Virtual Negotiations – The new Way to seal the Deal? A Comparison of virtual B2B Negotiation Developments between Europe and China

The outbreak of the global COVID-19 pandemic in the beginning of 2020 forced many global industrial companies to switch their business negotiations from a face-to-face setting to a virtual setting. Board room meetings, pitches and presentations in person were replaced by digital forms of communication and online mediums such as Zoom or Microsoft Teams have become the new standard for most companies nowadays. But even prior to the pandemic, business negotiations occasionally happened to occur online with the aim of eliminating unnecessary business traveling, saving time and money and helping reduce environmental costs. Although virtual negotiations are no longer new to the business world, companies still struggle with the digital setting, especially in the intercultural negotiation world. Social norms such as body language, emotional intelligence and cultural backgrounds can tremendously impact a negotiation and its result. Yet, these behaviors are difficult to be transferred to a virtual world and as a result, intercultural negotiations are even more complex. Thus, this study aimed to develop strategies and managerial implications that global B2B companies in the industrial sector can use to succeed in virtual intercultural negotiations as well as recommendations, which respond to future virtual negotiation developments emerging out of the study. The authors selected Europe and China as the two main areas for investigation as they tremendously differ in culture and hence in negotiation styles. Both Europe and China are considered as economically significant partners for companies across the globe and thus engage increasingly in intercultural and virtual business negotiations with each other.
Methodology: Expert interviews with 30 employees from 19 global industrial B2B companies based in Europe and China were conducted. The data collected provides opinions, insights and best practice examples from individuals who actively negotiate via online mediums and are hence considered as experts in the field of virtual negotiations.
Findings: The proper preparation, an increased communication with negotiation counterparts, the establishment of rules and guidelines as well as offering virtual negotiation training were identified as the key success factors to master virtual negotiations. Conducting pre-meetings before the negotiation, proactive research about the negotiation partners, being reliable and transparent throughout the entire process, connecting with negotiation partners on social media in advance, as well as doing follow ups and being consistent throughout the entire negotiation process are ways of how negotiators can establish trust in a virtual environment. A hybrid model of both virtual and face-to-face negotiations is predicted to become the future way of negotiating. In the mid-to long-term future, the metaverse, seen from the collective concepts perspective and utilizing a fully decentralized infrastructure with Avatar set ups, will revolutionize even more the virtual negotiations research field.
Conclusion: Consequently, the extent to which the implementation of the virtual negotiation study stimulated the dialogue between the academic and business community led to strategies and managerial recommendations for international B2B companies in the industrial sector which can be used to successfully negotiate with parties from different cultures in a digital setting. In conclusion, virtual negotiations are an efficient tool, helping to keep business operations running even in times of a global pandemic. Companies can save a lot of time and costs, mostly related to travel expenses that no longer occur. Outpacing competition by continuous cost-/efficiency management and simultaneous 24/7 hours availability for negotiation partners is the key success factor. Nevertheless, various challenges are associated with virtual negotiations, which make negotiators want to switch back to face-to-face negotiations. Therefore, a hybrid negotiation model, including both virtual and face-to-face negotiations in combination with the metaverse, seems to be most reasonable for the future of intercultural business negotiations.