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This document contains Chapters 10 to 12 Chapter 10 Cross-Cultural Negotiation OVERVIEW In a traditional course, there is little opportunity to experience cross-cultural negotiations; therefore, this chapter must often be discussed in the abstract, without a direct context for experience. I begin the class lecture by defining prototypes versus stereotypes. This is important to do, so as not to pigeonhole people. If the class is diverse enough in background, it may be worthwhile to have students engage in a face-to-face negotiation and make a personal note of every cultural issue that they are aware of. The lists that students make can become the basis of discussion. I like to begin the discussion by introducing two models: (1) the iceberg model and (2) the three-dimensional model. Students will generally spend quite a bit of time working through the three dimensions. I tend to resist spending a lot of time attempting to characterize each country in each box (there will be a strong temptation to do this). Rather, I use this model as a lens to analyze culture and, most importantly, expand our own repertoires for negotiations. Lecture Outline learning about cultures Negotiations across cultures are not only commonplace but a requirement for effective management in multinational and international companies Cross-cultural negotiations do not always go smoothly and money is left on the table (Exhibit 10-1) Developing a framework for thinking about culture Framework is sensitive to heterogeneity within cultural groups Allows us to learn how cultures change and grow Defining culture Unique character of a social group; shared values and norms that set it apart from other groups Concerns economic, social, political, and religious institutions; also the unique products produced by these groups Cultural institutions preserve and promote culture’s ideologies Culture influences mental models, behavior, and cause-and-effect relationships Avoid temptation to think of culture and diversity as a single dimension; culture is a complex whole Culture as an iceberg (Exhibit 10-1) cultural values and negotiation norms Three dimensions of culture (Exhibit 10-2) Individualism versus collectivism Individualism Collectivism Implications for negotiation Social networks (Exhibit 10-3) Cooperation In-group favoritism (Exhibit 10-4) Social loafing versus social striving Emotion and inner experience Dispositionalism versus situationalism (Exhibit 10-5) Preferences for dispute resolution Bargaining Mediation Adversarial adjudication Inquisitorial adjudication Egalitarianism versus hierarchy Egalitarian power relationships Hierarchical power relationships Hofstede’s (2010) analysis of collectivist/hierarchical countries (Exhibit 10-6) Implications for negotiation Choose your representative Understand the network of relationships Face concerns The conduct of negotiation Direct versus indirect communication (Exhibit 10-7) Direct communication Indirect communication Implications for negotiation Information necessary to reach integrative agreements Dispute resolution preferences Key challenges of intercultural negotiation Expanding the pie Dividing the pie Sacred values and taboo trade-offs Biased punctuation of conflict Ethnocentrism (Exhibit 10-8) Affiliation bias Faulty perceptions of conciliation and coercion Naïve realism Western Canon debate Fundamental attribution error predictors of success in intercultural negotiations Conceptual complexity: People who are conceptually complex show less social distance to different others People who use broad categories adjust to new environments better than do narrow categorizers Empathy Sociability Critical acceptance of stereotypes Openness to different points of view Interest in host culture Task orientation Cultural flexibility Social orientation Willingness to communicate Patience Intercultural sensitivity Tolerance for differences among people Sense of humor Skills in collaborative conflict resolution Advice for cross-cultural negotiations (Exhibit 10-9) Anticipate differences in strategy and tactics that may cause misunderstandings Analyze cultural differences to identify differences in values that expand the pie Recognize that the other party may not share your view of what constitutes power Avoid attribution errors Find out how to show respect in the other culture (Exhibit 10-10) Find out how time is perceived in the culture Cultural differences across 4 global negotiations stages Know your options for change (Exhibit 10-11) Integration Assimilation Separation Marginalization conclusion Negotiating across cultures is a necessity for success in the business world Unfortunately, cross-cultural negotiations frequently result in less-effective pie expansion than intracultural negotiations; part of the problem is a lack of understanding of cultural differences Key dimensions of cultural differences are individualism-collectivism, egalitarianism-hierarchy, and direct-indirect communication Key challenges of intercultural negotiation: Expanding the pie, dividing the pie, dealing with sacred values and taboo trade-offs, biased punctuation of conflict, ethnocentrism, the affiliation bias, faulty perceptions of conciliation and coercion, and naïve realism Negotiators should learn to analyze cultural differences to identify value differences that could expand the pie, recognize different conceptions of power, avoid attribution errors, find out how to show respect, how time is perceived in other cultures, and assess options for change Key Terms affiliation bias Bias that occurs when people evaluate a person’s actions on the basis of their group connections, rather than on the merits of the behavior itself. assimilation A situation that occurs when a group or person does not maintain its own culture, but adapts to the host culture. attribution error The tendency to ascribe someone’s behavior or the occurrence of an event to the wrong cause. biased punctuation of conflict The tendency for people to interpret interactions with their adversaries as offensive and their own behavior as defensive. causal chunking or punctuation The process of organizing interactions with others into a series of discrete causal chunks, rather than an uninterrupted sequence of interchanges. dispositionalism The tendency to ascribe the cause of a person’s behavior to their character or underlying personality traits. egalitarianism-hierarchy The means by which people influence others, either laterally or hierarchically. ethnocentrism The universal strong liking of one’s own group and the simultaneous negative evaluation of out-groups. guanxi networks Chinese networks of deep trust built over years and decades. fundamental attribution error Error that occurs when people attribute the behavior of others to underlying dispositions or character and discount the role of situational factors. integration In terms of cultural relations, a type of acculturation whereby each group maintains its own culture while also maintaining contact with another culture. marginalization A situation that occurs when neither maintenance of a group’s own culture nor contact with another culture is attempted. pseudosacred values Issues that a decision maker claims are sacred or heartfelt when, in fact, they are not. sacred values Issues that are deemed by the decision maker as ones that cannot be compromised, traded off, or even questioned. secular values Issues and resources that can be traded and exchanged. separation A situation that occurs when a group or individual maintains its own culture, but does not maintain contact with another culture. situationalism The tendency to ascribe the cause of a person’s behavior to external factors and forces that are beyond a person’s control. Schematic overcompensation When a negotiator tries to adjust to their counterpart’s cultural assumptions about negotiations. social loafing A form of motivation loss in which people in a group fail to contribute as much or work as hard as they would if they worked independently. social striving A form of motivation in which