Negotiation Strategies in Supply Chain Management

Purpose of this paper

This paper seeks to explore the impact of different negotiation strategies on the negotiation setting in different buyer-supplier relationships. So far, the extant SCM literature has only briefly touched this subject, though such a study has been advocated for on previous notes in the SCM literature.

Design/methodology/approach

A qualitative research methodology was chosen in order to investigate a focal firm's negotiations with five of its suppliers. 25 hours of interviews and 15 hours of observations were carried out at the focal firm and with a number of the firms' tier one suppliers in order to investigate the subject at hand. In addition, a literature review of articles dealing with negotiation issues was carried out.

Findings

Amongst others, it is explained when the use of different negotiation strategies can be considered expedient in different relational settings, pairing a distributive negotiation strategy with arm's length relationships, while integrative negotiation strategies remain a more ambiguous exercise. Valuable insight concerning the impact of different negotiation strategies on the negotiation setting are advanced, which, in turn, leads to a questioning of previous research conclusions regarding the application of distributive negotiation strategies in strategic partnerships. The reason for such questioning is due to a limited focal perspective applied in previous research on negotiations in SCM.

Research limitations/implications

Amongst others, future research should statistically and analytically validate this research in order to reject or confirm the reached conclusions.

Novelty/contribution

This paper is the first to specifically investigate the role of negotiation strategies in the academic discipline of SCM from a qualitative angle using participant observations and interviews.