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UNIVERSITY OF GLAMORGAN
BUSINESS SCHOOL
NEGOTIATIONS BETWEEN BUYERS AND SELLERS
What really happens when buyers and sellers negotiate?
“In business as in life – You don’t get what you deserve,You get what you negotiate”
Dr. Chester L. Karrass (1996)
STEPHEN GRANT HUBBARD05106869
A submission presented in partial fulfilment of the requirements
of the University of Glamorgan/Prifysgol Mogannwg
for the degree of Doctor of Business Administration
July 2013
Table of Contents
Candidate’s Declaration Form............................................................................................8Approval for Submission of a Thesis..................................................................................9Certificate of Research.......................................................................................................10Abstract ......................................................................................................................11Acknowledgments...............................................................................................................12CHAPTER 1: INTRODUCTION....................................................................................131. Introduction...............................................................................................................131.1 Aims and Scope of Research......................................................................................141.2 Motivation to conduct this research............................................................................161.3 Context ......................................................................................................................16
1.3.1 A DBA not a PhD.........................................................................................161.3.2 UK or global scope.......................................................................................171.3.3 Status and contribution of IPSERA and The Journal of Purchasing and Supply Management...................................................................................................171.3.4 Terminology.................................................................................................18
1.4 Contributions to Knowledge and Practice..................................................................181.5 Chapter Summaries.....................................................................................................18
1.5.1 Chapter 2: Literature Review.......................................................................181.5.2 Chapter 3: Research Methodology and Methods.........................................191.5.3 Chapter 4: Findings and Observations..........................................................201.5.4 Chapter 5: Discussion of Findings................................................................201.5.5 Chapter 6: Conclusions.................................................................................20
CHAPTER 2: LITERATURE REVIEW........................................................................222. Introduction and chapter overview.........................................................................222.1 Structured thematic search strategy............................................................................222.2 Background.................................................................................................................22
2.2.1 Negotiation research in Purchasing and Supply Management.....................222.3 Definitions of negotiation...........................................................................................242.4 Negotiation Approaches..............................................................................................26
2.4.1 Integrative versus distributive negotiation approaches................................262.5 Emotional Intelligence................................................................................................30
2.5.1 Interpersonal Chemistry...............................................................................302.5.2 Trust..............................................................................................................322.5.3 Integrity and deception.................................................................................342.5.4 Respect, Face and Ego..................................................................................352.5.5 Female negotiators........................................................................................38
2.6 Persuasion Techniques................................................................................................402.6.1 Bargaining....................................................................................................422.6.1.1 Extreme initial offers....................................................................................432.6.2 Logical persuasion........................................................................................442.6.3 Power and coercion......................................................................................452.6.3.1 Power Ploys..................................................................................................522.6.3.2 Best Alternative To Negotiated Agreement; Alternative To Negotiated Agreement; and Realistic Alternative To Negotiated Agreement (BATNA, ATNA and RATNA)..............................................................................................................522.6.4 Emotion........................................................................................................542.6.5 Understanding the other party’s genuine objectives.....................................55
2.7 Other factors influencing negotiations........................................................................55
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2.7.1.1 Reciprocity....................................................................................................552.8 Summary.....................................................................................................................58CHAPTER 3: RESEARCH METHODOLOGY AND METHODS.............................603. Introduction and chapter overview.........................................................................603.1 Philosophical assumptions, research strategies and methods.....................................60
3.1.1 Philosophies of research...............................................................................603.1.2 Ontology and Epistemology.........................................................................633.1.3 Validity and Reliability in Qualitative Research..........................................65
3.2 Methodological choice for this study..........................................................................673.2.1 The concept of the research..........................................................................673.2.2 Research Design...........................................................................................673.2.3 The rationale for the interview methods.......................................................683.2.4 The rationale for the survey (questionnaire) methods..................................683.2.5 Reliability.....................................................................................................693.2.6 The relationship between research objectives and research methods...........69
3.3 Selected Research Design...........................................................................................693.3.1 Considerations..............................................................................................693.3.2 Qualitative Study..........................................................................................693.3.3 Overview of Adopted Research Approach...................................................703.3.4 Researcher’s Interview Experience..............................................................713.3.5 Selection of Actors.......................................................................................71
3.4 Phase 1: The Interviews..............................................................................................723.4.1 Aims..............................................................................................................723.4.2 Design...........................................................................................................723.4.2.1 Phase 1 - Interviews......................................................................................723.4.2.2 Phase 2 – Questionnaires..............................................................................753.4.2.3 Phase 3 - Presentations of Initial Findings and Feedback............................77
3.5 Ethical considerations.................................................................................................783.5.1 Consent.........................................................................................................783.5.2 Actors rights.................................................................................................78
3.6 Summary.....................................................................................................................79CHAPTER 4: FINDINGS AND OBSERVATIONS......................................................814. Introduction and chapter overview.........................................................................814.1 Findings from Interviews............................................................................................82
4.1.1 Profiles of actors...........................................................................................824.1.1.1 Buyers and Sellers........................................................................................834.1.1.2 Years experience as professional negotiator................................................844.1.1.3 Diversity of actors........................................................................................84
4.2 Main findings of interviews........................................................................................854.2.1 Theme 1: Integrative Negotiations...............................................................854.2.1.1 Q 5 “Have you heard of negotiations described as integrative and distributive?”...............................................................................................................854.2.2 Theme 2: Use of Power and Coercion..........................................................894.2.2.1 “Tell me about the power relationship in negotiations, based on your personal experience - what gives a buyer or seller power in a negotiation?”.............894.2.2.2 Removal of a negotiating opponent..............................................................904.2.2.3 Q 4b “To what extent is the balance of power based on the perception in the minds of the negotiators?”..........................................................................................904.2.2.4 Q 4c “Are you familiar with the term ‘BATNA’”........................................90
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4.2.2.5 Q 4d “In your experience how often does a negotiator have a real alternative to a poor negotiated agreement? (ATNA)”................................................................904.2.2.6 Use and abuse of power - the "fait accompli" / hiding behind policy or rules.
......................................................................................................................924.2.3 Theme 3: Interpersonal ‘chemistry’.............................................................924.2.3.1 Research the negotiator(s) on the other party’s team...................................934.2.3.2 Disrespect or dislike for their opponent.......................................................934.2.3.3 Q 6 “Can the interpersonal behaviours involved in a negotiation be separated from the subject matter being negotiated?”................................................944.2.4 Selling negotiators’ personal motivations....................................................954.2.5 Ethics, Trust and Integrity............................................................................974.2.5.1 Q 7 “In your view how important is personal integrity in negotiations?”....974.2.5.2 Q 7a “Do you ever deliberately deceive your opponent in negotiations?”. .974.2.5.3 Q 8 Have you experience of 'golf course' deals being made outside the normal organisational framework?.............................................................................984.2.5.4 Deliberate deception.....................................................................................984.2.6 Theme 4: Persuasion Techniques.................................................................994.2.6.1 “What persuasion techniques exist in negotiations?”...................................99Do you use the following techniques:......................................................................1004.2.7 i Logical persuasion....................................................................................1004.2.8 ii Bargaining...............................................................................................1024.2.9 iii Use of power and coercion – see separate section 4.2.2 Theme 2.........1024.2.10 iv Emotion..................................................................................................1024.2.11 v Compromise.............................................................................................1034.2.12 vi Understanding the other party’s goals and objectives............................1034.2.13 vii Promises................................................................................................1044.2.14 Theoretical techniques................................................................................105
4.3 Other findings from interviews.................................................................................1054.3.1 Effective Negotiators..................................................................................1054.3.2 Female negotiators......................................................................................1084.3.3 Deadlines, fatigue and exhaustion..............................................................1094.3.4 Contracts.....................................................................................................1094.3.4.1 Q 9 “How important is the written contract when agreement has been reached?”..................................................................................................................1094.3.4.2 Q 10 “How common is it for major deals not to be documented in formal contracts?”................................................................................................................1104.3.4.3 Q 11 “Is it true that the contract is only important when things go wrong?”...
....................................................................................................................1104.3.4.4 The ‘Sweeper clause’..................................................................................1104.3.4.5 ‘Purposive contracts’..................................................................................1114.3.4.6 Minimise Legal involvement......................................................................1124.3.4.7 Unwritten contracts.....................................................................................1124.3.5 Major Outsource Contracts.........................................................................1124.3.5.1 First year.....................................................................................................1124.3.5.2 Failure to manage.......................................................................................1124.3.6 Lack of negotiation expertise and experience............................................1134.3.7 Global database of third party suppliers.....................................................1134.3.8 Dealing with major issues...........................................................................1134.3.9 Linkage of issues........................................................................................1134.3.10 Fear of retaliation........................................................................................114
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4.3.11 Feigned stupidity and persistence...............................................................1144.3.12 Culture of the organisation or sector..........................................................1144.3.13 Language obfuscation.................................................................................1144.3.13.1 Lower level of reporting.............................................................................1154.3.14 Negotiation Team Structure........................................................................1154.3.15 Reviewing lessons learned..........................................................................1154.3.16 Negotiation, a ‘seat of the pants’ activity, unplanned and disowned even in the most respected leading global companies...........................................................115
4.4 Phase 2 – Findings from questionnaires...................................................................1164.4.1 Questionnaire 1 - Perception of the importance of effective negotiator characteristics...........................................................................................................1164.4.1.1 Soft skills....................................................................................................1184.4.2 Questionnaire 2 - Negotiator perception preferences.................................119
4.5 Summary of findings.................................................................................................1194.5.1 Profiles of Actors........................................................................................1194.5.2 Theme 1: Integrative Negotiations.............................................................1194.5.3 Theme 2: Use of Power and Coercion........................................................1214.5.4 Theme 3: Interpersonal ‘chemistry’ between negotiators..........................1224.5.4.1 Ethics, Trust and Integrity..........................................................................1224.5.5 Theme 4: Persuasion Techniques...............................................................1234.5.6 Other findings from interviews...................................................................1244.5.6.1 Behaviours of effective negotiators............................................................124
CHAPTER 5: DISCUSSION OF FINDINGS...............................................................1265. Introduction, chapter overview, aims and objectives..........................................1265.1 Additional analysis....................................................................................................1265.2 Theme 1: Integrative Negotiations............................................................................1265.3 Theme 2: Use of Power and Coercion......................................................................128
5.3.1 Test of the Power Balance between the Parties..........................................1295.3.2 Control of contract drafts............................................................................1305.3.3 Removal of a negotiating opponent............................................................1305.3.4 Database of commercial interactions..........................................................1305.3.5 The "fait accompli" / hiding behind policy or rules...................................131
5.4 Theme 3: Interpersonal ‘chemistry’..........................................................................1315.4.1 Test of the Relationship between the Parties..............................................1335.4.2 Two critical variables.................................................................................1355.4.3 Integrity......................................................................................................1355.4.4 Personal motivations...................................................................................136
5.5 Theme 4: Persuasion Techniques..............................................................................1375.5.1 Logical Persuasion......................................................................................1385.5.2 Bargaining..................................................................................................1395.5.3 Emotion......................................................................................................1395.5.4 Compromise................................................................................................1405.5.5 Revealing two new Persuasion Techniques................................................1405.5.6 Understanding the other party’s goals and objectives................................1415.5.7 Promises......................................................................................................141
5.6 Female negotiators....................................................................................................1425.7 Discussion of other findings.....................................................................................142
5.7.1 Planning and Preparation............................................................................1425.7.2 Behaviours, skills and characteristics of effective negotiators...................1445.7.3 Focus on the end result...............................................................................147
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5.7.4 Questionnaire 1 - Perception of the importance of effective negotiator characteristics...........................................................................................................1475.7.5 Comparison with earlier studies of effective negotiator characteristics.....1475.7.6 Linkage of issues........................................................................................1485.7.7 Response options........................................................................................1485.7.8 Contracts - The ‘sweeper’ clause................................................................1485.7.9 Questionnaire 2 - Negotiator perception preferences.................................1485.7.10 Detached observer......................................................................................1495.7.11 Language obfuscation.................................................................................150
5.8 Summary – Negotiation principles...........................................................................151CHAPTER 6: CONCLUSIONS......................................................................................1546. Introduction, chapter overview, aims and objectives..........................................1546.1 Conclusions...............................................................................................................154
6.1.1 Neglect of negotiation as a subject.............................................................1546.1.2 Responses to the research questions...........................................................1546.1.3 Integrative negotiations..............................................................................1556.1.4 Power..........................................................................................................1556.1.5 Interpersonal chemistry..............................................................................1566.1.6 Integrity and deceit.....................................................................................1576.1.7 Persuasion techniques.................................................................................1586.1.8 Personal motivations...................................................................................1596.1.9 Importance of bargaining............................................................................159
6.2 Other findings...........................................................................................................1606.2.1 Behaviours of successful negotiators vs average negotiators.....................1606.2.2 Importance of preparation to successful negotiators?................................1606.2.3 Importance of contracts between buyers and sellers?................................1616.2.4 Four response options.................................................................................161
6.3 Contributions to knowledge and practice.................................................................1616.4 Importance of this research.......................................................................................1616.5 Implications of findings for practitioners.................................................................1626.6 Dissemination of new knowledge.............................................................................1626.7 Research limitations..................................................................................................163
6.7.1 Sample size.................................................................................................1636.7.2 Sample of convenience...............................................................................1636.7.3 Questionnaire format..................................................................................1636.7.4 Geographic scope.......................................................................................1636.7.5 Responses to Questionnaires......................................................................1646.7.6 Exploratory interviews...............................................................................164
6.8 Recommendations for future research......................................................................1646.8.1 Negotiations in different circumstances.....................................................1646.8.2 Personality types.........................................................................................1646.8.3 Investigate the relationship between power and negotiation......................1656.8.4 Develop a tool for the selection of negotiators...........................................1656.8.5 Quantitative study.......................................................................................165
6.9 Summary...................................................................................................................165APPENDIX 1: Core Interview Negotiation Questions.................................................181APPENDIX 2: Agreement of Informed Consent...........................................................186APPENDIX 3: Non-specialist ethical guidelines for research.....................................187APPENDIX 4: IPSERA Code of ethical research........................................................194REFERENCES...................................................................................................................198
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List of Figures
Figure 2.1: Porter’s Five Forces of Competition.............................................................46Figure 2.2: Power Dominance Model...............................................................................50Figure 3.1: Deductive research process............................................................................63Figure 3.2: Inductive research process.............................................................................63Figure 3.3: Subjectivist to Objectivist Approaches.........................................................65Figure 4.1: Actors’ years experience as professional negotiator...................................84Figure 4.2: Industry Sector of Actors...............................................................................85Figure 4.3: Sources of Power.............................................................................................89Figure 4.4: Preferred persuasion techniques.................................................................100Figure 4.5: Perceived characteristics of effective negotiators – interview responses.107Figure 4.6: Characteristics of effective negotiators – questionnaire responses..........117Figure 4.7: Characteristics of effective negotiators – interview and questionnaire
responses compared.................................................................................................118Figure 4.8: Negotiators’ Perception Preferences...........................................................120Figure 5.1: Selling negotiators’ possible personal motivations....................................136Figure 5.2: Persuasion techniques – traditional............................................................137Figure 5.3: Seven Persuasion techniques.......................................................................140Figure 5.4: Traditional topics for research....................................................................143Figure 5.5: Comprehensive topics for research.............................................................143Figure 5.6: Characteristics of effective negotiators ranked in importance from
different studies........................................................................................................146Figure 5.7: Non-preferred Negotiation Preferences from Questionnaire 2................151
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List of Tables
Table 2.1: Sources of power..............................................................................................47Table 4.1: Overview of Research Actors..........................................................................83Table 6.0 GLOSSARY OF TERMS AND ACRONYMS.................................................167
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Candidate’s Declaration Form
UNIVERSITY OF GLAMORGANPRIFYSGOL MORGANNWG
(This form should be typewritten)
Candidate’s Declaration Form
Note: This form must be submitted to the University with the candidate’s thesis (10.5 of the Regulations refers)
Name of Candidate: Stephen Grant Hubbard
Degree for which thesis is submitted: Doctor of Business Administration
1. Statement of advanced studies undertaken in connection with the programme of research (regulation 4.1 refers)
Negotiations between Buyers and Sellers
What really happens when buyers and sellers negotiate?
2. Concurrent registration for two or more academic awards (regulation 4.8 refers)
I declare that while registered as a candidate for the University of Glamorgan’s research degree, I have not been a registered candidate or enrolled student for another award of the University or other academic or professional institution.
3. Material submitted for another award
I declare that no material contained in the thesis has been used in any other submission for any academic award.
Signature of candidate: ..................................................... Date:
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Approval for Submission of a Thesis(Form R10)
Student:…………………… Stephen Grant Hubbard
Award:………………………Doctor of Business Administration
This is to confirm that a thesis entitled:
Negotiations between buyers and sellers - what really happens when buyers and sellers negotiate?
has been approved for submission by the student's supervisory team
and can therefore be forwarded to the examiners.
Signed ………………………………………Director of Studies
Date ………………………………………
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Certificate of Research(Form R11)
This is to certify that, except where specific reference is made, the work described
in this thesis is the result of the candidate’s research. Neither this thesis, nor any
part of it, has been presented, or is currently submitted, in candidature for any
degree at any other University.
Signed ………………………………………Candidate
Date ………………………………….......
Signed ………………………………………Director of Studies
Date ………………………………………
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Abstract
The aim of this thesis is to extend the current knowledge to understand what happens when buyers and sellers negotiate. The review of literature considers the processes, approaches, relationships and behaviours of negotiators in the current status regarding negotiations between buyers and sellers.
The major justification for this work is that the dominant concepts and theories developed in the academic literature are not supported by empirical evidence from professional negotiators in purchasing and sales. Previous research has mainly been conducted using either simulated negotiations to try to model or predict what happens in negotiation situations, or viewing the subject from a sales and marketing perspective. Minimal research has been identified concerned with what professional buyers, performing the role of negotiating with salespeople, actually do, and what motivates them to do it. The literature on negotiation specifically for the buyer from the 1960s was very limited indeed, although several general purchasing texts included something on the subject.
The research method adopted for this thesis is a qualitative study. Twenty in-depth semi-structured interviews were held with senior negotiators, thirteen of whom were buyers, three were involved in both buying and selling, and four of whom were sellers.
Following the interviews, two questionnaires were sent to all of the actors based on well established instruments that have been used throughout the history of negotiation in the emerging procurement profession. The first questionnaire gathered data on the perceptions of the actors on the relative importance of thirty-four qualitative characteristics of negotiators, and the second questionnaire determined their opinions relating to ten pairs of binary variables relating to how negotiators behave.
The theoretical contribution of this thesis to knowledge is via a number of new principles of negotiation. These principles represent the key underpinning foundations of negotiations between buyers and sellers from the buying negotiator’s position.
The contribution to practice is to enable an enhanced understanding to the practice of negotiation between buyers and sellers. This is to be achieved via the new principles of negotiation, which may enable practitioners to improve their negotiation outcomes, based on what works in practice for senior negotiators.
This research is important because negotiations between buyers and sellers has been neglected in the purchasing and supply management (P&SM) field for over four decades since Chester Karrass completed his doctoral research in 1968. It is also important because it is the first research to bring empirical data from practising negotiators into the body of knowledge on the subject.
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Acknowledgments
Firstly I thank my wife Marilyn, whose support throughout this project, and the other
major projects in my life, has been more than I could have wished for.
Second, a huge debt of gratitude is due to my Director of Studies, Professor Neil Marriott,
who has continued to support me over seven years with encouragement, help and guidance
despite having moved on from Glamorgan not long after I started this research.
Third, I would like to acknowledge my role models and mentors in procurement, Mike
Speed, Ralph Bollington, Ken Morris, Ken Lyndsell, John Rice, Dr. Brian Farrington and
the late Dr. David Farmer. They gave me my ‘mountain to climb’, and the inspiration to go
and climb it, for which I am indebted. More recently in this regard I am particularly
indebted to John Ramsay, who, as the lone voice in the academic Purchasing and Supply
Management (P&SM) community for many years, querying why the subject of negotiation
has been neglected by this community, provided me the inspiration and motivation to
embark upon this research.
Fourth, I acknowledge my tutors at the University of Glamorgan, who have opened up for
me the world of academia. Duncan Lewis, Rami Djebarni, Robin Croft, Mike Sheehan, and
more recently Andrew Thomas and Paul Jones all helped to make this journey an enjoyable
one. For this I am grateful.
Fifth, I could not have done this research without my research actors, negotiators who have
shared freely of their vast experience and knowledge of the subject, gained over many
years as practitioners in the real world, negotiating commercial contracts as buyers or
sellers or both. Their generosity with their time and their enthusiasm for my research has
been superb. I thank them greatly for what turned out to be fascinating insights into their
worlds. An unexpected bonus was that the interviews turned out to be highly enjoyable.
Sixth, I am most grateful to my good friend of many years, Gina Isaac, for her dedicated
and professional transcription of the interviews.
Finally, I am most grateful to my good friend and former colleague Jean-Michel Bouhier
for his expert assistance in the presentation of some of my findings.
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CHAPTER 1: INTRODUCTION
Negotiation is:
“one of the most demanding and sophisticated activities carried out by all purchasing functions in the management of competitive and co-operative buyer-supplier relationships alike. It is an essential element in the generation of all forms of Sustainable Competitive Advantage flowing from the function”
(2007, p.85).
1. Introduction
This introduction presents a background to the topic, justification for this work, clear
and explicit aims and objectives and an overview of the structure of the dissertation.
Early academic study of negotiations between buyers and sellers from the buyer’s
perspective was conducted by Karrass (1970) at the University of Southern California.
In his research he sought to investigate the roles of power and negotiator skill by way
of a series of experiments in which skilled and less skilled negotiators were compared.
Academic study of negotiation was advanced considerably by a few researchers at the
Harvard Business School in the late 1970s. The work that resulted was published in
numerous academic journal papers, and culminated in two landmark books, ‘Getting
to Yes’ (Fisher and Ury, 1981) and ‘The Art and Science of Negotiation’ (Raiffa,
1982), upon which much of the subsequent literature is based. Many of the ideas
within these books found their way into the literature on negotiations in many fields,
including those between buyers and sellers.
Bazerman et al (2000) identify Raiffa’s seminal 1982 work as the key turning point
in the research on negotiation, but make no mention of Fisher and Ury’s equally well-
known and best-selling 1981 text ‘Getting to Yes’. Conversely, Thompson and
Leonardelli (2004) claim Fisher and Ury’s book as the ‘big bang’ in negotiation
research. It is clear from references in many studies on negotiation that Fisher and
Ury (1981) and Raiffa (1982) created landmarks in the history of research into
negotiation, and that Harvard Business School cultivated the majority of established
researchers and authors in the subject, although they were more concerned with
international political negotiations than commercial ones. However, none of this
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research was specifically related to negotiations in business or commerce, and
certainly not to negotiations between buyers and sellers.
Whilst there has been considerable research into negotiation in a variety of fields
including accountancy, human resource management, operations management,
logistics, and particularly sales and marketing, where it has become a mainstream
topic of research, the process of negotiation has been largely ignored by the
Purchasing and Supply Field (Ramsay, 2007). Possibly one of the reasons for this is
that from the outset of the International Purchasing & Supply Education and Research
Association (IPSERA), Lamming stated that:
“It is not valid as a subject in its own right within the academic discipline of Purchasing and Supply, despite its important role in the practitioner’s ‘tool kit’.”
(Lamming, 1992 p.3) in (Ramsay, 2007, p.84)
This research is important because it is the first research into negotiations between
buyers and sellers to bring empirical data from senior practising negotiators in a
Business to Business (B2B) context into the body of knowledge on the subject.
1.1 Aims and Scope of Research
The purpose of this thesis is to review, primarily from a buyer’s perspective, the
extant knowledge covering the practitioner’s view of negotiations in B2B contexts,
identify some of the gaps in that knowledge, and attempt to fill those gaps. To this end
it is necessary to understand the current theories surrounding negotiations between
buyers and sellers as described in the extant literature, and also to assess through
empirical research how much of this theory is supported by acting purchasing and
sales negotiators. This involves evaluating the motivation and behaviour of
professional buyers and sellers by asking them about their own perspectives.
