Used effectively, e-mail and the web are good communication
channels that business executives can use for negotiations.
Q. What are the advantages of negotiating via the
A. When negotiating from your office, you save
time and money on travel. You also have access to your files, staff
and any other expertise you may require to carry out the
discussions to your full satisfaction.
Selecting the place of negotiation is no longer a sensitive
issue. Executives from small companies with limited travel budgets
and restricted office space can use the Internet to bypass these
impediments. (Note that despite the benefits of negotiating from
your office, it is wise to continue to travel frequently to your
markets to maintain personal contact with your clients and to
assess the local business environment.)
Knowing who your competitors are and what buyers are looking for
are essential before replying to e-mail inquiries. The Internet
provides business executives with up-to-date information on
competition, buyers' technical requirements and a plethora of
timely marketing intelligence.
Q. Why should I take time to think through the full
implications before replying?
A. Once you send a message, the recipient may
view it as a "legal" or "binding" document. Written statements tend
to be taken more seriously and may come back to haunt you in the
future, especially if they are of a negative or unpleasant
Too often, the main consideration is the need to reply as soon
as possible, as many executives consider quickness in
decision-making a sign of superior management skills. In addition,
because e-mail communication is easy and fast, there is a tendency
to respond immediately without taking the time to prepare well. In
fact, numerous e-commerce manuals recommend replying within 48
hours. For some business transactions, replying within 48 hours may
be too long while for others it could be too short.
Payment and security are sensitive issues requiring serious
assessment before responding, particularly when such requests
originate from unfamiliar markets or unknown parties.
Acting quickly is easier on the Internet as you are facing a
screen instead of people. Yet negotiating on the Net is no
different to face-to-face negotiations, in that both require
planning, preparation, patience, understanding people, knowing the
needs of the other party, persuasive skills and problem-solving
capabilities. It is important to give each incoming and outgoing
message full consideration, including assessing how your message
will affect your position vis-à-vis your competition.
If you need more time before replying, send an interim message;
it is common sense and good business practice to maintain open
communication lines with potential clients, while taking the time
to prepare well for upcoming negotiations.
Q. When should I negotiate on the
A. On a selective basis. Initially, negotiating
on the Internet should be limited to exchanging information,
clarifying key issues or finalizing specific clauses in an
It is also an excellent medium to make arrangements for
forthcoming face-to-face negotiations, such as travel bookings,
fixing the agenda, selecting a location, agreeing on the number of
people participating in the discussions and so on.
It is also expedient when negotiating a repeat order or a small
transaction which does not justify an investment in time, personnel
and financial resources.
Q. Should I negotiate electronically or insist on
A. Do both. Until e-commerce is fully
integrated in the global economy and management is committed to
this new form of doing business by restructuring their processes,
negotiators should combine face-to-face interaction with
Despite the advantages of doing business on the Internet, when
it comes to negotiations, most executives still prefer face-to-face
interaction, particularly if the value of the deal justifies it. In
dealing with more relationship-oriented cultures, restrict online
communication to exchanging background information while discussing
the main issues off-line.
Trust and confidence are difficult to establish and maintain
solely using the Internet. This is particularly true in situations
when one party is only interested in pricing. Competitive pressures
can make buyers and sellers limit their exchanges to offers and
counteroffers centred on the single issue of price. Sending
ultimatums like "this is my last offer" or other competitive moves
tend to dominate e-negotiations. Although pricing is always a key
issue in any business negotiation, in the end it is the capacity to
produce the required quality and quantity, timely delivery and the
firm's reputation that will influence the decision. For this
reason, each party should explore in detail what is required and
develop sound proposals that will withstand competitive pressures
and lead to repeat orders in the long run.
How to use e-negotiations
E-negotiations are best to...
• Negotiate repeat business
• Take and confirm orders
• Initiate trade leads
• Test the market
• Clarify specific points
• Furnish additional information
• Provide after-sales service
• Give details on shipping and deliveries
• Communicate with existing clients
• Check up on competition
• Prepare for face-to-face negotiations
• Send well-crafted e-messages
• Consider long-term implications
• Consult others before replying
• Carefully review your messages before sending them
• Be selective in replying to incoming inquiries
• Refrain from using negative or irritating expressions
• Adopt cooperative strategies
• Avoid discussing pricing issues from the outset
• Prepare thoroughly as for conventional negotiations
• Avoid developing "screen myopia"
But be careful when...
• Dealing with clients directly when you have agents with
exclusive territorial rights
• Charging different prices in the same target market
• Collecting payments
Pros and cons of e-negotiations
• Overcome time zones, location and distances
• Minimize social barriers, e.g., age, gender, position
• Obtain instant feedback to your offers and
• Use inexpensive and reliable communications
• Reduce the need to deal through intermediaries and agents
• Negotiate simultaneously with several parties
• Negotiate from "home base"
• Can be difficult to build trust, if used in isolation
• Can lead to single negotiation issues centred on pricing
• Insufficient information may be exchanged and shared
• Greater risks due to dealing at a distance with unknown
parties and markets
• Intensifies competition
• Reinforces buyers' negotiating power
Claude Cellich, Vice-President of the International
University of Geneva, Switzerland, formerly served as ITC's Chief
of Human Resource Development. He can be contacted at firstname.lastname@example.org