Between (In)Efficiency and (In)Effectiveness: Uncertainty, Risk and Benefits of Routine in Negotiation

18 Pages Posted: 16 Sep 2007

See all articles by Peter Kesting

Peter Kesting

Aarhus University - Department of Organisation and Management

Remigiusz Smolinski

Aarhus University - Department of Organization and Management; Handelshochschule Leipzig (HHL) - Leipzig Graduate School of Management

Date Written: September 14, 2007

Abstract

In this paper we explore the relationship between routine, risk and uncertainty in repeated negotiations. We link our analysis to the analytical framework of Kesting and Smolinski (2007), based on which we identify and discuss three major points: the risk connected with the decision to develop routine; the uncertainty related to the process and the outcome of a negotiation and its tendency to decrease with increasing routinization of negotiation processes; the risk of overlooking or ignoring relevant context changes and as a consequence ineffectiveness in the application of acquired routine. We also briefly analyze the connection between negotiators' individual risk preferences and their impact on the efficiency and effectiveness of negotiation results. We summarize these points in a simple model and discuss their consequences for theory and practice of negotiation.

Keywords: negotiation, routine, risk preference, uncertainty, knowledge, skills, efficiency, effectiveness

JEL Classification: D79

Suggested Citation

Kesting, Peter and Smolinski, Remigiusz, Between (In)Efficiency and (In)Effectiveness: Uncertainty, Risk and Benefits of Routine in Negotiation (September 14, 2007). Available at SSRN: https://ssrn.com/abstract=1014630 or http://dx.doi.org/10.2139/ssrn.1014630

Peter Kesting

Aarhus University - Department of Organisation and Management ( email )

Bartholins Allé 4
Aarhus, 8210
Denmark

Remigiusz Smolinski (Contact Author)

Aarhus University - Department of Organization and Management ( email )

Fuglesangs Alle 4
Aarhus V., DK-8210
Denmark

Handelshochschule Leipzig (HHL) - Leipzig Graduate School of Management ( email )

Leipzig Graduate School of Management
Jahnallee 59
04015 Leipzig
Germany

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