In order to meet the aim, the thesis seeks to answer these research questions:
· Do ‘integrative’ negotiations really happen between buyers and sellers? If so,
what is the nature of that collaboration?
· Who has the power in major negotiations between buyers and sellers? What
factors determine the balance of power
· How important is the ‘interpersonal chemistry’ between buyers and sellers?
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· What persuasion techniques do negotiators use?
The major justification for this work is that the dominant concepts and theories
developed in the academic literature are not supported by empirical evidence from
professional negotiators in purchasing and sales. Previous research has mainly been
conducted using either simulated negotiations to try to model or predict what happens
in negotiation situations (for example, Karrass (1968)), or viewing the subject from a
sales and marketing perspective (Harwood, 2003). Little research has been identified
concerned with what professional buyers, doing the job of negotiating with
salespeople, actually do, and what motivates them to do it.
The literature on negotiation specifically for the buyer has been very limited indeed
(Carlisle & Parker, 1989; Steele et al., 1989; Sheridan, 1990), although several
general purchasing texts included something on the subject (Aljian, 1958; Baily &
Farmer, 1968; Lysons, 1981; Syson, 1992).
It is surprising to learn that although the Chartered Institute of Purchasing and Supply
(CIPS) has provided short training courses on negotiation for many years, it has only
recently introduced a module on negotiation into its Graduate Diploma qualification
(becoming effective from September 2006), although it did previously appear as a
sub-topic within other modules such as ‘Tactics and Operations’. This means that
until recently there was a limited syllabus covering negotiation for the purchasing
profession for much of the developed and developing world (CIPS covers 154
countries that use CIPS courses for their purchasing education). It follows therefore
that until recently there were no recommended dedicated text books covering the
subject of negotiation for the CIPS qualifications for the purchasing profession. An
official CIPS course book was produced to coincide with the new syllabus from
September 2006 (Harwood, 2006) (a second edition was produced in 2009) and it is
accompanied by another recommended ‘essential’ text, ‘Essentials of Negotiation’
(Lewicki et al. 1997).
The research covered in this dissertation places on record, both for the academic
community and practitioners in the emerging profession, a series of insights that
originate from practitioners, and therefore the work identifies with, and is endorsed
by, practitioners. This enables the knowledge base to reflect how practitioners
actually negotiate (in line with their experience), in contrast to the current knowledge
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base, which it is believed has been created in a vacuum with little or no practitioner
input or involvement (Ramsay and Jackson, 2005).
1.2 Motivation to conduct this research
Following graduation with the MSc Procurement in 2003 the researcher became
interested in the academic treatment of procurement related topics, and in particular
negotiation. He was particularly intrigued by a paper by Ramsay and Jackson (2005)
presented at the 2005 IPSERA conference at Archamps in France. This paper
suggested that there was:
“An enormous gap between theory and practice; between the attitudes towards cooperation and competition that academics and consultants have been advocating for the last quarter of a century, and the way that practitioners have responded to that advocacy.”
The abstract of the paper describes how one of the authors accidentally uncovered
‘widespread practitioner resistance in buyers to the use of cooperative attitudes
towards suppliers.’ The work focuses on the neglected process of buyer-supplier
negotiations.
This was sufficient to inspire the researcher to enroll for the Doctor of Business
Administration at University of Glamorgan later that same year in order to research
the subject of negotiations between buyers and sellers.
1.3 Context
1.3.1 A DBA not a PhD
This thesis is contributory towards the degree of Doctor of Business Administration
(DBA), as distinct from a Doctor of Philosophy (PhD). The primary difference is that
the DBA candidate is a practising senior manager, and not an academic, the course is
part time and delivered mainly via distance learning.
According to the Definitive Scheme Document (2005), the Glamorgan DBA is:“a professional practice doctorate, concerned with researching real business and managerial issues via the critical review and systematic application of appropriate theories and research to professional practice. . . DBA students should not be confused with typical PhD candidates, instead DBA actors will be representative of senior managers and executives inside organisations who desire not only to make a contribution to knowledge but also a contribution to practice.”
The Association of Business Schools draft guidelines (September 2005) says:
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“The DBA has a dual purpose – to make a contribution to both theory and practice in relation to business and management, and to develop professional practice through making a contribution to professional knowledge (reference to ESRC Guidelines, Section 3). The DBA therefore seeks not only to increase knowledge about practice but also to inform and impact on practice.” Definitive Scheme Document (2005)
1.3.2 UK or global scope
The many references in this thesis to United Kingdom (UK) based authors and
researchers, and the Chartered Institute of Purchasing & Supply (CIPS) may suggest
that the scope is limited to the UK. This is not the case, and all searches for reference
material for the Literature Review (Chapter 2) have been unrestricted to all sources.
However, the dominant role of CIPS in the development and dissemination of theory
and practice on negotiation for the emerging purchasing and supply profession was
acknowledged from the outset, with specific recognition of the role of the CIPS
Levels 4, 5 and 6 modules on negotiation and influencing being taught to all
procurement practitioners who pursue the CIPS qualification.
1.3.3 Status and contribution of IPSERA and The Journal of Purchasing and Supply Management
Three entities that are referred to throughout this thesis are inextricably and closely
linked together: IPSERA (formerly the Purchasing and Supply Education and
Research Group, or PSERG), owes its existence to the Institute of Purchasing and
Supply, (IPS), which from 1992 was granted a Royal Charter and became the
Chartered Institute of Purchasing and Supply, (CIPS) (Lamming, 2010). The Journal
of Purchasing and Supply Management (formerly the European Journal of Purchasing
and Supply Management) also owes its existence to CIPS, as the following
background makes clear:
“It was very much the UK Institute of Purchasing and Supply (IPS, now CIPS, with its Royal Charter) that started the EJPSM, as part of their investment in academic development at the beginning of the 1990s. IPS Head of University Relationships, Dennis Jones, proposed the title and brokered the relationship with Elsevier - still the journal’s publishers.
(Lamming, 2010)
The following statement is quoted directly from the IPSERA website:
“IPSERA’s mission statement is:
18
‘IPSERA acts as a platform for academics and practitioners to exchange ideas, stimulate discussions and reflect on concepts, theories and educational forms and methods in an open and friendly atmosphere. The topics discussed and issues raised should one way or another improve the professional quality of those active in the field of purchasing and supply.’”
(IPSERA, 2011)
With regard to one of its stated objectives, the intention to change Purchasing
Practice, IPSERA currently has no direct channel to influence practice. There exists
an opportunity here to develop such a channel which could lead to a greater level of
co-operation between academics and practitioners.
1.3.4 Terminology
Throughout the thesis the term ‘purchasing professional’ is used and taken to mean
the job function of the professional buyer, including variations in common usage such
as ‘procurement’, ‘sourcing’, ‘supply management’, and ‘supply chain management’,
where they can reasonably be interpreted as having the same meaning.
The terms ‘collaborative’, ‘co-operative’, ‘integrative’, ‘win-win’, ‘mutual gains
bargaining’ and ‘principled negotiation’ are all used and taken to mean the same
approach to negotiation originating from Fisher and Ury’s (1981) ‘Getting to Yes’.
1.4 Contributions to Knowledge and Practice
As stated above, the DBA has a dual purpose – to make a contribution to both theory
and practice in relation to business and management, and to develop professional
practice through making a contribution to professional knowledge.
Through this research, several contributions are made to the existing body of
knowledge of negotiations between buyers and sellers via the principles of negotiation
developed from the research findings and the underpinning theories of negotiation
identified in the literature review.
1.5 Chapter Summaries
1.5.1 Chapter 2: Literature Review
This chapter reviews and provides the context of the existing knowledge, in other
words secondary data, around negotiations between buyers and sellers from the
purchasing professional’s perspective. It analyses the current academic and
practitioner situation regarding negotiating from primarily the buyer’s, but also the
19
seller’s perspective, in business to business contexts. The current knowledge base is
identified, and from each topic area questions arise relating to what really happens in
negotiations between buyers and sellers.
1.5.2 Chapter 3: Research Methodology and Methods
The purpose of this chapter is to present a critical review of academic research
theories and paradigms within the social sciences, and then present and debate the
researcher’s own paradigm of research and theoretical orientation, with suitable
methodological approaches, addressing the concerns of verification and validity in
qualitative research. The chapter justifies the data collection methods employed for
the empirical research in the light of the research questions.
The research method adopted for this thesis is a qualitative study, using an inductive
approach. Through this process the initial interviews evolve from a series of semi-
structured questions through the deliberate practice of allowing the actors to digress
into other topics, and then pursuing these new ideas, incorporated into the questions in
subsequent interviews. In this way revelations that emerged unprompted from
interviews are captured in the findings.
Originally it was anticipated that around twelve to fifteen in-depth interviews with
very senior and very experienced negotiators might provide sufficient data. However,
the adopted method, of using the technique of theoretical sampling meant that it was
not known to what extent the lines of questioning would evolve, or in what direction.
Thirteen interviews were completed between 13th June and 29th October 2008. A
further six interviews were completed between 6th January and 1st March 2009. It was
always part of the methodology to seek and record feedback on the research as it was
progressing, and this was enabled by two presentations of initial findings later in
2009, first via a presentation to 35 members of the CIPS Beds and Herts Branch on 7th
July 2009 and later via a presentation to ten senior managers, trainers and consultants
at Huthwaite International, Wentworth, Yorkshire, on 4th September 2009. Feedback
from these interactive presentations was incorporated into the findings. Finally, the
20th interview took place with the most experienced and successful sales negotiator on
21st December 2009.
20
All of the twenty actors had ten years or more experience as professional negotiators,
and six had more than twenty years experience. These two criteria are believed to give
the sample data real value in practical research terms.
1.5.3 Chapter 4: Findings and Observations
This chapter presents the findings and observations from the primary data collected in
the research. The findings from the interviews, the questionnaires and the feedback
from the presentations of initial findings are then presented in order of the major
themes covered, approaches to negotiation (integrative vs distributive), sources of
power, interpersonal ‘chemistry’, including ethics and integrity, and persuasion
techniques,
Other findings to emerge from the interviews included observations on language
obfuscation, lack of negotiation expertise and experience at senior levels within some
organisations, linkage of issues, fear of retaliation, and deliberate deception by
negotiators.
1.5.4 Chapter 5: Discussion of Findings
In this chapter the findings from Chapter 4 are discussed and evaluated in conjunction
with the underpinning theories identified from the literature review in order to
synthesise the various theories into a series of principles of negotiation.
1.5.5 Chapter 6: Conclusions
This chapter summarises the findings of the research in answering the research
questions. The conclusions of this research are summarised.
The contributions to knowledge and practice are stated: the contribution of this thesis
to knowledge is in the principles of negotiation. The contribution to practice is also
from these principles of negotiation, which enable an enhanced understanding to be
brought to the practice of negotiation. Several of the principles of negotiation are
different from what has previously been promulgated in the extant literature, and
through established training and education courses, though not necessarily what is
generally believed among practitioners.
This research is important because negotiations between buyers and sellers has been
neglected in the purchasing and supply management (P&SM) field for over four
decades since Chester Karrass completed his doctoral research in 1968. It is also
21
important because it is the first research to bring empirical data from practising
negotiators into the body of knowledge on the subject.
The research limitations are stated. Recommendations for future research are made.
Having identified the aims and objectives of this study the next chapter considers the
existing literature to examine this subject area in detail.
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CHAPTER 2: LITERATURE REVIEW
2. Introduction and chapter overview
This chapter reviews and contextualises the existing research into negotiations
between buyers and sellers. It analyses the current academic and practitioner situation
regarding negotiating from primarily a buyer’s, but also a seller’s perspective.
2.1 Structured thematic search strategy
The search strategy for the literature review comprised of a structured search on
negotiation themes. These themes emerged from the literature on negotiation
generated from the Harvard Business School, from the primarily academic authors
and researchers associated with Purchasing & Supply Management (P&SM).
The scope of the search was not limited to negotiations between buyers and sellers,
nor to business or commercial fields, nor in any way at all. All research in
negotiations from every field was considered to be worthy of consideration.
2.2 Background
2.2.1 Negotiation research in Purchasing and Supply Management
There is a paucity of academic literature on the subject of negotiation between buyers
and sellers (Ramsay, 2007), and such literature that exists is not sufficiently rigorous,
primarily because it lacks external validity and is contextually limited. Much of the
academic research into negotiations has taken place in different fields to the business-
to-business context of the buyer-seller dyad. For example, much of the Harvard
Business School research took place in the context of political negotiations between
countries (Heritage, 1978, Fisher and Ury, 1981, Raiffa, 1982, Lax and Sebenius,
1986, Ury, 1991, Bazerman and Neale, 1992, Lewicki et al., 2006).
That negotiation is not regarded as a research subject in its own right within the
academic discipline of purchasing and supply is an extraordinary conclusion,
particularly when it had been researched over a long period of time by so many other
academic disciplines including accountancy, human resource management, operations
management, logistics, and sales and marketing. This neglect of negotiation as a
subject is not a recent phenomenon. Farmer (1970) identified negotiation as one of the
23
most important and fundamental skills for business managers and could not
understand why it was neglected in the training agenda of most organisations.
Lamming (1992) in (Ramsay, 2007) stated that:
“Negotiation . . . is not valid as a subject in its own right within the academic discipline of Purchasing and Supply, despite its important role in the practitioner’s ‘tool kit’”.
However, the difference was that, in those early days, negotiation had been simply
overlooked in the scope of training within most organisations, whereas Lamming’s
statement in 1992 was a deliberate decision to exclude the subject of negotiation from
future research in purchasing and supply. When Lamming surveyed the spectrum that
comprised the automotive industry as studied in the second half of the 1980s
(Womack et al., 1990) in his groundbreaking work (Lamming, 1993) he dismissed the
existing literature on negotiation in one short paragraph (p.140) as being
presumptuous in treating negotiation as “the means whereby the ‘active’ buyer gains
control over the ‘passive’ sales representative”. He applies this statement to five
works that he labels as traditional purchasing literature (England, 1970, Lee and
Dobler, 1971, Webster and Wind, 1972, Sheth, 1973, Westing et al., 1976). This is
made in the context of repeated transactions between selling and buying companies
having only recently been classified as ‘relationships’. Perhaps herein lies a clue as to
why Lamming considered negotiation a subject unworthy of being studied in its own
right.
Farmer (1997) published a retrospective paper in which he reviewed the fundamentals
of the intellectual framework in which purchasing and supply research had been
conducted and tried to predict where research should be directed in the future.
Unfortunately, the opportunity to include the subject of negotiation was missed
although it was identified as around 20% of the traditional purchasing role, and
around 10% of the ‘new role’ as identified in the study (Smith, 1995). Farmer did not
mention the subject once. Smith (1995) had identified that negotiation in the
traditional model was believed to be solely concerned with price, whereas in the new
role of purchasing management of the mid 1990s, it was no longer limited to this one
aspect. A more recent analysis of research (Zheng et al., 2007) into the future of
purchasing and supply management did not even contain the word ‘negotiation’, and
this supports Ramsay’s conclusion that negotiation as a subject area has been
generally absent from the academic literature to date. Approaches to buyer-seller
24
negotiations by buyers and sellers have often been described as both sides of the same
coin (Campbell, 1997) as though the approaches are similar and have much in
common. Indeed, Olsen and Ellram (1997 p.221) based their study “on the premise
that purchasing and marketing are essentially mirror images in terms of their
processes, with each focusing on buyer-supplier relationships from a different
perspective.”
This literature review seeks to establish which of the existing work has and which has
not been grounded in the behaviours of practitioners in the field and finds that there is
a notable absence of evidence from the practitioner community in the academic
literature.
2.3 Definitions of negotiation
There is no agreed definition of negotiation among researchers. Harwood (2003)
identified forty definitions with different characteristics including the existence of
agreement and conflict, the bargaining process, exchange of information, techniques
of influence and persuasion, and capability of the parties to reach agreement. The
Shorter Oxford English Dictionary states that the word ‘negotiate’ is derived from the
Latin ‘negotiari’, to carry on business, and ‘negotium’, business, and it is defined as:
“1. a. To confer (with another) for the purpose of arranging some matter by mutual agreement; to discuss a matter with a view to a settlement or compromise.
b. To traffic.”
(Shorter Oxford English Dictionary, 1980)
and ‘negotiation’ as:
“1. a. A business transaction
b. Trading, traffic.”
(Shorter Oxford English Dictionary, 1980)
Harwood suggests three different definitions for the CIPS graduate diploma level 4
course book on negotiation (Harwood, 2006):
“A motivated process of information exchange between or among individuals, groups, organisations, communities, societies and supranational systems with the goal of reaching agreement about certain joint or reciprocal acts”
(Tracey, 1987) in Harwood (Harwood, 2006, p.2)
25
and:
“[negotiation is a] formal process that occurs when parties are trying to find a mutually acceptable solution to a complex conflict”
(Lewicki et al., 2003a) in Harwood (Harwood, 2006, p.3)
and:
“[Negotiation is] any form of verbal communication, direct or indirect, whereby parties to a conflict of interest discuss, without resort to arbitration or other judicial processes, the form of any joint action which they might take to manage a dispute between them. Bargaining is the process of negotiating for agreement.”
(Morley and Stephenson, 1977 p.26 ) in Harwood (Harwood, 2006 p.3)
Kennedy (1998a, p.5) gives a ‘behavioural’ definition of negotiation:
“Negotiation is a process by which we search for terms to obtain what we want from somebody who wants something from us.”
The above addresses the point that a negotiation can only develop between two parties
that both want something from each other.
Steele (1999)developed a definition of negotiation which has stood the test of time:
“A process through which parties move from their initially divergent positions to a point where agreement may be reached”
(Steele and Beasor, 1999, p.3) unaltered from Steele et. al. (Steele et al., 1989 p.3)
There is one definition that contemplates that the opportunities for negotiated
agreement may be worse than no agreement at all. This is significant from the buyer’s
perspective, because from a seller’s viewpoint, when all of their resource is devoted to
achieving a sale, there can be reluctance to contemplate the possibility of no deal
being better than any deal at all, no matter how costly or unprofitable for the
organisation. However, this is not the buyer’s only dilemma. Very often, there will be
other individuals within his or her own organisation that will be unable to contemplate
a ‘no deal’ outcome and they may be positioned such that they can only contemplate a
poor deal rather than no deal at all. In these circumstances there is no such thing as an
unacceptable deal, even though the cost could be significant. Taking this point from
Neale and Bazerman’s (1985, p.42) definition and adding it to a combination of
Kennedy’s 1998 definition and Steele et al’s (1989, p.3) definition provides the
26
researcher’s own definition that is comprehensive in the context of the buyer-seller
relationship:
“The process by which we search for the terms to obtain what we want from somebody who wants something from us, to a point where a good agreement is reached. In some cases, no agreement is better than reaching an agreement that is not in the negotiators’ best interests.”
The next section goes on to review different approaches to negotiation.
2.4 Negotiation Approaches
Kennedy (1998a, p.xii) states that there are three main approaches to negotiation:
“1. negotiation as a phased behavioural process; 2. negotiation as a streetwise manipulative game; 3. negotiation as a search for a rational solution.”
Kennedy (1998a) adds that:
“There are other approaches too, such as academic works on game theory, economics, social anthropology, social psychology and history that have contributed to our understanding of negotiation.”
However, these main approaches were not adopted by the textbooks used for the
teaching of negotiation to purchasing practitioners. For example Baily et. al. (1994),
do not mention any specific approaches, Lysons and Farrington (2006), only refer to
two opposing approaches, adversarial or collaborative, or Saunders (1994), who does
not mention the subject of negotiation at all per se, but instead quotes Partnership
Sourcing Ltd. throughout the chapter on strategic management of supplier
relationships.
2.4.1 Integrative versus distributive negotiation approaches
Conventional wisdom has evolved to have purchasing people believe that there are
two types of negotiations, distributive and integrative, and that these labels may be
applied across all negotiations including those between buyers and sellers. Ramsay
notes that:
“The fashion for talking about partnerships and win-win negotiating is now firmly established . . .
Indeed, the fashion is now so deeply entrenched that I think it reasonable to claim that there is a dominant discourse in the purchasing field that assumes that the benefits of greater co-operation and partnerships outweigh the costs. There would be nothing wrong with this state of
27
affairs but for the fact that the empirical work supporting this assumption is, to say the least, thin on the ground.”
(Ramsay, 2003, p.28)
The two-option model of integrative versus distributive approaches to negotiation,
that emerged from the Harvard Business School gradually over time became absorbed
into the literature and into the examination syllabus of the CIPS negotiation module
without challenge. It is certainly remarkable that the concept of these two competing
approaches to negotiations has grown to become the dominant discourse in the
literature on buyer-seller negotiations. The literature claims that the integrative
approach is the more highly favoured with buying and selling negotiators.
The CIPS course book on negotiation begins the section on ‘Collaboration and
distribution approaches to negotiation’ with the statement:
“There is consensus that two distinct negotiating situations occur. Firstly, there are those where agreement is sought through collaboration (integration) and problem solving and those where agreement is reached by distributive (competitive) means”
(Harwood, 2006, p.5)
Murray (1986) challenged whether there really are two competing theories that
explain what happens in negotiations. He contrasted the opposing theories of White
(1980) and Fisher and Ury (1981) and identified that negotiators who position
themselves at either of these polarised positions are working on different assumptions
about their worlds of negotiations.
The various labels to describe the two theories as categorised by Murray are:
‘competitive and coordinative’ (Pruitt, 1981), ‘competitive and co-operative’
(Williams, 1983), ‘adversarial and problem-solving’ (Menkel-Meadow, 1984), ‘hard,
soft and principled’ (Fisher and Ury, 1981), ‘distributive and integrative’ (Raiffa,
1982), ‘functional and developmental models of negotiating behaviour’ (Gulliver,
1979), and ‘bargaining and problem-solving’ (Hopmann, 1995, Hopmann, 1996,
Niemann, 2006). Whilst Raiffa may have brought attention to the distributive and
integrative labels, they had in fact existed in Walton and McKersie (1965), in the
context of labour relations negotiations between unions and management, although
the foundations of the problem-solving concept within negotiation were laid by Follett
(1924) and then subsequently developed by Rapoport (1960).
28
In the procurement field, these became widely identified with Lamming (1993) as he
was closely associated with the global automotive research project (Womack et al.,
1990). Lamming seems to have adopted the position that negotiation itself was an
outdated practice remaining from a less enlightened era, and that he had been
privileged to be granted an insight into a ‘brave new world’ of partnerships led by
Toyota and the rest of Japanese manufacturing industry. It was as though negotiation
had no part in the ‘grown-up’ world of the new ‘lean’ automotive manufacturing
industry.
Fisher and Ury (1981) named the distributive bargaining situation as ‘win-lose’
because they believe that in this type of negotiation the goals of the negotiating parties
are fundamentally in direct conflict with each other. They named the integrative
approach as ‘win-win’, in which the goals of each party are not mutually exclusive,
and they did not specify any types of negotiations for which this approach might be
inappropriate. So began a trail of researchers who accepted that the ‘win-win’
approach is good, innovative and modern, and as this belief grew, so did its
counterpart, that the ‘win-lose’ approach is adversarial, entrenched, old-fashioned and
bad. Over time they have become accepted as being constructive versus destructive
approaches to negotiation, and also an idea has emerged that somehow every
negotiator has a choice to make at the outset of a negotiation to take one approach or
the other. This is known as the negotiator’s dilemma (Lax and Sebenius, 1986 p.38).
However, this is to take a concept from one specific field of negotiation (labour
relations) and treat it as generally applicable across all types of negotiation. Walton
and McKersie (1965) said that if one side pursues its goals, it does not necessarily
preclude the other from achieving its own objectives, because it is possible for both
sides to win. Cox (2003b) takes ‘the negotiator’s dilemma’ a stage further, although
not mentioning the word negotiation anywhere in relation to the concept, preferring to
use the more vague terms ‘relationships’ between ‘exchange partners’, but it is clear
from the context that what is meant is ‘negotiations’ between ‘buyers and sellers’. He
identified four basic relationship management styles or approaches that buyers could
adopt in these ‘relationships’, which he described as:
“Adversarial arms-length relationships where the exchange partner seeks to maximise value and regularly tests the market.
