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Leadership & Organisations

Seeing eye to eye in business negotiations

Karen Cho |

With expressions like 'out of sight, out of mind', one would make a natural assumption that there's a lot to be gained from direct face-to-face communication.

However, according to Roderick Swaab, Assistant Professor of Organisational Behaviour at INSEAD, being able to see others and making eye contact may not always be the best thing in any scenario, including high stakes business negotiations.

“If you look at the research … you get a very mixed picture. There is some research showing exactly that – that sometimes we gain a lot from being able to see the other side. At the same time, there’s a substantial amount of research showing the exact opposite, that visual contact may hurt.”

So when does eye contact work?

Swaab says that eye contact and visual contact can be informative when people don’t know each other like in job interviews. When people do not have a strong incentive to cooperate or compete, it may help them to form a more complete impression of the other side. That said, one should be careful not to read too much into eye contact because most of us are no better than chance reading others’ facial expressions.

However, a face-to-face encounter that allows for eye contact would fail miserably in scenarios where there is already conflict. “In times where there is severe conflict, it may actually be better to separate the adversaries in that way to avoid all eye or visual contact. It is probably best to involve a third party who can mediate the conflict in a dispute that may have evolved between the two people. If the dispute or the negotiation is less contentious, but still there is some conflict, it might actually be better to switch to electronic forms of communication like email and IM (instant messaging).”

Gender differences

Swaab’s research also suggests that there are stark differences between the genders in relation to how they communicate with each other.
“Men respond differently to eye contact than women, at least in Western cultures. Boys tend to avoid eye contact when they play with each other. Some research shows that they prefer to play with someone else from the same gender sitting side by side, whereas two girls are more likely to sit facing each other while playing. This difference also exists in adulthood: Women are more comfortable gazing (at each other), they gaze for long periods of time; men tend to avoid it and associate it with attempts to dominate the conversation.”

We thought this should impact peoples’ ability to act creatively during a negotiation and found exactly that - that visual contact benefits two unacquainted women because they are more comfortable with it, whereas the opposite is true for two unacquainted men. “So simply put, it might be better for two males who don’t know each other to put a barrier in between them or to conduct the negotiation by phone instead of face-to-face.”

In mixed groups, however, the contrast is less severe. These differences strongly depend on the nature of the relationship between the parties in question. If people do not know each other, don’t have a strong incentive to either compete or cooperate, and are relatively open to discussion, then there is a greater scope for the communication medium to have an impact on peoples’ behaviours.

Cultural sensitivities

Culturally, there are also differences. Swaab says the impact of seeing the other side also depends on local communication norms. While making eye contact is de rigeur in cultures where direct communication is highly valued, some people who prefer a more indirect style of communication may shy away from it.

“What we find is that the role of technology has a far more positive impact in cultures where indirect communication is the norm (e.g. some Asian countries). People from these cultures are much better in utilising email to find creative outcomes in group decision-making tasks or negotiation tasks.”

This simple finding can be of great use for the way you set up your business. Citing an example of a US clothing manufacturer who was interested in a long-term stable business relationship with an Asian supplier, Swaab says the US company benefited because they were sensitive to the communication norms of their Asian counterpart.

Instead of flying there and doing all the negotiations face-to-face, they suggested that the other side choose the communication medium. The Asian company actually preferred to communicate via email or IM because this wouldn’t put them on the spot to do all the negotiations in English.

“This decision gave the Asian company more time to process the American proposal and to think about an adequate response. This was a smart move because the Asians really saw that the Americans did them a favour by letting them choose the communication medium. Not only did this help to build trust between the two parties, it also made the Asians more likely to return that favour over time.”

An upper hand

Conversely, Swaab explains that those aiming to outperform and compete could choose to communicate in an environment with which their counterparts are less comfortable.

For example, he says, when you know your counterpart is not as fast at typing as you are, you can initiate negotiations via IM because it is a synchronous chat where we can see what the other one is typing directly. If your counterpart is a slower typist, you have more airtime, opportunities to influence them, which can give you an edge in the negotiations.

Swaab’s research comparing MBAs and executives, as well as MBAs and their older counterparts, supports his theory. “What we found was exactly this – the MBAs in their late 20s or early 30s are used to using this medium. They type faster, and as a result can outperform any slow-typing counterpart, including their more senior managers.”  

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