Trust, risk taking behaviour and satisfaction in international business negotiations: Exploring the impact of different communication modes

Abstract

ABSTRACT: As a result of rapid globalization and technological advancement, organizations of all sizes, from small local firms to large-scale enterprises, are increasingly entering in to the international business landscape. Most organizations pursue various internationalization strategies to expand into global markets. To establish strong cross-border relationships, meet mutual business expectations, and achieve strategic goals, companies actively engage in the international business negotiation (IBN) process. However, the COVID-19 pandemic significantly disrupted traditional negotiation practices, prompting a shift from commonly used face-to-face (FTF) negotiations to virtual modes such as video conferencing. Consequently, international business negotiators (IBNs) began relying on a variety of digital tools to conduct negotiations across borders. This growing trend in digital communication, especially during the post-pandemic, has highlighted the need to understand how different communication modes affect key negotiation success factors, specifically trust, risk-taking behavior, and satisfaction. While an extensive number of prior studies have examined the role of cultural differences in IBN, fewer studies have examined the effect of communication modes on negotiation success factors. Therefore, the primary objective of this study is to investigate the influence of different communication modes on negotiation success factors among Finnish IBNs.

To achieve this objective, the study employs Media Richness Theory (MRT) by Daft and Lengel (1986) as a theoretical foundation, integrating the selected communication modes (FTF vs. video) with negotiation success factors (trust, risk-taking behavior, and satisfaction). The research adopts a positivist philosophy and a deductive approach. Quantitative data were collected through a web-based survey targeting 124 Finnish international negotiators who had experience with either FTF or video negotiations, or both. Confirmatory factor analysis was conducted to ensure the validity and reliability of the measurement scale, and an independent samples t-test was used for statistical analysis, supported by SPSS software.

The results of the t-tests reveal statistically significant differences between FTF and video-mediated IBN across all three negotiation success factors. Specifically, the analysis demonstrates that negotiators using FTF communication report higher levels of trust, risk-taking behavior, and satisfaction compared to those using video communication. These findings offer meaningful contributions to MRT and provide practical implications for IBNs operating not only in Finland but also in other Western and Asian contexts.