29
Non-adversarial arms-length relationships where the exchange partner pays the current market price without recourse to aggressive bargaining, but tests the market actively.
Adversarial collaborations where the exchange partner provides extensive operational linkages and relationship-specific adaptations, but seeks to maximise the appropriation of value.
Non-adversarial collaboration where the exchange partners operate in a transparent operational manner with long-term relationship commitments and share any resulting commercial value equally.”
(Cox et al., 2003b p.544)
Raiffa’s proposition that negotiations are either integrative or distributive quickly
gained acceptance as universally applicable to all types of negotiations, although
interestingly the concept is dismissed as largely irrelevant by Farrington (1980), who
states that:
“It has been proved, beyond doubt, in many research studies that a great deal of mistrust exists between buyer and seller.”
Farrington, (1980, p.122)
Farrington’s statement about the extent of proven mistrust between buyer and seller is
an important one. If such deep rooted mistrust exists, it can’t be possible that the trend
in negotiations between buyers and sellers has shifted towards the dominant use of
collaborative approaches.
Instead of referring to the two approaches, integrative and distributive, Sheridan
(1991) describes three ‘styles’: ‘passive’; ‘co-operative and mutually supportive’; and
‘combative or adversarial’. Sheridan op. cit. ( p.7) was aware that:
“a co-operative negotiating style – sometimes called ‘the win/win’ method – has been much recommended in recent years”,
but he does not say by whom, or identify where the idea might have come from. It is
clear that he does not believe that it has any real relevance to buying negotiations and
continues to defend so-called ‘adversarial negotiation’. In addition to asking
negotiators about their beliefs around integrative and distributive negotiations, it was
decided to ask the actor sample of this research to complete the questionnaire based
on Murray’s (1986) study, see chapter 3.
30
There is a gap in the extant knowledge around integrative and distributive
negotiations. Is there really a consensus among practicing negotiators that integrative,
collaborative negotiation is the prevailing approach used, or is it even used at all?
2.5 Emotional Intelligence
This section examines and analyses relationships between buyers and sellers,
particularly within the context of the sales and marketing perspective of trying to
establish and build relationships in order to increase sales.
Emotional Intelligence (EI) emerged from the USA in the early 1990s by Mayer and
Salovey (1990) and then became established in the UK with research by Goleman
(1995) and Professors Higgs and Dulewicz of Henley Management College
(Dulewicz and Higgs, 1999, Dulewicz and Higgs, 2001, Higgs and Reynolds, 2002).
Mayer and Salovey (1990) op. cit., defined Emotional Intelligence as the “ability to
monitor one’s own and others’ feelings and emotions, to discriminate among them
and to use this information to guide one’s thinking and actions.”
Emotional Intelligence consists of seven key components: Self - awareness,
Conscientiousness and integrity, Motivation, Emotional resilience, Intuitiveness,
Influence, and Interpersonal sensitivity.
Higgs and Reynolds (Higgs and Reynolds, 2002) examined the need for Emotional
Intelligence in negotiation and concluded that a high level of competence is required
for negotiation in all seven of the EI components.
2.5.1 Interpersonal Chemistry
Whilst Emotional Intelligence goes some way to prescribe the seven elements
Salespeople have long wished to present themselves to business buyers as similar to
them in as many ways as possible (Evans, 1963, Dwyer et al., 1998). The landmark
study on buyer-seller similarity was Evans (Evans, 1963) which examined seven
characteristics and established that the greater portion of successful buyer-seller dyads
were where there was greater similarity between buyer and seller. The ‘interpersonal
chemistry’, or ‘relationship chemistry’ that exists between two people is unique, and
usually the most positive bonds are established when individuals share similarities
(Campbell, 2011). Campbell describes the core components of relationship chemistry
31
as non-judgment, similarity, mystery, attraction, mutual trust and effortless
communication.
Herbst et. al. (2011) conducted a study to obtain an overview of negotiation research
in marketing in which they assessed the top marketing journals over a period of 45
years, identifying 78 negotiation related papers. With respect to the parties Herbst et.
al. (2011). found that existing research mainly analyses negotiator characteristics’
impact on negotiation behaviour and performance. According to Spiro and Weitz
(1990) these negotiator characteristics fall into five categories: personality, intrinsic
motivation, experience, managerial style and performance. A buyer in a negotiation is
often automatically considered to enjoy a stronger position than the seller, which
Cotter and Henley (2009) refer to as ‘subservient seller syndrome’ (SSS), particularly
in highly status and class structured societies. Herbig (1995) cites Japanese society as
the extreme example of a status-conscious society in which the buyer feels dominant
and it is considered normal to demand a great many things of the seller as a right. This
deference or subservience often extends to sellers mimicking and mirroring the
behaviour of buyers in order to appear to be similar to the buyer.
The way in which salespeople emphasise similarities between themselves and buyers,
and in other ways tailor their sales proposals to individual buyers is a practice known
as adaptive selling behaviour (ASB). ASB became established by Weitz and his
colleagues (Saxe and Weitz, 1982, Weitz et al., 1986) and is defined as altering sales
related behaviours during a customer interaction or across interactions based upon
perceived information about the nature of the selling situation. Spiro and Weitz
(1990) identified that there are five characteristics that salespeople adapt, which are
personality, intrinsic motivation, experience, managerial style and performance.
Within adaptive selling behaviour Spiro and Weitz (1990) identified five personality
traits which allow interpersonal flexibility: self-monitoring, being the degree to which
they alter their presentation in response to situational clues; empathy, which they
define as ‘the reaction of individuals to the observed experiences of other individuals’
(p.63); androgyny, being the extent to which people perceive themselves as both
assertive and yielding and both instrumental and expressive and having the ability to
adopt the specific interaction pattern appropriate to the situation; being an opener,
meaning having the ability to get people to ‘open up’ to them; and locus of control,
which, according to Paulhas (1983) comprises personal efficacy, interpersonal control
32
and socio-political control. Spiro and Weitz (1990) argue that empathic ability is
directly related to ASB, and emphasise the importance of salespeople to
spontaneously adopt the perspective of their customers through intellectual
apprehension of their mental state or condition, thereby generating a genuine feeling
of concern toward the customer. They argue that sellers with greater empathic ability
should be able to improve their adaptive selling effectiveness based mainly on the
premise that sellers gain ‘unique insights’ by being able to place themselves
psychologically and emotionally in the position of the customer.
Closely related to the concepts of adaptive selling behaviour and empathic ability is
the concept of liking and disclosure. If individuals benefit those that they like (Worthy
et al., 1969), then it follows that individuals should disclose more to those they like.
Miller (Miller, 1990) established that there is a strong correlation between liking
individuals and disclosure of highly intimate information, but that it is dependent
upon the particular relationship between the two individuals. Information sharing in
negotiation is a matter of trust (Harinck and Ellemers, 2006). Alternatively sharing
information increases the likelihood and quality of an agreement (Lax and Sebenius,
1986, Thompson, 1991, Pruitt and Carnevale, 1993). Moreover, sharing information
makes one vulnerable to exploitation by the other party (Kelley and Thibaut, 1969,
Lewicki, 1983).
Meehan and Wright (2011) conducted a study of who, or what, holds power in
business-to-business buyer-seller relationships. They found that power is sometimes
derived from individual characteristics, such as knowledge, skills or their own profile,
and is sometimes derived from relational interactions such as elements of the
relationship between buyers and sellers. Elements that were identified as strongly
important were honesty, empathy and fairness. There was a high desire among both
buyers and sellers to work in trusting relationships.
2.5.2 Trust
One of the outcomes of an established buyer-seller relationship may be that a basis
exists for building trust between seller and buyer. Smeltzer (1997) conducted a study
to define trust from the buyer’s perspective. He identified that key characteristics
were consistency, the sharing of important information, and mutual respect, all of
which have relational dimensions. Because of these relational dimensions, trust may
facilitate further business transactions, as the information flow between these
33
personally connected sources is taken as more reliable and trusted by both parties
(Coleman, 1988, Tenbrunsel et al., 1999).
If the economic dependency is asymmetric (i.e. unbalanced in favour of one party
over the other) then trust may become an important source of leverage in maintaining
the business relationship, particularly if the emphasis of the negotiation can be shifted
to non-economic elements of the transaction (Meehan, 2007).
By establishing a relationship of trust, the less powerful party can reduce the risk of
exploitation (Campbell, 1997), because by building the relationship of trust,
opportunistic moves by the more powerful party can be reduced (Tenbrunsel et al.,
1999). Conversely, if neither party trusts the other, then non-co-operation will result
(Christopher, 1998). Lack of trust is a barrier to reaching agreement (Luecke, 2003),
and trust begins with civility and respect (Coutu, 2002).
Sako (1998) identified three forms of trust between buying and selling organisations:
firstly, contractual trust, which is based on the belief that the other party will honour
its obligations in accordance with the contract; the second form is competence trust,
which is based on the belief that the other party is competent and capable to deliver,
and the third form is goodwill trust. This form of trust is based on the belief that both
parties are so sufficiently committed to the relationship that they will be prepared to
do more than contractual obligations require, and will not expect immediate
recompense for doing so.
If one is negotiating with a party that one does not believe to be trustworthy, then
there are several safeguards that can be included in the contract (Luecke, 2003):
· Emphasise that the deal is predicated on their accurate and truthful representation of the situation.
· Require that the other party provides back-up documentation, and that the terms of the deal be explicitly contingent on the documentation’s accuracy.
· Structure the agreement in a way that makes future benefits contingent on current compliance and performance.
· Insist on compliance transparency. Compliance transparency refers to one’s ability to monitor compliance from the outside.
(Luecke, 2003, p.83)
Weiss and Hughes (2011) state the importance of establishing trust early in the
relationship:
34
“Build trust first. Trust is currency in any culture.”
There is a gap within the literature regarding the interpersonal chemistry between
negotiators around whether trust is important to negotiators.
2.5.3 Integrity and deception
Lewicki and Letterer (1985 p.324) accord with the view that “lying and deceit are an
integral part of effective negotiation”. Deception is commonly used in negotiation
(Schweitzer, 1997) and can be effective in increasing success in meeting one’s
objectives (O'Connor and Carnevale, 1997). During the 1990s there was an active
debate on the ethics of deception in negotiation (Bazerman et al., 2000), though not
specifically within the buyer-seller context. Alternatively, several writers stated that
deception in negotiation is to be expected and is morally acceptable (Wokutch and
Carson, 1993, Strudler, 1995). In contrast, other writers maintain that deception is
morally unacceptable and should always be avoided (Dees and Cramton, 1991, Dees
and Cramton, 1995). Olekalns and Smith (2009) identified that deception is most
likely to occur when negotiators have a low level of trust or negative emotions in the
context of nonmutual or low dependence relationships, whereas negotiators who
expressed positive emotions used less deception.
Individual negotiators tend to perceive how ethical standards apply to their particular
circumstances depending upon how they are likely to affect their interests and
motivations at the time (Kronzon and Darley, 1999). Negotiators tend to increase their
use of deception as they stand to gain greater personal benefit from a successful
outcome (Tenbrunsel, 1998). Furthermore, negotiators are more likely to use
deception to satisfy their personal motivations than to satisfy the motivations of the
negotiating team (O'Connor and Carnevale, 1997). Negotiators are subject to the same
motivations as any other individuals. When assessing the motivation of traitors for
conducting espionage against their own state or company, LeRoy Stone developed a
two-factor motivational theory based on ‘MICE’ – Money, Ideology,
Compromise/Coercion or Ego. Stone postulates that spies motivation can be plotted
against two variable axes, the first being Money to Ideology and the second being
from Other (including ego) to Disaffection (Stone, 2001).
If Stone’s theory is correct, in that all acts of treachery are motivated by a
combination of these motivational factors, then it is reasonable to conclude that in the
event that a negotiator were personally, rather than professionally motivated, then the
35
motivational factors would be the same. Individuals tend to believe that they are more
ethical than the average person (Tenbrunsel, 1998). When they do engage in ethically
questionable behaviour, they often justify it as a necessary form of self-defence
(Shapiro, 1991). Furthermore, a negotiator’s expectation that their opponent will try to
deceive them is influenced by their own tendency to deceive (Tenbrunsel, 1998).
Finally, negotiators are more likely to tell the truth in face-to-face negotiations than
when using any other media (Valley et al., 1998).
Several gaps exist in the current knowledge base arises around integrity and deceit:
How important do negotiators believe integrity to be? Do they deliberately deceive
their opponents in negotiations? Is there a code of integrity that negotiators abide by?
Is it acceptable for negotiators to tell lies in negotiations? Or is it acceptable to
deceive their opponents provided that they don’t actually tell a lie? Do negotiators
expect their opponents to lie to them, or try to deceive them?
2.5.4 Respect, Face and Ego
Mutual respect is a powerful enabler in negotiation, according to Lax and Sebenius
(1986, p.64). They also state that by contrast, disrespect of one party by the other is a
serious disabler in negotiation, and can create an unsurpassable obstacle to reaching
the best possible agreement. Deutsch, (1961) identified that maintaining face is
necessary to sustain one’s self-esteem. White et al. (2004) studied ‘face threat
sensitivity’ (FST) in negotiations and stated:
“When a person’s face is threatened in a negotiation, it can tip the balance of his/her behaviour away from cooperation toward competition, resulting in fewer agreements and/or less cooperative agreements.”
When a negotiator encounters face threat it has been found to increase negotiator
competitiveness and decrease negotiator cooperation (Walton and McKersie, 1965).
Further variations of these aspects of human interaction include ‘relationship
compatibility’ (Trimarchi et al., 2010), who state that ‘present research defines buyer-
seller relationships compatibility as the capability of two firms to engage in mutually
beneficial exchange, in continuity, across the dimensions of competence and
distance.’ This definition extends to the individual negotiators within those firms.
Another variation is known as ‘motivational orientation’ (Schei and Rognes, 2003),
which is focused on the orientation of the negotiator and opponent, specifically
whether this is collaborative or adversarial, and whether there is symmetry of
36
information (e.g. do each of the negotiators know the orientation of their opponent).
Schei and Rognes (2003) conclude that motivational orientation is an important
influence on negotiation behaviour and outcome, as found by De Dreu et. al. (2000).
One of the most recent studies examined the changing nature of relationships, which it
described as relationship velocity (Palmatier et al., 2013). This is based on the belief
that relationships between firms evolve over time as they grow, mature and decay as
originally proposed by Dwyer et. al. (1987). Palmatier et. al.(2013) identify the
dynamic components of the relationship that change over time, the key component
being commitment, and state their theory of relationship dynamics by introducing the
construct of relationship velocity, or the rate and direction of change in commitment
between buying and selling organisation.
All of these categorisations, and many more, describe one or more aspects of the
unique interaction that takes place between two people when they interact. In addition
there are many more commonplace elements in the mix of human interactions
including trust or mistrust, liking or disliking, respect or disrespect, charm, charisma,
friendliness or antipathy, empathy, gravitas, reputation, personal attractiveness and
ability to get on with people. The first person to define different personality types was
the psychologist Dr. Carl Gustav Jung (1921), who identified sixteen different
psychological personality types, based on four pairs of opposing characteristics:
Extraversion or Introversion (E or I), Sensing or Intuition (S or N), Thinking or
Feeling (T or F) and Judging or Perceiving (J or P). Thus, everyone has a personality
with four dominant characteristics, and these may vary from being a marginally
dominant preference to an extremely dominant preference. These types were further
developed by Isabel Myers (1952) and will be familiar to those many people who
have been given their Myers-Briggs personality type after completing the Myers-
Briggs Type Indicator questionnaire. Futrell (2002) in (Harwood, 2006) took two of
the competing pairs of Jung personality traits (Thinker v Intuitor, and Feeler v Senser)
and allocated strengths and weaknesses to each. However, these offer no clue as to
whether the strengths or weaknesses are likely to dominate, and, therefore, it is of no
value as a predictor of negotiator success, or even negotiator performance.
Personality may be defined as:
‘The relatively enduring and stable patterns of behaving, thinking, and feeling which characterise an individual’
(Cooper and Makin, 1988. p.58)
37
However, personality within the sphere of negotiation can be taken to be a broader
ability to influence the other party, covering a variety of personal characteristics,
including the individual’s credibility, personal reputation for integrity, appearance and
self-presentation, perceived expertise, persistence and tenacity and even personal
attractiveness and likeability (Lewicki et al., 2006). It could be equated to personal
charisma.
The seminal work on personality characteristics or styles in negotiation was
conducted by Rubin and Brown (1975), who proposed the theory that there are two
personality variables that determine the ability to influence a negotiation:
interpersonal orientation and motivational orientation. The context of Rubin and
Brown’s (1975) work was social psychology, set against a number of varied events in
1974 which included the wars in Cyprus and the Middle East, the impeachment and
resignation of the US President, a large increase in the number of divorce
proceedings, and countless disputes between labour and management. The work did
not address business-to-business negotiations between buyers and sellers. The four
personality styles identified in Rubin and Brown’s (1975) four box matrix are
competitor, avoider, accommodator and collaborator (Kennedy, 1998a), and their
typical characteristics are at the extreme ends of the two scales. These are:
competitors, who use threats and coercive behaviour in an aggressive and
domineering manner, they make demands and seldom make offers; avoiders, who
prefer to avoid conflict and taking decisions, and they tend to have limited social
skills and are not good at using them; accommodators, who tend to be relationship-
oriented, and they can make concessions too quickly if threatened with conflict,
preferring to seek friendly agreement and ingratiation; finally, collaborators, who seek
to find agreement by working in problem-solving mode via good working
relationships with their opponents. These four personality styles of Rubin and Brown
(1975) appear to have no connection with the work and accepted personality types of
Jung (1921) and Myers (1952) above, and the four personality styles of Rubin and
Brown are typical behaviours rather than characteristics.
Reynolds (2003) identifies that by establishing a rapport prior to the negotiation, a
potential negotiation capability is low or high at the outset. It would, therefore, appear
to be a worthwhile investment of time for negotiators as a precursor to all
negotiations.
38
There remain gaps in the literature around how important interpersonal chemistry is to
negotiators. Does the relationship chemistry between negotiators influence
negotiation outcomes? Or is the ‘personal chemistry’ between the negotiators an
element that remains elusive, and is that something that cannot be predicted or
planned for until the negotiators come face to face?
2.5.5 Female negotiators
Female negotiators tend to view negotiations in a different relationship context than
male negotiators (Bixenstine et al., 1964) in (Kolb and Coolidge, 1991). Linked to
personality traits, these gender differences have been found to influence negotiation
outcomes. Bixenstine et al. (1964, p.157) identified a particular difference between
male and female negotiators:
“One possible interpretation is that women tend to be initially more trusting and trustworthy than men but are less willing to forgive violations of trust. Another interpretation, which really differs only in emphasis, is that men are more willing to ‘take advantage’ of another’s unconditional co-operation but are more willing to forgive such violations of trust by another man.”
Frankel (2004) provides her own insight into why women need to leave behind the
learned behaviours expected of girls, and assume the more masculine behaviours of
grown up women, particularly assertiveness, in order to succeed in the male-
dominated world of business. Kolb and Coolidge (1991) identified four basic
differences in the ways that men and women approach negotiations: a) women tend to
take a broader view of the relational context, relate more to the perceptions of
individuals and, expressing more emotions and feelings; b) they view negotiation as
part of a relationship with the other party; c) they tend to allow all parties to establish
their own power base, whereas men use power to achieve their own goals; and d)
they tend to use dialogue in a more problem-solving mode than men, who use
dialogue to persuade the other party.
Kolb (2009) conducted a review of the considerable literature produced over the past
25 years on females as negotiators. This tends to have come to prominence due to the
growth of interest in the feminist views of gender and the social construction of
gender, and also in the recent interest in the ‘glass ceiling’ and the gender gap in
compensation and achievement. Many of these studies have focused on the inability
39
of women to achieve parity of compensation with their male equivalents, and these
studies have revealed much about women’s general deficiencies as negotiators.
There was minimal literature specifically examining the role of gender in commercial
negotiations between buyers and sellers, especially from the buyer’s perspective, until
Faes et al (2010), who concluded:
· “Male negotiators tend to set themselves higher objectives than female negotiators, specifically under conditions of high competitiveness;
· Male negotiators do not set themselves low objectives more regularly;
· Women tend to set themselves a lot more mid-range objectives and are thus somewhat more realistic than men;
· Female negotiators tend to obtain higher results than male negotiators. Male negotiators are more likely to obtain mid-range results;
· Although the roles of women in industry tend to become more identical to men’s roles, the aforementioned differences in results did not change in our database over time;
· Female negotiators are more likely to reach no deal results;
· Female negotiators use communication exchanges more frequently than male negotiators. Male negotiators use tactics more frequently than female negotiators;
· Open communication is used more frequently by female negotiators;
· Female negotiators use competitive tactics less often than male negotiators.
All of the observed relationships were identified as significant but weak.”
What is not clear from this literature studying the success of women as negotiators
against male counterparts, is whether their success is due to their ability to exploit
‘girlish behaviours’ of which Frankel (2004) is so critical, or whether they use the
more mature behaviours of adult women. It is clear that the ‘relationship chemistry’ is
extremely complex and incorporates a multitude of elements that influence whether
the experience of the two individuals coming together is positive or negative. The gap
in the literature is whether the relationship chemistry between negotiators is important
in determining negotiation outcome.
2.6 Persuasion Techniques
It is commonly acknowledged within the purchasing literature, and certainly as taught
in the CIPS module on negotiation, that there are five key tools in negotiation and
these are: bargaining, compromise, coercion, logical persuasion and emotion (Steele
40
et al., 1989, Harwood, 2006, p. 115). However, Farrington (1980) identified the
original source of these persuasion techniques as being Brown et al. (1966, p.488) and
he states that they actually identified six, not five, ‘attitudinal structuring’ techniques
“that lead to an accommodation of viewpoints”, the sixth, lost technique being “a
learning process to understand each (the other) side’s genuine objectives vis-a-vis
some issue”:
“An exercise in logical persuasion; an application of power and coercion; an exploration of mutually advantageous concessions; a search for middle ground compromise; a learning process to understand each side’s genuine objectives; and a special case of attitude change involving emotional components.”
(Brown et al., 1966, p.488 )
To place these persuasion techniques in their original context, they are actually part of
a section labelled ‘Negotiations with an Antagonist’. The five main persuasion tools
or techniques in Brown et al. (1966) may have originated from earlier versions of the
book by just one of the authors, Berrien, in 1944. What is unknown from previous
work is whether buying and selling negotiators are aware of the five traditional
persuasion techniques, and if so, which do they use out of preference, and are there
any techniques that they would not use? Are there any other persuasion techniques
that they use?
Influencing strategies between negotiators are classified as either coercive or non-
coercive (Payan and McFarland, 2005). Coercive influence strategies are intended to
motivate compliance by the use of punishments and/or rewards, whereas non-coercive
influence strategies work by attempting to change the beliefs of the other party, in
other words, persuasion techniques Payan and McFarland (2005).) .
Before the existing secondary data on each of these five different persuasion
techniques is examined in detail, it is worth noting that they are not universally
accepted as negotiation techniques. Baily et al (1994, p.165) identify four alternatives
to negotiation: persuasion, give in to the other party’s demands, coercion, and
problem solving. Two of these, persuasion and coercion, are among the traditional
five persuasion techniques. If these are alternatives to negotiation, they can hardly be
negotiation techniques. Kennedy (2003, p.6) identified six alternatives to negotiation:
persuasion, giving in, coercion, problem solving, instruction, and arbitration. There
are two others, emotion, one of the original ‘five persuasion techniques’, and
41
acceptance, which may be considered to be the same as giving in, but in certain
circumstances, could be different. The reasons why these are alternatives to
negotiation and may not necessarily be persuasion techniques are as follows:
Logical persuasion is not a negotiating technique because no exchange is sought. The
logical persuasion is not normally accompanied by the offer of an inducement to
accept the logic. This is one of Kennedy’s (2003) six alternatives to negotiation.
