The European Business Review

NEGOTIATING IN A DIGITALISED ERA

When negotiations take place between business organisations, it’s clear that those involved in the discussions will be intensely focused on the content of their exchanges. What is, perhaps, not so evident is the role and influence of the precise media of communication that may be employed in this digital age. As this enlightening article explains, we would be well advised to choose our weapons carefully in the duel of modern business negotiation.

Face-to-face negotiation is the transmission method with the highest level of signals (since it includes both verbal and non-verbal communication), while emails are more limited in this regard.

1 New environment

The procurement manager of a pharmaceutical company, a young MBA who has only held their position for a year, is called on by the Director of Research and Development to source a new material within a week. The company has its existing suppliers, and the price negotiations nearly always follow a very predictable course. However, this time, the situation is different. The pressure to find a supplier is high and the only option is one located in another country. The negotiation is conducted via email and the price demanded by the supplier is very high. The procurement manager sticks to the normal policy and asks for a discount, but receives subsequent counter-offers to no avail. The limited time available means this is the only supplier that can serve the company’s needs. Fortunately, an interesting opportunity arises: the following week there is a convention attended by both the Director of Research and Development and this particular supplier. At the end of the event, the director, after face-to-face negotiation, returns after coming to an agreement, in under twenty-four hours, at the preferred price and with a long-term contract. After the successful conclusion of the negotiation, the procurement manager asks what went wrong with the negotiation by email so that it failed to reach an agreement to the satisfaction of both parties.

Negotiations can be very different in nature; for example, face-to-face, in a team, multilateral, incorporating significant multicultural elements, and also those in which the new communication technologies play an important part. In companies and other organisations, negotiations are increasingly conducted online1 . In this technical note, we analyse the types of online communication within the context of that pairing that permeates our lives: space and time. We discuss what effects the use of technological tools have on negotiators and what principal biases prevail when using them, as well as the strategies that should be employed in online negotiation processes so as to achieve greater success.

2 How do space and time influence negotiations?

The classic negotiation process takes place in a single venue and in a simultaneous manner, parties playing an essential role, amplified by the opportunity to interpret the non-verbal signals, such as, for example, body language. With the latest technological tools, which are driving an unstoppable wave of digitalisation, these two dimensions have been transformed, and even overlap on a single plane. See Figure 1 for a summary chart.

The information transmission and communication process is not just verbal; it also includes the abovementioned body language, which always transmits signals which can be deciphered in a competitive or a collaborative way. Successful negotiators are crack communicators that adapt to the tools at their disposal and to the environment in which they find themselves.

Online communication mechanisms can be organised according to the which depends on the capacity of the medium to communicate with a greater or lesser degree of detail, based on the signals that it includes. Face-to-face negotiation is the transmission method with the highest level of signals (since it includes both verbal and non-verbal communication), while emails are more limited in this regard. On the temporal plane, a second dimension is in the which captures the level of synchronicity of the interactions or the extent to which the individuals work on the same activity at the same time. In face-to-face negotiation, phone calls, video conferences and chats, the interaction is synchronised, since the communication between the two parties is synchronous. Conversely, in

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