Tuesday, July 22, 2008

Guidelines for Alcohol Use in Business Settings

Alcohol facilitates relationship building, but harms the actual bargaining process.

Alcohol might be appropriate when the objective of an encounter is to develop a relationship or share information. Alcohol lowers inhibitions, encourages conversation, and causes individuals to feel closer to each other than they might otherwise. By encouraging disclosure, moderate use of alcohol can deepen and personalize formal business ties. And by encouraging a sense of closeness and mutual identification, it can help legitimize different points of view and reduce mistrust. It therefore might be appropriate when a primary objective is to develop a long-term relationship. Consequently, alcohol may be better suited for top decision-makers structuring the general framework of an agreement than for their subordinates who need to resolve the technical details of the deal. For similar reasons alcohol may facilitate agreement in particularly contentious negotiations such as when negotiators have reached an impasse.

Bargaining under the influence: The role of alcohol in negotiations
Maurice E Schweitzer, Jeffrey L Kerr.
The Academy of Management Executive.
May 2000. Vol. 14, Iss. 2;

Maurice E. Schweitzer is a visiting assistant professor at the Wharton School at the University of Pennsylvania. His background is in behavioral decision theory and his research focus is negotiations. He has studied the use of deception in negotiations, as well as factors that influence the negotiation process, including alcohol, physical attractiveness, and videoconference technology. Contact: schweitz@wharton.upenn.edu.

Jeffrey L Kerr is an associate professor in the School of Business at the University of Miami. His work focuses on strategic management and organization. Current research interests are in the areas of new organization design, competitive strategy in electronic commerce, and issues of strategy implementation. He currently serves as chair of the Management Consulting Division of the Academy of Management. Contact: jkerr@exchange. sba.miami.edu.

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