Clinton vs. Trump. Apple vs. Samsung. The New York Yankees vs. the Boston Red Sox.
Whether we work in politics, business, sports, or another arena, our competitors sometimes turn into fierce rivals. In addition, many sales, legal, and financial firms structure jobs, incentives, and promotion systems in ways that pit employees against one another to increase their motivation.
What happens when rivals negotiate with each other? Do pairs of rivals reach different outcomes than more traditional pairs of competitors? New York University professor Gavin J. Kilduff and his colleagues examined these questions in a recent study and reached conclusions that might alter some of our negotiation practices.
Features of rivalries
Several factors explain why relationships between competitors sometimes escalate into rivalry, according to Kilduff and his team. First, similarities between competitors (such as Coke and Pepsi) can encourage comparisons that foster rivalry. Second, competitors who repeatedly square off may develop stronger feelings of rivalry toward one another over time. Third, when competitions between rivals result in close outcomes, they anticipate similarly tight competitions in the future, and their rivalry intensifies.
Rivalry increases the psychological stakes of a competition, and we are more motivated and perform better when competing against rivals as compared to nonrivals. For example, Kilduff found in a 2014 study that long-distance runners ran faster in races that included their rivals.
The dark side of rivalry
In his new study, Kilduff and his colleagues identified a hidden pitfall of rivalry— namely, its tendency to increase unethical behavior, including in negotiation.
In one experiment conducted online, Kilduff and his team told 101 participants that they would be paired for a negotiation simulation with another participant. (In fact, there were no counterparts, and the study ended before any negotiation began.) Participants were told they would be playing the role of a car dealer negotiating the sale of used equipment to a competing car dealer in the same town. About half of the participants received instructions that portrayed their counterpart as a longtime business rival; the other half were told that the counterpart ran a new business and was not yet a direct competitor.
All the participants were told that they had a low offer of $25,000 from another party to buy the equipment, which they had purchased for $75,000. They were asked how they would communicate information about the other offer to their competitor in the negotiation. Among the participants, 56% in the rivalry condition said they would deceive their counterpart about the offer to gain an advantage, as compared to only 33% of those in the nonrivalry condition.
In particular, those who believed that they would face a rival indicated being far more likely to lie indirectly—for example, by exaggerating the offer’s quality (“very good”) without mentioning a numerical value—as compared to those who thought they’d face a nonrival.
In a similar experiment, participants reported being more willing to engage in unethical negotiation tactics, such as making false promises or intentionally misleading the other side, with rivals than with nonrivals. The prospect of negotiating with a rival heightened participants’ concerns about maintaining their sense of self-worth and status. In turn, these concerns seemed to lead participants to focus so narrowly on performing well that they were willing to cut ethical corners to do so.
Promoting more ethical negotiations
The study’s authors advise managers to take several precautions to reduce the likelihood that rivalries will promote unethical behavior in their organizations:
1. Avoid promoting fierce competition between employees for prizes such as bonuses and promotions. The rivalries that result may increase motivation, but they can also backfire by encouraging unethical behavior.
2. To maintain high ethical standards in external negotiations, don’t encourage employees to view competing firms as rivals.
3. To protect their own decisions in negotiation from being eroded by rivalry, managers should augment intuitive decision making with algorithms and other objective sources of data.
Resource: “Whatever It Takes to Win: Rivalry Increases Unethical Behavior,” by Gavin J. Kilduff, Adam D. Galinsky, Edoardo Gallo, and J. James Reade. Academy of Management Journal, 2016.