Negotiating Through Agents: A Principal-Focused Agency Model in Representative Negotiations

Abstract

While the negotiation field has thoroughly explored an agent’s experience in representative negotiations, an examination of the principal’s perspective is notably lacking. To address this under-researched area in management, we present the Principal-Focused Agency Model -- a trust-based, principal-centric conceptualization of how principals control their agents’ behavior, and how those controls affect negotiation outcomes. This article puts forth four main propositions. First, we posit that principals’ trust based in perceptions of their agents’ benevolence (i.e., benevolence-based trust) negatively relates to how much principals attempt to control the outcomes of their negotiations (i.e., the “ends”). Second, we hypothesize that principals’ trust based in perceptions of their agents’ integrity (i.e., integrity-based trust) negatively relates to how much principals’ attempt to control the process of their negotiations (i.e., the “means”). Third, principals’ trust based in perceptions of their agents’ ability (i.e. ability-based trust) is necessary but not sufficient for principals to relinquish control over either negotiation outcomes or processes. Fourth, we posit that principals’ decision to maintain control in representative negotiations negatively affects their outcomes, and that this relationship is moderated by the negotiation’s integrative potential, such that the more integrative potential is present, the more detrimental it is for principals to attempt to maintain control.