Similarly, compromise is not a negotiation technique because, again, no exchange is
sought. The use of threats, power and coercion is not a negotiation technique because
negotiation is a voluntary exchange process, that requires both parties to be free to
accept or refuse any offer. As Kennedy (1998a, p.5) states:
“The threatened menace implied in the Godfather’s ‘offer you can’t refuse’ (Puzo, 1970, p.38) is not within the ambit of negotiation . . .”
In addition, it is important to recall what Brown et. al (op cit). stated:
“A host of studies testify to the inappropriateness of force as an effective instrument of attitude change.”
The use of emotion may be considered not to be a negotiation technique because it
could be simply a plea to the other party’s softer side, (but see 2.5.4 Emotion). It is
not a request that offers anything in return (except possibly gratitude), so there is no
trade. An exception that comes to mind is observed within the film “The Godfather”,
whereby the Godfather’s (Puzo, 1970, p.31) granting of a favour in response to an
emotional appeal by the undertaker, Bonasera, with the caveat:
“Some day, and that day may never come, I will call upon you to do me a service in return. Until that day, consider this justice a gift from my wife, your daughter’s godmother.”
In fact, only bargaining is a negotiation technique because it is the central core of
negotiation (Kennedy, 1998a). Although the five persuasion techniques are mentioned
in the official text book of CIPS level 4 module on negotiation (Harwood, 2006), it is
only by inclusion of a small table giving a very brief summary of the five techniques.
The source is quoted as ‘derived from (Steele et al., 1989)’. However, the table is an
inadequate misrepresentation of Steele et. al.’s (Steele et al., 1989)work, with the
techniques not explained in any detail. Only two of the approaches involve giving up
part of your position: bargaining and compromise. The other methods, logic, coercion,
emotion – all take the form of a demand, request or plea, which may or may not work,
but it could be argued that they are not strictly negotiation.
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2.6.1 Bargaining
Bargaining is at the heart of negotiation. It is about exchanging – the negotiator is
prepared to give something up in exchange for something gained. Steele and Beasor
(1999) say that it is the exchange of various items (‘variables’) that each party values.
Rubin and Brown (1975, p.2), define bargaining as:
“The process whereby two or more parties attempt to settle what each shall give and take, or perform and receive, in a transaction between them.”
They treat the terms bargaining and negotiation as synonymous. One of Kennedy’s
(1980) key contributions to the knowledge of negotiation is his identification of the
single most important rule of bargaining, and of negotiation as a whole, that all
proposals and concessions, indeed practically any statement at all, must be
conditional:
“Everything, absolutely everything, is conceded in exchange for something else.”
(Kennedy et al., 1980, p.90)
Bargaining is different to haggling, which Kennedy defines as:
“Haggling is about finding out the maximum that the other person would pay, without disclosing the minimum that you would accept”.
(Kennedy, 1998b, p.64)
‘If’ is described by Kennedy as the most important two letter word in negotiation, and
indeed, this is the most fundamental lesson of negotiation. It, therefore, follows that
anyone granting concessions without the IF word is not negotiating. The official CIPS
course book, (Harwood, 2006) does not contain this most basic of lessons on the
subject. Despite the fact that one of the most widely used textbooks for purchasing
courses, Baily et al. (1994) refers to Kennedy et. al (1980) for their definition of
negotiation, they omit the fundamental ‘if … then’ lesson. One of the most
comprehensive books on Purchasing and Supply Management to date, by Lysons and
Farrington (2006) has an extensive chapter on negotiation. It is surprising, therefore,
to discover that the basic lesson of bargaining is not present within it. That the above
mentioned books, core to the negotiation module of the CIPS syllabus, discuss a
process of concession making, but fail to underline the imperative that all offers must
be conditional creates a serious shortcoming in the purchasing literature on
negotiation. The established five ‘persuasion techniques’ reviewed here (excluding
43
the sixth technique of ‘understanding the other party’s genuine objectives’) are not
techniques or tools of equal importance. As Rubin and Brown (1975) state, not only
are the terms bargaining and negotiation synonymous, negotiation IS bargaining.
Whatever other persuasion techniques are used, and in whatever way they are utilised,
they do not constitute negotiation if they are not part of an ‘if ... then’ scenario.
Steele, et.al. (1989, pp.14-15) outline four ‘rules’ of bargaining:
“Rule one: Do not indicate that you are prepared to move quickly from your position.
Rule two: Move slowly, making the other party work for every concession they get.
Rule three: Avoid putting ‘markers’ down. (By putting a marker down you immediately put a ceiling on what you can achieve).
Rule four: Get a return for any concession you make.”
It is a failure of their book that Steele et al. (1989), in their fourth rule above, almost
make the same point that every proposal must be conditional, except that they fail to
say it explicitly. Steele (1990) however, in his ‘PMMS Cue Cards’ revised these to
three rules:
1. “Don’t expose your position2. Thank and bank; it now belongs to you3. Move conditionally, slowly and in small steps.”
2.6.1.1 Extreme initial offers
Many writers on negotiation recommend that the initial offers by both buyer and
seller should be somewhere towards the extreme end of the credible spectrum, the
most well-known being Karrass (1970). It is even considered best practice in tactical
negotiation according to Hughes and Mikkelsen (2007). Some writers believe that the
first negotiator to put forward a figure automatically places him/herself in a position
of weakness (McCormack, 1995). The initial price requested by the seller and the first
offer of the buyer determine the bargaining range within which the negotiation will
take place, assuming that both parties are prepared to continue. More extreme opening
offers can move outcomes favourably in the direction of the party that makes the
extreme opening offer. However, the tactic of making extreme opening offers
introduces a big risk, because they increase the likelihood of impasse (Blount, 2000).
An example of a highly successful extreme opening offer is that of Richard Branson
(2006) when he offered just 5% of the asking price for Necker Island in 1977. Whilst
44
the offer was turned down twice, the owner eventually accepted it three months later.
Nash (1950) includes a classic bargaining model which predicts that, in two-party
negotiations over price, bargainers will settle at the mid point of the Zone of Possible
Agreement (ZOPA). The concept of ‘firm negotiators’ (defined as having high goals)
obtaining better results than negotiators with less ambitious goals was identified by
Karrass (1970). Whether professional buyers are aware of the theories of bargaining is
not known, and, therefore further gaps arise in the literature here: are buying and
selling negotiators familiar with the ZOPA? Do they believe that the most beneficial
outcome is likely to follow an extreme initial offer or a more moderate one?
2.6.2 Logical persuasion
Logical reasoning is probably the most commonly used approach to business
negotiations. It requires the preparation of statistics and evidence in order to prove to
the other party that they must make a concession (Steele and Beasor, 1999). The
ability to use logical reasoning successfully depends upon being able to articulate a
rational argument and it being accepted by a rational negotiator. However, Herbig
(1991) identified that business negotiators rarely act completely rationally due to their
personal emotive preferences, which are likely to influence their behaviour. For
example, this could mean that they have a desire to act with fairness, or to deliberately
mislead the other negotiator, or they may be motivated by a different time perspective
than the other negotiator (for example, a quarterly sales target).
The need to articulate a rational argument depends upon language skills. These are
fundamental to negotiation, and comprise three elements: language, culture and
discourse (Mulholland, 1991). Mastery of these skills will lead inevitably to mastery
of negotiation. A major element of the language used in negotiation is in the form of
questioning, and this is a separate subject in its own right, which requires the same
degree of expertise as the language skills (Nierenberg, 1987). Steele et. al. (Steele et
al., 1989, p.21) outline three ‘rules’ of logical reasoning:
“Rule one: Be careful how you use the ‘why?’ approach. Rule two: Get your logic in first. Rule three: Maintain the credibility of your logic.”
Steele (1990) revised these to:
· “Get your logic in first.· Don’t ask why – they may actually tell you!· Don’t depend solely on logic – vary your style”
45
2.6.3 Power and coercion
This section aims to analyse and contextualise the existing research, information and
secondary data on negotiations between buyers and sellers through a critical
evaluation of the literature on the use of power and coercion, including revenge and
retaliation, in negotiations. There are three dominant schools of thought concerning
power in buyer-seller relationships (Meehan, 2007). The first school attributes power
to individuals, and is the longest established (Webster and Wind, 1972, Bonoma and
Johnston, 1978, Fern and Brown, 1984, Zemanek and Pride, 1996, Giannakis and
Croom, 2000, Wilson, 2000). This focuses on personalities, yet lacks contextual
boundaries (Meehan, 2007). The second school attributes power to individuals within
relationships (Busch and Wilson, 1976, Ho, 1991, Nielson, 1998, Cheng et al., 2001).
The final school attributes power to the organisation (Cox, 1999, Ratnasingam, 2000,
Cox, 2001c, Esposito and Raffa, 2001, Cox et al., 2004, Sanderson, 2004), but note
that Cox et al and Sanderson were all working together in the same faculty at the
University of Birmingham Business School, – so these different references represent
only one viewpoint. It is also important to note that Cox et al never personalise this
work by placing it in context with the behaviour of buyers and sellers, nor even
mention the subject of negotiation. They refer to ‘exchange’ between organisations, as
though there is no human interface, and assume that the balance of power between
organisations somehow prevails without any other influences. These ontological
positions are driven by the intellectual traditions of the domains from which these
schools have developed (Meehan, 2007).
Steele et al. (Steele et al., 1989, p.18) give two ‘rules’ of using coercion:
“Rule one: Before you threaten, think about the consequences. Rule two: Use ‘mirrored’ or emotional threats rather than crude ones.”
Steele, in his ‘PMMS Cue Cards’ (Steele, 1990) revised this to three rules of using
threat:
1. “Threaten discreetly2. Add threat to bargaining by using ‘if’3. Never make a threat you cannot carry out”
Whenever power is discussed in relation to negotiations between buyers and sellers
the subject of Porter (1980) and his ‘five forces of competition’ model (see Figure
2.1) will soon arise. This model is meant to be useful when planning and preparing for
46
a negotiation by determining market dynamics, according to Reynolds and Thompson
(2008, p.39), as it focuses on the bargaining power of buyers (customers) and sellers
(suppliers).
Figure 2.1: Porter’s Five Forces of Competition
Source: Adapted from Porter (1980) in (Reynolds and Thompson, 2008, p.37)
The seminal work on defining types of power in social contexts is that of French and
Raven (1959) in which they identified ‘five bases of social power’, these being:
Expert power: derived from having unique, in-depth information about a subject. Reward power: derived by being able to reward others for doing [what one wants to have done].Coercive power: derived by being able to punish others for not doing [what one wants to have done].Legitimate power: derived from holding an office or formal title in some organization and using the powers associated with that office.Referent power: derived from the respect or admiration one commands because of attributes like personality, integrity, interpersonal style, and the like.(Raven, 1993) in Lewicki et. al. (Lewicki et al., 2006, p.188)
French and Raven (1959) also concluded that the more legitimate that coercion is
perceived to be, the less it will engage resistance. Meehan’s (2011) study identifies
three sources of power: organisational, individual and relational. Furthermore,
Meehan (2011) states that who, or what, holds power is a complex synthesis of these
three major sources of power. These three major themes broadly equate to three of
French and Raven’s (French and Raven, 1959) five sources of power as follows:
47
Organisational power originated as Legitimate power in French and Raven (1959),
and this was later revised to Position-based power by Raven (1993). Individual power
originated as Referent power in French and Raven (1959), and this was later revised
to Personality and individual power by Raven (1993). Relational power had no
equivalent in French and Raven’s (1959) original five major sources of power, but
emerged in Raven’s (1993) refined work as Relationship-based power.
These three elements are further broken down by Meehan into sub-elements as shown
in Table 2.1.
Table 2.1: Sources of powerTHEMES SUB-THEMES
OrganisationalMarket Environment
Commercial Attractiveness
Individual
Knowledge
Skills
Profile
RelationalRelationship Focus
Outcomes Focus
Source: Meehan (Meehan and Wright, 2011)
These sub-elements are stated by Meehan (2011) to exist on both sides of the
negotiation, both as elements of the self-perceived power of one party and mirrored or
counter-balanced as elements of the countervailing power of the other party. Emerson
(1962, p.32) defines power as ‘the potential to influence’. Karrass (1970, p.56)
defines power as “the ability of a negotiator to influence the behaviour of an
opponent”. However, his other observation is that “power, like beauty, is to a large
degree a state of mind” (Karrass, 1970, p.56). He believes that power is perceived as
existing by both the party that has it and the party that doesn’t, and frequently it is
never referred to. Conversely, a party may be in a preferred position over another, but
if neither party perceives the advantage then the power does not exist. This research
aims to verify whether negotiators believe that power is real or imagined, whether
either or both parties need to test the reality of the imagined power, and whether the
48
testing of it may be a high risk, because it may erode or eradicate the position of
perceived power by allowing it to be called into question.
Lewicki et al. (2006) cite two definitions of power related to negotiations:
“The ability to bring about outcomes they desire” or “the ability to get things done the way they want them to be done.”
(Salancik and Pfeffer, 1977) in (Lewicki et al., 2006, p.184)
“Presumably, a party with power can induce another to do what the latter would otherwise not do.”
(Dahl, 1957, Kotter, 1979) in Lewicki et. al. (Lewicki et al., 2006 p.184)
Atkinson (1990) introduces French and Raven’s (1959) power bases linked to his
‘motive bases’ and then builds on work by Chamberlain (1951) and Levinson (1966)
in order to arrive at a ratio that a negotiator can use to determine the relative
disadvantages of accepting or rejecting their opponent’s proposal according to which
option will leave them worst off:
The costs or disadvantages to B of disagreement with A’s terms
The negotiating power of A = _______________________________
The costs or disadvantages to B of agreement with A’s terms
(Atkinson, 1990, p.139)
Care should be taken when using escalation, due to the likelihood of unintended
consequences (Smyth, 2012). Smyth (2012). cites Glasl’s (1982) study in which there
are nine stages of escalation from ‘hardening’ through to ‘total war with all means’.
The danger is that each stage of escalation tends to initiate a set of feedback loops that
are self-amplifying, and further escalation often becomes self-fulfilling and almost
inevitable. Again, these studies do not originate from buyer-seller negotiations but
from conflict escalation situations, but some of their conclusions may apply to
escalation in other negotiations. The assessment of the power balance between
negotiating parties is subjective. Kennedy states:
“Your perceptions of which of you has power, whether right or wrong, in my view, play a greater role in your negotiating behaviour than any objective measure of power.”
(Kennedy, 1998a, p.82)
49
Two researchers who have written extensively about the exercise of power within
buyer-seller relationships are Cox (Cox, 1997, Cox, 2001b, Cox, 2001d, Cox, 2001a,
Cox, 2001c, Cox et al., 2001, Cox and Ireland, 2002, Cox et al., 2002, Cox, 2005b,
Cox et al., 2005), and Ramsay (Ramsay, 1985, Ramsay, 1987, Ramsay, 1994,
Ramsay, 1996, Ramsay, 2000, Ramsay and Jackson, 2003). However, their
approaches to the phenomenon of power, its definition, and how it is acquired and
exercised, are fundamentally different. Cox approaches the subject from an
economist’s perspective, because political economics is his background. His
perspective seems to be that any and every negotiation can be interpreted using the
law of supply and demand, and despite having written a huge volume of output on the
subject of power, he has avoided almost any reference to the process of negotiation, or
how power might be utilised within negotiations.
Indeed, within Cox’s extensive literature there is no reference to negotiation at all,
other than a passing comment on contracts being negotiated, and he often refers to
buyers and sellers ‘interacting’, or buyer-seller ‘exchange’ rather than negotiation.
This presents a detached, text book, and theoretical perspective, almost as though
there is something low, non-strategic and unworthy about negotiation, or that Cox
does not acknowledge that negotiation happens. Perhaps he believes that, because the
individual circumstances of the supply and demand equation will pre-determine the
outcome, there is little that a negotiator can do to alter the result. Cox has developed a
large number of matrices, based on Kraljic’s original (1983) four box model, each one
gaining more in complexity with the growing number of variables involved. Yet none
of these models give any guidance as to how to negotiate, either for the buyer or the
seller. One of the models does go as far as identifying situations of buyer dominance
and supplier dominance in what Cox calls The Power Dominance Model (Cox et al.,
2004 Figure 2.12).
Cox et al.’s (2002) power-dominance model charts the four potential power structures
between any two parties in a commercial relationship, according to Reynolds and
Thompson (2008, p.121), who say that Cox et al claim that the power of one party
over another is based on the relative scarcity and utility of each party’s resources. The
model considers the relative strength of each party’s power over the other and
indicates which of the four different power structures apply in any given
50
circumstance. The model is shown in Figure 2.2, and its application is meant to be
useful in understanding supply markets prior to sourcing from them.
Figure 2.2: Power Dominance Model
Source: Adapted from Cox et al. (2002) in (Reynolds and Thompson, 2008, p.121)
Cox was researching the nature of power in buyer-supplier relationships almost
continuously from taking the second UK chair in purchasing and supply at the
Birmingham Business School in 1993, with a particular interest in the role of power in
relationships, and the enigma of ‘win-win’ (integrative) relationships versus ‘win-
lose’ (distributive) ones. Up to around 2004 he appears to have shifted from the
position advocated by Lamming (1996), that sophisticated buyers should be moving
towards integrative rather than distributive bargaining positions, to an interim position
accepting the level of ‘appropriateness’ of integrative positioning (Cox, 1997, Cox et
al., 2003a), though, as mentioned above, nowhere is this process referred to as
negotiation. However, more recently Cox (Cox, 2005a,) seems to have recognised that
the integrative position is unrealistic:
“True win-win, in which both parties simultaneously achieve their ideal outcomes, is not feasible under any circumstances. By its very nature, buyer and supplier exchange is always contested.”
“. . . there is an unavoidable tension and conflict of interest in business relationships between buyers and suppliers.”
“It is worth remembering that, for suppliers, achieving long-term collaborative relationships is one of the surest ways by which they can close markets to their competitors. In these misguided circumstances, buyers normally lock themselves into long-term operational ways of
51
working and then lose control over the supplier commercially because of a naïve view that win-win outcomes are achievable.”
(Cox, 2005a, p.40)
The ultimate exertion of power in a negotiation might be expected to manifest itself in
the form of an overt threat or even an ultimatum. Kramer et al. (1995) define an
ultimatum as “to induce compliance or force concessions from a presumably
recalcitrant opponent”. Ultimatums typically have three components: a demand, a
deadline by which compliance is required, and threat of punishment if compliance is
not forthcoming (George, 1993). For an ultimatum to succeed, both parties must
believe that the threatening party has the power to carry out the threat and intends to
use it, and the threatened party must believe that it has no better alternative than to
comply. These writings on ultimatums did not come from research into commercial
negotiations. George’s (1993) research is in the area of last-ditch attempts to avert
war, by the use of coercive ultimatums. This does not mean that their conclusions
regarding the use of ultimatums are invalid, but they may well have differing
outcomes when utilised in buyer-seller negotiations.
Lysons et al. (2006) identify that from one perspective the buyer will be in a strong
position where:
1. Demand is not urgent and can be postponed.2. Suppliers are anxious to obtain the business.3. There are many potential suppliers.4. The buyer is in a monopolistic or semi-monopolistic position.5. Demand can be met by alternatives or substitutes.6. ‘Make’ as well as ‘buy’ alternatives are available.7. The buyer has a reputation for fair dealing and prompt payment.8. The buyer is well briefed regarding the supplier’s order book,
financial situation, manufacturing processes and other relevant intelligence.
and alternatively, the seller will be in a strong position where:
1. Demand is urgent.2. Suppliers are indifferent about accepting the business.3. The supplier is in a monopolistic or semi-monopolistic position.4. Buyers wish to deal with the suppliers due to their reputation for
quality, reliability and so on.5. The supplier owns the necessary jigs, tools or specialised
machinery.6. The supplier is well briefed regarding the buyer’s negotiating
position.
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One of the most common ultimatums faced by the corporate buyer is a deadline to
conclude a deal by a critical date, usually the supplier’s fiscal quarter, half or year
end, and almost always with an ‘exploding offer’ (Robinson, 1995) that will expire if
the deadline passes.
2.6.3.1 Power Ploys
There are many well-known ploys to exercise power over the opposition (Kennedy,
1998a, p.110), and Karrass (1974) gives around two hundred examples. Other lists of
ploys are offered by Schoenfield (1991), Fuller (Fuller, 1991) and Gottchalk (1993).
According to Kennedy (1998a):
“All ploys belong to one of three main categories: dominance, shaping and closing.”
(Kennedy, 1998a, p.107)
These three categories roughly equate to the three phases of negotiation: opening,
middle and closing (Kennedy, 1998a, p.107). Dominance ploys include the closely
aligned ‘preconditions’ and the ‘non-negotiable’, or ‘fait accompli’ ploy, as well as
many other attempts at conditioning the other party to make concessions (Kennedy,
1998a). Several gaps arise in the knowledge base on power in buyer-seller
negotiations: For example: Is power used in buyer-seller negotiation, rarely,
commonly, or often? Is Porter’s ‘five forces of competition’ model used by
negotiators in their planning and preparation for negotiations? What gives the buyer
power in a negotiation? What gives the seller power in a negotiation? To what extent
is the dependency of an organisation on the other party an attribute of power?
2.6.3.2 Best Alternative To Negotiated Agreement; Alternative To Negotiated Agreement; and Realistic Alternative To Negotiated Agreement (BATNA, ATNA and RATNA)
The concept of the BATNA originates from Fisher and Ury (1981), and began as part
of the process of preparation for negotiation. By working through the various
alternative options open to them, the negotiators on both sides arrive at their best
alternative to the agreement that is likely to result from the negotiation. From one
perspective, this process can be useful for producing arguments for use in the
negotiation, which the other party may or may not accept as valid, and, if well
positioned and presented, may act as levers leading towards a better negotiated
agreement. From an alternative perspective, the alternatives may appear as unrealistic
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‘grasping at straws’ and they can sometimes have the reverse effect, convincing the
other party that you don’t have any real alternative to the likely outcome of a
negotiated agreement with them. The reason that the BATNA appears as part of
power and coercion is that an effective BATNA is power in the hands of a negotiator.
With a robust alternative, the negotiator may break off negotiations at any point,
whereas without one the negotiator is powerless. The concept of the BATNA
representing the ‘best’ alternative is subjective as determined by both negotiating
parties, but that is how Fisher and Ury (1981) framed the construct. ATNA is any
alternative to a negotiated agreement, not just the best one. This was coined by the
Conflict Resolution Consortium of the University of Colorado. It is considered a more
realistic alternative to BATNA, but perhaps should be termed the RATNA, or realistic
alternative to a negotiated agreement. Bazerman and Neale identified in their work on
‘Negotiating Rationally’ (1992) that negotiators tend to have decision-making biases
that blind them to opportunities and prevent them from getting the best out of
negotiations. They identify seven biases as follows:
“1) Negotiators tend to be overly affected by the frame, or form of presentation, of information in a negotiation;
2) Negotiators tend to non-rationally escalate commitment to a previously selected course of action when it is no longer the most reasonable alternative;
3) Negotiators tend to assume that their gain must come at the expense of the other party and thereby miss opportunities for mutually beneficial trade-offs between the parties;
4) Negotiator judgments tend to be anchored upon irrelevant information such as, an initial offer;
5) Negotiators tend to rely on readily-available information;
6) Negotiators tend to fail to consider information that is available by focusing on the opponent's perspective; and
7) Negotiators tend to be overconfident concerning the likelihood of attaining outcomes that favour the individual(s) involved.”
(Neale and Bazerman, 1992 p.43)
Gaps are evident in the literature: are negotiators familiar with the BATNA? How
often does a negotiator have a real BATNA? Is the BATNA relevant in negotiations
between buyers and sellers?
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2.6.4 Emotion
The use of emotion can be interpreted in three quite different ways in the context of
negotiations: firstly it could be a display of emotion in the form of an outburst,
possibly accompanied by banging the table with a fist, and anger (real or feigned);
secondly it could be an emotional appeal to the other party, or finally it may be an
attempt to build rapport and trust (Fisher and Shapiro, 2005).
