A Temporal Lens on Buyer-Supplier Negotiations

Posted: 2 Mar 2009

Date Written: March 2, 2009

Abstract

This paper analyzes how timing in buyer-supplier disputes impacts subsequent negotiation strategies. We examine different facets of timing - when the dispute occurs during the contract, the process of negotiations unfolding and the time to respond to the other party - and their effects on the choice of a collaborative versus competitive negotiation strategy. Our empirical analysis employs a unique dataset of 2293 negotiation interactions in 102 disputes arising in buyer-supplier relationships. Our results show that, contrary to previous research, fixed duration contracts and later contract disputes led to higher collaborative negotiation strategies. We also found that as the negotiation progresses over time the choice of negotiation strategies tend to be more collaborative. Furthermore, the impact of the negotiation context, whether it is the relational or contractual, wanes as the negotiations proceed over a longer period of time. Finally, we find that more dialogue (through written letters) seems to matter, regardless of the content of the letters.

Keywords: Timing, Negotiation Strategy, Disputes, Vertical Relationships

Suggested Citation

Lumineau, Fabrice and Henderson, James E., A Temporal Lens on Buyer-Supplier Negotiations (March 2, 2009). Atlanta Competitive Advantage Conference Paper. Available at SSRN: https://ssrn.com/abstract=1351726

Fabrice Lumineau (Contact Author)

Purdue University ( email )

610 Purdue Mall
West Lafayette, IN 47906
United States

James E. Henderson

IMD International ( email )

Ch. de Bellerive 23
P.O. Box 915
CH-1001 Lausanne
Switzerland

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