ABSTRACT:

This study examines the effects of communication channels (computer-mediated versus face-to-face) and interaction structure (no formal structure versus modified Nominal Group Technique) on the performance of three-person groups assigned an intraorganizational transfer pricing negotiation task. Participants assumed the role of a selling division manager or one of two buying division managers and negotiated joint agreements on transfer pricing terms including price, quality, and timeliness. In half of all groups, members were physically isolated from one another and communicated with the aid of a simultaneous electronic-messaging facility; in the other half, members met directly and communicated face-to-face. Within each of these two communication conditions, half the groups interacted freely without any formal structure; in the other half, group members interacted using a two-step, modified Nominal Group Technique analogous to an agenda or problem-solving procedure.

Negotiation performance over three consecutive sessions was analyzed using various criteria. Results showed that computer-mediated groups and unstructured groups obtained lower outcomes and distributed resources more unequally than face-to-face groups and structured groups, respectively. Computer-mediated groups and unstructured groups also displayed a greater tendency to reach coalitional agreements than face-to-face groups. After learning effects in all conditions were considered, the performance of computer-mediated unstructured groups was significantly lower than that of both face-to-face groups and computer-mediated structured groups (between which there was no significant difference).