Negotiation Behavior Research Articles

The Effect of Past Client Relationship and Strength of the Audit Committee on Auditor Negotiations

SUMMARY Auditors and clients are often required to resolve difficult, complex accounting issues in which they have different views. However, we know little about the effect of contextual factors on auditors' negotiation behaviors. This experimental study involving 63 experienced audit managers and partners examines the impact of the strength of the audit committee (strong or weak) and past relationship with the client (contending or compromising) on auditors' judgments in the pre-negotiation planning phase in resolving a difficult, subjective inventory writedown issue. These two important contextual factors are posited to affect auditors' perceived bargaining power and expectations of difficulties with respect to the impending negotiation. Specifically, we hypothesize an interaction where the most contending position (negotiation strategy) is adopted when the audit committee is strong (enhanced auditor bargaining power) and the past relationship is contending (a difficult negotiation). The findings support these expectations. In additional analyses, we obtain parallel results in the negotiation phase. In all, the findings confirm the importance of strength of the audit committee and past client relationship on auditors' negotiation planning judgments, and the concurrent consideration of these two pervasive contextual factors in the audit environment. Data Availability: Contact the authors.

A Comparative Approach To International Marketing Negotiations

Despite the increasing number of marketing transactions that transcend both the national and cultural boundaries, comparative studies on the influence of culture on business negotiations have been lacking. This paper presents intra-cultural and inter-cultural perspectives on business negotiation behaviors of Japan, Peoples Republic of China, Canada, and the United States. The authors identify culturally bound factors that can affect the negotiation activity and thereby aid the manager in the adaptation and/or adjustment of the marketing plan to suit the foreign environment.

A computational model for multi-agent E-commerce negotiations with adaptive negotiation behaviors

This paper presents a computational model to organize multi-agent E-commerce negotiations with adaptive negotiation behaviors aiming at enhancing the negotiation flexibilities of software agents. Firstly, the computational E-commerce negotiation model covering negotiation protocol, negotiation issues and negotiation strategies is specified to assist agents’ computing functions. Then, a three-staged adaptive negotiation behavior configuration mechanism is proposed to tackle the negotiation dynamics. In the pre-negotiation stage, agents’ negotiation behaviors are deployed by the case-based strategy assignment mechanism; in the on-going negotiation stage, opponents’ negotiation behaviors are tracked through the neural network learning model; in the post-negotiation stage, opponents’ concession functions are recorded using the time series measure. Finally, the computational negotiation model is tested through hypothetical negotiation cases. The outcomes show that the adaptive negotiation behavior configuration mechanism can benefit an agent to win more in the E-commerce negotiation.

Bargaining with Optimism

Excessive optimism is a prominent explanation for bargaining delays. Recent results demonstrate that optimism plays a subtle role in bargaining, and its careful analysis may shed valuable insights into negotiation behavior. This article reviews some of these results, focusing on the following findings. First, when there is a nearby deadline, optimistic players delay the agreement to the last period before the deadline, replicating a broad empirical regularity known as the deadline effect. Second, there cannot be a substantial delay under persistent optimism; i.e., excessive optimism alone cannot explain delays. Third, when optimistic players are expected to learn during the negotiation, they delay the agreement in order to persuade their opponents. The delays in these results can be quite costly, Pareto inefficient, and common knowledge at the beginning of the game.

Minimizing Negotiation Process Losses With Computerized Negotiation Support Systems

The growing frequency of negotiation situations as well as an increasing complexity of the issues that need to be resolved in a negotiation have generated interest in computer support for negotiation. Negotiation Support Systems (NSS) show potential for alleviating or overcoming major process losses which hinder the effectiveness of negotiations, including the negative effects of cognitive limitations, cognitive biases and dysfunctional socio-emotional aspects of negotiator behavior. This paper gives a brief overview of existing NSS and presents a framework for research in the NSS area, which highlights empirical research, which has already been conducted in this area. Also included is a discussion of future research directions, which are needed in the area of NSS.

Cross‐cultural negotiations revisited

PurposeThe purpose of this paper is to explore possible changes in national culture for generations X and Y members from selected Asian national cultures and the impact on cross‐cultural negotiations.Design/methodology/approachAn interpretivist epistemology is combined with an ontology of subjectivism for this exploratory study which does not seek generalization. Emphasis is placed on the development of new survey items by members of generations X and Y for Hofstede's dimensions. An online survey yielded n=224 responses. Data were collected from members of generations X and Y, but also Baby Boomers as the control group, to test differences.FindingsFor national culture dimensions, only individualism/collectivism tests for significant differences between Asian GenY and Baby Boomers. GenX and GenY show little interest in pre‐opening relationship building and focus on positioning and compromising.Research limitations/implicationsThe study is exploratory in nature and future studies should revisit this topic. The items developed to measure national culture might be biased by the 39 focus group participants. Future studies should consider differentiating Asian groups.Practical implicationsWestern negotiators need to prepare for multiple scenarios when entering negotiations with Asian partners. Depending on the age of the Asian negotiator, emphasis on different phases of the negotiation process needs to be reevaluated.Originality/valueThis research holds immediate lessons for cross‐cultural negotiations. Results support that generations X and Y members in some Asian cultures do not differ from their elders across all Hofstede dimensions, however they display different negotiation behaviors.