people are concerned for the welfare of the group. trade-offs Exchanges that are made between parties; in negotiation, one party gives up something less valuable to him or herself in return for something more valuable, and vice versa. quality of communication experience (QCE) Measure the nature and quality of intra-cultural and intercultural communications. Suggested Exercises and other materials EXERCISE: Abhas-Bussan by Amol Patel and Jeanne M. Brett Abhas is a negotiation between a Japanese manufacturer and an Indian distributor. It is designed to be used with Raiffa’s (1982) chapter about quantifying preferences and priorities. Preparation: 120 min. Negotiation: 60 min. Available from the Dispute Resolution Research Center at the Kellogg School of Management, Northwestern University, 2001 Sheridan Road, Evanston, IL 60208. Phone: (847) 491-8068; e-mail: drrc@kellogg.northwestern.edu. EXERCISE: Alpha Beta by Thomas Gladwin DRRC’s version of Alpha Beta is a cross-cultural, team-on-team negotiation of a potential alliance. The exercise requires the two parties to enact a cultural style during the negotiation. Preparation: 30 min. Negotiation: 60 min. Available from the Dispute Resolution Research Center at the Kellogg School of Management, Northwestern University, 2001 Sheridan Road, Evanston, IL 60208. Phone: (847) 491-8068; e-mail: drrc@kellogg.northwestern.edu. EXERCISE: Cartoon by Jeanne M. Brett and Tetsushi Okumura Cartoon is a U.S.-Japanese version of the Moms.com exercise (see suggested cases and exercises for Chapter 8). Preparation: 60-90 min. Negotiation: 90 min. Available from the Dispute Resolution Research Center at the Kellogg School of Management, Northwestern University, 2001 Sheridan Road, Evanston, IL 60208. Phone: (847) 491-8068; e-mail: drrc@kellogg.northwestern.edu. EXERCISE: Cobalt Systems by Catherine Tinsley This is a joint venture negotiation between a U.S. and Korean company. It is set up to teach Raiffa’s for¬mal analysis technique for prioritizing issues. It is also useful for teaching the concept that culture im-pacts parties’ positions on the issues. Preparation: 60 min. Negotiation: 60 min. Available from the Dispute Resolution Research Center at the Kellogg School of Management, Northwestern University, 2001 Sheridan Road, Evanston, IL 60208. Phone: (847) 491-8068; e-mail: e-mail: drrc@kellogg.northwestern.edu. EXERCISE: Granite Corporation in Costa Rica by Adrianne Kardon and Jeanne M. Brett This negotiation illustrates the situation when a U.S. company has a foreign government on the other side of the table and an activist environmental group demonstrating outside. Preparation: 60 min. Negotiation: 60 min. Available from the Dispute Resolution Research Center at the Kellogg School of Management, Northwestern University, 2001 Sheridan Road, Evanston, IL 60208. Phone: (847) 491-8068; e-mail: drrc@kellogg.northwestern.edu. EXERCISE: International Lodging Merger by Tony Simons and Judi McLean Parks International Lodging Merger is a quantified, integrative negotiation about the merger of a U.S. hotel chain with a Brazilian chain. The point structure motivates culturally different behaviors from the ne¬gotiators. Key cultural differences that have been incorporated into the exercise include time, power di¬stan¬ce, individualism/collectivism, and universalism/par¬ti¬cu¬la¬r¬ism. Preparation: 60 min. Nego¬ti¬a¬tion: 60-90 min. Available from the Dispute Resolution Research Center at the Kellogg School of Management, Northwestern University, 2001 Sheridan Road, Evanston, IL 60208. Phone: (847) 491-8068; e-mail: drrc@kellogg.northwestern.edu. EXERCISE: Les Florets by Stephen B. Goldberg A simplified version of Texoil (see exercise list for Chapters 2 and 8) set in France. Preparation: 30 min. Negotiation: 45-60 min. Available from the Dispute Resolution Research Center at the Kellogg School of Management, Northwestern University, 2001 Sheridan Road, Evanston, IL 60208. Phone: (847) 491-8068; e-mail: drrc@kellogg.northwestern.edu. EXERCISE: The Mexico Venture by Holly Schroth and Jackie Ramirez The Mexico Venture is a negotiation between joint venture partners, one representing the U.S. partner and the other representing the Mexican partner. There are several cross-cultural issues, e.g., currency devaluation and cultural differences in work norms. Preparation: 15-20 min. Negotiation: 45 min. Available from the Dispute Resolution Research Center at the Kellogg School of Management, Northwestern University, 2001 Sheridan Road, Evanston, IL 60208. Phone: (847) 491-8068; e-mail: drrc@kellogg.northwestern.edu. EXERCISE: Mouse by Geoffrey Fink and Maria Baute Stewart DRRC’s version of this Harvard University Program on Negotiation (PON) case is a six-party negotiation based loosely on EuroDisney’s rocky start in France. At the table are four mayors of French communities, a representative of the Mouse corporation, and an official of the French nati¬o¬n¬al government. This multiparty, multi-issue, multicultural negotiation contains some interesting teach¬ing points regarding the BATNA concept. Preparation: 60 min. Negotiation: 90 min. Avail¬able from the Dispute Resolution Research Center at the Kellogg School of Management, North¬western University, 2001 Sheridan Road, Evanston, IL 60208. Phone: (847) 491-8068; e-mail: drrc@kellogg.northwestern.edu. EXERCISE: The Paradise Project by Jeanne M. Brett, Rekha Karambayya, Catherine A. Tinsley, and Anne Lytle This is a version of Amanda (see suggested cases and exercises for Chapter 9 and Appendix 3) set in a Mexican tile manufacturing facility. Preparation: 30 min. Negotiation: 60 min. Available from the Dispute Resolution Research Center at the Kellogg School of Management, Northwestern Uni¬ver¬¬s¬ity, 2001 Sheridan Road, Evanston, IL 60208. Phone: (847) 491-8068; e-mail: drrc@kellogg.northwestern.edu. EXERCISE: The Summer Interns Program by Roy Lewicki and Blair Sheppard This is a dispute between the heads of engineering and personnel. It can be used to teach interests, rights, and power in multiple cultures. It has good comparative culture data in the teaching notes. Preparation: 60 min. Negotiation: 60 min. Available from the Dispute Resolution Research Center at the Kellogg School of Management, Northwestern University, 2001 Sheridan Road, Evanston, IL 60208. Phone: (847) 491-8068; e-mail: drrc@kellogg.northwestern.edu. EXERCISE: Tipal Dam by Peter Wheelan and Jeanne M. Brett This is a transactional negotiation between a construction company and a foreign government. Preparation: 60 min. Negotiation: 60 min. Available from the Dispute Resolution Research Center at the Kellogg School of Management, Northwestern University, 2001 Sheridan Road, Evanston, IL 60208. Phone: (847) 491-8068; e-mail: drrc@kellogg.northwestern.edu. MULTIPLE-CHOICE QUESTIONS Which of the following best describes the difference between individualism and collectivism as a cultural value? individualists focus on money; collectivists focus on relationships individualists see themselves as autonomous entities; collectivists see themselves in relation to others individualists prefer to work alone; collectivists prefer to work in groups individualists are competitive; collectivists are cooperative Which of the following best describes the difference between egalitarianism and hierarchy as a cultural value? egalitarian cultures divide things equally; hierarchical cultures divide things according to merit and status egalitarian cultures treat people equally; hierarchical cultures discriminate among people egalitarian cultures believe that status is permeable through effort and achievement; hierarchical cultures believe that superiors should take care of the needs of subordinates egalitarian cultures communicate directly; hierarchical cultures communicate indirectly Which of the following best describes the difference between direct and indirect communication with regard to culture? direct communicators express their intent in words; indirect communicators convey meaning and intention through story and inference direct communicators address others by their first name; indirect