Corporate Antagonism Goes Public

Business negotiations are moving from closed and discreet to open and political.

"There's a code of the past that we keep things in the boardroom and don't go public," said Bobby Calder, chairman of the marketing department at Northwestern University's Kellogg School of Management. "What you're seeing is, I think, a realization that you can go outside and gain some negotiating power." The campaigns play to populist sentiment, asking the public to do the right thing, an approach that also draws from politics. They create a public spectacle, a narrative that distills dull subjects like contract negotiations into a good-guy, bad-guy conflict — a Harvard Business School case study turns into a shootout with Liberty Valance.

The tactics are examples of what economists call signaling: when two parties in a transaction have different information, one can transmit messages about his status or power by sending signals — or, in this case, buying advertising meant to show that the public is on his side. And these signals can conflict, creating another hazard: by going public with customers, companies are explicitly criticizing the people on the other side of the negotiations, as Time Warner did with Fox and Conan O'Brien had been doing almost every night on NBC's own network, until his final show on Friday. "You can't do that too many times — you destroy trust, you destroy a sense of protocol," said Vanderbilt's David Owens. "Negotiations have been done the way they've been done for a reason."