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

Abstract

Purpose The 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/approach A 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. Findings Experimental 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/implications Buyer-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 implications The 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/value Previous 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.