communicators address others by their formal title direct communicators always speak the truth; indirect communicators never say what they really mean direct communicators are honest; indirect communicators often lie or misrepresent information Which of the following statements is most true with regard to cultural differences? Cultural differences are largely inborn and do not change or grow over time It is possible to “prime” or “activate” different cultural values in people, at least temporarily, that change their behavior Negotiations between people from different cultures often result in less effective pie expansion than negotiations between people from the same culture It is best to use a stereotype approach, rather than a prototype approach, when thinking about cultural differences Ethnocentrism refers to genocide (i.e., the killing of people from different cultures) the cultural version of egocentrism (i.e., the belief the one’s own culture is superior to other cultures) separatism (i.e., the tendency for a culture to withdraw from other cultures and act independently) the blending of different cultures in a way that creates a “melting pot,” or mix of different cultures If a person from Brazil is late for a negotiation with someone from the United States and the U.S. person concludes that the Brazilian negotiator is unreliable and disrespectful, such a belief may be an example of ethnocentrism naïve realism marginalization an attribution error Which of the following is an example of in-group favoritism? the belief that the members of one’s own group are better or more deserving than members of another group a group who decides to elect a new president by choosing someone’s brother rather than opening up the election to others a person works less hard when part of a group effort than they would individually a person interprets interactions with their adversaries in self-serving and other-derogating terms A sacred value is a religious or spiritual belief that guides a person in their behavior and action a belief in a higher negotiation power, particularly with regard to conflict resolution a belief that people regard to be so fundamental that it is not discussable or debatable a belief that money is not the most valuable possession that one can have Which of the following statements is most true with regard to integrative negotiation as it pertains to culture? Members of western cultures are more adept and skilled at expanding the pie compared to members of eastern cultures Members of eastern cultures are more adept and skilled at claiming resources than members of western cultures Inter-cultural negotiation often yields higher joint gain than intra-cultural negotiation Intra-cultural negotiation often yields higher joint gain than inter-cultural negotiation With regard to cultural differences, a stereotype is___________; a prototype is ___________ a belief that members of a given culture are largely all the same; the recognition that members of a given culture might have a central tendency, but there is variation within the cultures the recognition that members of a given culture might have a central tendency, but there is variation within the cultures; a belief that members of a given culture are largely all the same an act of discrimination; a scientific or technical invention that is in its initial form (i.e., before refinement) a form of racial prejudice; a form of belief prejudice Answer key: 1.B; 2.C; 3.A; 4.C; 5.B; 6.D; 7.A; 8.C; 9.D; 10.A. Discussion Questions Consider the “iceberg model” of culture in Exhibit 10-2. How does a limited definition of culture (or the “tip of the iceberg”) contribute to cross-cultural negotiation problems? What are some key differences between individualistic and collectivist cultural values? What are the implications for negotiation? Consider Exhibit 10-8. How is power distance correlated with individualism and collectivism? How do differences between direct and indirect communication cultures affect how negotiators share information? What are some examples of acceptable and taboo trade-offs in negotiation? How does the trade-off principle operate within systems of sacred and secular values? Suggested answers 1. The “tip of the iceberg” that includes obvious behaviors is an expression of fundamental values that remain invisible below the surface of the water. To try to change obvious expressions would be to challenge centuries-old values and beliefs. 2. People in individualistic cultures give priority to their own gain, even when it conflicts with that of their group. In collectivist cultures, the dominant motive is belonging to the group and focus is on social relations. In negotiations, individualists attribute a disagreeable person’s behavior to underlying disposition and desire more formal dispute resolution procedures; collectivists are more likely to ascribe behavior to situational factors and prefer informal procedures. 3. In Exhibit 10-8, countries high in collectivism are also high in power distance. In examining the correlation between power distance, individualism, and collectivism, it's crucial to understand each concept's essence within the context of cross-cultural negotiation dynamics. Firstly, power distance refers to the extent to which less powerful members of a society accept and expect unequal distribution of power. It reflects the degree of hierarchy and authority respected within a culture. Higher power distance cultures accept and even endorse significant power differentials, while lower power distance cultures strive for more egalitarian relationships. On the other hand, individualism and collectivism represent the degree to which individuals prioritize personal goals over group goals (individualism) or vice versa (collectivism). Individualistic cultures emphasize autonomy, independence, and personal achievement, valuing individual rights and freedoms. In contrast, collectivistic cultures prioritize harmony, interdependence, and group cohesion, where collective goals supersede personal ones. Now, considering Exhibit 10-8, which likely illustrates the relationship between these dimensions across various cultures: In cultures with high power distance and collectivism, there tends to be a strong emphasis on respecting authority and maintaining harmony within the group. Individuals may defer to authority figures without question and prioritize the collective good over personal desires. Power is centralized within a few key figures, and decisions are often made based on what benefits the group as a whole. Conversely, cultures with low power distance and individualism exhibit more equality in power distribution and prioritize individual autonomy and achievement. There's less deference to authority, and decisions may be made independently or through consensus-building rather than hierarchical structures. Personal goals and freedoms are highly valued, sometimes at the expense of group cohesion. Overall, the correlation between power distance, individualism, and collectivism suggests that cultural norms surrounding hierarchy and group dynamics significantly influence how individuals negotiate, make decisions, and navigate relationships in cross-cultural contexts. Understanding these dynamics is crucial for effective communication and collaboration across diverse cultural backgrounds in negotiation scenarios. 