Handling inter-organisational conflict based on bargaining power

Abstract

PurposeThis paper aims to reveal the effects of an organisation’s bargaining power on its negotiating behaviours (including integrating, obliging, compromising, dominating and avoiding) in the context of inter-organisational conflict in construction projects and investigate how organisational power distance orientation moderates the relationship between the organisation’s bargaining power and its negotiating behaviours.Design/methodology/approachThe authors conducted a questionnaire survey among practitioners in the Chinese construction industry with the final sample consisting of 219 responses. A structural equation model was used to analyse the data and test the hypotheses.FindingsThe results reveal that an organisation’s bargaining power is positively associated with dominating and integrating behaviours but negatively associated with obliging and avoiding behaviours. Additionally, bargaining power is found to be negatively associated with compromising behaviour when the organisation has a high power distance orientation. Finally, a higher degree of power distance orientation strengthens the positive effect bargaining power has on dominating behaviour.Practical implicationsThe findings can help practitioners to predict the negotiating behaviours of a counterpart according to its bargaining power and the power distance in its organisational culture. This can then enable practitioners to adjust their strategies accordingly and steer the negotiations towards a win–win outcome.Originality/valueThis study applies the approach-inhibition theory of power to inter-organisational negotiations and empirically tests the relationship between an organisation’s bargaining power and its negotiating behaviours in the context of construction projects. Additionally, this study reveals that organisational power distance orientation moderates this relationship.