Strategies in international regime negotiations: reflecting background conditions or shaping outcomes?

Negotiation behaviour is usually seen as an intervening variable—adapted to structural and institutional conditions, but with sufficient degrees of freedom to leave its own imprint on outcomes. Little is known, however, about the extent to which negotiation behaviour in fact shapes outcomes. This paper addresses that question, building on data from the Miles et al. (Environmental regime effectiveness: confronting theory with evidence. MIT Press, Cambridge, MA, 2002) environmental regimes project. Four main conclusions can be inferred from the analysis. First, the Miles et al. core model seems to account for a fair amount of the variance observed in the strategies adopted by “pushers” and “laggards,” but it also leaves ample scope for other explanations. Second, both of these groups respond to the choice of strategy made by the other. Third, adding negotiation strategies to the Miles et al. core model does not significantly change the conclusions obtained from that model itself. Finally, sometimes negotiation strategies—in particular combinations of strategies—nevertheless make a real difference, often through interplay with other factors. To better understand when and how this occurs, we need models that are more sophisticated and a combination of methodological tools designed for aggregating as well as separating effects.

Attitudes towards questionable negotiation tactics in Turkey

PurposeThe purpose of this paper is to examine the impact of individualism‐collectivism, trust, and ethical ideology on ethically questionable negotiation tactics, such as pretending, deceiving and lying, in Turkey.Design/methodology/approachSurvey questionnaires translated from English to Turkish were administered to 400 respondents, of whom 379 fully completed the questionnaires.FindingsThe research empirically corroborated a classification of three groups of negotiation tactics, namely, pretending, deceiving and lying. Turkish negotiators who scored high on horizontal individualism tended to score highly on pretending and deceiving and less on lying, and presented an inverse relationship between scores on those tactics and score on idealism. Trust was not found to be related to any of the negotiation tactics.Research limitations/implicationsThe study investigated the respondents' perceptions rather than their actual negotiation behavior. The sample size, though large and inclusive of public and private sector employees, provided limited ability to generalize Turkish negotiator conduct.Practical implicationsThe study provides hints to managers negotiating in Turkey of the extent to which Turkish managers would employ ethically questionable negotiation tactics.Originality/valueThis empirical field research is the first to present a model of the antecedents of negotiation tactics in Turkey, a country where negotiation studies are limited and are mostly conducted within the safe controls of the laboratory.

Turning Points in Multilateral Trade Negotiations on Intellectual Property1

Abstract Application of a turning points analysis to detailed chronologies of events that transpired prior to and during two matched cases of multilateral intellectual property rights (TRIPS) negotiations yields useful lessons for understanding negotiation process and effective negotiator behavior. The unfolding negotiation process is traced in the GATT Uruguay Round and prior to and during the WTO Doha Ministerial. Departures from earlier trends in the chronologies merit special attention. A departure is defined as a clear and self-evident change from earlier events or patterns in the form of an impactful decision taken by one or more parties. By coding the causes (precipitants) and effects (consequences) of the departures, we perform a turning points analysis. The turning points analysis, composed of three-part sequences, reveals the triggers and impacts of departures during the extended TRIPS negotiation process. The analyses will allow a comparison of the patterns that unfolded during the two phases of TRIPS negotiations, which will highlight the breakthroughs that occurred during the Uruguay Round and the crises that emerged later, prior to and during the Doha Ministerial. Improving the effectiveness of multilateral trade negotiations depends in part on understanding how critical turning points emerge.