4. Getting information out on the table is critical for expanding the pie; relying on context alone to convey information necessary to craft integrative agreements is not enough. Cultures that use direct information-sharing strategies or a combination of direct and indirect strategies reach the most integrative, pie-expanding agreements. In direct cultures, the process of deal making comes first; in other cultures, the relationship comes first and provides a context for making deals. Because indirect communication requires more complex and subtle communication skills, direct communicators often find it difficult or impossible; but indirect communicators can be direct when they need to. 5. Proposals to exchange sacred values (e.g., human life, familial obligations, national honor) for secular ones (e.g., money, time, or convenience) constitute taboo trade-offs. However, some factors allow trade-offs to occur on sacred issues. It becomes obvious, however, that labeling an issue as sacred may be a negotiation ploy and by removing ‘sacred issues’ from bargaining consideration, a negotiator increases the likelihood of a favorable settlement. Chapter 11 Tacit Negotiations and Social Dilemmas OVERVIEW This chapter ideally follows a multi-round prisoner’s dilemma or social dilemma game. I like to debrief the exercise in terms of cooperation and defection and then carefully present the prisoner’s dilemma logic. I find that even if students have had formal courses in game theory, it is still very useful to work through the logic in the context of actual behaviors. I challenge students to confront the dilemma and then tell them about the work of Axelrod. We then work through the virtues of the tit-for-tat strategy. Then I introduce social dilemmas and note that tit-for-tat does not apply as well in these situations. The class can be challenged (either individually or in groups) to come up with ways to address the social dilemma (i.e., so as to induce cooperation). The instructor can classify the strategies as either economic or psychological. Lecture Outline Two Types of Negotiation situations (Exhibit 11-1) Explicit negotiations Tacit negotiations Nash: cooperative and non-cooperative games Social dilemmas Two-person (prisoner’s) dilemmas Multiperson dilemmas business as a social dilemma the prisoner’s dilemma (Exhibit 11-2) Cooperation and defection as unilateral choices Rational analysis Case 1: one-shot decision Dominance detection; mutual defection is an equilibrium outcome Multiple trials may help players avoid disastrous outcome Case 2: repeated interaction over a fixed number of trials Backward induction Defection remains the dominant strategy Case 3: repeated interaction for an infinite or indefinite amount of time Logic of backward induction breaks down Cooperation in the first period is optimal What general strategy is optimal to adopt? The tournament of champions The winner is a loser (tit-for-tat) Psychological analysis of why tit-for-tat is effective Not envious Nice Tough Forgiving simple Extremely stable Recovering from defection Make situational attributions One step at a time Getting even and catching up Make your decisions at the same time Superrationality (Hofstadter’s letter, Exhibit 11-3) social dilemmas (ExhibitS 11-4 and 11-5) The multiperson prisoner’s dilemma, volunteer dilemma, and ultimatum dilemma People tend to behave more competitively (self-interestedly) in social dilemmas Size difference (groups versus 2-person situations) Costs of defection are spread out Social dilemmas are riskier Social dilemmas provide anonymity People in social dilemmas have less control over the situation The tragedy of the commons Types of social dilemmas (Exhibit 11-7) Resource conservation dilemmas (collective traps; Exhibits 11-6(a) and 11-6(b)) Public goods dilemmas (collective fences) How to build cooperation in social dilemmas (Exhibit 11-8) Structural strategies Align incentives Monitor behavior Regulation Privatization Tradable permits Psychological strategies Psychological contracts and the norm of commitment Superordinate goals Communication Personalize others Social sanctions Focus on benefits of cooperation How to encourage cooperation in social dilemmas when parties should not collude Keep your strategy simple Signal via actions Do not be the first to defect Focus on your own payoffs, not your payoffs relative to others Be sensitive to egocentric bias
escalation of commitment Negotiators will persist with a losing course of action, even in the face of clear evidence that their behaviors are not working and the situation is deteriorating Personal escalation dilemmas Interpersonal escalation dilemmas Escalation of commitment process (Exhibit 11-9) Avoiding the escalation of commitment in negotiations Set limits Avoid decision myopia Recognize sunk costs Diversify responsibility and authority Redefine the situation conclusion Prisoner’s dilemmas and social dilemmas are characterized by the absence of contracts and enforcement mechanisms; people must choose between acting in a self-interested or cooperative fashion and are therefore vulnerable to exploitation Strategic pie-expanding and pie-slicing strategies in the prisoner’s dilemma can be achieved via tit-for-tat strategy, but only if negotiator with two players in a repeated game In social dilemmas, the best way to ensure cooperation is to align incentives, monitor behavior, practice regulation and privatization, use tradable permits, communicate with involved parties, personalize others, and focus on the benefits of cooperation. Escalation dilemmas occur when people invest in a losing course of action; people can de-escalate via setting limits, getting several perspectives, recognizing sunk costs, diversifying responsibility, and redefining the situation or the decision criteria Key Terms backward induction A mechanism for making rational decisions in a multistage game in which a person reasons backwards from the last stage of the game. dominance detection A principle stating that one alternative dominates another if it is just as good on all pertinent aspect dimensions and better on at least one. equilibrium outcome An outcome in which no player can unilaterally (single-handedly) improve his or her outcome by making a different choice. escalation of commitment A situation in which decision makers fail to adapt their reference point and continue to make risky decisions even when the results prove unprofitable. explicit negotiations Bargaining situations in which people are able to openly communicate with one another. impression management Questions if people’s behavior is different when it is anonymous. interpersonal escalation dilemma Escalation dilemmas that involve two or more people, often in a competitive relationship (e.g., negotiation, union strikes, or war). norm of commitment The tendency for people to feel psychologically committed to follow through with their word. personal escalation dilemma An escalation dilemma that involves only one person and concerns whether or not to continue with what appears to be a losing course of action or to cut one’s losses. prisoner’s dilemma A two-party game in which the pursuit of self-interest leads to collective disaster. psychological contracts Contracts that are not binding in a court of law, but create a psychological pressure to commit. Also commonly known as “handshake deals”. public goods dilemmas or collective fences Situations in which individuals have the choice to contribute resources to a common pool or community. Contributing helps the group, but is costly to the individual; if all individuals fail to contribute, the public good cannot exist. resource conservation dilemmas or collective traps Situations in which individuals take or harvest resources from a common pool when no external monitors are available; the maintenance of the pool depends on individuals exercising restraint in their harvesting. social dilemma A multiparty situation that results when people engage in behaviors that seem perfectly rational on an individual basis and maximize self-interest, but lead to collective disaster. subgame perfect equilibrium The rational strategy stating that a best move in a given trial of a game should also be the best move in a multiple-trial game. superrationality A person’s need to believe that (1) others are rational; and (2) others believe he or she is also rational. tacit negotiations Bargaining situations in which people are unable to communicate but coordinate decisions through their independent actions. tit-for-tat A strategy of decision making that always cooperates on the first trial and, on subsequent trials, does whatever its opponent did on the previous trial. tragedy of the commons When people maximize their own gains reasoning that their actions will not have measurable impact on others, but if everyone engaged in this