. Sobral, G. Islam

123

Appendix: Metric Equivalence of Measures Across

Alternative Scenarios

Metric equivalence refers to the similar pattern of psy-

chometric properties of measures (i.e., internal consistency

and dimensionality) across different situations or samples.

Metric equivalence is concerned with the extent to which

parameters comprising the measurement portion of the

model are similar across groups and is considered a pre-

requisite for examining relationships among constructs and

mean difference tests using different groups or samples

(Vandenberg and Lance 2000).

The equivalence of the measures and the relationships

among the constructs were examined at a situational level

(i.e., each negotiation scenario’s data was analyzed sepa-

rately) and a multi-group level using multi-group structural

equation modeling (MSEM). Whereas the situational-level

analysis examines model measures and relationships in

each negotiation condition separately, the multi-group

approach looks for the presence of an invariant pattern of

measurement and constructs relationships across alterna-

tive negotiation conditions.

With regards to the situation level analysis, the psy-

chometric properties of the five-item moral judgment and

behavioral intention instruments were examined, on a sit-

uation-by-situation basis, to ensure that conclusions made

were not influenced by measure unreliability or differing

dimensionality across scenarios. Two tests assessing the

discriminant validity of the moral judgment and behavioral

intention measures were performed. First, if the v2 fit of the hypothesized factor model is better than the fit of the one-

factor model, evidence of discriminant validity exists

(Bagozzi and Phillips 1982). For all situations analyzed,

the proposed factor model was significantly better fitted

than the one-factor model (p \ .01, df = 1). Discriminant validity is also supported if the confidence intervals around

the maximum likelihood estimates of the interfactor cor-

relations (i.e., U) do not contain a value of one (Anderson and Gerbing 1988). Across samples, U values for the factor model ranged from 0.55 to 0.83, and none of the confidence

intervals around these estimates contained a value of one

(p \ .05). The dimensionality of the proposed factor model is also supported by examining its values on several other

measures of fit. For example, for each negotiation scenario,

the standardized loadings of the items to their constructs

ranged from 0.40 to 0.78, and all loadings were significant

(p \ .01). Also, the goodness-of-fit index (GFI) values ranged from 0.94 to 0.96, and the RMSEA values ranged

from 0.025 to 0.079. In sum, the discriminate validity and

dimensionality estimates indicate that the judgment and

intention constructs are metrically similar across situations.

Next, the MSEM assessed the invariance of the factor

structure and the internal consistency of the proposed

measures. For this procedure, an unconstrained model, with

the factor structure (item-to-factor loadings) and the cor-

relations among constructs varying across the samples, is

first estimated, then compared to a constrained model

where the factor structure is held invariant across samples

(Bollen 1989). If the fit of the unconstrained model (as

given by v2) is not significantly different from the fit of the constrained model, then the factor structure does not differ

across alternative conditions. For the proposed model of

ethical decision making, the unconstrained model’s v2

value was 323.8 (df = 184), and the constrained model’s

v2 was 367.7 (df = 224). This difference was not signifi- cant (43.9, df = 40). This result suggests that both the

factor structure and the dimensionality of the measures are

invariant across scenarios.

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