Purpose The purpose of this paper is to investigate the effects of ethical climate on the use of deception during negotiation for both individuals and groups. It aims to focus on the use of “ethical climate” as a shared task representation at the group level. Design/methodology/approach Participants were 458 undergraduate students who earned course credit. Participants engaged in a simulated negotiation task about the selling/purchase of a new car, via an instant messenger program. Those assigned to the “seller” role either negotiated individually or as a three-person group, and received one of three ethical climate manipulations (honesty, competitive, or control). The main dependent variable was whether the seller(s) disclosed information about a possible defect. Findings As predicted, groups were less honest than individuals. Participants in the honesty condition were most likely to be honest while those in the competitive condition were the least likely to be honest, although this difference was not statistically significant. Finally, there was a significant interaction effect between size of negotiating party and ethical climate indicating that groups' “default” response was to lie, but they lied significantly less often in the “honesty” condition. Alternatively, individuals' default response was to be honest. Practical implications Decision-making groups have a tendency to compete even if it means being dishonest. However, organizations can help to overcome this tendency by establishing an ethical climate. Originality/value While there have been studies published on the effects of ethical climate on decision making at the individual level, there is a gap in the literature on these effects at the group level. Decisions are made at the group level too often to not pay attention to these differences.
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