behavior, it would become a collective disaster. Suggested Exercises and other materials EXERCISE: Comparative Advertising by Leonard Greenhalgh and Max H. Bazerman This case is an iterative Prisoner’s Dilemma exercise set in the context of the decision of whether or not to engage in negative advertising. It can be done in pairs or groups. Preparation: 10 min. Negotiation: 45 min. Available from the Dispute Resolution Research Center at the Kellogg School of Management, Northwestern University, Leverone Hall, 2001 Sheridan Road, Evanston, IL 60208. Phone: (847) 491-8068; e-mail: drrc@kellogg.northwestern.edu. EXERCISE: The Diamond Bidding Game by J. Keith Murnighan This is an asymmetric Prisoner’s Dilemma game for two individuals or two parties. It is an excellent example of how unequal payoff distributions, when known, can throw a wrench into potentially cooperative relations. This builds nicely off The Gas Station Game (see below). Preparation: 10 min. Negotiation: 45 min. Available from the Dispute Resolution Research Center at the Kellogg School of Management, Northwestern University, Leverone Hall, 2001 Sheridan Road, Evanston, IL 60208. Phone: (847) 491-8068; e-mail: drrc@kellogg.northwestern.edu. EXERCISE: The Everyone Has a Number Market by J. Keith Murnighan This market exercise is for medium or large groups (i.e., 16 or more). Participants all receive private information that determines the kinds of strategies that are beneficial to them within the market, where they must negotiate dyadically, but can move from one potential partner to another. The exercise moves from market interactions, to debriefings, to additional market interactions and debriefings. Issues raised include the value of information and the importance of nonverbal cues. Preparation: 5 min. Negotiation: 10-15 min. Available from the Dispute Resolution Research Center at the Kellogg School of Management, Northwestern University, Leverone Hall, 2001 Sheridan Road, Evanston, IL 60208. Phone: (847) 491-8068; e-mail: drrc@kellogg.northwestern.edu. EXERCISE: The Executive Decision Making Game by J. Keith Murnighan This is a multi-party (typically 4 or 5) veto game, where one party has veto power and the other parties must either band together to protect themselves or try to deal individually with the veto player. A simple but compelling analog to the formation of unions in the face of harsh treatment by an authority, this exercise generates a wide range of outcomes from open revolt to intense internal competition. Preparation: 10 min. Negotiation: 25 min. Available from the Dispute Resolution Research Center at the Kellogg School of Management, Northwestern University, Leverone Hall, 2001 Sheridan Road, Evanston, IL 60208. Phone: (847) 491-8068; e-mail: drrc@kellogg.northwestern.edu. EXERCISE: The Game of Envelopes and Money by J. Keith Murnighan This is a large-group social dilemma game where the parties can win or, more likely, lose real money. Based on an exercise described by Dave Messick and Christel Rutte (1992), it shows how difficult cooperation is for large groups of people who cannot interact to boost commitment. Time: Takes 5 min. to play and additional time to tabulate results. Available from the Dispute Resolution Research Center at the Kellogg School of Management, Northwestern University, Leverone Hall, 2001 She¬ridan Road, Evanston, IL 60208. Phone: (847) 491-8068; e-mail: drrc@kellogg.northwestern.edu. EXERCISE: The Game of 4-3-2 by J. Keith Murnighan This is a three-party coalition game, with three variations. It shows how subtle changes in the structure of the situation have marked impacts on the negotiation process. Discussion highlights the strategies to be considered in choosing between individually beneficial two-party agreements and collectively beneficial three-party agreements. Time: three 25-min. rounds. Available from the Dispute Resolution Research Center at the Kellogg School of Management, Northwestern University, Leverone Hall, 2001 Sheridan Road, Evanston, IL 60208. Phone: (847) 491-8068; e-mail: drrc@kellogg.northwestern.edu. EXERCISE: The Gas Station Game by J. Keith Murnighan This is a Prisoner’s Dilemma game for two individuals or two parties. It revolves around repeated price-setting choices by the owners of two gasoline stations. It moves from no communication, to communication, to a known endpoint looming in the near future. The case shows the conflicts people have when making basic cooperative or noncooperative choices and raises issues of trust, intergroup, and intragroup coordination. Preparation: 10 min. Negotiation: 30-40 min. Available from the Dispute Resolution Research Center at the Kellogg School of Management, Northwestern University, Leverone Hall, 2001 Sheridan Road, Evanston, IL 60208. Phone: (847) 491-8068; e-mail: drrc@kellogg.northwestern.edu. EXERCISE: The Highest Number Game by J. Keith Murnighan This is a short group exercise that shows negotiating strategies can rarely maximize all possible outcomes, and that low probability-high outcome events should not be expected. No preparation necessary. Exercise: 5-10 min. Available from the Dispute Resolution Research Center at the Kellogg School of Management, Northwestern University, Leverone Hall, 2001 Sheridan Road, Evanston, IL 60208. Phone: (847) 491-8068; e-mail: drrc@kellogg.northwestern.edu. EXERCISE: The Information Game by J. Keith Murnighan This is a two-party negotiation where the individuals have different information and different outcome possibilities. It shows the value of information, the possibility that truthful revelations will not be believed, and the likelihood that relevant information will be withheld to protect one party's interests. Preparation: 10 min. Negotiation: 25 min. Available from the Dispute Resolution Research Center at the Kellogg School of Management, Northwestern University, Leverone Hall, 2001 Sheridan Road, Evanston, IL 60208. Phone: (847) 491-8068; e-mail: drrc@kellogg.northwestern.edu. EXERCISE: The Low-Price Promotion Program by Leonard Greenhalgh This two-group, multiround negotiation is a multitrial Prisoner’s Dilemma set in a corporate context. It works best with groups of four to seven. A messenger is required for every pair of teams. Dis¬cus¬s¬ion emphasizes constrained communication, group process (intragroup negotiation), trust, in-group/ out-group cognitions, groupthink, and intergroup relationships. Negotiation: 45-60 min. Available from Creative Consensus, Inc., P.O. Box 5054, Hanover, NH 03755. Phone/fax: (603) 643-0331. EXERCISE: The Multiple Items Game by J. Keith Murnighan These are two, two-party negotiations, quantitatively scoreable, over three and five issues. The first negotiation displays, quite easily, the value of tradeoffs and the true meaning of win-win agreements. The second negotiation adds a compatible issue (where participants’ preferences are identical), increasing the complexity of the negotiation due to additional issues, and allows people to sharpen their abilities to share information effectively and discover valuable tradeoffs. Preparation: 10 min. Negotiation: 25 min. each. Available from the Dispute Resolution Research Center at the Kellogg School of Management, Northwestern University, Leverone Hall, 2001 Sheridan Road, Evanston, IL 60208. Phone: (847) 491-8068; e-mail: drrc@kellogg.northwestern.edu. EXERCISE: SHARC by Kimberly A. Wade-Benzoni, Max H. Bazerman, and Ann E. Tenbrunsel SHARC is a four-party social dilemma. It is based on the real-life crisis in the Northeastern fishing industry. It illustrates how asymmetry in interests and outcomes causes different interpretations of fairness. In this case, harvesting judgments are biased in an egocentric, self-serving manner. Preparation: 30 min. Negotiation: 60 min. Available from the Dispute Resolution Research Center at the Kellogg School of Management, Northwestern University, Leverone Hall, 2001 Sheridan Road, Evanston, IL 60208. Phone: (847) 491-8068; e-mail: drrc@kellogg.northwestern.edu. EXERCISE: SHAC: Competitive Decision Making Version by Kimberly A. Wade-Benzoni, Max H. Bazerman, and Ann