A comparative assessment of win-win and win-lose negotiation strategy use on supply chain relational outcomes

Abstract

PurposeThe purpose of this paper is to study the relational impact of using win-win or win-lose negotiation strategies within different types of buyer-supplier relationships.Design/methodology/approachA multi-method approach is used. Qualitative interviews with supply chain managers reveal that relationship-specific assets and cooperation are important relational factors in buyer-supplier negotiations. Framing interview insights within the social exchange theory (SET), hypotheses are tested using a scenario-based behavioral experiment.FindingsExperimental results suggest that win-lose negotiators decrease their negotiating partner’s commitment of relationship-specific assets and levels of cooperation. In addition, the use of a win-lose negotiation strategy reduces levels of relationship-specific assets and cooperation more in highly interdependent buyer-supplier relationships than relationships that are not as close.Research limitations/implicationsBuyer-supplier relationships are complex interactions. Negotiation strategy choice decisions can have long-term effects on the overall relationship. As demonstrated in this study, previous research focusing on one side “winning” a negotiation as a measure of success has oversimplified this complex phenomenon.Practical implicationsThe use of a win-lose negotiation strategy can have a negative impact on relational outcomes like cooperation and relationship-specific assets. For companies interested in developing strong supply chain relationships, buyer and suppliers should choose their negotiation strategy carefully as the relational impact extends beyond the single negotiation encounter.Originality/valuePrevious research predominantly advocates for the use of a win-win negotiation strategy within interdependent relationships. This research offers evidence that the use of a win-lose strategy does have a long-term relational impact.