May 22, 2014

Home field advantage

The researchers Graham Brown and Markus Baer published the results of some of their works under the heading Location in negotiation: Is there a home field advantage? in “Organizational Behavior and Human Decision Processes” in March 2011. They stated that: “[…] by experimentally manipulating participants’ occupancy status […] we find that residents of an office space outperform the visiting party in a negotiation. In addition, our results suggest that this performance discrepancy between residents and visitors may be due to both a resident advantage and a visitor disadvantage.”

So what to do when a bigger competitor of yours invites you to their offices for the first round of acquisition talks, which is very important due to the first impressions to be formed? I know from field experience that even after reading the above written paragraph some of the company owners will still decide to accept this invitation. They cannot risk, they will argue, to “upset” the inviters and lose the chance of negotiating with such a company.

One point they do not think of is the fact that no company interested in their business will give up this acqusitive behaviour just because the target company does not visit them for the first round of negotiations. They will accept your counter offer asking them to visit you.

Then you will be playing a home game with the advantages described by the researchers Graham Brown and Markus Baer.

To purchase the paper Location in negotiation: Is there a home field advantage? please click here.

The oldie of the week: Tony Orlando & Dawn – Knock Three Times (1970)

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