E. Tenbrunsel The Competitive Decision Making version of SHARC is an asymmetric social dilemma. The numbers are not the same as the regular version of SHARC. There is no solution in the Competitive Decision Making version of SHARC that allows parties to cut the harvest to the sustainable level of 2,500 metric tons and to maintain their profits. This is a much harder exercise than the generic version of SHARC and we recommend it for more advanced MBA students. The teaching notes explain clearly the differences in the two versions of the exercise. Preparation: 30 min. Negotiation: 60 min. Available from the Dispute Resolution Research Center at the Kellogg School of Management, Northwestern University, Leverone Hall, 2001 Sheridan Road, Evanston, IL 60208. Phone: (847) 491-8068; e-mail: drrc@kellogg.northwestern.edu. EXERCISE: The Silent Bargaining Quiz by J. Keith Murnighan This is a series of “quiz” questions with a scoring rule that “The right answer is the answer that everyone else provided.” The quiz forces people to consider what others might do. Discussion highlights how the prominence of particular solutions can help determine a negotiation outcome. This exercise is based on stories told by Thomas Schelling in his book, The Strategy of Conflict, 1960. Quiz: 10 min. Available from the Dispute Resolution Research Center at the Kellogg School of Management, Northwestern University, Leverone Hall, 2001 Sheridan Road, Evanston, IL 60208. Phone: (847) 491-8068; e-mail: drrc@kellogg.northwestern.edu. EXERCISE: The Ultimatum Game by J. Keith Murnighan This is a market exercise for medium or large groups (i.e., 16 or more) that is played twice, with discussion between, and after the two rounds. One party is given information and power; the other party must deal with a position of relative weakness. Discussion raises issues of fairness, the use of strategic power, equality, and justice. Preparation: 5-10 min. Negotiation: 10 min. each. Available from the Dispute Resolution Research Center at the Kellogg School of Management, Northwestern University, Leverone Hall, 2001 Sheridan Road, Evanston, IL 60208. Phone: (847) 491-8068; e-mail: drrc@kellogg.northwestern.edu. FILM: A Beautiful Mind (2001) Directed by Ron Howard An award-winning biopic of the meteoric rise of John Forbes Nash, Jr. (played by Russell Crowe), a math prodigy able to solve problems that baffled the greatest of minds. It is the story of how he overcame years of suffering through schizophrenia to win the Nobel Prize. The scene in the bar is a great illustration of tacit cooperation in social dilemmas. Running time: 135 min. Released by Universal Studios; available from www.amazon.com and other online outlets. FILM: Return to Paradise (1998) Directed by Joseph Ruben In this film, three friends share a hedonistic vacation in Malaysia, then all go their separate ways. But before one of them, Lewis, has a chance to leave, he is arrested for possession of the friends’ leftover marijuana and is sentenced to death under Malaysian law. Lewis’ lawyer tells Sheriff and Tony, the other two friends who are back in New York, the news: Three years in prison for each if both friends go back to Malaysia, six years if one goes, Lewis’ death if neither go. Although neither wants Lewis to die, they do not know him well enough to want to sacrifice three years of their life in a Third-World prison. Return to Paradise follows Sheriff and Tony as they struggle with this convoluted prisoner’s dilemma. Running time: 111 min. Released by UMVD and available from www.amazon.com and other online outlets. MULTIPLE-CHOICE QUESTIONS A prisoner’s dilemma is best defined as a situation in which a person has done something wrong and needs to face the consequences the rational pursuit of self-interest leads to collective disaster people try to outsmart an opponent without knowing what their opponent is doing a person must put aside self-interest in order to contribute to a greater good According to game theorists, a person should ________ in single shot prisoner’s dilemma games; ________ in multi-round prisoner's dilemma games with a defined end point, and ________ in infinite-horizon prisoner's dilemma games. defect, defect, play tit-for-tat defect, play tit-for tat, cooperate cooperate, cooperate, cooperate defect, play tit-for-tat, defect The principle of dominance detection indicates that a strategy results in a better outcome for player 1 most of the time for player 2 most of the time for player 1 no matter what player 2 does for player 1 depending on what player 2 does Which of the following is an example of a social dilemma? a person does not help someone who is stranded on the highway, because it is inconvenient to stop a person decides to work instead of take time off with family and friends a person does not contribute to charity because they feel that their money will be improperly used a few kids take all the candy from an unattended bowl on Halloween night and others are left with nothing The basic principle of tit-for-tat is to cooperate on the first trial, and subsequently defect if the opponent invites cooperation do what the opponent did on the previous trial reciprocate defection but not cooperation reciprocate cooperation but not defection In negotiation, a psychological contract is a form of nonverbal communication in which people understand the body language of their opponent process in which a person does a favor for somebody else and demands repayment at a later point in time verbal or nonverbal commitment of one’s intentions to cooperate that is not legally binding mutual agreement among negotiators to not use attorneys if they deem that they can both trust each other All of the following can increase cooperation in social dilemmas, except: appealing to a superordinate goal communicating with others threats of punishment and retribution personalizing others Tit-for-tat was the most effective strategy in the Prisoner's Dilemma Tournament held by Robert Axelrod. All of the following factors were cited as reasons for tit-for-tat’s effectiveness, except: it is a nice strategy, and makes a positive first impression it is a tough strategy, that cannot be taken advantage of it is a forgiving strategy, that allows players to put the past behind them it is a fearless strategy, that makes decisions independent of what the other player might do According to economists, what is the ideal demand to make in an ultimatum game, in which you can divide $100 between yourself and another player? $99.99 (self); $.01 (other) $50 (self); $50 (other) $51 (self); $49 (other) $100 (self): $0 (other) A government agency or city that is trying to increase cooperation among citizens in terms of encouraging people to carpool, use less water, and recycle, etc. might use which of the following strategies? incentive alignment, regulation psychological contracts, social sanctions tit-for-tat, tradable permits regulation, tit-for-tat Answer key: 1.B; 2.A; 3.C; 4.D; 5.B; 6.C; 7.C; 8.D; 9.A; 10.A Discussion Questions How does the principle of dominance detection operate in a prisoner’s dilemma? Why do multiple trials of the prisoner’s dilemma make it possible to avoid the outcome produced by mutual defection? What are some different types of social dilemmas, and how do they differ from one another? Why is tit-for-tat such an effective strategy for inducing cooperation? What are psychological contracts for building cooperation in social dilemmas? Give some examples of personal and interpersonal escalation dilemmas. What are the psychological reasons for the escalation of commitment phenomenon? Suggested answers The principle of dominance detection in a prisoner’s dilemma indicates that no matter what Louise does (remains silent or confesses), it is better for Thelma to confess. To avoid the outcome produced by mutual defection, both parties can make those decisions over time thereby allowing them to influence one another, by making a cooperative choice in an early trial, cooperation may be elicited in subsequent periods. Social dilemmas are situations in which short-term private interests are at odds