Communication Quality in Business Negotiations

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Group Decis Negot (2010) 19:193–209 DOI 10.1007/s10726-008-9128-8

Communication Quality in Business Negotiations
Mareike Schoop · Frank Köhne · Katja Ostertag

Published online: 12 August 2008 © Springer Science+Business Media B.V. 2008

Abstract The quality of a business negotiation process is usually assessed by its economic outcome, e.g. in terms of Pareto efficiency or distance to Nash equilibrium. We argue that this assessment method is insufficient in that it fails to provide a comprehensive analysis of business negotiations. Negotiators engage in highly complex communication tasks, and these communication processes should be analysed along with the outcome in the overall evaluation of a business negotiation. To this end, we will introduce Communication Quality as a new construct for analyzing the negotiation process. Furthermore, it will be argued that Communication Quality itself can affect economic negotiation outcomes both short- and long-term. We will present relevant aspects of Communication Quality, outline a scheme for its operationalisation and measurement, and discuss its probable impacts on business negotiations. Keywords Negotiation · Negotiation evaluation · Negotiation process · Communication process · Communication Quality · Pragmatics · Coherence 1 Introduction A business negotiation is conducted between agents aiming to reach an agreement based on demand and supply. The agents interact by means of communication, e.g. face-to-face, via telephone, or in written form. All participants possess different implicit or explicit preferences and have an idea of their preferred outcome that is based on their economic requirements and goals. These preferences and ideas guide the participants’ behaviour, which consists of their exchange of offers (offer-communication, strategic action) and their communication style (non-offer-communication,

M. Schoop (B · F. Köhne · K. Ostertag ) Information Systems I, University of Hohenheim, 70593 Stuttgart, Germany e-mail: schoop@uni-hohenheim.de

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communicative action). But such behaviour is not planned and executed in isolation, and, therefore, depends on and must be adapted to the behaviour of the negotiation partner. In other words, negotiation is a social interactive process. If this aspect is not adequately taken into account, empirical data is often puzzling. Game theoretical analyses, which take a symmetrical and interactive perspective, usually fail to explain actual behaviour in negotiations satisfactorily because they assume rational negotiators and disregard the communicative nature of negotiations (Müller 2007). Every process can be associated with a certain level of quality. When looking at business negotiations as processes, two main factors of negotiation quality can be identified, namely their effectiveness and their efficiency (Raiffa 1982). While much research effort has been directed towards measures of individual gain or effectiveness, current studies emphasise the importance of long-lasting business relationships and tend to analyse symmetric measures such as joint utility and Pareto efficiency. We argue that the communicative and strategic actions and interactions of the negotiators determine the efficiency of the process as well as the effectiveness of the joint outcome. Furthermore, good communication during the negotiation has the potential to build long-lasting business relationships. On the other hand, poor communication can have far-reaching negative effects, e.g. protracted processes, costly renegotiations, or the breakdown of relationships. Studying the quality of negotiation communication comprehensively can thus yield deep insights into the whole negotiation process and explain outcomes on the basis of the negotiators’ actual behaviour. In order to use the explanatory potential of our Communication Quality construct, we will present a definition and an illustrated framework of Communication Quality in...
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