Emotions are an important factor in negotiation because they are ‘powerful, always
present, and hard to handle’ (Fisher and Shapiro, 2005). In addition, emotions are
important in negotiations for two other reasons, firstly because by the use of positive
emotions a negotiator can positively influence the outcome of the negotiation, and
secondly because negotiators ignore emotions at their peril (Fisher and Shapiro,
2005). Huthwaite (2004) identified that effective negotiators reveal their emotions
nearly twice as much as average negotiators. This has the benefit of building trust
with the opponent and establishing a basis for agreement, as the expression of feelings
is usually constructive in moving towards agreement. However, it is this building of
trust between negotiators that is itself a conundrum.
Clearly, Steele et. al. (Steele et al., 1989, p.20) were considering the first of the two
approaches when they warned that there is only one rule about emotion:
“Rule: Control your emotions; don’t let them control you.”
Steele (1990) revised this to three rules in his ‘PMMS Cue Cards’:
1. “Use emotion early2. Emotion is more persuasive than logic3. Emotion can increase perception of value”
2.6.5 Understanding the other party’s genuine objectives
Fisher and Ury (1981) identified the importance of understanding the other party’s
genuine objectives when they put forward the concept that negotiating parties should
focus on interests and not positions. This learning comes from the context of
territorial disputes where parties become entrenched in fixed positions. It is possible
to see that if there are entrenched positions that can be exchanged for further
movement on the underlying major interests this could lead to greater progress
towards agreement. There is no reason why this should not apply equally in
negotiations between buyers and sellers as to territorial disputes. However, this is
55
clearly a more integrative process than a distributive one, and it may take courage and
expose the negotiator to greater risk to propose such an approach within a distributive
negotiation. This is an extension of defining the interests of the other party (see
section 2.4.4) but ensuring that one has a real understanding of the other party’s
genuine objectives, underpinned by an understanding of their true interests, as Weiss
and Hughes (2011) state, “that is pure gold for the negotiator”. Although it may not be
convenient or time pressures may prevent it, a separate session to meet a negotiation
opponent in a major negotiation will ideally be allocated solely for meeting and
building rapport in an informal environment, for example over a meal or a coffee.
This may be viewed as ‘sizing up the opposition’, but is an important element in
building the basis of trust from which to commence negotiating (Fisher and Shapiro,
2005).
2.7 Other factors influencing negotiations
This section aims to contextualise the literature covering the current situation on
negotiations between buyers and sellers. Several influences on organisations are
reviewed, both externally and internally driven.
2.7.1.1 Reciprocity
There are two distinctly different types of reciprocity of concern to buying and selling
negotiators: reciprocal behaviour and reciprocal trade.
2.7.1.1.1 Reciprocal behaviour
The first type of reciprocity, reciprocal behaviour, concerns the actions of negotiators,
and this reciprocal behaviour takes the form of either co-operation or retaliation in
response to favourable or hostile actions of the other party. This behaviour was
primarily investigated by Axelrod (1980a, , 1980b, , 1984), and concerns
mathematical probabilities of success based on computer modelling of various choice
behaviour strategies within ‘the prisoner’s dilemma game’ (PDG), and in particular,
Tit-for-Tat (TFT) as a strategy. Axelrod’s research identified that the most effective
strategy for gaining co-operation is not based upon trust but on reciprocity. There are
three types of reciprocity within behaviour in negotiation according to Stoll and
McAndrew (1986) these being:
a) Directional, under which a concession or retraction is met with a concession or retraction;
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b) Trend, under which a concession is increased or decreased in response to the other party’s increased or decreased concession;
c) Comparative, under which a concession is increased or decreased in response to the difference between the concessions made by one’s own party and the other party during the previous round of negotiations.
However, it is worth noting that Stoll and McAndrew’s work was in the field of
strategic arms limitation negotiations and not business negotiations between buyers
and sellers. One particular trend type of reciprocal negotiation technique is that
invented by Osgood (1962) known as Gradual Reduction in Tension (GRIT). This is a
gradual de-escalation process which is started by one party making a unilateral but
minor concession in the hope that the other party will be encouraged to do the same.
Furthermore, this originates from conflict resolution negotiations and not the buyer-
seller context. This identifies a gap regarding the knowledge around buyer-seller
negotiations: do negotiators believe that reciprocal behaviour is a usable technique in
negotiations? In other words, does it work?
2.7.1.1.2 Reciprocal trade
The other type of reciprocity, reciprocal trade, which is part of a broader range of
commercial mechanisms called Countertrade, is defined by CIPS as:
“Reciprocal trading, which makes being a customer of an organisation, a condition of being a supplier, is generally unacceptable business practice. It is acceptable only when:
· There is no coercion· Both parties are in agreement· There is mutual benefit and transparency.”
CIPS (2009) Knowledge Summary: Countertrade
However, this definition is unbalanced, and largely irrelevant, as it is focused on an
organisation wanting to sell to another, but being forced to overcome a barrier; that in
order to become a supplier one’s organisation must as a pre-qualification already be a
customer. This is not how reciprocity works in reality. A more effective, and simpler
definition is:
“Reciprocal trading relationships – where firms buy some of their needs from their best customers rather than from outsiders – are probably as old as commerce.”
(Weigand, 1973, p.40)
However, the CIPS definition contains two relevant points, these being the
implication of coercion, and a general lack of transparency around many reciprocal
57
arrangements. The literature contains many examples of the concerns that buyers have
had over reciprocal trading, starting with a series of articles in Harvard Business
Review early in the last century (Harvard-Business-Review, 1924, Devlin, 1933,
Lewis, 1938). As these and may subsequent articles make clear, the main driver in
reciprocal trading relationships is the sales organisation using its major suppliers as a
potential list of customers, and approaching them solely because they are suppliers, to
buy their products or services. This is where the implication of coercion arises: the
major customer is in selling mode, and the natural inclination of most sales
organisations (and senior management) is to protect its customer relationship if that is
under threat or perceived threat.
Given that reciprocity barely figures in business literature, one might conclude that it
is an uncommon practice. In truth, it is a quite common practice (Ammer, 1962,
p.116). Reciprocal trading in an organised form became a ubiquitous function within
most large American corporate organisations in the 20th century, known as the Trade
Relations Department (Weigand, 1973). These were, in effect, very efficient sales
departments. Their activities focused on their large suppliers and they applied
whatever coercion was deemed appropriate to persuade their suppliers to become
customers. One of the simplest and most effective actions that the Trade Relations
Department could take was to insist that all visiting representatives from their
suppliers use only their products. Thus it became the norm that if visiting a car
manufacturer, one would not be allowed access in a competitor’s vehicle (Weigand,
1973). It is apparent that buyers and purchasing departments tend to hold
unfavourable views of reciprocity, primarily because it would seem to go against the
ethos of trying to select suppliers based on objective criteria. By contrast, sales people
tend to see it as a quick route to easy sales (Tangpong et al., 2010).
2.8 Summary
The dominant theories and concepts that have emerged from the literature review are
that there are two approaches to negotiation, integrative and distributive; that
distributive negotiation is an old-fashioned, traditional, arms-length and adversarial
approach that has no place in modern procurement. It has been largely discontinued in
favour of a more integrative, collaborative approach. Also, a dominant theory that
there are five persuasion techniques available to negotiators: logical persuasion,
bargaining, use of power and coercion, compromise and emotion. Influencing
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strategies are classified as either coercive or non-coercive. This review of the extant
literature covering the scope of the research questions around negotiation in the B2B
context has identified the following gaps in the knowledge: Gap 1: Integrative versus
Distributive approaches - The first major gap in the literature concerns the approaches
integrative and distributive negotiations, concerning whether there is really a
consensus among practicing negotiators that integrative, collaborative negotiation is
the prevailing approach used, and if so, is it used predominantly, occasionally or
rarely. Gaps 2 and 3: Interpersonal ‘Chemistry’ between negotiators and trust,
integrity and deceit. The second major gap in the literature concerns the question of
how important interpersonal ‘chemistry’ is to negotiators. There has been
considerable research in negotiation in the fields of marketing and psychology, with
many new constructs emerging, such as personality, intrinsic motivation, experience,
managerial style and performance, ‘subservient seller syndrome’ (SSS), deference or
subservience, buyer-seller similarity, ‘adaptive selling behaviour’ (ASB),
interpersonal flexibility: self-monitoring, empathy, androgyny, being an opener, and
locus of control, which, comprises personal efficacy, interpersonal control and socio-
political control. Closely related to the concepts of adaptive selling behaviour and
empathic ability is the concept of liking and disclosure. Although some of these
constructs, such as emotional intelligence have attempted to offer a comprehensive
solution to the many variable elements that make up the ‘relationship chemistry’,
there is little empirical evidence from negotiators to support what negotiators believe
about its importance, both in establishing a positive negotiating environment and
determining negotiation outcome. The third gap arising from the literature within the
interpersonal chemistry between negotiators concerns the importance of trust to
negotiators, and its several component elements of integrity and deceit: This gap leads
to a number of ancillary questions: How important do negotiators believe integrity to
be? Do negotiators deliberately deceive their opponents in negotiations? Is there a
code of integrity that negotiators abide by? Is it acceptable for negotiators to tell lies
in negotiations? Is it acceptable to deceive their opponents provided that they don’t
actually tell a lie? Do negotiators expect their opponents to lie to them, or try to
deceive them? Gap 4: Persuasion Techniques - The fourth gap that exists in the
literature concerns persuasion techniques. Are buying and selling negotiators aware of
the five traditional persuasion techniques, and if so, which do they use out of
preference, and are there any techniques that they would not use? Are there any other
59
persuasion techniques that they use? Gaps 5 and 6: Power and Alternatives To
Negotiated Agreement concern the knowledge base on power in buyer-seller
negotiations and their ancillary questions: How often is power used in buyer-seller
negotiations? Is Porter’s ‘five forces of competition’ model used by negotiators in
their planning and preparation for negotiations? What gives the buyer power in a
negotiation? What gives the seller power in a negotiation? Related gaps to power are
identified in the literature: are negotiators familiar with the BATNA? How often does
a negotiator have a real ATNA? How relevant is the BATNA in negotiations between
buyers and sellers?
This thesis plugs the gaps in the extant literature by investigating the perceptions and
beliefs of practising negotiators at senior management level in large organisations on
these topics.
In summary, the existing literature on negotiations between buyers and sellers, are
devoid of practitioner input. Given the paucity of practitioner based research on which
to base teaching materials the next chapter outlines the methodological choices made
to provide an adequate research basis from practising senior negotiators to contribute
to the academic literature in the area.
The next chapter discusses the methodology to be used in the research for this thesis.
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CHAPTER 3: RESEARCH METHODOLOGY AND METHODS
3. Introduction and chapter overview
This chapter establishes the rationale for the methodological approach adopted for this
research. It begins by examining the researcher’s own philosophy of research. Then
the gaps in the literature are examined, and what the researcher is hoping to find to fill
those gaps. Finally, the chapter describes the selected research design and details the
research methods employed in gathering the data to answer the research questions in
this study.
The terms “methodology” and “methods” are not synonymous – methodology is the
study of methods and their underpinning philosophical assumptions, whereas methods
are the research practices used within a research study (Denzin and Lincoln, 2005).
The chosen methodology and methods should be able to meet the stated aims and
objectives, and they should sit comfortably with the contribution the work seeks to
offer. Cognisance must be taken by the researcher of his/her own bias from the outset
(Merriam, 1988) in (Cresswell, 1998, p.202). The intention of stating the researcher’s
bias and confronting it is to begin a process that should go some way to countering it,
therefore adding a degree of validity to the work.
3.1 Philosophical assumptions, research strategies and methods
3.1.1 Philosophies of research
Philosophical assumptions form the basis for any research enquiry. They inform the
nature of the research and determine how a research model is utilised to answer the
research questions. It is important, therefore, to identify the philosophical assumptions
underlying the design of the research.
Two of the most fundamental decisions confronting researchers are to establish their
own paradigm of research and whether to adopt a quantitative or a qualitative
approach to their research. Guba and Lincoln (1994, p.105) state that “both qualitative
and quantitative methods may be used appropriately with any research paradigm”.
However, quantitative research tends to be associated with a positivistic paradigm,
closely aligned to scientific research, and objectivist and experimental methods,
whereas qualitative research tends to be associated with a post-positivistic approach,
61
aligned to phenomenology, and an interpretevistic or subjectivist approach (Wilson,
2009).
Qualitative research differs from quantitative research in five significant ways
(Becker, 1986). These are firstly the use of positivist and post-positivist traditions in
the physical and social sciences (Denzin and Lincoln, 2005, p.11). Secondly, the use
of qualitative, post-positivist methods and assumptions has been rejected by a new
generation of qualitative researchers (Denzin and Lincoln, 2005, p.11). Thirdly,
although both qualitative and quantitative researchers are concerned with the
individual’s point of view, qualitative researchers think they can become closer to
their subjects through detailed interviewing and observation, in a way they argue that
quantitative researchers seldom can (Denzin and Lincoln, 2005, p.12). Fourthly,
qualitative researchers are more likely to confront and come up against the constraints
of the everyday social world, whereas quantitative researchers abstract from this
world and seldom study it directly (Denzin and Lincoln, 2005, p.12). Finally,
qualitative researchers believe that rich descriptions of the social world are valuable,
whereas quantitative researchers are deliberately unconcerned with them because such
detail interrupts the process of developing generalisations (Denzin and Lincoln, 2005,
p.12).
All research of any kind depends upon observation (Wilson, 2009). In some fields of
study the means of observation is pre-determined, for example, in botany the
researcher relies on direct observation of plants, whereas in physics the researcher
uses observation by instruments. Within sociology and the social sciences the
observation may either be direct or indirect. In direct observation the researcher is the
observer, whereas in indirect observation the researcher relies on the reported
observations of others, namely the research subjects (Wilson, 2009). Within indirect
observation there are two further alternatives. These are: an imposed structure, where
the nature of the research problem is well understood, and an emergent structure,
where the nature of the research problem is not well understood and consequently
exploratory research is necessary in order to gain sufficient understanding of the
research problem(s). In the case of an imposed structure the research is mainly
quantitative, while most research within an emerging structure mainly consists of
analysing text, which tends to be qualitative (Wilson, 2009).
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The researcher may already have an idea of whether they are likely to lean towards a
quantitative or a qualitative approach and also whether they favour the positivistic or
post-positivistic research paradigm or philosophy of research. A paradigm is a “basic
set of beliefs that guides action” (Guba, 1990, p.17). Therefore, a researcher’s
paradigm is his or her ‘world view’, which defines the researcher’s view of the world,
and encompasses five fundamental assumptions about that view: their epistemology,
ontology, ethics (axiology), rhetoric and methodology.
In order to assist the qualitative researcher to determine his or her own paradigm,
Cresswell (1998, p.75) identifies the questions that the researcher needs to resolve,
along with the assumed characteristics that guide the qualitative researcher .
At the broadest level, the choice for the researcher using qualitative research in the
social sciences falls between four methodological approaches: Positivism, Post-
positivism, Critical Theory and Constructivism (Guba and Lincoln, 1994). However,
these paradigms, or methodological approaches tend to become blurred and confused
due to the frequent use of alternative terms. There are two fundamental differences
between positivism and post-positivism: “positivism asserts that objective accounts of
the real world can be given” whilst “post-positivism holds that only partially objective
accounts of the world can be produced, for all methods for examining such accounts
are flawed” (Denzin and Lincoln, 2005, p.27). These alternative paradigms will now
be considered.
As stated above, the positivist paradigm has its philosophical origins in the approach
to the pure and applied natural sciences (Wilson, 2009). The approach is based on the
belief that everything can be measured, it assumes an objective world and is
concerned with exploring that world by establishing facts through using experimental
and observation methods (Gephart, 1999). This view accepts that aspects of the world
can be represented by variables which can be isolated and measured. In contrast to
this, metaphysics is based on abstract theorising because the phenomena under
investigation prevents direct measurement. An example would be astronomy (Wilson,
2009). The process of deductive research begins with a theory and tries to find
evidence to support or reject it as shown in Figure 3.1.
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Figure 3.1: Deductive research process
(or not, as the case may be).
Source: (Trochim, 2007, p. ‘Deduction and Induction’)
The process of inductive research starts out to observe, identify patterns or themes,
and deduce a theory, as shown in Figure 3.2. Also, this is what precedes deductive
research.
Figure 3.2: Inductive research process
Source: (Trochim, 2007, p. ‘Deduction & Induction’)
The phenomenological researcher believes that his/her involvement introduces an
inherent bias (the phenomenological or relativist view).
3.1.2 Ontology and Epistemology
The process that every researcher goes through in order to determine his or her
research paradigm (his or her ‘world view’ or set of basic beliefs) is to work out, what
Cresswell terms, their five philosophical assumptions, these being their ontology and
epistemology, their related axiology (values system) and preferred rhetoric, and then
finally the methodology that fits best with both their chosen philosophical paradigm
and also the subject area that they are intending to research. Guba and Lincoln pose
questions to enable this process:
Ontological question:
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What is the form and nature of reality and, therefore, what is there that can be known about it?
Epistemological question:
What is the nature of the relationship between the knower or would-be knower and what can be known?
(Guba and Lincoln 1994, p.108)
Ontology places the researcher somewhere on a continuum from realism to
nominalism. At one end of the spectrum you believe that reality is a ‘hard’ and
objective nature of things that exists independent of an individual’s appreciation of it,
and at the other, reality is constructed by us as individuals and we describe that reality
by the use of labels or names. Hence the nominalist is in the same region of the
spectrum as the constructivist. The researcher’s ontology is based on a belief that
there is not one single objective reality – tending to believe that everyone’s reality is
slightly different, depending upon one’s position, based on experience. This,
therefore, puts the researcher fairly close to the constructivist end of the spectrum in
Figure 3.3.
Epistemology ranges from positivism to anti-positivism, constructivism or
phenomenology. In fact, there would seem to be some debate about the fundamental
positions of epistemology. As seen earlier, Burrell and Morgan (1979) show
positivism and anti-positivism at either end of the continuum, whereas Jankowicz
(2000 Table 6.1, p.113) shows the construct as positivism to constructivism and
Easterby-Smith, Thorpe and Lowe (1991) show the two main traditional philosophies
as positivism and phenomenology.
Epistemology places the researcher somewhere on a continuum from positivism to
anti-posivitism. Guba and Lincoln show four epistemological positions, positivism,
post-posivitism, critical theorism and constructivism, and they show examples of
typical positions on selected practical issues under each of these four epistemological
standpoints. The researcher’s epistemology is based on a belief that the researcher
cannot be remote and objective about the individuals that are the subject of his or her
research. This puts the researcher at the anti-positivist end of the spectrum in Figure
3.3.
The various approaches using the subjective-objective dimensions outlined in Burrell
and Morgan (1979) are:
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Figure 3.3: Subjectivist to Objectivist ApproachesSubjectivist ObjectivistApproach Approach
Nominalism Ontology RealismAnti-positivism Epistemology Positivism
Voluntarism Human nature DeterminismIdeographic Methodology Nomothetic
Source: (Burrell and Morgan, 1979, p.3)
From Kelemen and Bansal’s (2002) analysis of the academic versus practitioner
dichotomy, they concluded that there are fundamental differences in research intended
for an academic or a practitioner audience. The impact of a piece of research
conducted using quantitative methods or a deductive process would be likely to have
a negative impact upon a practitioner audience.
3.1.3 Validity and Reliability in Qualitative Research
Guba and Lincoln (1994) identified three paradigm assumptions that link particular
choices of validity procedures, which they labelled as post-positivist, constructivist,
and critical influence research (Cresswell, 1998). It is necessary to take these three
paradigm assumptions one by one. Firstly, the modernist approach seems the most
seriously flawed. How can the mere assumption “that qualitative research consists of
rigorous methods and systematic forms of inquiry” have any credibility? It would
seem to play into the hands of the critical quantitative researchers. Secondly, the
labels of trustworthiness and authenticity allocated by the constructivists – these seem
to align with Cresswell’s ‘prolonged engagement and persistent observation’. This
coincides also with Fetterman’s contention that “working with people day in and day
out, for long periods of time, is what gives ethnographic research its validity and
vitality” (Fetterman, 1989, p.46). It therefore seems reasonable to conclude that the
closer the relationship between the researcher and the actor, and the longer the
duration, the higher the reliability of the findings will be.
There are two strands to this position. One being the necessity to incorporate the
researcher’s, as well as the actor’s, personal bias, which everyone automatically
carries. The second being a similar ethic to the Marxist ideal that implies that the
critical theorists’ perception is not that they seek to interpret or understand the world,
but that they require their adherents to change it. Any follower of this epistemology
must, by definition, already be a long way removed from a quantitative/positivist
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position, and thus more inclined to accept the standards of verification of qualitative
research.
There are fundamental challenges in undertaking qualitative research whilst
upholding the more traditional principles of validity and reliability associated with
quantitative research methods. The natures of reality or different realities, and of
qualitative research itself, need to be understood. An individual’s epistemology may
influence his or her view of the validity and reliability of qualitative research. The
traditional principles of validity and reliability are associated with quantitative
research and there is contention as to whether they may be used appropriately in the
world of the qualitative researcher. There are some fundamental criticisms of
qualitative research, and they may or may not be justifiable. Cresswell (1998) put
forward eight popular verification procedures used in qualitative research and
recommends that the researcher adopts at least two. The researcher must ask
themselves whether they can maintain standards in qualitative research equivalent to
the standards traditionally associated with quantitative research.
All individuals are different, and all have their own ‘reality’. Different individuals
will interpret the same experiences in different ways (Dowd and Pace, 1989). The
qualitative researcher refers to this individual perspective as the lens through which
he/she approaches the study, and uses a viewpoint for establishing validity in a study.
“Qualitative inquirers may use a second lens to establish the validity of their account: the actors in the study. The qualitative paradigm assumes that reality is socially constructed and it is what actors perceive it to be. This lens suggests the importance of checking how accurately actors’ realities have been represented in the final account. . .
A third lens may be the credibility of an account by individuals external to the study.”
(Cresswell & Miller, 2000, p.125-6)
Cresswell (1998) identified five traditional approaches to qualitative research, each
coming from different perspectives. These are the historian’s biography, the
psychologist’s phenomenology, the sociologist’s grounded theory, the
anthropologist’s ethnography, and political scientist’s case study. He assessed quality
standards, verification and validity, and identified eight popular verification
procedures used in qualitative research:
· Prolonged engagement and persistent observation.
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· Triangulation.
· Peer review and debriefing.
· Negative case analysis.
· Clarifying researcher bias from the outset.
· Member checks.
· Rich, thick description.
· External audits.
(Cresswell, 1998, p. 201-203)
He recommends the qualitative researcher to engage in at least two of them in any
given study.
3.2 Methodological choice for this study
3.2.1 The concept of the research
The concept of the research was inductive in nature, to establish from the ground up
the actual practices in major negotiations between buyers and sellers. The intention
was to use a qualitative study, and starting from a blank canvas, attempt to be
unbiased and open in asking semi-structured questions to learn from senior
negotiators how they approach and conduct negotiations.
3.2.2 Research Design
The purpose of this work is to derive empirical data directly from negotiators,
primarily purchasing practitioners, in order to develop an understanding of how they
really negotiate. This can then be compared to the extant theoretical base of
knowledge on the subject. This research is predominantly post-positivistic in
approach in its use of in-depth semi-structured interviews as the primary data
collection tool, and subsequent qualitative analysis techniques. A post-positivist
approach is one from a perspective that believes the researcher needs context and that
context free experimental design is insufficient. As a secondary data collection
method, two questionnaires were sent to all of the actors. These questionnaires are
important because they have become well-established in the study of negotiation in
the emerging procurement profession. The first questionnaire, originally used by
Karrass (1968) in his doctoral research, seeks the perceptions of the actors on the
relative importance of thirty-four qualitative characteristics of negotiators. The second
questionnaire, devised by Murray (1986), seeks their beliefs relating to ten pairs of
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binary variables relating to how negotiators behave, and is aimed at establishing
whether the negotiators favoured adopting an adversarial or a collaborative approach
to negotiation.
