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Reflections and Learnings : E-Commerce and Negotiation
Submitted by : Kartikeya Sharma
Reflections and Learnings : E-Commerce and Negotiation
CONTENTS
Acknowledgement..3 Introduction.4 Communication channels for negotiation4 Exercise : One-time Deal.7 Exercise : Food and beverages catering contract.8 Exercise : Division/ Corporate HQs and Mutual Magic..9 Exercise : Creativity and Competition...10 Conclusion.10
Reflections and Learnings : E-Commerce and Negotiation
Acknowledgement
I am highly thankful to Dr. Chavi Chen, my mentor for E-Commerce and Negotiation Course, for her support and guidance which was required in carrying out this project.
Reflections and Learnings : E-Commerce and Negotiation
Introduction
In todays world, survivability demands the use of cutting edge technology and fastest way of communication to atleast be in the competition. With the changing technology, the ways of communication has changed over the period. In ancient times, peoples used to communicate by sending messengers to the others place and wait for the person to come back with the message. This changed over time to communicating through letters. And now days any person in any corner of the world can be contacted in seconds. What has happened because of this is that the time required to contact people across the globe and take decision has reduced drastically. Before any decision is to be taken that requires a consensus of two or more parties, negotiation always plays a key role. Each party would want that its demands are satisfied and to satisfy the demands, the parties negotiate. Any deal ends on a positive note only when interests of both parties are met. Negotiation is a process of dealing by putting forward ones interest and compromising to meet others interests as well. Negotiation can take place through various forms of communication. It can be a direct face to face negotiation, a telephonic negotiation or online negotiation through emails, audio or video calling. Each of these negotiations has its own characteristics which decide the end result of a negotiation.
Communication channels for negotiation Face to face negotiation
This type of negotiation comes into picture when the parties sit across the table and talk straight to each other. The place and time is decided with the consensus of both the parties. Most of the negotiation takes place right then so that parties have to come prepared. The time taken to reach a decision is comparatively less as parties dont have time to think, which is one the main disadvantages of face to face negotiation. As everything being done right then, the parties dont usually have lot of time to interpret the data provided by other party. But on the other hand the advantage being that both parties can see each other and so can other understand the feelings involved, of the other party. Also the party can also make sure of the confidence they can put in the other party.
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Telephonic negotiation
The negotiation takes place through telephonic conversation. The place can be anywhere but time is decided which is convenient to both the parties. Sometimes when the negotiation takes place across the globe then the time difference plays a lot of role and so such a time is decided which is convenient. Most of the negotiation takes places during the conversation only so parties need to be prepared before-hand. Time to think and interpret the data is less and the parties need to react right then. One more disadvantage is that the parties cant see each other so cant understand the feelings involved.
Audio and video calling
When a meeting is not possible, parties decided to negotiate on audio or a video call. This is done through internet and is similar to telephonic communication, except in video calling both the parties can see each other and so the feelings can be understood and reciprocated. This is generally done when the negotiation has to take place between parties far across the globe. Based on the type of Information communication technology used, the amount of information exchange changes, following shows the hierarchy of media richness :
Reflections and Learnings : E-Commerce and Negotiation
This shows that in moving from communication through bulletin, fliers or standard report to notes, memos or letter to telephone and finally to face to face the media richness increases which increases the amount of amount information exchange. Hence whenever it is possible, the parties prefer to have a face to face negotiation to have a maximum exchange of information to put each other in the maximum comfort zone. Hence the choice of media makes a huge difference in a negotiation.
Information processing
There can be two things which can happen when information is being exchanged between two parties. 1. Either there is a lack of information which is called uncertainty. This occurs when the information is absent. This can lead to lot of problems which can lead to a wrong negotiation and can put one of the parties in a great loss or also can just finish cancelling the negotiation by one of the parties creating a discomfort zone and lack of confidence in each other. 2. Or there is misinterpretation of information by other party which is called equivocality. It depends on the type of information communication technology is being used. As media richness increases the capacity of parties to process the equivocal information also increases. Hence again in case of face to face negotiation, the chances of processing equivocal information increases. But face to face communication doesnt always mean that there is a good flow of information as it depends the level of comfort that the parties are in while communicating. Hence always such a media should be chosen which best fits in those current requirements which is suggested by Media synchronicity theory. Following will discuss the reflections from the daily exercises and how different information communication technologies and theories played a role.
