Withholding Information Case


Week 5 Withholding Information Case

Read the Withholding Information Case below and address the following:

  1. Identify ethical systems that may guide the parties to a negotiation.
  2. Determine the substantive fairness of the negotiation.
  3. Ensure the procedural fairness of the negotiation.
  4. Distinguish between concealment behaviors in negotiations that are ethical and those that are unethical among the parties in the negotiation.
  5. Describe how the parties can learn to create trust in a one-shot negotiation and in a long-term negotiation relationship.


Sample paper

Withholding Information Case


The Withholding Information case examines a scenario where a dispute arises between the employer and the employees in a labor contract. Owing to rising health insurance costs, the management decided to shift into self-insurance without revealing the facts to the employees. The employer’s negotiator came to learn that the management had changed into self-insurance two years earlier without notifying the employees. Since the plan to become self-insured had been suggested by employees as the best alternative, the negotiator worried that employees may realize what the employer did, and hence refuse to give up some of the benefits available in their insurance plan. In such a situation, it is important that both parties learn to trust each other so that they can hold fruitful negotiations. This paper examines how the employer and the employees can conduct successful negotiations by observing ethical conduct, and ways in which the two parties can develop mutual trust.

Ethical Systems that Guide the Parties

Ethics refers to the study of moral values held by a group of people. The ethical system is the basis for which one’s values lies (Carrell & Heavrin, 2008). Values are the means by which individuals achieve their goals or make ends meet. In the Withholding Information case study, it is possible to apply three ethical systems to guide the parties to a negotiation. These include ethics of consequence, ethics of purpose, and ethics of principle. The ethics of consequence, commonly known as consequentialism, holds that the consequences of one’s action or conduct are the ultimate guide in evaluating whether the actions are good or bad. Consequentialists judge the moral rightness of an action basing on the outcomes. Thus, in deciding whether the employer’s negotiator should tell the employees about the self-insurance plan, one should evaluate questions such as follows: What benefits are there if the negotiator reveals this information? What are the likely consequences for withholding the information? Which of the two alternatives is has the least negative impacts? With such questions in mind, the negotiator may be able to make a decision whose outcome has the least negative impacts on the employees.

 Ethics of principle is another ethical system that can guide the parties to a negotiation. Ethics of principle are the duty-based ethics, or deontological ethics. Ethics of principle emphasize on doing the right thing because they are what is right. Deontological ethics caution people to avoid wrong things (Mizzoni, 2010). The “right things” are those considered good by a person, whether others do them. In applying deontological ethics, the negotiator may evaluate whether the employees deserve to know the truth, which is affirmative. On the other hand, would the employer expect the same treatment from employees? The last ethical system is ethics of purpose, also known as refined consequentialism. Ethics of purpose dictate that one cannot reach a good end while using bad means (Tully, 2006). According to ethics of purpose, the negotiator cannot use immoral acts even though the results are positive. As such, the negotiator ought to tell the truth to the employees.

Substantive Fairness of the Negotiation

The substantive fairness of the negotiation stipulates that dismissal of employees can only occur when there is a fair reason to do so. Naturally, the employer expects some standard of conduct and productivity from employees. Likewise, the employees are protected from arbitrary action that may result from the employer. While following the substantive fairness, the employer may not dismiss the employee basing on first offense, especially when the offense is not of serious nature. In applying substantive fairness while making a decision, the employer considers the frequency of occurrence of the negative behavior, the nature of rule contravened, whether the employee was aware of such rule, and whether the action taken is fair considering the standard contravened. Thus, before the management can take action against the employees for any form of misconduct, it must take into consideration a number of factors, all relating to the substantive fairness of the negotiation.

The substantive fairness of a negotiation ensures that all parties are heard before decisions can be made. Substantive fairness requires the parties to show impartiality, where different views are treated fairly before making decisions. Another key element is reciprocity, which involves establishing mutual relations between the parties in a negotiation (Carrell & Heavrin, 2008). Thus, in the event that an employee commits a form of misconduct, the management must evaluate whether to sanction the employee. The employee should have the chance to amend his/her behavior before a dismissal is affected. Thus from the case study, the management should give employees dialogue even if they decide not to give up some the benefits they were receiving from the plan. The management should not dismiss employees simply because they refuse to give up the benefits.