There were two reasons for asking the selected actors to complete these
questionnaires. Firstly to establish how the perspectives of this sample of senior
negotiators differed from those of the people questioned in the earlier surveys, (which
may not have been as experienced in negotiation), and secondly, to provide
verification of the actors’ perspectives given in the interviews. It was anticipated that
a 100% response to the questionnaires would be possible, because of the rapport
established with each of the actors during the in-depth interviews, and indeed this
proved to be the case, although several of the respondents needed considerable
chasing up to complete them.
3.2.3 The rationale for the interview methods
The choice of interview method was to use semi-structured questions in face-to-face
interviews, recorded on a digital voice recorder and professionally transcribed to
ensure minimal, or no loss, of data. The rationale for this method was to enable the
same questions to be asked of all actors as a common start point, but with the
flexibility to pursue unusual or interesting answers. Accurate transcription ensured
critical analysis and clear understanding of the points made.
3.2.4 The rationale for the survey (questionnaire) methods
Two questionnaires were sent to the actors. The first to seek their perceptions on the
relative importance of a series of thirty-four qualitative characteristics of negotiators,
and the second to seek their beliefs relating to ten pairs of binary variables relating to
how negotiators behave. Both of the questionnaires had been used previously,
producing interesting results. Questionnaire 1 originates in Raiffa (1982, pp.120-121)
adapted by John Hammond from Karrass (1968, pp.242-244). It was subsequently re-
used by Harwood (2003). Questionnaire 2 originates from Harwood (2003, p.42)
adapted from Murray (1986). The rationale for this method was to enable responses to
questions received from the interviews to be compared with similar questions in the
questionnaires as a cross correlation. Moreover, responses to the same questions can
be compared from previous surveys.
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3.2.5 Reliability
In order to avoid bias, the sample was drawn of individuals with a range of experience
of negotiations from a broad cross section of different industry sectors. One of the
main difficulties in qualitative research is to recognise the scope for researcher bias
and how it has been managed. This research will not have external validity (nor is it
meant to), but it does need to have internal validity and a degree of integrity.
3.2.6 The relationship between research objectives and research methods
The research objective was to understand what really happens in negotiations between
buyers and sellers. The researcher found it necessary to establish a relationship
between himself and each of the research actors, such that they would feel
comfortable in confiding with him their thoughts, motives, aspirations and actions in
negotiations. Semi-structured interviews were ideally suited to this objective, in that
they were structured sufficiently to be able to compare basic responses, but
unstructured enough to allow the actors to answer in their own way and digress from
the main point to add anything that they felt was important to them. An initial
introduction and background conversation was used in order to establish a rapport
with each of the actors, putting them at ease, and this worked well in all except one
interview. The single exception was one of the shortest interviews, in which it was
difficult to elicit much more that yes or no answers to most questions from this actor.
3.3 Selected Research Design
3.3.1 Considerations
The primary consideration in the design of the research was to give voice to real
buying and selling negotiators. The findings of the research should reflect the beliefs,
perceptions and understanding of the actors, represented using their own words.
3.3.2 Qualitative Study
The methodology which seemed the most appropriate fit to this research was a
qualitative study, as qualitative methods are often used for inductive research
introduced by Glaser and Strauss (1967). Constant comparison and theoretical
sampling are used to support the systematic discovery of theory from the data (Boeije,
2002). Thus theories remain grounded in the observations rather than generated in the
abstract. Qualitative research can be a popular approach for people exploring a new
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area of research. The theory developed from the data can then be tested by further
research.
3.3.3 Overview of Adopted Research Approach
The final research methodology adopted was a qualitative study comprising a series of
twenty semi-structured interviews, followed by two questionnaires completed by the
same sample of twenty participants. Through this process in Phase 1 the initial
interviews evolved from a series of semi-structured questions through the deliberate
practice of allowing the actors to digress into other topics, and then pursuing these
new ideas, incorporated into the questions in subsequent interviews. In this way
revelations that emerged unprompted from interviews are captured in the findings.
It was anticipated that around 12 to 15 in-depth interviews with very senior and very
experienced negotiators might provide sufficient data. The adopted methodology of
using the grounded theory technique of theoretical sampling meant that it was not
known to what extent the lines of questioning would evolve, or in what direction.
In Phase 2, two different questionnaires were sent to the same actors who had been
interviewed, immediately following their interviews. This was intended to provide
triangulation. These questionnaires are important in that they have become well-
established in the study of negotiation in the emerging procurement profession. The
first questionnaire, initially used by Karrass (1968) in his doctoral research, seeks the
perceptions of the actors on the relative importance of thirty-four qualitative
characteristics of negotiators. The second questionnaire, devised by Murray (1986)
seeks their beliefs relating to ten pairs of binary variables relating to how negotiators
behave, and is aimed at establishing whether the negotiators favoured adopting an
adversarial or a collaborative approach to negotiation.
The reasons for asking the selected actors to complete these questionnaires were:
firstly, to establish how the perspectives of this sample of senior negotiators differed
from those of the people questioned in the earlier surveys, (which may not have been
as experienced in negotiation), and secondly, to provide verification of the actors’
perspectives given in the interviews. The questionnaires asked them to state
preferences and give a triangulation on the conclusions derived from the rich data
gained from the interviews. Rich data, or rich descriptions, as the terms imply, contain
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a high level of detail, often this is from ‘open’ questions and from information
volunteered by actors in semi-structured interviews (Denzin and Lincoln, 2005).
3.3.4 Researcher’s Interview Experience
The researcher had gained experience by conducting twenty-four semi-structured
interviews whilst undertaking a master’s degree in 2002-2003, in addition to
conducting employment interviews in his working roles over many years.
3.3.5 Selection of Actors
The most important criterion in the selection of actors for the core research is that this
sample conforms to the ‘real buyers and sellers’ sought by the researcher to be
representative of senior and highly experienced negotiators in buying/selling
negotiations. The actors for the core research were selected primarily on two major
criteria, these being the size of their employing organisation (15 of the 20 were, or
had been, employed by organisations with multi billion pound turnover including the
two lawyers, whose clients met the same criteria), and their years of experience as a
professional negotiator either as a buyer or seller or both. Otherwise the selection was
a sample of convenience, based on the participants being available to be interviewed
in London.
Thirteen interviews were completed between 13th June and 29th October 2008. After
reviewing the data from these interviews, and the new areas identified which required
further investigation, a further six interviews were arranged and these were completed
between 6th January and 1st March 2009.
All of the twenty actors had ten years or more experience as professional negotiators
and six had more than 20 years experience. This criterion is believed to give the
sample real value in research terms, making them what Spradley (1979) describes as
‘excellent informants’ in that they are closely aligned to the subject of the research.
The initial pilot interview took place on 13th June, 2008. The remaining 19 interviews
took place between 19th August 2008 and 21st December 2009. The interviewees were
a convenience sample to the extent that 17 of the 20 actors were interviewed in
London, either at the actors’ office or at the researcher’s office, two were interviewed
at the researcher’s home and one was interviewed at the actor’s home, all in order to
minimise inconvenience to the actors. All of the other criteria, including the actors’
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education, professional membership and the value of the negotiations they had
worked on, were not discovered until the time of the interviews.
3.4 Phase 1: The Interviews
3.4.1 Aims
The primary aim was to explore the genuine beliefs, perceptions and understanding of
the actors, all experienced senior negotiators, concerning how they have experienced
negotiations between buyers and sellers. Part of the primary aim was to gain clarity
around whether the actors were aware of the existing knowledge base of the subject,
and whether they agreed or disagreed with some of the dominant discourses within it.
3.4.2 Design
3.4.2.1 Phase 1 - Interviews
The design of the interview structure for the core interviews on negotiations began as
a series of basic questions that emerged from the literature review. These
corresponded directly to the main themes identified under the major headings. The
interviews were semi-structured and questions were added to the list during each
interview for the first six interviews. After that occasional additional questions were
added or, in some cases, questions were refined to give clarity when actors had
difficulty understanding what was being asked. The design ended up with 13 major
questions, each with up to ten sub-questions or variations. The questions evolved
following each successive interview until there were no further changes. This process
is known as theoretical sampling (Cresswell, 1998, p.118).
Background and Introduction for actors
Before the interview the objectives were explained and confidentiality and anonymity
were assured, and two copies of an Agreement of Informed Consent were signed by
the researcher and the actor. Each actor was presented with a letter and an agreement
of informed consent (see Appendix 2). Each kept a copy. The letter explained the
purpose of the research including the interviews and how they were intended to be
recorded, transcribed, analysed and stored in future. All of the actors consented to
their interviews being recorded.
Initial Interview
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In the first interview the actor responded to semi-structured questioning and spoke
largely uninterrupted about his experiences of negotiations as a seller over a seventeen
year period whilst running his own business. Following analysis of the transcript of
the pilot interview, the questions were refined and were then further developed into a
series of semi-structured questions, which were used in subsequent one-to-one
personal interviews. Semi-structured questions enable flexibility in interview design
and conduct, resulting in rich data for subsequent analysis (Horton et al., 2004).
Interview Questions
The questions asked in the core interviews covered thirteen key areas and evolved to
the final state as shown in Appendix 1.
Data collection
Potential actors were identified as being senior negotiators in buying or selling roles
in large organisations. These were informed about the objectives of the research and
invited to participate. Interview dates were arranged with all those who consented, the
majority of interviews being scheduled in London at the researcher’s place of work.
The interviews lasted between 50 and 151 minutes. The interviews were semi-
structured, commencing with a list of set questions. The set questions were asked of
all actors and subsidiary questions were added to expand their replies and clarify
points made. If the actor made a new point, not mentioned by previous actors, then
further clarity was usually sought. If the point was considered significant it was added
to the set questions for future interviews. The recordings of the interviews were
subsequently transcribed into Microsoft Word documents.
Method of data analysis
This section of the chapter describes the process used to analyse the data gathered in
response to the questions asked in the interviews. The interview transcripts consisted
of 34 hours and 42 minutes of digital recordings, and these were professionally
transcribed into Word documents. The documents then needed to be analysed to
conduct a ‘serious inspection’. A software package called NVIVO had been suggested
for use in the analysis, and initially version 2 of this software was tried. However, the
software was not intuitive, was very time consuming to use, and offered no apparent
benefits over the two mainstream Microsoft software packages familiar to the
researcher, Word and Excel.
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Open coding, bracketing, theming and categorisation
The interview transcripts had been typed in Microsoft Word and this software has an
adequate search facility called ‘Find’ which locates every instance of a word or phrase
in a document. For example, a search on the word ‘power’ will reveal all instances of
that word including all of the questions relating to ‘power’ that were asked of the
actors. NVIVO was abandoned for five reasons. First, the researcher had wasted many
hours trying to overcome this user unfriendly software. Second, the researcher was
already very familiar with using the Microsoft Excel spreadsheet program for sorting
data, both numerical and English language, and, therefore, further time and energy
could be saved by not having to learn how to use another software program. Third, the
data could easily be entered into the spreadsheet by copying and pasting narrative
extracts from the Word documents containing the interview transcripts. Fourth, no
special formatting was required. Fifth, the spreadsheet was easily updated, edited and
revised as the transcripts were further interpreted on listening to the original audio
recordings a second time.
The first stage of analysis in grounded theory is known as open coding, in which the
researcher forms initial categories of information, in order to open the data ready for
analysis (Cresswell, 1998). To commence open coding all of the transcripts were
combined into one large Word file of 329,000 words covering all of the twenty-two
interviews. Word was, therefore, used for gathering the data in response to the
questions and for initial analysis of the data. This enabled all of the themes to be
searched.
Coding or categorisation of the data was conducted by analysing the interview
transcripts and transposing these from Word into an Excel spreadsheet. This enabled
line by line analysis. This was done by establishing a network of themes or ‘nodes’
upon which to code the content of the interview transcriptions. The first stage of
coding was based on a small number of nodes corresponding to the original list of
questions asked of the actors at the start of the field research. This list of primary
themes included power, arms-length/adversarial, personality, partnerships, trust,
negotiator characteristics, preparation, planning, price, persuasion methods, and
contracts. The full list of questions shown in Appendix 1 is what the list had evolved
into by the final interview on 21st December 2009. As can be seen, this list contains
themes and categories bracketed together, within the subject of negotiations, into a
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structure primarily informed by the CIPS syllabus on negotiation. All responses to the
questions were classified and categorised against this set of themes and categories.
After these nodes of primary themes had been used to code the data contained in the
interview transcriptions, secondary themes and concepts began to emerge as often
found to be present alongside the primary ones. The list of nodes grew to around three
hundred and this was found to be unmanageable, not least because many nodes were
closely linked to others and considered too similar to stand alone. A rationalisation
exercise was then undertaken and the resulting number of nodes was reduced to just
over one hundred.
Representative nature of views
When an actor gave a response or made a statement that was a departure from
previously expressed views of other actors, further clarification was sought in order to
ensure that the new and non-representative viewpoint was captured accurately.
Selection of representative quotation extracts
The researcher wanted to cite extracts from the transcriptions of interviews which
contained responses or statements that were representative of the group of actors that
had expressed similar views. It was important to the researcher that the views and
beliefs of the actors should be grounded in the voices of the actors themselves. The
method of selecting these quotes was a form of content analysis known as ‘open
analysis’ (McKeone, 1995). Open analysis consists of identifying the dominant
messages and subject matter within a sample of text, unlike ‘prescriptive analysis’ in
which the text is analysed for a narrowly defined set of communication parameters.
Missing or unusable data
Upon receipt of each interview transcript, all missing or unusable data was
highlighted in the Word document. The original audio recording was then replayed
using Microsoft Windows Media Player and the missing elements were replayed until
they could be understood. They were then corrected in the Word document. These
were mainly technical or unusual terms that were not known to the transcriber.
3.4.2.2 Phase 2 – Questionnaires
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It was decided to take the list of thirty-four characteristics of effective negotiators first
researched by Karrass in the 1960s and subsequently ranked by different groups of
negotiators for Raiffa (1982) and then again by Harwood (2003) in the belief that this
would provide a comparable insight into the perceptions of the actors in this research.
Questionnaire 1 is entitled ‘Perceptions of the importance of Effective Negotiator
characteristics’. In Questionnaire 1, initially the pilot actor was asked to rank the
thirty-four characteristics in order of importance. Feedback from the actor indicated
that the questionnaire took around twenty minutes to complete, and took considerable
concentration in order to satisfactorily rank all thirty four characteristics. The actor
said that completing the questionnaire was onerous and suggested a simpler ranking
would be less onerous and time-consuming if it could fulfil the intended purpose.
Questionnaire 1 was therefore modified so that actors were asked to group the thirty-
four characteristics into three categories, being high, medium or low importance. In
addition, they were asked to rank their top five most important characteristics.
Questionnaire 2 is entitled ‘Negotiator beliefs’. In Questionnaire 2, the actors were
asked to select their preferred choice from ten pairs of statements, each pair
containing a ‘distributive’ and also an ‘integrative’ statement. Questionnaire 2 was
less onerous to complete, and took less time, so based on the feedback it was not
modified.
Aims
The purpose of the questionnaires was to obtain descriptive data to add perspective
for the reader. It was accepted that the sample of twenty actors was a sample of
convenience, not a random sample, and also it was too small to be used for inferential
analysis, as the minimum theoretical sample is thirty, according to the Central Limit
Theorem in statistics. Anderson et al (2003) recommend that a sample size of 30 or
more is taken to satisfy the large-sample condition of the central limit theorem. This
means that only factual statements (the responses received) may be used for
descriptive purposes, and nothing is inferred or concluded from the responses, beyond
the statement of preferences of the sample of actors in this study. No conclusions
around generalisability can be deduced from the questionnaires.
Questionnaire design
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The design of Questionnaire 1 originates in Raiffa (1982, pp.120-121) adapted by
John Hammond from Karrass (1968, pp.242-244). It was subsequently re-used by
Harwood (2003). The design of Questionnaire 2 originates from Harwood (2003,
p.42) adapted from Murray (1986).
Data collection
The two questionnaires were e-mailed to actors immediately following their
interviews. If no response was received they were expedited after two weeks.
Ultimately a response rate of 100% was received.
Method of data analysis
Questionnaire 1
All of the actors were sent the questionnaires and asked the question:
“Please rank the following characteristics of negotiators in importance into High,
Medium or Low importance and indicate with H, M or L in column B. (There should
be 11 in the High and Medium groups with 12 Low).”
The responses were analysed by a simple count, due to the sample of twenty-one
actors being too small to be used for inferential analysis. For Questionnaire 1, the
numbers of High, Medium and Low responses were counted, along with the ranking
of the top five. The data was then presented showing the characteristics in ranked
order of preference from high through medium to low, showing the preferred ranking
as indicated by the actors.
Questionnaire 2
All of the actors were sent the questionnaire by e-mail following the interview and
asked the question:
“Please select one from each pair of negotiating tactics to indicate your preference.”
For Questionnaire 2 the number of responses selecting each of the pair of opposing
statements was counted. The data was then presented showing the statements ranked
in order of preference from the highest to the lowest as indicated by the actors.
3.4.2.3 Phase 3 - Presentations of Initial Findings and Feedback
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In Phase 3, the initial findings were presented to two specialist groups of Subject
Matter Experts. The first was to the CIPS Beds & Herts Branch, on 7 July 2009, and
the second to a group of senior managers, trainers, researchers and consultants at
Huthwaite International, Wentworth, Yorkshire, on 4 September 2009. These
presentations were intended to be, and were, interactive sessions in which the
audience participated in a dialogue and gave feedback on the findings. The feedback
was then incorporated into the discussion and incorporated into the findings. By
coincidence, there was one key piece of feedback from each of the presentations.
3.5 Ethical considerations
There are four main ethical principles within social research, and these are: whether
actors may be harmed, informed consent, invasion of privacy and deception (Bryman,
2004). These principles underpin the Non-Specialist Ethical Guidelines for Research
of the University of Glamorgan, which additionally assure actors of confidentiality
and anonymity, fair treatment and research conducted with integrity. This research
has been conducted in compliance with the Non-Specialist Ethical Guidelines for
Research of the University of Glamorgan (Appendix 3) and also the IPSERA Code of
Ethical Research Conduct (Appendix 4), both in its design and implementation.
3.5.1 Consent
A letter of ‘Agreement of informed consent’ was prepared for each individual actor in
the research. This is a joint undertaking signed by both the interviewer and the actor,
laying out the principles upon which both undertake to conduct the interviews
(Appendix 2). The letter is both the actor’s agreement of informed consent and the
researcher’s agreement to undertakings of confidentiality and anonymity, purpose of
research, and ownership and access to the data. All actors were given a copy of their
own letter and copies of the Non-Specialist Ethical Guidelines for Research of the
University of Glamorgan and the IPSERA Code of Ethical Research Conduct.
3.5.2 Actors rights
Core participants
The rights of actors were considered at all stages of the research. As well as obtaining
agreement of informed consent in writing from all actors, at the beginning of each
interview, actors were reminded that they were free to withdraw from the research at
any time and that their participation was entirely voluntary. They were also reminded
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that the recorded interview, its transcription and any related analysis would be kept
secure and used only for the purposes of this research and any publications,
conferences including possible broadcasts on radio or TV. They were assured that
their names and those of their organisations would remain anonymous at all times. All
actors indicated they were comfortable with the assurances given.
3.6 Summary
This thesis uses qualitative research from a post-positivistic perspective, using
interviews as the primary data collection method. The first phase uses semi-structured
interviews to investigate two specific areas of context.
The first phase uses semi-structured interviews in an inductive reasoning manner to
gather data by observation, (how they negotiate), establish patterns from which to
draw tentative hypotheses, and then worked through these to establish, and/or modify
existing theories. Semi-structured interviews were undertaken with a sample of buyers
and sellers with extensive negotiation experience. In addition, as a second phase, each
actor was asked to complete two questionnaires, one based on a ranking of importance
of negotiator characteristics previously used by Raiffa (1982) and Harwood (2003), a
second based on the two competing theories of negotiation adapted by Harwood
(2003) from Murray (1986). The scope within qualitative research for researcher bias
was identified and managed in order to have internal validity and integrity by:
A) Careful structuring of the questions to deliberately avoid ‘leading the
witness’. Questions were worded in an open manner in order to allow a
variety of interpretations. In the early interviews they proved to be too
obscure, with a lack of clarity as to what was being asked, but the
questions were adjusted in the first seven interviews to the point where
clarity around the question still did not lead the actor in a particular
direction.
B) Asking all actors the same questions. The only change after each
subsequent interview was to add new questions relating to new avenues of
research that emerged from the interviews.
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The second phase, the questionnaires, was intended for triangulation purposes, by
asking each actor to complete two exercises: the first asked them to divide thirty-four
statements about negotiation into three categories, being in their opinion of ‘high’,
‘medium’ or ‘low’ importance, and in addition to rank their top five. The second
exercise gave ten pairs of alternative options, and the actors were asked to select their
preferred choice from each pair.
The method, conducting a qualitative survey using semi-structured interviews of
twenty individuals in top management positions, experienced in negotiating multi-
million £ projects over many years, gives a robust method to provide the contributions
to knowledge and practice. This criterion is believed to give the sample real value in
research terms, making them what Spradley (1979) describes as ‘excellent informants’
in that they are closely aligned to the subject of the research.
There were three limitations to the methods employed. Firstly, the study is based on a
sample of convenience, in that most of the actors were available for interview in
London. In the event, seventeen of the twenty interviews took place in London.
Secondly, the study relies on qualitative methods. Consequently external validity is
limited and can only be generalised if a quantitative study was designed, administered
and the data analysed. This is outside of the scope of the aims of this work but is in
scope for further research. This study would enable such further work to be
considered.
Thirdly, a limitation was the large amount of data gathered during the interview phase
of the field research, much of which was not able to be used due to the challenges of
consolidation and analysis. This was of particular concern where the actors made
passing reference to issues either by implication or nuance, though not explicitly.
This chapter has established the rationale for the methodological approach adopted for
the research, described the selected research design, and detailed the research methods
employed. The next chapter presents the findings from the field research.
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CHAPTER 4: FINDINGS AND OBSERVATIONS
4. Introduction and chapter overview
The purpose of this chapter is to present the findings and observations of the research
from the primary data collected. Chapter 3 outlined the research design,
methodological choice, and methods employed to carry out the research. This chapter
builds on the previous chapter by presenting the findings from the three phases of
research.
It is perhaps worth noting that the interview phase of the field research generated a
large amount of rich data from the 20 interviews. This thesis presents the key findings
from this large volume of data. The qualitative approach adopted for this thesis
consists of an evolving base of semi-structured questions from the interviews yielding
rich data. Rich data, as the term implies, contains a high level of detail, which goes
beyond the simple answers to the questions and reveals a deeper insight into the
negotiators interviewed and the methods they use.
In the field research, interviews were conducted with all 20 actors, first interviews to
build profiles of them as professional negotiators, which were used to build a rapport
with the negotiators, and then semi-structured interviews were conducted with them.
The data collected from the transcribed interviews was analysed. This chapter of
findings uses some of the words of the actors themselves and includes their feelings,
beliefs and motives about the way they approach their work as negotiators to the
extent that these can be ascertained from the interview transcripts.
No interview transcripts are included in this thesis due to strict confidentiality
undertakings agreed with all core actors. In Phase 2 of the field research, two different
questionnaires were completed by all 20 of the actors and the responses are
summarised. Phase 3 of the field research documents two interactive presentation
sessions where the researcher presented his initial findings to two professional special
interest groups, CIPS Beds & Herts Branch, and a group of senior managers, trainers
and consultants at Huthwaite International. This chapter outlines the interactive
presentations at which initial findings were presented and discussed, and presents
feedback received from the presentations.
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4.1 Findings from Interviews
An initial interview was conducted in June 2008 using several scoping questions that
had emerged around the key themes that emerged from the literature review. In the
initial interview the actor, Adam, responded to semi-structured questioning and spoke
largely uninterrupted about his experiences of negotiations as a seller over a seventeen
year period whilst running his own business, supplying biscuits and ‘cookies’ to a
range of specialist stores and some of the UK supermarkets.
