Stanford Report Online

Stanford Report, September 27, 2000
Sensitive negotiations benefit from human interaction over e-mail

But skilled negotiators can also take advantage of e-mail communications, Business School professor finds


Negotiating a deal with a new client, customer or supplier has traditionally meant meeting in person, sometimes enduring long hours in transit. Today, businesspeople find themselves with an ever-increasing array of technologies for communicating and initiating relationships, many of which do not involve leaving the office. But one wonders: When am I better served by a face-to-face meeting, a telephone conference or an e-mail exchange?

Michael Morris, associate professor of organizational behavior at the Business School, has examined how negotiations are affected by different communications media. Morris, who teaches MBA and executive negotiation courses, has argued that it is through the psychology of trust that the type of media can make a difference in the outcome of a negotiation.

When talking of trust and cooperation, many experienced negotiators emphasize the need to develop rapport, a shared state of positive emotion and regard. Most researchers have paid little attention to the concept of rapport because it is hard to measure scientifically. But Morris and his colleagues developed ways of gauging rapport in a conversation by tracking the cues for emotion ­ words, expressions, gestures ­ displayed by opposing negotiators. In several laboratory experiments conducted with Aimee Drolet, assistant professor at the Anderson School of Business at UCLA, who earned her doctorate from Stanford in 1999, Morris found that higher levels of rapport produced by nonverbal emotional cues give face-to-face negotiations an advantage over telephone negotiations.

Given that, the ever-widening practice of negotiating over e-mail might trigger worries. Indeed, in other studies Morris found role-play negotiations conducted over e-mail were more likely to fail than face-to-face negotiations. The cause of breakdown in e-mail negotiations tends to be exchanges in which offense is taken at blunt, and sometimes misconstrued, messages. Consider the following exchange from an e-mail negotiation exercise:

"Because I want a fair settlement, I would like to suggest $1.2 million."

"That figure is ridiculous. Don't you understand that sunk costs are not relevant?"

Or, consider this exchange:

"I think our firm deserves $1.1 million."

"You must be kidding, right? Let's not waste each other's time, OK? Send me another message when you're interested in having a productive discussion."

As many people have learned from painful experience, e-mail, although great for transmitting factual information, is not very good for conveying tone and attitude. An e-mail intended to be direct can come across as rude. One intended to be humorous can come across as hostile, as a "flame." At this point, the budding relationship between the two negotiators disintegrates and the prospect of a settlement is lost.

So how do e-mail negotiators avoid the problem of flames?

"Success depends on how people use e-mail," Morris says. Studies by Morris and his colleagues found that successful negotiators add relationship-building content to their messages. They punctuate their messages with signals of positive emotion and intent and make statements referring to the relationship, such as: "Thanks for your flexibility in working with me on these points," or "We have been making great progress together in this negotiation." Statements about emotions and the emerging relationship would be superfluous in a face-to-face conversation, but in an e-mail interaction they do the important communicative work that is done by nonverbal expressions and tone of voice during a personal encounter.

Interestingly, skilled e-mail negotiators benefit from some other properties of e-mail, such as the fact that it gives people more time to think before reacting. Face-to-face negotiators often become committed to hastily constructed, less than optimal settlements. "When things start moving too fast in face-to-face negotiations, negotiators are well served by taking a break, stepping away from the table," says Morris. "E-mail makes this easier to do."

Given the potential value of e-mail, Morris has investigated the conditions under which it is best used. He discovered that a pre-existing basis of trust between two negotiators protects the interaction against a spiral of misinterpretation and mistrust. In one experiment, half the negotiating pairs were from the same business school and half from different schools. Breakdowns of e-mail negotiation were less likely between schoolmates, presumably because negotiators gave classmates the benefit of the doubt when interpreting messages, but did not do so for outsiders. The practical implication is that the liabilities of e-mail may be greater for inter-firm than intra-firm negotiations, where relationships cushion the interaction.

Other experiments tested whether a cushion of rapport can be created. They showed that injecting personal, rapport-building elements by exchanging pictures, background information or personal phone calls before launching into an e-mail negotiation of the issues protected negotiators against the problem of misinterpretation and mistrust. A practical implication is that enhancing e-mail with voice and video connections may improve long-distance negotiations.

As organizations find it necessary to communicate around the world, electronic communication will play an increasingly important role. Clearly, e-mail works better to sustain relationships than to initiate them. E-mail negotiators should remember that the role of human psychology and the exchange of social, emotional information is as important as the swap of hard facts.