Online Negotiation



86th Annual International Purchasing Conference & Educational Exhibit

April 2001

Author(s):

Julie S. Roberts

Monday, April 30
Workshop AG
Presenters:
Lee A. Buddress, Ph.D., C.P.M.
Professor of Supply and Logistics
Portland State University

Alan R. Raedels, Ph.D., C.P.M.
Professor of Supply and Logistics
Portland State University

Michael Smith, Ph.D.
Assistant Professor of Management
Western Carolina University

To understand the online negotiation process, it is necessary to first understand the traditional negotiation process. A negotiation process should include the following five steps:

  • Recognizing opportunities - both internal (with engineers, users, or co-workers) and external (with new suppliers, existing suppliers, or customers)
  • Recognizing situational issues - such as gender, education, participant age, personality type, information, authority, and credibility
  • Negotiation planning
  • Conducting the negotiation
  • Analyzing the results

Communication, of course, is key to negotiating. Successful communication may warrant a positive outcome, but communication problems may hinder success. Online negotiations may solve a few problems associated with face-to-face negotiations - such as a controlling participant who doesn't allow anyone else an opportunity to say anything - but generally, negotiation communication problems such as understanding of technical vocabulary, a judgmental participant, and/or a lack of diplomacy will remain as problems even if the negotiation occurs online.

Nonetheless, some of the advantages of negotiating online include:

  • Allows time for calculations, settling emotions, etc., between responses
  • Readily available transcript of all communications
  • May remove biases that result from personal attributes and communication style
  • May allow for systems that overcome cognitive shortcomings of individuals

To achieve these desired advantages, there are things that supply managers can do to enhance their online negotiations. One such idea is to exchange information that helps promote like and trust. In short, previous communication promotes cooperation. Along with this idea of exchanging information, it is important to remember to attend to emotional bonds and social contracts. Self disclosure prior to negotiations can serve as a powerful social lubricant. Lastly, a successful search for commonality between negotiators increases the likelihood of a positive outcome.

While there are advantages to using online tools for negotiations (e.g., timing and convenience), it is important to note that online negotiations still require supply managers to acquire and use most of the same negotiation skills used for face-to-face negotiations.

By Julie S. Roberts, Writer for Purchasing Today®.

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