Reflections and Learnings : E-Commerce and Negotiation
Exercise : One-time Deal
Here the task was to sell an apartment. There was a time limit given which was 90 minutes, hence the negotiation was to be completed in that time frame only. The negotiation was to be carried out through emails only and no other information communication technology was to be used. The negotiation went smooth but there were a lot of challenges that had to be faced during the time. 1. Language barrier : The person I was supposed to deal with was from some other country so there were some language barriers which led to slow down of the process of negotiation and again we had to face a time crunch. Also there were misinterpretation of phrases by the buyer, one example of which was, during the dealing, we were supposed to decide on how much amount will be transferred through thee bank and how much amount will be given in cash. So I used the terms, white money and black money. In India white money refers to the money exchanges through the bank and black money refers to the cash exchanges which are un-accounted. This information was interpreted as drugs, as in their country these terms are used in dealings of drugs. Hence because of low media richness we were less capable to process the equivocal information. So after using these terms there was a heated atmosphere which required time for the things to clear out. 2. Time crunch : As the negotiation had to be finished within 90 minutes, there was a time crunch and with low media richness and other barriers, it was a difficult task. Also due to negotiation was to be carried out only through mails, this led to misinterpretation of information and every time another mail had to be written to clear the misinterpretation which consumed ,moretime. 3. Media richness : The negotiation was to be carried out through emails only, hence there was low media richness because of which we were incapable of processing the equivocal information. Communication through emails also was taking too much time as typing speed also plays a role. The feelings were not able to reciprocate among us that how I felt for my apartment and the buyers had a budget crunch which was not conveyed very well, hence no one could understand each others feelings.
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4. Social presence : Due to restriction to only emails very less information was shared about one another and one was socially less aware of other. 5. Seller disadvantage : As the apartment was not been sold for quite some time so it was kind of pressuring to sell it and hence I was at a little disadvantage, and ended up getting a bad deal.
All this led to a very formal negotiation where no personal interaction was done and no exchange of feelings were made. The only thing that was doing in the mind was to negotiate and make the deal without considering any long term relationship.
Exercise : Food and beverages catering contract
This was a negotiation where a hotel was looking for a tea supplier. As for communication, along with emails instant messaging could also be used. Following discusses the features of the negotiation 1. Media richness : Although instant messaging was an addition to the information communication technology which to some extend made the negotiation process a bit informal but still there was a barrier to exchange of feelings. 2. Typing speed : The opportunity of using could not be well utilized as the seller had a slow typing speed, and hence after a while the negotiation was shifted to emails only. 3. Social presence : Restriction to only emails and instant messaging made it difficult for one party be socially aware of the another one as during the process, the flow of personal information was very low. It was just the basic and formal introduction. 4. Buyer advantage : As being such a famous hotel and also the buyer, I was at an advantage and most of the times, the seller was giving up to whatever I was asking which got me a very good deal. 5. Information processing : The negotiation only restricted to emails and instant messaging created some misinterpretation of information sometimes as most of the things are not explained in the email.
Reflections and Learnings : E-Commerce and Negotiation
Exercise : Division/ Corporate HQs and Mutual Magic
In this case, a hotel was to be constructed and the project was either to be given to the usual company or find some new contractor or it could be carried out by our company only. All there was a problem with the performance of the juniors who work with the usual contractor and were suggesting the same for the new contract. Hence a decision had to be taken whether to stick with the juniors and usual contractor, find a new contractor or do it on your own. Communication could be through all possible routes that is emails, instant messaging, audio/video calling and also face to face. The features of the negotiation are as follows 1. Media richness : All possible forms of communication could be used so there were lot of exchange of feelings. One could understand when talking face to face with another person what was going on in other persons mind which was very advantageous while taking decisions. There was one incident when the junior employee came to me with the proposal of working with the usual contractor. I could realize while talking to him and looking at his face that he had an attitude problem and so the message was conveyed to him to take care of this thing in the future while approaching the boss. This shows that with the high media richness there was, one, good interpretation of the information and second, the feelings were reciprocated between people. 2. Social presence : Again due to face to face interaction, the new contractor approached directly and after talking to him directly, one could make out that though he his company was new with less employees, he was extremely passionate about the job he does and hence the confidence level on him was good. 3. Technology hindrance : The audio and video calling did not work so all the negotiation was done mostly by face to face and to a small scale by emails. 4. Information processing : Due to face to face interaction, there was hardly any misinterpretation of information as any doubt was cleared right then. This again led to more consumption of time as to clear the information every time a new mail had to be written.
Reflections and Learnings : E-Commerce and Negotiation
This shows that with the introduction of face to face interaction, the feelings between different parties were exchanged which helps a lot in taking a decision and also in knowing people well. Also the information processing improves which was shown while taking to the junior face to face and understanding the information that he was presenting in detail and questioning him then and there.
Exercise : Creativity and Competition
In this case a full contract with mobile connection along with internet and after services was to e bought for the company employees. The information communication technology was restricted to emails and instant messaging only. The features of the negotiation are as follows 1. Media Richness : As the negotiation being restricted to emails and instant messaging, the media richness was low. 2. Social presence : Due to absence of face to face interaction or any video calling, there was exchange of information about one another and hence one party knew very little of the another one on a personal basis. 3. Information processing : There was sometimes misinterpretation of information as the information exchange was through emails only. Though there was instant messaging but still this was a hindrance to the information processing and hence to a smooth negotiation. Also this led to time crunch as every time the information was interpreted wrongly, another mail had to be written to clear the matter which consumed lot of time.
Conclusion
To have a good negotiation so that the each parties has its interests met, there should be high media richness which will lead to a high flow of information and less misinterpretation of information. Also both the parties should be in a zone of comfort so that none of them should be at a disadvantage or under pressure. Also a good negotiation will lead to a win-win situation and will enhance future prospects of both the parties to have a long time relationship.
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