Why Don’t We Discuss It Over Lunch?

The process of negotiation presents an endless stream of questions and ideas about how we conduct business – and the practices that can make us more or less successful.

The Harvard Business Review recently published an article that dissects one such question that any of us in the business world face on a regular basis:  Are business deals actually improved when people discuss important matters over a meal?

The article, “Should You Eat While You Negotiate,” was written by Lakshmi Balachandra, assistant professor of Entrepreneurship at Babson College and a fellow at the Women and Public Policy Program at the Harvard Kennedy School of Government.

Ms. Balachandra tackled this questions by conducting three experiments.

She first compared negotiations conducted over a meal in restaurants to negotiations in conference rooms without any food to eat.   She then compared negotiations conducted with and without a meal in a business conference room.

She asked 132 MBA students to negotiate a complex joint venture agreement between two companies, instructing them to determine how to handle each term of the deal in order to maximize profits.  

“As is typical in many negotiations, in order to maximize their profits, the negotiators must share information and work together with the other side to learn where the most value can be created,” she writes, adding, “To explore how eating together affected negotiation outcomes, I considered the total value created by both companies.”

According to Ms. Balachandra’s findings, participants who ate together while negotiating —at a restaurant or in a conference room — created profits that were 11 percent to 12 percent higher than those students who negotiated without dining together.

She tested her findings with a third experiment in which the subjects negotiated the same simulation while completing a jigsaw puzzle that had nothing to do with the negotiation.   These students produced no higher profits that those who negotiated in conference rooms without dining.

So, why does eating together seem to improve the outcome of business negotiations?

“There may be biological factors at work,” says Ms. Balachandra. “When the negotiators in my first two studies ate, they immediately increased their glucose levels. Research has shown that the consumption of glucose enhances complex brain activities, bolstering self-control and regulating prejudice and aggressive behaviors. Other research has shown that …when individuals eat together they enact the same movements. This unconscious mimicking of each other may induce positive feelings towards both the other party and the matter under discussion.”

You can read the full article here: http://tinyurl.com/a6wr7pw

What’s my take from this experiment?   Why don’t we discuss it over lunch! 

 

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