Several findings emerged from the interview. Adam believed that a) bullying of small
suppliers by major UK supermarkets was endemic; b) it is common for no written
contracts to be issued by the major supermarkets to many smaller suppliers
(employing 50 or less people); c) small suppliers were constantly under explicit
threats of losing the business of major UK supermarkets, if they did not comply with
onerous demands, usually for price reductions; and d) it was commonplace that the
smaller suppliers would ultimately suffer termination of the business and it would in
many cases be awarded to their competitors, often based on the deposed suppliers’
own recipes.
4.1.1 Profiles of actors
From the preliminary profile questions asked prior to the core interviews, the actors
revealed the profile information about themselves shown with their pseudonyms in
Table 4.1. The most important criterion in the selection of actors for this research is
that this sample conforms to the ‘real buyers and sellers’ sought by the researcher. As
mentioned in Chapter 3, the sample of actors was selected primarily on one major
criterion, this being the number of years of experience as a professional negotiator.
All of the 20 actors had ten years or more experience as professional negotiators, and
six had more than 20 years experience. These criteria are believed to give the sample
real value in research terms. 17 of the 20 actors were interviewed in London. The
actors were asked profile questions in order to establish a rapport with them at the
start of the interviews.
The sample is considered representative of the population of senior negotiators
occupying top management positions with extensive experience of negotiating multi-
million pound contracts in the B2B buyer-seller context.
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Table 4.1: Overview of Research Actors
Interviewee N
o.
Name Job Title
Negotiator experience
years
Buying or Selling
Organisation
Core Interviews 1 Adam Chairman 17 Selling Food manufacturing
company2 Ben Head of Commercial Practice 10 Both Law firm3 Carl Procurement Contracts
Manager29 Buying Multi-national
computer sales 4 David Client Services Delivery
Manager11 Selling Global technology &
document5 Eric Director of Procurement 29 Buying National
communications 6 Alice Managing Director 20 Buying Bank7 Frank Director 22 Buying e-sourcing specialist8 Graham Head of IT Procurement 20 Buying Bank9 Harry Head of Procurement 10 Buying Government
Department10 Ivor Managing Director 24 Buying Various industries11 Barbara Strategic Sourcing Manager 23 Buying Big Four' Audit &
Accounting 12 James Alliance Sales Director 10 Buying Global Consulting
Firm13 Ken Director of Outsourcing 10 Buying Bank14 Christine Director, Procurement &
Revenue Protection20 Buying Public sector
corporation15 Len Global Account Manager 17 Selling Global
communications16 Denise SBU Services Director 13 Both Multi-national
computer sales 17 Elizabeth Group Procurement Director 18 Buying Various industries18 Mike Partner, Head of Technology 16 Both Law firm19 Norman Non Executive Director 30 Buying Plumbing supplies20 Oliver Global Business Manager 30 Selling Global technology &
document
All of the actors have been given pseudonyms to protect their identities.
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4.1.1.1 Buyers and Sellers
The sample included both buyers and sellers as follows: 13 buyers with that as their
primary role, four sellers with that as their primary role, and three working in dual
buying and selling roles.
4.1.1.2 Years experience as professional negotiator
The actors’ years of experience as professional negotiators ranged up to 30 years. In
all the 20 actors had cumulative experience of 379 years; four actors had over 28
years experience, six more had 20 years experience or more, a further four actors had
15 years experience or more, and all twenty had 10 years experience or more. The
mean average experience of the actors was 18.95 years. This data seems to show that
the interviews were conducted with actors who fulfilled the criteria of negotiators
with the appropriate experience. These are shown in Figure 4.1.
Figure 4.1: Actors’ years experience as professional negotiator
10-146
15-194
20-246
25+4
4.1.1.3 Diversity of actors
The sample selected was not intended to have external validity (Campbell and
Stanley, 1963). However, in order to avoid bias, the sample was drawn from
negotiators with a broad cross-section of different industry experience from sectors
including banking, finance, food, e-commerce, computing, telecommunications (fixed
and mobile), government, consultancy (including Business Process Outsourcing and
offshoring, Systems Integration, procurement and software consultancy), a public
sector corporation, education, construction, law and wholesale plumbing supplies (see
Figure 4.2).
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Figure 4.2: Industry Sector of Actors
0
0,5
1
1,5
2
2,5
3
No.
of P
artic
ipan
ts
Industry Sector
The profiles above show that the actors are, therefore, suitable for this research and
enabled the capture of valid and useful data.
4.2 Main findings of interviews
The presentation of the findings from the analysis of the core interviews is structured
in line with the major themes that emerged from the interviews as the questions
developed. The major themes categorised from the literature review were:
1. Integrative negotiations2. Power in negotiations3. Inter-personal chemistry between negotiators4. Persuasion techniques
All of the questions asked in the interviews are shown in Appendix 1. The actors
volunteered views, opinions and perspectives beyond the issues identified in the
questions, and these have also been analysed and presented.
4.2.1 Theme 1: Integrative Negotiations
4.2.1.1 Q 5 “Have you heard of negotiations described as integrative and distributive?”
(Deliberate closed question initially)
Of the 20 actors interviewed, all except three actors replied that they had not heard of
negotiations described as integrative and distributive. Two said that they were not
familiar with the terms, but if they knew what they meant they might be familiar with
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them. Only one actor was familiar with the terms. The sole actor familiar with the
terms integrative and distributive negotiation had moved from being a purchasing
practitioner via academia (an MBA), to being the principal of a training and education
organisation. The individual is also an examiner on negotiation for CIPS and is,
therefore, familiar with the syllabus. This provided strong evidence that the terms
integrative and distributive negotiation are academic terms, used only by academics,
and unknown to practising negotiators.
When all negotiators except one had stated that they were unfamiliar with the terms,
the question was re-phrased as “Have you ever heard negotiations described as
collaborative or adversarial, or win-win and win-lose, or ‘partnership’?” This time the
response was positive from all 20 actors. After pursuing their response to the above
question, all actors were then asked “Do win-win negotiations actually happen in
practice, in your experience? In summary, the responses were divided into three who
replied positive and 17 who replied negative. However, this breakdown does not tell
the whole story. It became clear to the researcher that of the three actors who replied
positive all had differing perspectives relating to the question and different caveats or
reservations about their responses, which they shared.
Three respondents of the 20 replied that win-win negotiations do actually happen in
practice. However, although these might strictly be accepted as positive responses
indicating that ‘win-win’ deals are possible, it is clear from the words used by the
respondents that they do not have a conventional belief that win-win works in
practice. For example, Harry expressed the simple view that:
“If we’re getting a service, and the supplier is still surviving, that must be a win-win.”
Similarly, Elizabeth said:
“You get win-win all the time because, in reality, (the supplier) wouldn’t supply if (they) weren’t happy, so I think you always get to a win-win.”
Only one actor, Oliver, had a good example of a win-win working in practice, and he
explained in detail why it worked out to be a win-win:
“One of the smartest guys, (the) best salesman I ever worked with, he actually early on . . . he sold a number of our high end production printing products to the customer at list price.
“However, the way he did that was he got in that organisation in a manner that no-one had before him. He looked at all of the various applications
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for that equipment and identified applications that were going externally from the organisation. He redesigned the applications and he actually produced extraordinary savings through understanding their business so well that he was actually able to reduce their overall costs by something like 40% to 50%, quantified, and still sell the product that enabled that at list price.”
“So if you take a look at the win-win in that particular instance, the customer derived much more significant value because of the fact that the salesman involved was able to roll up his sleeves, was astute enough to get in and understand the requirements better than the customer, understand their business better than they did and, actually, in the final analysis, delivered greater savings through that process that had they taken 20% off the price of the box, absolutely no comparison.”
The researcher, therefore, believes that two of the actors that indicated they believe
that win-win negotiations do actually happen in practice do not in the conventional
understanding of ‘win-win’, and that only one out of the 20 actors articulated a
convincing belief in ‘win-win’ deals being possible. The other 17 actors out of 20 felt
that win-win negotiations do not actually happen in practice. Of the 17 actors that
replied negative there were differing levels of emphasis regarding the extent to which
they felt that there is no such thing as a win-win, or collaborative negotiation between
buyer and seller. What the actors said was revealing about their perspective on ‘win-
win’ outcomes.
David said:
“I would suggest, in the majority of negotiations, both parties feel that the other party got the bigger share of the pot, certainly my experience as a sales person - I would always think that it’s the purchaser that is bound to get the better deal, because I’ve had to give away this, I’ve had to give away that.”
Alice said:
“I come from the old school of you do as much as you can for your company and make the other company feel like you’re working together but really you’re not- I call that win-perceived-win.”
Graham said:
“When all the talk of partnership and win-win and all these things came in, I think the guidance from my management at the time was that you should beat the bastards into submission - they’ll know when they’ve reached the point beyond which they won’t go, and I think there’s a lot to that”
Barbara said:
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“Not in my experience, no, (win-win does not exist).”
James said:
“I might describe it as we put on a front to instil confidence in the client, ... so we’ll say, “Yes we’ve got the partnerships and we’ve got the skills, and we’ve got this, that and the other, and we can deliver all of this”, and then ...behind the scenes it might be fragmented and messy ... - and so there might be all sorts of adversarial (deals in place) in order to present a very neat, united, single point of contracting for the client.”
Ken said:
“No, don't understand it - so you’re holding them at arms length-... you’re not... partnering with them or collaborating with them in the true sense .... So I think the theory of it is great. - The reality of it, I don’t think it exists.”
Christine said:
“I don’t think you’re ever in a partnership when you’re in a commercial arrangement, actually. I think you’re in a mutually beneficial but guarded relationship.”
Mike said:
“The kind of win-win partnership that puts my teeth on edge is where you get the customer . . . saying, “but, this is a partnership”, when I hear someone saying that, I know absolutely that this is not a partnership - quite the opposite - it’s the customer seeking to screw the supplier, or vice versa. . . I still hear it, but probably less so, partly because everyone’s become so jaded and cynical about it, I think. Because, you know, in 99% of these agreements there’s nothing at all which indicates, factually, a partnership, nothing at all.”
The researcher became familiar with the usual reaction to this question throughout the
interviewing process and it was characterised by Ken, who had spent many years as
Head of Offshoring for a High Street bank. He had heard of the theory of
‘partnership’ and ‘win-win’ negotiations but he did not understand how they could
work in practice. He spoke as though he thought he should understand how it could
work in practice, but he did not. He, therefore, concluded that it is great in theory, but
he believes it doesn’t exist in practice. Only one of the actors had a convincing story
to demonstrate that he believed in win-win.
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4.2.2 Theme 2: Use of Power and Coercion
Although power and the use of coercion are usually grouped together with the other
persuasion techniques, it is here treated separately, as a major theme and one of the
research questions of this thesis.
4.2.2.1 “Tell me about the power relationship in negotiations, based on your personal experience - what gives a buyer or seller power in a negotiation?”
Overall 14 out of 20 mentioned the use of power as a negotiation technique they
favour. The 14 actors who mentioned power talked about 30 different sources of
power. All of the 30 sources of power mentioned were compiled into a list which was
then consolidated into seven major themes (see Figure 4.3).
Figure 4.3: Sources of Power
1 Power of the seller over the buyer2 Power of the buyer over the seller3 Personal power4 Power of knowledge / preparation5 Stakeholder power6 Perception of power equals power7 Power caused by dependency
4.2.2.1.1 Competition as a source of power
Negotiations with suppliers pre-contract are often easier than negotiations post
contract, especially whilst there is competition driving the behaviour of the seller pre-
contract, according to Denise.
4.2.2.1.2 Use of reverse auctions as a source of power
The use of reverse auctions was viewed by eight buyers as a source of power for
buying ‘commodity’ goods, the most common example given being personal
computers. There was consensus among actors that in these circumstances they would
consistently achieve significant cost savings the first time a category was auctioned.
Graham stated: “It’s fantastic doing auctions, it’s great sitting there and watching these prices tumble and I haven’t seen one yet where the prices haven’t tumbled. It takes away a lot of your responsibility for trying to find what should be a market point, because you’re going through a close to infinite series of meetings to beat the supplier a little more each time”.
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This power is derived from the immediate and direct force of competition on potential
suppliers fighting for business.
4.2.2.2 Removal of a negotiating opponent
Four buying negotiators mentioned that if they had been really unhappy with the
leading sales negotiator, they had exercised the power of their position and requested
the removal of the negotiator.
Typical of these, Christine, a senior procurement director, said:
“I think if you’re dealing with somebody that is not reasonable . . . I can just ring up somebody else who’s more senior than them and say, ‘look, I need to do this in a different way’.”
4.2.2.3 Q 4b “To what extent is the balance of power based on the perception in the minds of the negotiators?”
Six out of 20 believed that power is accrued from their own confidence; whereas 14
did not. As an example, Christine said:
“If you believe that you are the more powerful party, then you are. . . until the other party surprises you.”
4.2.2.4 Q 4c “Are you familiar with the term ‘BATNA’”
(Best Alternative to Negotiated Agreement) (A deliberate closed question)
Only five of the 20 actors interviewed had heard of the term BATNA. Four of the five
were in primary buying roles, and the fifth was a lawyer conducting negotiations for
both buyers and sellers. None of the negotiators in primary selling roles were familiar
with the term. Denise said that she had only ever seen a deal turned down once in her
career, and that had been because her organisation concluded that the competition
were buying the business to enter the market and could not make any profit at that
level of pricing. Carl, a buying negotiator within a selling organisation (a Systems
Integrator), said that he could not think of a single example where a deal had been so
poor that they had not gone ahead with the purchase. When the term was explained to
those who were not familiar with it, some were familiar with the concept but not the
acronym.
4.2.2.5 Q 4d “In your experience how often does a negotiator have a real alternative to a poor negotiated agreement? (ATNA)”
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Only three out of 20 actors believed that a negotiator often does have a real ATNA.
Two of these believed that it is part of the negotiator’s job to create an effective
alternative. James had found himself in a situation where his organisation had to
spend time and money in order to try to create a realistic alternative due to the hostile
way in which they had been approached by an existing supplier, who had accused
them (and it later turned out, most of their other customers) of IPR infringement as a
short term revenue boost.
In the usual buyer-seller situation, neither the buyer nor the seller had any realistic
possibility of walking away, no matter how poor the deal in prospect may be for their
respective organisations. Carl was emphatic about this. This is because on the one
hand, the seller has only a limited range of products or services to sell, and he has to
overcome whatever obstacles the buying organisation may put in his way to try to
achieve a sale regardless of the circumstances and the profitability of the deal that can
be done. For a salesman to walk away, the deal has to be a really bad deal. This often
means a bad deal for the salesman personally, rather than for his organisation. The
buyer, on the other hand, can walk away from one seller to another, but has a
requirement to fulfil on behalf of his organisation, so he has to buy it from one source
or another. Ben said that often a negotiator’s BATNA changes through the life of a
negotiation:
“It’s very important to re-assess what that BATNA is on a continuing basis, and update it. And it will be updated through two different things: - it’ll be updated through a growing appreciation of the issue at hand and the facts surrounding it, which will help you make an informed decision, - and the second thing is that it will be affected by the individual’s interpretation of where the leverages and where the behaviours are in the negotiation.”
Carl said: “. . . I have never seen us walk away from a bad deal, that I can think of. . .
. . . I’ve seen people wrap themselves inside out and end up walking away with something that they know that stinks and they’re trying to justify it, but I’ve never seen anyone say no, we can’t do it.”
Christine said: “Findings relating to the BATNA were mixed. However, its frequency of use as a real alternative appears in question . . . and I mean, we have somebody there that takes notes and just watches, and takes notes of how the other party react”.
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Ivor said: “There is always an alternative - how often is that real, it depends on how good the negotiator is, and how well they’ve prepared, and the situation they’re in.”
There were some clear findings emerging from the responses to the two questions
about the BATNA: · A BATNA is an artificially created negotiation position, not a real
alternative to a negotiated agreement.
· In extreme circumstances (for example, where a supplier has suddenly turned extremely hostile) it may be necessary to create a BATNA as a strategy to allow further options other than the undesirable likely outcome currently envisaged. This was not a Best Alternative to Negotiated Agreement (BATNA) but simply an Alternative to Negotiated Agreement (ATNA).
4.2.2.6 Use and abuse of power - the "fait accompli" / hiding behind policy or rules
Mike recalled a customer, a large power-dominant financial organisation taking an
extreme negotiating position:“Their stance is that they will not accept any uncapped indemnities at all, even if it is standard market practice to do so (e.g. for third party IPR or data protection breaches). It is a matter of policy. They will not allow any exceptions. It is not negotiable, to any organisation.”
The only organisations that have negotiated this away, have been prepared to take a
stand and risk losing the business, but it has happened on one or two occasions. This
would appear to be abuse of the power of a large organisation.
4.2.3 Theme 3: Interpersonal ‘chemistry’
From the interviews emerged several areas which could be described as personal
characteristics, but which exhibited themselves as behaviours, which are currently
grouped together and collectively known as emotional intelligence. These elements
recurred throughout the interviews as actors kept returning to issues around emotional
intelligence which had significantly influenced their major negotiations. The issues
circled around whether the negotiators held each other in respect or contempt, liked or
disliked each other, trusted or distrusted each other, and whether the behaviours they
saw demonstrated integrity, fairness or charisma. One of the factors which could
influence the perception of these elements was the self-confidence of the negotiators.
Several actors constantly repeated that it was these interpersonal ‘chemistry’ issues
that dominated the outcome in many major negotiations, and left lasting impressions
on the negotiators. According to them, the traditional influences on negotiation
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success, such as preparation and planning, or choice of persuasion techniques
employed, were of less importance than the relationships that occurred between
negotiators around these elements. These begin with the importance of establishing a
rapport.
4.2.3.1 Research the negotiator(s) on the other party’s team
Barbara said:
“I think you’ve got to understand people, and the most important part of the negotiation is researching who you’re going to be negotiating with. And I do. - But I never start a negotiation off by starting the negotiation. - I always start off by having a bit of a chit-chat.”
She went on to say:
“You must know who you are negotiating with.
. . . if you don’t look at who you are actually negotiating with, you’ve lost, because I guarantee, if they’re good on the other side, they’ll have done it about you.”
4.2.3.2 Disrespect or dislike for their opponent
There was consensus amongst the buying negotiators that respect and personal liking
for their negotiating opponents makes their task easier, while disrespect and dislike
make the negotiation more difficult and de-motivate them. This may only make the
negotiation more difficult, as Eric said:
“One of the most difficult things in buying or negotiating is working with somebody you don’t like and you don’t like their style or manner.”
However, it may bring about a resistance to negotiate which will ultimately lead to an
adverse result, as stated by Ben:
“. . . it doesn’t matter what you say - you could be correct - if somebody takes a personal dislike to you because of the way that you’re negotiating with them, and if you’re not treating them with adequate respect, or you’re not listening to them, or you’re simply trying to force your opinion on to them, then often you get an adverse result because the shutters come down and the person just says ‘it doesn’t really matter whether you’re right or wrong, I’m going to resist this on principle’.”
Ivor confirmed this and was clear that he would get a better deal with someone he
liked and respected:
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“I tend to think you give a better deal at the end of the day to someone you like and respect and have a bit of bonding with, than someone you think is an idiot, or something worse.”
4.2.3.3 Q 6 “Can the interpersonal behaviours involved in a negotiation be separated from the subject matter being negotiated?”
This question arose from Ivor, one of the most experienced negotiators, a past
president and Fellow of CIPS, who made the comment:
“Can I introduce an interesting concept here? It’s just coming to me as I’m thinking . . . we use these words adversarial and collaborative and so on, but just thinking about my experience, I’d almost separate the content and style of the negotiation from the personal relationship because I can think of times when the content and style of the negotiation has been what you’d probably define as collaborative . . . but actually the style, just because the personal relationship wasn’t good, or you didn’t like the person, or maybe it was just very different styles, has felt quite adversarial.”
The concept had arisen earlier with David but had not been identified as a separate
point at that time:
“Often there is a very good personal relationship between the two parties, and that often serves to benefit the supplier over the customer because, when the supplier is not performing, or is reluctant to do something, then they revert to sort of an emotional appeal to the customer that, because everybody is great friends, we don’t need to pin this issue down in the negotiation because we’ll sort it all out later.”
Denise identified the opposite of these good interpersonal relationships:
“I think you can have a clash of testosterone sometimes, and actually the purpose becomes irrelevant and it’s just the battle that’s important. And I see that in members of my team sometimes. And I have to say, you can lose the battle to win the war, all those clichés. - Actually, it’s the bigger person that puts it in perspective. . . if you get professional negotiators negotiating against each other, the purpose of the negotiation, in extreme circumstances, can be forgotten.”
4.2.3.3.1 Vulnerability of a negotiator susceptible to being seen to be reasonable
Mike said:“Once a negotiator has revealed that he prefers to be perceived as logical or reasonable, you can make a lot of headway by appealing to that natural instinct (and it's an instinct that most people have to some extent). By constant repeating of the logical argument and claiming how unreasonable
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the other party's position is, the negotiator with a conscience will often eventually concede.”
4.2.4 Selling negotiators’ personal motivations
Two actors had identified personal motivations of sales negotiators that had far
reaching consequences. Eric identified that one of his potential suppliers was looking
to get a foothold in Scotland: “. . . one of my buyers . . . cleverly learned, . . . a certain business was trying to move into Scotland and we were already working very well with their competitor who had a base in Scotland . . . so that understanding, that piece of emotion, helped him in his preparation, conditioned both parties that he was going to use it. And he did, and we got a massive benefit cost-wise, out of all proportion to the real cost of the article, because he had one defending their territory and the other one wanting to come into the territory, and almost in those cases the money is not the object, it’s the target for them of getting a foothold, and the other is resisting that foothold by our competitors . . . had he not brought the new entrant into the thing, we would never have got the commercial benefit we got out of that.”
Ivor had learned how a salesman was rewarded while negotiating a particular deal. He
said:“I discovered actually when I was at [XY Bank], I got this amazing deal from one of the consulting houses - basically I got £200,000 of free consulting on e-procurement, and it was because I realised - I don’t think it was me being particularly smart, I think he more or less told me - but the partner, his target that year was just to get in and get a project with [XY Bank] procurement as a sort of beachhead to them trying to sell us much bigger e-procurement solutions and stuff - I mean he was willing to really give the first project away as long as he just had on his sheet ‘I’m doing work with [XY Bank] Procurement’, and of course once you realise that you can get £200K’s worth of free consulting.”
This revealed that the sales negotiator was targeted solely with getting a project
established with the Ivor’s employer. There were no revenue or profit related targets
associated with it. David identified that a significant amount of effort had been
invested by his global sales organisation in a competitive process but that the award of
the global contract that followed (in the event that they had been awarded it) would
neither have resulted in any new business in any particular country for his
organisation, nor any commission for him personally. The scramble for business in
each and every country that followed the global process would result in the award of a
local contract in that country and each local country salesman was free to enter that
competition and win sales commission.
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Following this revelation, all of the transcribed interviews were analysed for mention
of the personal motivations of sales negotiators. The following examples were
identified:
· Inducements to sign a new customer but no specific target revenue or profit,
and a budget to give free services as an inducement for further business.
· Inducements to sign a global contract, even though this was a framework
agreement with no revenue directly linked to it, and individual contracts would
be open to competition separately in each country.
· Inducements paid in each country to local sales personnel, regardless of global
or regional contracts.
· Widely varying commission and bonus schemes for differing elements within
an overall contract.
· Widely differing payment terms dictating when commission and bonus
schemes become payable. The more sophisticated organisations not only
delayed payments until they had delivered and invoiced the sale, but until
payment had been received from the customer, to avoid the salesperson having
been remunerated against an unpaid invoice or a bad debt.
· Within these varying commission and bonus schemes there were different
rates for one-off sales compared to sales resulting in Recurring Monthly
Revenues (RMRs). The more sophisticated of these schemes paid commission
based upon a percentage of gross profit that varied depending on the gross
profit achieved – the higher the profit realised, the higher the percentage of
commission would be paid.
