Business negotiations and alcohol have accompanied each other for centuries. This is why in several cultures, it is a prevailing practice to have a drink before business negotiations. For example, in Russia, negotiators start the conversations with a peg of a vodka shot. In China, starting a business relationship kicks off with a banquet and celebratory toasts. In Franch, the participants of a business lunch are served local wine. In the USA, business executives enjoy business meals where alcohol is a necessary element. In Korea or Japan, turning down a drink offer is treated as rude behavior by the guests. However, alcohol drinking in a business meeting is in decline in the UK and is totally absent in Saudia Arabia, and in Malaysia.
When the dilemma is drinking or not drinking alcohol, it is also found that many business managers drink with or without consideration and they don’t give much importance to the benefits or risks of hard drink consumption. To find an answer regarding the issue that does alcohol consumption affect business deals we decided to rely on experimental evidence which we believe would help us reach an informed decision.
Researchers found that intoxication makes some people violent. So they(the researchers) anticipate that drinking before or during a business negotiation will not help the negotiator. Why liquor consumption has such a negative impact is because alcohol has found to hamper cognitive functioning. A negotiator with impaired cognitive ability is highly unlikely to make good negotiations and make a better deal. However, the positive side of alcohol is it can warm up a cold relationship. In other words, it can help build a better relationship between two negotiating parties. So since alcohol has several negative sides as well as one or two positive sides, it is difficult to rule it out completely and at the same time keep it on the negotiating table.
In this context, we would like to present a summary of a research paper namely “the impact of alcohol negotiator behavior: Experimental evidence. ” In this research, the researcher duo conducted two experiments. In these two experiments, they paired two groups of people. Each group contains 42 and 50 people respectively.
In the first experiment, there were further two groups of people. These two are sober-sober and inebriated-inebriated. Both these two groups are allowed to drink not more than two and a half glasses of beer. Drinking this amount of beer will keep the alcohol level in the blood at a moderate level. After the end of the experiment, it was found that the sober-sober pair made a better deal than their inebriated-inebriated counterparts. One objection to this experiment is the inebriated-inebriated group claimed that the beer they drank had little or no impact on them during the negotiation.
The researchers then conducted another experiment. In this study, the researchers let drink every participant of the experiment. But these participants don’t know whether they drink alcoholic drinks or not and constitute pairs of negotiators. Each pair has a sober and an inebriated negotiator. Like the first study, the people who are deliberately provided with an alcoholic drink claimed that the alcohol has no impact on them while negotiating with their counterparts. In the second study, the researchers recorded the conversation. The transcript of the conversation revealed that the intoxicated participants adopted aggressive tactics in their discussion.
They used bluffs, threats, misrepresentation, and insults in their negotiation. They also make more mistakes than their undrunken counterparts. However, the researchers anticipated that the inebriated negotiators will ask fewer questions than their counterparts which didn’t happen. Regarding the questions, counting the number of questions that are asked by a party is not enough to declare that party a winner. The winner is which party asked more win-win questions like how can we make it happen. In this context, since it was impossible to determine which party asked more win-win questions, so we cannot declare whether the sober-sober or inebriated-inebriated the winning party.
Another interesting finding of this research is drinking alcohol prior to a negotiation hampers the performance of a sober negotiator more when he faced an intoxicated negotiator while the negotiating performance remains intact when two inebriated negotiators negotiate with each other. Regarding sober-inebriated negotiation, though the undrunken negotiator may sometimes concede defeat to the drunken counterpart but it is always not the case. A negotiator’s personal traits also play a role during a negotiation. A sober negotiator may still win against a drunken negotiator but the extent of that win may not be large.
Available experimental data indicate that alcohol influences a negotiator to adopt aggressive tactics thereby making him vulnerable to mistakes that may result in making poor value deals. However, despite this negative effect of alcohol, no one still can’t rule it out either before or during a negotiation. Regarding alcohol drinking and business negotiation here is our final opinion
If you are a person with good control over your temper and the purpose of the meeting is to build a relationship or to extract as much information as possible from your negotiating counterpart drinking alcohol is acceptable and even in some cases may help you.
If the purpose of your meeting is to discuss the technical aspect of a project which requires you to understand the different difficult sides of a project as well as a discussion that involves making points and counterpoints, in such case abstaining from alcohol is a good idea.
If your intention is to make a good impression or you are going to meet a higher official or there is a probability of conflict escalation, avoiding alcohol is also a good idea. A little amount of drinking during a conversation is acceptable if you are a more powerful party and it appears to you that showing some irrational behavior will help you to make a better deal. As we stated earlier, since in many cultures turning down a drink offer is treated as an offending behavior, if you are a non-alcoholic and fall in such awkard situation, you can tell the host that you avoid alcohol due to your health issues. Our verdict regarding drinking alcohol prior or during a business negotiation is it (alcohol) does not boost the performance of a negotiator.