Social Networks and Negotiation

While Polanyi’s comment may have come as a surprise to economists (as pointed out in Granovetter’s 1985 critique), the effects of social relationships on economic outcomes are well understood by people working for tips (e.g., hairdressers and waiters) and parents of Girl Scouts trying to sell cookies. Behavior, even buying and selling behavior, is embedded in networks of interpersonal relationships. People rely on and are affected by social relationships of many types, including friendships, advice ties, and kinship ties, even in what appear to be perfectly open commodity markets (cf. Abolafia & Kilduff, 1988). Introductions between buyers and sellers are often facilitated through networks of these ties; referrals on who is trustworthy and who is to be avoided based on prior negotiations, who has useful knowledge and whose views are dated, and who is to be respected and who is to be feared are also transferred through these social networks (cf. Kilduff & Krackhardt, 1994). This all makes it surprising that we find relatively few examples of the effects of these networks of social relationships on negotiation outcomes. Like power and conflict, negotiations inherently involve more than one party, and Bazerman and colleagues (Bazerman, Curhan, Moore, & Valley, 2000) have noted a history and recent resurgence in interest in the role of social relationships on negotiations. Yet, the focus of most negotiation research remains on the “behavioral decision” perspective (cf. Malhotra & Bazerman, 2008) and its emphasis on cognitive heuristics and predictable biases that affect negotiator behaviors. Social relationships have been relatively neglected (Valley, Neale, & Mannix, 1995), and few studies have gone beyond the negotiating dyad (Valley, White, & Iacobucci, 1992) to consider the role of third parties or the wider network of social relationships on negotiations. Yet, the negotiators’ social networks, and the networks of individuals observing the outcome of the negotiations, will affect both the process and the outcomes of negotiations. To the extent that negotiations involve the exercise of an inherently relational phenomenon-power-the structural perspective of social network analysis may add to the predictive ability of negotiation research. In return, the more cognitive and behavioral insights from the behavioral decision perspective on negotiations may provide the understanding of the process mechanisms often missing from network analysis. To that end, both the negotiations literature and the social network literature may benefit by informing each other. As a start toward this goal, our chapter’s aims include: (a) to provide a brief general primer on social networks (for more depth, see Borgatti & Foster, 2003; Brass, 2011; Brass, Galaskiewicz, Greve, & Tsai, 2004; Kilduff & Brass, 2010); (b) to identify social network relationships that are likely to affect the extent to which negotiators have “power, " or the ability to influence others to accommodate their requests; (c) to identify characteristics of the 21st century workplace that may affect social networks and negotiations; and (d) to identify questions in need of future research by both negotiation scholars and social network scholars. Cumulatively, this chapter’s goal is to provide readers enough information to consider how they might increase their power/influence in negotiation situations with social network variables in mind and to encourage more research on the social network structure of negotiations.