Cooperation and Trust for Americans, Power and Relationship for Chinese: In Search of More Culturally Relevant Features of Negotiator Mentality

We define negotiation mentality as a negotiator’s general understanding and belief about the nature, context, and effective approaches of negotiation. In a comprehensive cross-cultural study, we investigate the etic and emic features of negotiators’ mentality. We theorize that how an individual perceives and understands a negotiation is both etic (universal) and emic (culture-specific). We developed a scale to measure negotiators’ mentality (Study 1), and examined the effects of its specific dimensions on negotiation outcomes (Study 2). In Study 1, we found three etic or universal dimensions across both Chinese and American negotiators, in addition, two emic dimensions are found among the U.S. negotiators and three emic dimensions among Chinese negotiators. In Study 2, we validated the developed scale and examined the relationships between the etic and emic dimensions and negotiation outcomes. We found that although the etic factors of cooperation and trust are relevant in predicting negotiation behaviors for both American and Chinese negotiators, their effects are much stronger for the Americans. For Chinese negotiators, the emic factors of power, relational concern, and open discussion are more powerful predictors of negotiation outcome than the etic factors of cooperation and trust. Our research contributes to cross-cultural negotiation research by establishing both etic and emic constructs and scales of negotiation mentality and shedding light on the necessity of investigating the proximal factors influencing negotiation processes and outcomes, especially the potential of emic factors in non-U.S. contexts.

USING NEURAL NETWORKS FOR EARLY DETECTION OF UNSUCCESSFUL NEGOTIATION THREADS

Building agents that negotiate on behalf of their owners aiming to maximise their utility is a quite challenging research field in the artificial intelligence domain. In this paper, such agents are enhanced with techniques based on neural networks (NNs) to predict their opponents' negotiation behaviour, thus achieving more profitable results and better resource utilization. The NNs are used to early detect the cases where agreements are not achievable, supporting the decision of the agents to withdraw or not from the negotiation threads. The designed NN-assisted negotiation strategies have been evaluated via extensive experiments and are proven to be very useful.

A royalty negotiation model for BOT (build–operate–transfer) projects: The operational revenue-based model

Whilst few studies have explored royalty negotiations for build, operate and transfer (BOT) projects, some works have proposed numerous royalty formulas to evaluate royalty amounts or franchise fees for a BOT project. Despite this, the royalty negotiation process is one of the many critical negotiation items of a concession contract. This study not only developed a royalty negotiation model for BOT projects, but also developed the iterative algorithm for the BLP problem for the government and the private sector. In addition, the factors incorporated into the iterative algorithm for the BLP problem include the concession rate, learning rate, and the time value discount rate for both parties. Moreover, this paper conducted a case study of the Taipei Port Container Logistic BOT Project using LINGO and MATLAB programming. The results show that the two parties involved completed royalty negotiation at the sixth negotiation. The objective function value for lower-level programming was 1.062 and the government finance recovery rate for higher-level programming was 11.832. The findings show that the government can receive the royalty, which is calculated by using 0.012% of the operating revenue of this BOT project, from the concessionaire. Therefore, the royalty negotiation model based on the operating revenue developed herein; could be employed to explain the negotiation behavior.

The Effect of Past Client Relationship and Strength of the Audit Committee on Auditor Negotiations

Auditors and clients are often required to resolve difficult, complex accounting issues in which they have different views. Despite its importance we have little knowledge of the effect of contextual factors on auditors’ negotiation behaviors. This experimental study involving 63 experienced audit managers and partners examines the impact of the strength of the audit committee (strong or weak) and past relationship with the client (contending or compromising) on auditors’ judgments in the pre-negotiation planning phase in resolving a difficult, subjective inventory writedown issue. These two important contextual factors are posited to affect auditors’ perceived bargaining power and expectations of difficulties with respect to the impending negotiation. Specifically, we hypothesize an interaction where the most contending position (negotiation strategy) is adopted when the audit committee is strong (enhanced auditor bargaining power) and the past relationship is contending (a difficult negotiation). The findings support these expectations. In additional analyses, we obtain parallel results in the negotiation phase. In all, the findings confirm the importance of strength of the audit committee and past client relationship on auditors’ negotiation planning judgments and the concurrent consideration of these two pervasive contextual factors in the audit environment.

How Valid Is Negotiation Research Based on Student Sample Groups? New Insights into a Long-Standing Controversy

Although a considerable amount of research has examined the impact of experience on negotiation behavior and performance, we still know very little about the usefulness of student samples in negotiation research because most studies have compared the performance of inexperienced students with those who had received some kind of extensive negotiation training or with experienced professional negotiators(s). Against this background, we investigate whether the results obtained from trained student samples are generally similar to those of professional negotiators. Generally, our data confirm our hypotheses that students with some negotiation training and experience perform better than untrained student negotiators and that they are not significantly outperformed by professional negotiators. From this, we conclude that many questions in the field of negotiation research can be effectively tested by using trained students as experimental subjects.

