From movie moguls hammering out film deals in Los Angeles to publishers and agents assessing each other’s tastes in New York, the “power lunch” has become a familiar institution. Across the globe, negotiators often do business over shared meals, whether out of convenience or as part of a concerted effort to get to know one another better. The belief has always been that food helps create a win-win situation.
Are we correct in assuming that dining together creates a communal spirit that leads to better deals? Not entirely, according to Stanford Graduate School of Business professor Margaret Neale and doctoral student Peter Belmi. In a recent study, the researchers found that whether we are likely to reap benefits from negotiations conducted in the presence of food depends on the type of bargaining situation we are facing—as well as the way the food is served.
Neale and Belmi told negotiators they were facing either a competitive situation or a cooperative one. Some pairs were given food to share while they negotiated; other pairs were given individual portions of food. (Apples and caramel sauce were used in one experiment, and chips and salsa in another.)
Interestingly, for those facing a competitive negotiation, shared food, but not individual portions, helped them create significantly more value – a hallmark of win-win negotiations. By contrast, those facing a cooperative situation created less value when given food to share.
Why the difference? Neale and Belmi theorized that the juxtaposition of a social ritual that suggests cooperation—namely, shared food—creates a disconnect with the task of negotiating competitively. That disconnect inspires people to pay more attention to one another and look for opportunities to create value.
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Meanwhile, when negotiators are focused on cooperating with one another, shared food can create a relaxed, familiar atmosphere. Consequently, negotiators may become more concerned about maintaining a friendly relationship than with achieving a win-win situation.
The results suggest that when you are dealing with a particularly competitive negotiator, looking to break an impasse, or dealing with conflict, it might be a good time to pass some appetizers or visit a restaurant where it’s common to share dishes – Spanish tapas, Ethiopian food, or Asian cuisines might be good choices. But in negotiations with someone you know well, you might pass on eating entirely or at least order your own food.
The study results serve as a reminder that negotiation advice is not “one size fits all.” Often, what works in one situation will be the wrong choice in another. Always take time to think about the potential challenges you are likely to face at the table before negotiating the process itself.
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Originally published on May 20, 2014.