with long-term collective interests. Social dilemmas prove that people are not always rational optimizers. The volunteer dilemma is a situation in which people face the decision between freeriding or making a small sacrifice from which all will benefit. The ultimatum dilemma is a situation in which one party proposes how to divide a sum of money, and the responder can either reject the deal (neither party will receive anything) or accept it (the money will be split as proposed). The most frequent outcome is a fair share, however, the rational solution is for the first party to offer the smallest possible share and for the responder to accept it. Tit-for-tat (always cooperating on the first trial, and on subsequent trials, doing whatever its oppon¬ent did on the previous trial), is an effective strategy for inducing cooperation. It does not care that it can never beat the opponent; it always begins the interaction by cooperating and is never the first to defect; it reciprocates defection; and it is so simple that people can quickly figure out what to expect from the counterparty. Psychological contracts are commonly known as “handshake deals.” They began as a means for two people to assure that neither was carrying a gun. The "handshake deal" is not a binding obligation but still today carries a weight of a psychological commitment to cooperate. Personal escalation dilemmas (such as continuing to gamble after losing money, pouring resources into a car or house that continues to deteriorate, and waiting in long lines) relate to whether to continue with a losing course of action or to cut one’s losses. Interpersonal escalation dilemmas (such as union strikes or wars) involve two or more people, often in a competitive relationship. In most cases, people fall in these traps because initially the situation does not appear to be a losing enterprise. The bigger the investment and the more severe the possible loss, the more prone people are to stay in the situation. Chapter 12 Negotiating Via Information Technology OVERVIEW This chapter works well if there is some information-technology component of the course. One idea is to have students in the class do one negotiation solely over e-mail. This can work even if students are in the same class. Students can be asked to forward copies of the entire negotiation to the instructor, who can then quote a few of the most notable exchanges to illustrate concepts like flaming and paranoia. I like to begin the entire discussion by introducing the place-time model and working through each of the four cells in some detail, especially the e-mail cell and the face-to-face cell (and contrasting the two). Lecture Outline place-time model of social interaction (Exhibit 12-1) Based on the options negotiators have when doing business across different locations and times Richness: the potential information-carrying capacity of the communication medium Face-to-face communication is relatively “rich,” whereas written messages are “lean” (Exhibit 12-2) Face-to-face communication Crucial in the initiation of relationships and collaborations Encourages cooperation in negotiators Fosters the development of interpersonal synchrony and rapport Predicted by how closely people are located to one another Why is face-to-face communication important? Easier and more likely to occur than other forms of communication People primarily rely on nonverbal signals to help them conduct social interaction Same time, different place Key challenges Loss of informal communication Lost opportunity Separation of feedback Negotiation timing Different time, same place Negotiators interact asynchronously, but have access to the same physical document or space People seldom realize it, but they negotiate quite often in an asynchronous fashion Different place, different time Negotiators communicate asynchronously from different places Key biases that affect electronic mail negotiation Temporal synchrony bias Exit bias Flaming bias Sinister attribution bias How information technology affects negotiation performance (Exhibit 12-3) information technology and its effect on social behavior Trust On-line negotiators trust each other less They report less desire for future relationships, less confidence in their performance, and less overall satisfaction Status and power: The “weak get strong” effect Status predicts domination When negotiators interact via technology, power and status differences/cues are minimized People respond more openly and are less likely to conform to social norms Less participation, but contributions of members are more equal than in face-to-face communication Social networks Computerized interaction increases resources of low-network people Some companies need to rely on electronic mail for employees to form connections with each other Electronic mail provides alternate routes for low contributors in face-to-face meetings Risk taking Framing effect Groups make riskier decisions than individuals Paradoxically, electronically communicating groups are risk seeking for both gains and losses Rapport and social norms Paranoia strategies for enhancing technology-mediated negotiations Initial face-to-face experience One-day videoconference/teleconference Schmoozing Humor conclusion Place-time model of social interaction examines how the medium of communication affects negotiation Use of information technology affects social behavior Non-face-to-face interaction results in more airtime than face-to-face meetings because status and authority cues are not as evident Information technology expands potential reach and influence of managers People are more likely to display risk-seeking behavior when interacting via information technology Biggest threat to effective negotiation in non-face-to-face settings is loss of rapport and less consciousness of social norms Methods for enhancing technology-mediated negotiations include initial face-to-face experience, one-day videoconference, and schmoozing Key Terms continuation norm Refers to the belief that negotiations are worth continuing. flaming Insulting or critical remarks or defamations of character that people exchange via electronic mail. framing effect The tendency for decision makers to be risk averse for gains and risk seeking for losses. place-time model A model of communication based on the options that negotiators have when doing business across different locations and times. richness The potential information-carrying capacity of a communications medium. schmoozing Superficial contact that has the psychological effect of establishing a relationship between people. sinister attribution bias Tendency for e-communicators to ascribe diabolical intentions to the other party. See also sinister attribution error (Kramer 1995). temporal synchrony bias The tendency for negotiators to behave as if they are communicating synchronously when in fact they are not. Suggested Exercises and other materials Note: Many of the exercises suggested in previous chapters can be used as cases for students to complete on-line or via telephone, particularly exercises from Chapters 5 and 6. CASE: Virtual Victorian by Wendi Adair, Gaylen D. Paulson, and W. Trexler Proffitt, Jr. Virtual Victorian is a distributive, house buying negotiation that is carried out through agents and via e-mail. There are four parties: the buyer, the buyer's agent, the seller, and the seller's agent. Pre¬pa¬ra¬tion: 60 min. Negotiation: one week (e-mail). Available from the Dispute Resolution Research Cen¬ter at the Kellogg School of Management, Northwestern University, Leverone Hall, 2001 Sheridan Road, Evanston, IL 60208. Phone: (847) 491-8068; e-mail: drrc@kellogg.northwestern.edu. EXERCISE: Schmoozing Instructors can pair students and instruct them to do any of the two-party negotiations listed in this manual. For approximately half the groups, instruct the students to “schmooze” with each other by having a “strictly social,” five-minute, get-acquainted conversation before negotiating. For the other groups, instruct them to keep the interaction “entirely businesslike” and formal. Compare and discuss