Between a Rock and a Hard Place: Small States in the EU–SADC EPA Negotiations

This article explores the role and effectiveness of small state trade diplomacy in the negotiations to conclude Economic Partnership Agreements (EPAs) between the European Union (EU) and the African, Caribbean and Pacific (ACP) group of countries, focusing specifically on the Southern African Development Community (SADC). Given the vast power asymmetries between the EU and the ACP, small states have had limited bargaining power to shape the process and the outcome of the negotiations. Unlike most other ACP EPA negotiations, the SADC small states were also caught between a rock (EU) and a hard place (South Africa), with both parties competing to promote their visions for regional integration. In the end, the EPA process split SADC into four sets of separate trade regimes with the EU, undermining the established regional integration project. The article explains this divisive outcome of the SADC EPA process by analysing the negotiation behaviour of the main parties, specifically the ‘weaker’ players. The article concludes with key lessons for small states' future trade negotiations.

Group Negotiation Decision Method and its Application based on Multi-Issues Combined Programming for High-tech Virtual Enterprise

The negotiation goal for High-tech Virtual Enterprise is close relation with participants negotiation behavior, which also is impacted by environment constrict and member enterprise strategies among negotiation process. Multi-Agent negotiation process is formalized described for High-tech Virtual Enterprise and combined programming model for Multi-part and Multi-Issue negotiation and decision are established including of the general programming model and particular programming model, by which united protocol zone and basic negotiation value is ensured from Multi-Agent negotiation power degree, by which united negotiation equilibrium value from Multi-Agent adopting strategies, and finally optimal estate of united utility and equilibrium situation of protocol result are received. The empirical results show Multipart and Multi-Issue negotiation and decision based on double programming is the important approach for conflict management of High-tech Virtual Enterprise, its acting mechanism is analyzed and operation model is established, which is the effective means for coordinating with collaboration relations among participants, reducing conflict consumption and realizing alliance targets.

Cognition and Decision Making in Construction Engineering and Management: A Case of Construction Project Contract Negotiation

Cognition is defined as a faculty for the processing of information, applying knowledge, and changing preferences. Increasing cognition research in management science indicates the significance of leveraging cognitive science to improve decision-making; however, little research has been conducted within the construction engineering management (CEM) community. Construction project contract negotiation plays an important role in CEM, which is also the key to the initial operation of the whole project. Many factors influence construction project contract negotiation including the goal of the negotiation, trust relationships, cooperation and so on. Using a fuzzy cognitive map (FCM) method, this paper investigates the factors which affect contract negotiation. The fuzzy cognitive map for the contract negotiations is established from the perspective of the contractor. This cognitive map analyzes the construction project contract negotiation behaviors and gives new methods for seeking a breakthrough in negotiations.

Negotiation Under Possible Third Party Settlement

The effect of possible third party settlement on negotiation behaviour is studied in an economic bargaining experiment. The bargaining phase is preceded by a production phase that allows for different fairness principles to guide the division of the total production value. The experimental results show that a possible third party settlement lowers the dispute costs by reducing the number of rounds of alternating offers. In the presence of a third party, negotiators make first offers that are more strongly related to their production, which reduces the number of rounds of bargaining. The production phase has an effect on the distributional property of the settlements. In negotiations where third party settlement is an option, the negotiation outcome shifts towards a more unequal outcome, more in line with each person's contribution.

Can Nervous Nelly negotiate? How anxiety causes negotiators to make low first offers, exit early, and earn less profit

Negotiations trigger anxiety. Across four studies, we demonstrate that anxiety is harmful to negotiator performance. In our experiments, we induced either anxiety or neutral feelings and studied behavior in negotiation and continuous shrinking-pie tasks. Compared to negotiators experiencing neutral feelings, negotiators who feel anxious expect lower outcomes, make lower first offers, respond more quickly to offers, exit bargaining situations earlier, and ultimately obtain worse outcomes. The relationship between anxiety and negotiator behavior is moderated by negotiator self-efficacy; high self-efficacy mitigates the harmful effects of anxiety.

When Does Taking a Break Help in Negotiations? The Influence of Breaks and Social Motivation on Negotiation Processes and Outcomes

Most negotiations are interrupted from time to time to reflect on the negotiation or to do other pressing tasks. This study investigated how these breaks and the thoughts during these breaks influence subsequent negotiation behavior. Prosocially motivated dyads, with a tendency to think cooperatively, and proself-motivated dyads, with a tendency to think competitively, engaged in a negotiation in which there was a 3-min break. During this break, either they could reflect upon the negotiation or they did a distraction task. After the reflect break, but not after the distract break, prosocial dyads displayed more concern for other, engaged in more cooperative negotiation, and reached more agreements than proself dyads. We conclude that breaks are constructive if, and only if, negotiators reflect on their negotiation when having a prosocial orientation.