Procedural Fairness of the Negotiation

The procedural fairness of the negotiation asserts that the dismissal of employees following a major disagreement should follow an established and fair procedure. Procedural fairness is all about the type of procedures employed by the decision maker. When the right procedures are followed, there is a highly likelihood that a fair decision is reached (Hollander-Blumoff & Tyler, 2008). There are various rules that ensure that procedural fairness applies especially in situations involving negotiations between an employer and the employees. First, procedural fairness requires that hearing is appropriate as per the circumstances of the case. The employees concerned must be given a chance to respond to allegations before a decision is made. Second, there should be no bias during the hearing process. Third, there must be evidence to support the decisions made. The management should not make decisions basing on rumors or unfounded claims. The major goal in applying procedural fairness is to reach a valid agreement, bearing in mind that the bargaining process is rather a voluntary process (Hollander-Blumoff & Tyler, 2008). It is worth noting that negotiation may be adversarial to one of the parties involved in the process.

Concealment Behaviors that are Ethical and those that are Unethical

Concealment behaviors are common in negotiations. Nevertheless, some of these behaviors may be unethical. Unethical concealment behavior comprise of those behaviors that contravene the ethical codes of conduct or established guidelines in negotiation. It is difficult to establish whether the other party in a negotiation is telling the truth because they will likely attempt to conceal this from the other party. In a negotiation, all parties attempt to hide some information that may fundamentally affect the opinion of the other party. One party may hide crucial information from the other party in order to gain power. Negotiators often use deception in order to gain an advantage over the other party. A common tactic employed in negotiation is “truth telling”, which involves “lying, bluffing, exaggeration, manipulation, or concealment” (In Olekalns & In Adair, 2013, p. 176).

In the withholding Information case, a number of concealment behaviors that are ethical can be employed. One of these is to gain information about the other party through contacts, friends, associates, and other close stakeholders. Gaining information about the other party increases one’s power in the negotiation. The second ethical behavior is to conceal one’s real bottom line. Third, another ethical concealment behavior is to make unrealistically high demands in the initial stages. Lastly, it is common for negotiators to give a false impression that they cannot be easily manipulated to give in to the demands of the other party. One of the unethical concealment behaviors is use of bribery to gain information about the other party or to dissuade them from pursuing their interests. A second unethical concealment behavior is to make false promises to either of the parties. For instance, the management may promise the employees higher salaries, which it cannot afford to pay. Third, it is unethical to misrepresent factual information. Lastly, none of the parties should use threats or force, as this constitutes unethical behavior.

How the Parties can Learn to Create Trust

It is essential that parties in a negotiation learn to build and develop trust. Trust ensures that parties involved in a negotiation engage in cooperative behavior, and thus lesser conflicts. When parties in a negotiation learn to create trust, it is easier to reach a mutual agreement. The parties can develop trust in a one-shot negotiation through the following ways. First, the parties can build trust by carefully analyzing the situation. For instance, it is important to examine the time constraints, the presence of incentives that may lead one party to deceive the other, common interests, and how well the parties know each other. Second, the parties should build mutual trust. This can be achieved by identifying mutual interests, maintaining openness during negotiations, and employing reciprocity. In a long-term negotiation relationship, the parties can build trust by developing a common language, identifying one’s concessions, and by recognizing the interdependency.


The Withholding Information case provides a platform for critical analysis of the way in which the employers and employees may engage in negotiation and develop mutual agreement. Each of the parties in the negotiation is guided by ethical systems that guide their actions. The key ethical systems in this case are consequentialism, deontological ethics, and refined consequentialism. By observing the ethical systems, the parties involved in a negotiation are likely to make right decisions. The employer must also consider the substantive and the procedural fairness of the negotiation before making  the final decision. Moreover, both parties should engage in ethical concealment behaviors such as making high demands in the initial stages. Lastly, trust is a key element in the negotiation process.



Carrell, M. R., & Heavrin, C. (2008). Negotiating essentials: Theory, skills, and practices. Upper Saddle River, NJ: Pearson Prentice Hall.

Hollander-Blumoff, R., & Tyler, T. (2008). Procedural Justice in Negotiation: Procedural             Fairness, Outcome Acceptance, and Integrative Potential. Law & Social Inquiry, 33(2),        473-500. Available from http://www.jstor.org/stable/20108768

In Olekalns, M., & In Adair, W. L. (2013). Handbook of research on negotiation. Cheltenham,    UK: Edward Elgar Publishing.

Mizzoni, J. (2010). Ethics: The basics. Chichester, West Sussex, U.K: Wiley-Blackwell.

Tully, P. A. (2006). Refined consequentialism: The moral theory of Richard A. McCormick. New             York: Lang.