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IT Effects Negotiation

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Back to: NEGOTIATIONS via IT

What is information technology and how does it affect negotiation?

There is no consensus on whether information technology effects the ability to reach integrative agreements or whether they affect equality of outcome. When we communicate via technology, we attend less to the other person and more on the message they are disseminating. Potential benefits of communicating through IT include:

  • Strength of Argument – Stronger arguments are more successful – weaker arguments are less effective due to the effect of IT on persuasive process.
  • TimeGreater ability (time) to ruminate over a negative or confrontational message.
  • Perception of Risk – Individuals assume those with whom they are unfamiliar are more risk prone than themselves or those with whom they are familiar.
  • Visual & Social CuesThe primary effect of commenting through IT is that it limits the dissemination of social information that comes from visual cues common to face-to-face communication. There is an increased focus on what is said rather than the individual characteristics of those who are communicating. For example, the absence of smiles, nodding, handshakes, and the scarcity of questions about the other person or disclosures about the self might impede negotiators’ attempts to establish a working relationship or build the trust.
  • Identity Association – We act in accordance with norms associated with the salient identities attributed to use personally or through a group. We show a significantly greater opinion shift in the direction of group norms when their shared group identity is salient than when individual identity was salient. A shared cooperative identity tends to avoid distributive behavior in favor of a cooperative negotiation. Priming group identities associated with cooperation as they build rapport prior to exchanging offers yields less competition and more integrative agreements.
  • Rapport and RelationshipsPeople are more willing to help a target who is more identifiable than one who is more abstract. For example, the extent to which we are willing to give money to another person has also been shown to depend on how identifiable that person is. The existence of prior relationship is shown to yield cooperation in the negotiation. The stronger the relationship between negotiators, the more likely they are to share information. An existing relationship increases negotiators’ concern about the outcome of the other party. Taken one step further, the less abstract the other person about whom I make a judgment, the more likely I am to judge that person as more similar to me.
  • Trust and Perception of the Other Party – On-line negotiators trust each other less. They report less desire for future relationships, less confidence in their performance, and less overall satisfaction. Negotiating via IT causes us to view our counterparts less positively than if communicating face-to-face. Likewise, people who are preparing to negotiate face-to-face expect to trust the other party more than people who are preparing to negotiate using e-mail. Trust and the resultant increased sharing of information is a necessary aspect of achieving integrative outcomes. Each believes that revealing some information about one’s own preferences and priorities will be reciprocated by the other party, allowing for discovery of mutually beneficial negotiation solutions.
  • Status and power:  Status predicts domination in the communication.  When negotiators interact via technology, power and status differences/cues are minimized. This is known as the “weak get strong” effect. As such, people respond more openly and are less likely to conform to social norms. Communicating via IT may also allow greater control over the informational content of the interaction. This may reduce the seller’s conversational dominance, resulting in outcomes being more equal.
  • Cooperationsome studies show that parties behave more cooperatively when negotiating face-to-face. Also, negotiators tend to behave less cooperatively when they have visual access to one another than when they do not.
  • Social networks  It, such as computerized interaction, increases resources of low-network people. It provides alternate routes for low contributors in face-to-face meetings. Unfortunately, it makes parties less likely to desire future interaction with their counterpart after the negotiation is finished.
  • Risk taking – Decision makers have a tendency to be risk averse for gains and risk seeking for losses. This is known as the framing effect. Groups make riskier decisions than individuals. Paradoxically, electronically communicating groups are risk seeking for both gains and losses
  • Confidence and Satisfaction Parties who negotiate face-to-face have been reported to feel more confident in their performance and satisfied with the outcome than parties who negotiate via computer (Naquin & Paulson, 2003; Purdy et al., 2000; Thompson & Coovert, 2003).

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