The Changing Dynamics of Negotiation

“The advent of greater use of technology and social media has changed the way businesses are going about negotiating,” says attorney John DeWulf, of Roshka DeWulf & Patten. Parties are better able to negotiate thanks to technology that enables them to access more information not just about the subject matter (i.e., market trends) but also about the other side of the negotiation (including company history and the lead negotiator’s practices).

The ease the Internet has brought to research is only one factor in this. “Social media has changed the landscape,” DeWulf says, pointing out that people lower their guard on social media. Parties can easily gain information they might not otherwise have at all. “Part of what you’re trying to do is solve a problem or find a compromise. Through social media, you gain a sense of the other side’s objectives, perceptions or values,” he explains.

The point is not necessarily to gain the upper hand, although of course businesses enter into a negotiation because each party is looking to gain something. Learning more about the other side’s value system, business goals and culture can facilitate reaching a desired outcome by finding common ground between the parties.

While technology has brought advances in research capabilities, advances in electronic technology itself is causing loss in some human aspects of communication — and communication is what negotiation is founded on. Electronic devices reduce the opportunity to observe nuances of body language or inflections in the voice. Skype and teleconferencing overcome some of the deficiencies of email or text communication, but are still less efficient than in-person discussion. Says DeWulf, “You don’t get a feel for the person or the environment. It’s a narrow picture.” Marty Latz, founder of Latz Negotiation Institute and an adjunct professor at the Sandra Day O’Connor College of Law at ASU, points out another consideration: “Someone may have a pleasant phone personality but come across condescending in email.”

While noting that remote communication has been with us for a long time — phone, fax — Latz observes, “It’s easier to say ‘no’ the more distant you are.” Which is why companies will spend thousands of dollars to send a team around the world for a one-hour meeting. “It’s more difficult to create rapport in an email or on the phone.” He suggests, however, that businesses take into account how they communicate at each step of the negotiation; once rapport has been established early in the process, electronic communication may work fine in later stages.

In fact, over-reliance on electronic communication may be what lies behind another trend DeWulf has seen in his three decades of practicing law. “People in business are not as educated or trained in the interpersonal skills that older generations had,” he observes. Into this breach has grown the field of alternative dispute resolution. This involves a third party, who can avoid emotional issues or different perceptions to help the parties get past an impasse.

Alternative dispute resolution can be mediation — a non-binding negotiation — or arbitration. The field is so large now that it is far more than one-size-fits-all. The choice of the individual to perform the resolution may be made based on objective factors, such as technical expertise or knowledge of subject, or subjective factors, such as demeanor.

Alternatively, a businessperson can use social media — blogs and tweets in particular — and the Internet to identify and follow people who are experts, and learn from them. “Before, you had to attend a seminar and pay a substantial amount of money,” Latz says.

And negotiation software is available that businesses can use to facilitate online meetings and structure their negotiation efforts as a team rather than a silo — however far apart the members are geographically — to create a plan that ensures the team is strategically accomplishing corporate objectives. The level of consistency that creates will enhance businesses’ ability to strategically negotiate.

“The most important element in any negotiation,” Latz says, “is the Plan B — what you do if you don’t do this deal. The stronger your Plan B, the stronger your leverage.” But that is relative to the other side’s Plan B. “It’s not only, ‘What are you going to do if you don’t do a deal with the other side?’ but ‘What are they going to do if they don’t do a deal with you?’ The ability to create a better Plan B or to find out the other side’s plan is going to have a huge impact on the negotiation.”