results. MULTIPLE-CHOICE QUESTIONS In terms of information technology and social interaction, the “weak get strong” effect refers to the fact that people who might not have much influence or status in a face-to-face setting have more status in an electronic forum people who make an extreme first offer hardly ever receive that offer and must back down four times as often making a strong initial offer, regardless of one’s actual BATNA, is more strategic than making a moderate first offer people behave in a more aggressive fashion when interacting via information technology When it comes to risk taking, such as choosing between a risk-averse course of action and a risk-seeking course of action, which of the following statements is true? people are more risk averse when making decisions electronically than face-to-face people are less risk averse when making decisions electronically than face-to-face there is no discernable difference in risk-taking behavior between face-to-face interactions versus electronically-mediated groups people are initially more risk averse when interacting electronically, and then, over time, grow to be risk-seeking According to the place-time model of social interaction, the richest form of communication occurs when people have which channels of communication available to them? phone, text messaging, and face-to-face face-to-face, telephone, single-text, e-mail linguistic, paralinguistic, vocal, visual linguistic, paralinguistic, visual, kinetic In terms of the difference between e-negotiations and face-to-face negotiations, all of the following are true, except: e-negotiators make more multi-issue offers e-negotiators tend to divide the pie more equally e-negotiators have less rapport e-negotiators reach less integrative outcomes Enhanced e-negotiations are those in which negotiators attempt to personalize or enrich the interaction. All of the following are true with regard to enhancing e-negotiations, except: a brief, personal disclosure over e-mail increases the likelihood of learning the other party’s reservation price a brief, personal disclosure over e-mail reduces the likelihood of impasse a brief telephone call prior to e-negotiation improves joint outcomes a brief telephone call prior to e-negotiation increases trust Which of the following statements is true with regard to the incidence and frequency of face-to-face (FtF) communication in companies? FtF communication frequency can be predicted by how often people e-mail one another FtF communication frequency can be predicted by how close people’s offices are to one another FtF communication frequency can be predicted by how much people trust one another FtF communication frequency can be predicted by how much people telephone one another Flaming or acting rudely toward others often occurs more frequently on e-mail than in face-to-face interactions because people feel more status competition when interacting electronically than they do face-to-face people pay more attention to the content of the message in e-mail and less attention to the context of the message people are more likely to seek revenge in e-mail than they are face-to-face people are less distracted by nonverbal cues in e-negotiations than they are in face-to-face negotiations The sinister attribution bias is the belief that everyone is out to get you the situation influences a person’s behavior much more than their personality someone’s personality influences their behavior much more than the situation people are more likely to engage in risky behavior on e-mail than face-to-face With regard to schmoozing and social interaction in e-negotiations, all of the following are true, except: the volume of conversational turn-taking (back and forth interaction) facilitates trust and rapport schmoozing involves social interaction that is non-task related schmoozing is relatively cost-effective (i.e., does not involve significant amounts of time and money investment) schmoozing is best conducted over the telephone Which of the following methods is not recommended for enhancing technology-mediated negotiations? getting down to business technology-mediated schmoozing initial face-to-face experience initial phone call with the counterparty Answer key: 1.A; 2.B; 3.D; 4.D; 5.A, 6.B; 7.B; 8.A; 9.D; 10.A Discussion Questions Consider the place-time model of social interaction (Exhibits 12-1 and 12-2). Why is face-to-face communication the “richest” mode of communication, and what are some of the inherent advantages to negotiating in a face-to-face fashion? When sending or receiving an electronic mail message, what are the components we should consider? How do norms, roles, and status change as a function of interaction via electronic media? What social dynamics come into play when negotiating via technology? What are the positive and negative implications for electronic negotiation? Does information technology hurt or hinder the ability of negotiators to “expand the pie” of resources in a negotiation? What are some strategies for enhancing technology-mediated negotiations? Suggested answers Face-to-face communication has the highest potential of information-carrying capacity of the communication mediums. People have a natural tendency to rely on nonverbal communication clues, and face-to-face communication allows for the simultaneous observation of multiple clues including body language, facial expression, and tone of voice, providing people with a greater awareness of context. There is a greater potential for miscommunication when interacting via electronic communication than in face-to-face communication. As visual, auditory, or physical cues are missing and people are less likely to conform to social norms, consider the following: acknowledge and respond promptly; identify yourself and your affiliations; do not respond while emotional; do not use jargon that is understood by the sender but not the receiver; be aware that sent messages are permanent, have in mind your audience; use a greeting, sign-off, and subject lines; pay attention to cues as to the emotional state of the writer; and do not be so brief or abbreviated that the meaning is no longer clear. The traditional cues about someone’s status and authority and the dynamic cues are not as evident. People in traditionally weak positions in face-to-face negotiations become more powerful via information technology because status cues are harder to read. The absence of these cues leads people to respond more openly and less hesitatingly than in face-to-face interaction. Messages are likely to display less social awareness, politeness, and concern for others, and may be too blunt. Additionally, through electronic mail, actions and decisions (not just messages) might become more extreme and impulsive. The likelihood of reaching a mutually profitable negotiation (and avoiding impasse) is a function of the richness of the communication. Thus, negotiators who communicate face-to-face are more likely to reach deals and avoid impasses than are e-negotiators. The biggest threat to effective negotiation in non–face-to-face settings is the loss of rapport and the tendency for people to be less conscious of social norms. On-line negotiators report less desire for future relationships with the counterparty, less confidence in their performance, and less overall satisfaction. If you have a strong bargaining position, face-to-face interaction is ideal; if you have a weak bargaining position, impoverished media can add an important buffer. Regarding “expanding the pie,” there is mixed results, with some investigations finding that face-to-face results in better joint profits; other studies indicate that there is no difference. Some strategies: an initial face-to-face experience, so that negotiators can establish social norms and rapport; a one-day videoconference; and schmoozing. Even a brief telephone call prior to e-negotiation, improves joint outcomes and increases cooperation and relationship quality. Instructor Manual for The mind and heart of the negotiator Leigh L. Thompson 9780132543866, 9781292023199, 9780132827669, 9780135198582
