A Temporal Lens on Buyer-Supplier Negotiations
Posted: 2 Mar 2009
Date Written: March 2, 2009
This paper analyzes how timing in buyer-supplier disputes impacts subsequent negotiation strategies. We examine different facets of timing - when the dispute occurs during the contract, the process of negotiations unfolding and the time to respond to the other party - and their effects on the choice of a collaborative versus competitive negotiation strategy. Our empirical analysis employs a unique dataset of 2293 negotiation interactions in 102 disputes arising in buyer-supplier relationships. Our results show that, contrary to previous research, fixed duration contracts and later contract disputes led to higher collaborative negotiation strategies. We also found that as the negotiation progresses over time the choice of negotiation strategies tend to be more collaborative. Furthermore, the impact of the negotiation context, whether it is the relational or contractual, wanes as the negotiations proceed over a longer period of time. Finally, we find that more dialogue (through written letters) seems to matter, regardless of the content of the letters.
Keywords: Timing, Negotiation Strategy, Disputes, Vertical Relationships
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