The key to the benefit which the buying negotiator may be able to negotiate is to
understand those areas where the seller can give concessions without incurring any
personal disadvantage. All of the sales negotiators interviewed had mentioned that
they sometimes found themselves in the ambiguous position of being the sole
representative of their customer/potential customer within their organisation, being
challenged to justify the position of their negotiating opponent within their own
organisation. This clearly created a dilemma for the sales negotiator, which placed
pressure on them to act in good faith on behalf of their opponent. In these
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circumstances, it was the individuals who had established at the least a rapport and, at
best, a relationship over an extended period of time that would fare best.
4.2.5 Ethics, Trust and Integrity
4.2.5.1 Q 7 “In your view how important is personal integrity in negotiations?”
This was one question for which the answers given were unanimous. All respondents
considered personal integrity and trust to be of paramount importance and were at
pains to emphasise that they have personal integrity themselves. Denise was typical,
with the following response:
“Yes. I think that’s [personal integrity] really important. I don’t think lying and cheating, and ducking and diving in a professional environment does you any good at all.”
However, when this was probed in slightly more depth, a different slant was revealed:
“. . . No, no, I didn’t give the whole story, the whole picture, which is not the same. I don’t tell them anything that’s not true, I just may not tell them all of the toys that I’ve got in my cupboard - which is just basic negotiation.”
This led to the next question:
4.2.5.2 Q 7a “Do you ever deliberately deceive your opponent in negotiations?”
(The words ‘lies’ and ‘lying’ were specifically excluded from this question initially).
The responses to this question exposed an area of ambiguity around the integrity of
buyers in negotiations. All of the actors were swift to state in strong terms their
integrity, often stating they would not tell lies in negotiations. However, when asked
if they would mislead the other party, or correct the other party’s misunderstandings,
or correct their mistaken assumptions, they unanimously agreed that they would not
correct them, but would mislead them, (or allow them to mislead themselves). When
asked if they would tell a seller that their price was not competitive even if it was the
lowest price, all of the buyers agreed they would. Therefore, it is clear that although
all actors regard themselves as being people of integrity, they have clear ideas of what
this requires them to do and how this differs from what is allowable in normal
commercial practice.
One actor, Ivor, recognised this ambivalence or cognitive dissonance displayed by
negotiators who, he believed, had clearly partitioned in their own minds ‘lying’,
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which they would not do, and deceiving their opponent, which they were comfortable
to do:
“If you are dealing with someone who is deliberately disingenuous, then you have to ask precisely the right questions to find out what you want to know. Otherwise they will be able to answer your questions truthfully, but still deceive you. The skill is uncovering that this is how the negotiator thinks. And then asking the right questions.”
The breakdown of trust in relationships is critical in preventing business continuing
on an ongoing basis. Carl said:
“You’re working with a supplier with whom the relationship has totally broken down, you distrust each other, you dislike each other, you don’t want to take their calls - you know, it’s just so time consuming - everything has to be put in writing, no one will move until they’ve got a purchase order, no one will do a jot more than it actually says in the contract - business can’t function like that, if there’s been such a breakdown of trust.”
4.2.5.3 Q 8 Have you experience of 'golf course' deals being made outside the normal organisational framework?
Several senior negotiators had experienced ‘golf course deals’ that had been
concluded between senior stakeholders from both parties whom, having shaken hands
on a ‘Heads of Agreement’ or a ‘Letter of Intent’, then required procurement to step
in to document the deal in a formal contract. Ben said:
“Broadly, ‘golf course deals’ favour suppliers and they’re a deliberate tactic in order to isolate the negotiation teams. My experience of them is that a supplier wins a competitive tender by returning a wholly compliant term sheet that it knows it can’t live with, fully in the knowledge that, once it’s won the work, the frictional cost of changing that supplier half way through the tender process means that the customer will effectively always deal with the supplier . . . - it’s a highly disingenuous mechanism, but it goes on and it’s rampant. It goes on all of the time.”
Ivor had an equally bad experience of the practice:“In my worst ever negotiating experience . . . I said to the partner, “I need to meet you and talk about it”, so got him in the meeting room, and I started doing my spiel about I wasn’t very happy with the rates, and all the rest, and I think he was younger than me which annoyed me as well, and he sort of looked at me and he said, ‘you have to realise, we’ve done this deal with Patrick, (who was the chief executive guy just then) - it’s a done deal, we’re starting tomorrow’.”
4.2.5.4 Deliberate deception
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David identified a practice he had observed, of negotiators agreeing to concede a
point that they had no intention of conceding in the contract, in the hope that it would
be forgotten before being incorporated into the contract. This practice relies on the
other party not keeping meticulous notes and one’s own party controlling the draft
updates. Therefore, it is more difficult to get away with this if the draft is controlled
by the other party, or when larger negotiation teams are employed, as there will be
observers/note-takers ensuring that every concession is documented and carried
forward into the contract. He had even witnessed the situation when Microsoft Word
versions of a contract were being exchanged with ‘Track Changes’ highlighting
supposedly all changes made by the other party, where controversial points already
conceded had been removed with ‘Track Changes’ switched off. When this practice
had been uncovered by the actor, he changed his organisation’s processes to ensure
that every version of a contract received in Word is now compared to the previous
known version using the ‘compare documents’ function in Word in order to verify it.
Furthermore, David’s firm now insists on controlling the drafting process in almost all
negotiations.
4.2.6 Theme 4: Persuasion Techniques
Although power and the use of coercion are usually grouped together with the other
persuasion techniques, it has here been treated separately, as a major theme and one of
the research questions of this thesis.
4.2.6.1 “What persuasion techniques exist in negotiations?”
The responses to this question included a wide variety of points.
All actors replied to the question with different ideas on important persuasion
techniques, but 14 actors replied with a number of criteria that are not normally
regarded as persuasion techniques. Upon analysis, these 48 techniques could be
summarised and consolidated into the twelve techniques in Figure 4.4. This summary
comprises of the traditional five persuasion techniques plus the sixth ‘lost persuasion
technique’ of understanding the other party’s motivation from Berrien et al. (1944)
and a further six persuasion techniques: relationship building (sometimes stated as
establishing rapport), rejection, adversarial short term view (this was described as
taking an adversarial stance and fighting hard to win this particular negotiation with
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no regard to the future relationship with the other party), credibility, deceit and neuro-
linguistic programming (NLP).
Figure 4.4: Preferred persuasion techniques
0123456789
101112131415
No.
of I
nter
view
ees
Persuasion Techniques
Of the main five persuasion techniques that are taught on CIPS courses (logical
persuasion, bargaining, threats (the use of power and coercion), emotion and
compromise), most actors identified with one or two, and when all five were revealed
after they had responded, had various things to say about the techniques they had not
mentioned, often stating why they would not use them.
Do you use the following techniques:
4.2.7 i Logical persuasion
In total, 15 out of 20 actors mentioned logical persuasion as a negotiation technique
they favour.
Of the five persuasion techniques which are ‘logical persuasion’, ‘bargaining’,
‘coercion’, ‘emotion’, and ‘compromise’, the findings from the field research indicate
that logical persuasion is more likely to be favoured than the other techniques in the
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ratio of 4:1. Of the 15 that favoured logical persuasion, six claimed that this was their
primary negotiation technique above all others, and were reluctant to be shifted from
it, even when it was clear that it was not having the desired effect on the other party.
Those negotiators that favoured logical persuasion supported their views as follows:
Carl:
“. . . logical persuasion has to work, to a certain extent. Otherwise there’s no point in talking to each other. When I’m telling a customer that the product’s got 30% almonds in - everyone knows almond is a very expensive nut, you’ve got to import it from California - we used to use Californian almonds - as an example, so it’s logical that makes the product more expensive, and if they don’t want to pay for it we take some almonds out. That is logical.”
David:
“. . . even if you are able to argue your case in an entirely logical fashion, it doesn’t mean that the other side is willing to accept your position.”
Only one actor, Harry, said that logical persuasion is a technique that he definitely
does not use. However, he seemed unclear about what logical persuasion is, and
seemed to be under the impression that it was ‘debating about what scope of services
(the supplier) are proposing to provide’. This was clearly a perception problem with
this one actor.
4.2.7.1.1 Accepting the logical argument, but refusal to change position
Some actors identified a gap between the acceptance of the logic of another
negotiator’s argument, and agreement to change one’s position as a consequence,
particularly when it would be to their disadvantage.
Norman said:“I’ve had occasional encounters with hard-nosed negotiators, who can accept the logic of an argument but will still refuse to change their position, not caring that their stance is illogical, and that they are perceived as illogical and unreasonable.”
4.2.7.1.2 The power of persisting with logical argument
Ben said:
“even in situations where the balance of power is such that the person being persuaded really doesn't have to accept the position being put forward by the other party (if for example, it is strongly believed that the
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other party will not walk away), if the argument is put forward logically and persistently enough, most people in that position of power find it hard to resist the logic, and end up accepting the position even if they probably could get away insisting on what they actually want.”
4.2.8 ii Bargaining
It was at the researcher’s presentation of initial findings to Huthwaite at Wentworth,
Yorkshire, on 4th September 2009, that two significant points were made about the
importance of bargaining, and its apparent absence from the CIPS syllabus on
negotiation. The first point was that, of all the negotiation techniques available, it is
bargaining that is the core negotiation activity around which all others should be
centred. Bargaining is negotiation, and negotiation is bargaining. The second and
more important point was that all statements in the bargaining context must be
predicated on the word ‘if’. The key to bargaining is the concept of exchange. So, the
offer goes, “If I do xyz, will you do abc?” or alternatively phrased, “If you do abc,
then I will do xyz”. The key point about these offers is that they are conditional.
Without the offer of exchange, then it is not bargaining, but merely discussion. The
importance of the conditional ‘If . . . . then’ statement could not be over emphasised. I
am most grateful to Ian Newall of Huthwaite for this insight.
By the date of the presentation to Huthwaite, all except one of the research interviews
had taken place. Given the above, it is interesting to note that only four out of 20
actors had mentioned bargaining as a negotiation technique they favoured. Barbara
stated she had never used bargaining in a negotiation. In contrast, Denise said:
“You don’t get anything for nothing. So you’ve got to give to get.”
The researcher concluded that the importance of bargaining as a technique is widely
underestimated.
4.2.9 iii Use of power and coercion – see separate section 4.2.2 Theme 2
4.2.10 iv Emotion
Overall, 12 out of 20 mentioned emotion as a negotiation technique they did not
favour. It became clear from the ensuing conversation that nine of these actors did not
regard the use of emotion as a valid negotiation technique, rather an emotional plea to
the other party, which they believed was unprofessional. This was an unexpected
perspective for the researcher, as emotion has been taught as one of the valid five
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traditional persuasion techniques. Eight of the actors mentioned the use of emotion as
just one of the tools in their kit, and were comfortable using it.
4.2.11 v Compromise
Nine out of 20 mentioned compromise as a negotiation technique they were aware of
but did not favour themselves. It became clear from the ensuing conversation that six
of these actors regarded the use of compromise as a weak negotiation technique, with
strong negative overtones.
Barbara stated:
“I don’t think of it as being a persuasion technique, I think of it as giving in.”
However, one single actor, Oliver, had a very different perspective on compromise.
He noted:
“Compromise is a noble endeavour. Compromise is about different parties getting together and understanding how to work together. It can apply to different cultures, it can apply to matters of State … You know, compromise in many instances is the only way things get done. So you know, to me, there’s absolutely nothing wrong with compromise if it’s a means to an end and if ultimately at the end of the day both parties benefit. Both parties should benefit. How can people stay in business if…?”“Certainly I’ve never done a deal where some element of compromise wasn’t present – not ever – because I’ve never ever done something where I got absolutely everything I ever wanted. That simply doesn’t happen.”
4.2.12 vi Understanding the other party’s goals and objectives
The actors who use this technique described with enthusiasm how they had found the
key to a successful negotiation outcome emerged as soon as they understood the
underlying motives of the other party with whom they were negotiating.
Oliver explained that his preferred negotiation technique is to discover exactly what
the other party’s genuine objectives are. He said this technique has been the secret of
his considerable success in negotiations throughout his career. He starts out by
building a strong rapport with his opponent and, during the course of establishing a
cordial relationship, listens carefully so as to understand the opponent’s primary goals
relating to the matter of the negotiation and any perceived obstacles to meeting those
goals. He then seeks to obtain what he requires from the negotiation while at the same
time, delivering their goal. An overlay of fairness, flexibility and firmness adds to his
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success. Oliver was not the only negotiator to adopt this technique as his mantra in
negotiation. Mike uses this technique and stated that, in his view, a good negotiator is:
“Someone who is able to empathise with the other side. So, someone who is able to stand in his opponent’s shoes. For me, that’s the overriding characteristic.I think if you start off with an understanding of what the other side is trying to achieve, then it informs you and makes you a better negotiator for your own side. You can’t come at it in a vacuum - you need to understand what their motivators are, what their parameters are.”
Eric said that it was important to put yourself in the shoes of the other party:
“If I was in their shoes now what would I be feeling, how would I be going through this, what do they need out of you, what could I give them?”
That three of the most experienced negotiators approached negotiations intending to
gain an understanding of the underlying motives of the other party, and used this as a
key to finding a mutually acceptable outcome, was evidence that this is in use as a
valuable technique in buyer-seller negotiations currently.
4.2.13 vii Promises
A new technique which emerged from the interviews is the ‘promise of future
business’. This was first mentioned by Carl, who said:
“If I was trying to persuade a supplier to do something that he really didn’t want to do, and the only thing I had to offer, the only carrot in my bag was the promise of future business, then yes, I may well inflate the …, you know, I’d give as good a spin as possible to that.”
Ivor mentioned this as ‘promises of future benefits’. He was aware of this as a
technique but he refused to use it himself, believing it would store up future problems:
“What I wouldn’t say to a supplier, and I don’t think I’ve ever done this, is the sort of false promises thing where you say, ‘well if you do this for me at his price, I’ll give you a £1million order next month’, knowing you’ve got no intention of doing it.”
It was clear that promises made during negotiations could be either explicit or
implicit, and were meant to be instrumental in influencing the other party to whom the
promise was made, to reach agreement. This would take place as part of the
bargaining phase, and may be recorded in the contract subsequently signed between
the parties, but most likely would not be part of the formal deal.
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Several actors mentioned this technique, and it is considered worthy of being added to
the established persuasion techniques. The technique of making promises may be seen
by some as the converse of the established technique of threat, the use of power and
coercion, because rather than making an explicit threat, a promise may be the more
acceptable alternative side of the same proposition. Although the technique is closely
linked to bargaining, compromise and use of emotion, after consideration the
researcher decided it should be identified as a separate new technique.
4.2.14 Theoretical techniques
Actors were asked whether they used Porter’s ‘Five Forces’ or Kraljic’s ‘Portfolio
Matrix’ or similar approaches that featured in the literature review. The unanimous
response was that not one of them used these approaches.
4.3 Other findings from interviews
Several new perspectives were identified from the interviews. Some of these
perspectives were not responses to specific questions because they were outside of the
scope of the research questions and they emerged unprompted from the semi-
structured questions and the deliberate practice of allowing the actors to digress into
other topics, and then pursuing these new ideas, as part of the theoretical sampling
methodology. They are recorded here for readers because they are believed to be of
interest to researchers into the subject of negotiations between buyers and sellers in
the B2B context.
4.3.1 Effective Negotiators
All of the actors gave responses to the question “What makes an effective
negotiator?” in their own words. These responses were then correlated to the terms
used in research first conducted in the 1960s by Karrass (1968), where the meanings
were synonymous. These are shown in Figure 4.5. Some of the characteristics
described by the actors are new, there being no equivalent in Figure 4.6. These are
vigilance, understanding of stakeholder’s requirements, ability to recognise
opponent’s style and mirror it, numeracy, ability to flex their neural pathways, and an
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astute business person. Samples from the responses include, in the words of the actors
themselves, describing what a good negotiator is:
Eric said:
“A good listener, and a good planner, someone who thinks ahead and has the ability to plan and plot and have various scenarios in their head. Thoughtful, alert, ability to think on your feet, ability not to panic - that usually comes from preparation and understanding, homework and so on.”
Alice said:
“. . . a natural instinct, raw capability, appetite for a deal and all that stuff and then I think it’s a mixture of some of the hard skills and some of the soft skills, some technical knowledge, knowing the right negotiation framework. But also there’s the art of the negotiation.”
Graham said:
“Somebody who listens well, who can evaluate information, can communicate well, and can work towards a joint solution.”
On the BATNA Graham said:
“I think a good negotiator will work hard to establish one, i.e. an alternative supplier, an alternative product, an alternative whatever - a plan B, and the stronger the plan B, is the more it puts power in the buyer’s hands, I guess, and makes the negotiation stronger.”
Ivor said:
“Somebody who’s very determined. Somebody who is very focussed on the outcome they are looking for. Somebody who is a good listener - you need to be able to hear as well as speak. I think someone who’s got good human skills. They talk about that blend between warm and cold: to be able to be very hard about the subject but also be able to warm with the person.
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Figure 4.5: Perceived characteristics of effective negotiators – interview responses
0 1 2 3 4 5 6
1 - Listening skills
2 - Focus on target outcome
3 - Persistence and determination
4 - Preparation and planning skill
5 - Subject knowledge of negotiation content
6 - Understanding of other party's needs and interests
7 - Clarity of thought under pressure
8 - Integrity
9 - Emotional intelligence
10 - Verbal expression
11 - Judgment and general intelligence
12 - Ability to understand and get on with people
13 - Personal confidence
14 - Ability to take on different negotiating roles
15 - Compromising temperament
16 - Appetite for a deal
17 - Hard skills
18 - Soft skills
19 - Negotiating experience
20 - Self-control
21 - Attractive personality
22 - Rank (seniority) within own organisation
23 - Problem solving and analytical abilities
24 - Vigilance
25 - Understanding of stakeholder's requirements
26 - Ability to recognise opponent's style and mirror it
27 - Numeracy
28 - Ability to flex their neural pathways
29 - An astute business person
Interviews answers
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4.3.2 Female negotiators
The first actor to raise the topic of female negotiators possessing power over their
male counterparts, was male actor Harry, who raised the topic in response to a
question about whether he used emotion in negotiations. He said that he used female
negotiators as his ‘secret weapon’, and went on to say:
“I think women are slightly harder to negotiate with. I think it’s because they’re women . . . I’ve got two procurement managers who are female. I’d bring one of them in to sit alongside me, or I let them chair it - and it’s distracting in some cases, especially if it’s an all male team on the other side, they’re more liable to comply to what the woman says.”
The subject of female negotiators was raised in subsequent interviews, numbers 10 to
20.
The next actor was Ivor, and he agreed that female negotiators held a greater power
over him than their male counterparts:
“ . . . I think sometimes I didn’t push quite as hard with a couple of my female salespeople - . . . there was a little bit of ‘well, I won’t go for that last couple of percent’, which I think with a bloke, even if it had been a bloke I had a good relationship with, I might have pushed just that bit harder.”
Christine, a senior female procurement director, agreed that female negotiators are at
an advantage over male negotiators. She said:
“I don’t think that a man sometimes feels that he’s losing face when he gives in to a woman as much as he would if it was a man.”
Elizabeth, a senior female procurement director operating in a predominantly male-
dominated industry, construction, agreed that being female gave her a particular
advantage, saying:
“. . . the suppliers, they’re only used to dealing with men. --So in negotiations it’s actually quite easy because they’re so unused to my style. - I think it just scares them rigid most of the time because they just don’t know what’s coming - because men negotiate in such a different way, and it’s always a bit testosterone fuelled with me, in the negotiations it’s beating chests type of men - with women, we don’t do that, we’re much more disarming.”
She also admitted to using a certain female guile:
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“. . . being a female, I build relationships in a better way, so it means that I can call in favours.”
The consensus from the sample following the revelation in interview 9 was that
female negotiators are at an advantage when negotiating with male counterparts, and
this was confirmed as the consensus of the actors in the sample, although only four of
them were female.
4.3.3 Deadlines, fatigue and exhaustion
Four actors who had experience of acquisitions and merger negotiations identified
that the imposition of deadlines (real or artificially created) on the other party, and the
consequent fatigue and sometimes exhaustion, often caused by sleep deprivation, had
a detrimental effect on the quality of decision-making of negotiators. This had been
used against them as a deliberate tactic in order to try to force a negotiation team to
make major concessions against their better judgment, because their judgment was
temporarily impaired.
Ben said:
“In situations where the timelines are often ridiculously tight, very often on corporate or mergers and acquisitions transactions, where they get agreed very late at night because people are so tired and under pressure to meet a deadline . . . they concede on points that they would otherwise probably not concede”
Norman said:
“I think for that one individual, I would have to say (that that was their normal way of doing business,) yes. But we were equally determined that those tactics wouldn’t work, and we were equally determined be it cold or hungry that that wouldn’t affect us, or tired, but we would just see it through.”
4.3.4 Contracts
4.3.4.1 Q 9 “How important is the written contract when agreement has been reached?”
There was almost unanimous agreement on the importance of written contracts, 19
actors out of 20 claiming that they are very important. Reasons given for the
importance included:
“An important mechanism for managing relationships”Ben
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All except one of the actors had never heard of large organisations doing business
without written contracts. It was, therefore, concluded that this practice was peculiar
to supermarkets, when buying goods for resale from small suppliers, where it had
been identified. According to the actor, it was common to all of the UK supermarkets
in the period of seventeen years up to 2002 but the practice was not found in any other
field in the study.
4.3.4.2 Q 10 “How common is it for major deals not to be documented in formal contracts?”
Adam had informed the interviewer in the initial interview that in seventeen years
supplying biscuits and cookies to supermarkets he had never had a written contract.
He believed that this was because the supermarkets wanted flexibility of supply
themselves, but none for their small suppliers.
Frank had a different perspective on simple contracts:
“Yes. A bit like if you go into the London Fuel Exchange, and they actually sell tankers of oil on little bits of paper. - There is no 50-page contract that goes with it, but that piece of paper is a contract. But, there will be some trading rules around what that means - and what’s interesting in that environment is that those rules tend to be quite generic not adversarial, if you see what I mean.”
4.3.4.3 Q 11 “Is it true that the contract is only important when things go wrong?”
(Deliberate closed question)
Sixteen of the 20 actors concurred with this statement, but most went on to cite
examples of contracts being necessary for clarity around deals done prior to their
taking up their responsibilities.
Ben, a lawyer, put forward his overview of the importance of contracts:
“I think that there is a fundamental purpose to a written contract, which stretches back to the Magna Carta a thousand years ago, where everybody recognises the fact that you have to reach an agreement, carve out the things that are not written down, and it’s impossible to establish in many ways what’s been agreed between parties unless you can do that. So I think it’s a very important mechanism for managing relationships.”
4.3.4.4 The ‘Sweeper clause’
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Some sellers, particularly in large outsource contracts, rely on being able to
supplement the original contract price with ‘change control’ charges, which may
move the contract from negative profit to positive. Several buying negotiators made
the point that they believe that suppliers will put forward a compliant bid during a
competitive process knowing they will not agree to the same terms when it comes to
signing the contract, just to get shortlisted. Buyers spend a lot of time countering this
risk by specifying in minute detail exactly what the supplier is contracted to do. This
is often not the optimal way to deal with the problem, as an alternative is to insert a
‘sweeper clause’, putting the obligation on the supplier to deliver the full end-to-end
service inclusive of everything necessary to deliver it, whether specified in detail in
the contract or not.
Some actors, like Ken, believe they will even sign an unprofitable contract, relying on
chargeable change controls after contract signature, in order to bring the contract into
profitability:
“It was broadly an unmanageable contract. And you’d got a supplier who was set a task that was impossible to deliver on; - they wanted to win the business so, like all suppliers in my view, they think they can get away with slippage of the scope.”
The ‘sweeper clause’ is a ‘catch-all’ clause which has the effect of ‘sweeping up’ all
ambiguity which the seller might rely upon in order to invoke chargeable Change
Controls. (This is a well-known ploy where a seller may agree to take a contract that
is either low or even negative margin business, relying on turning the contract to
profitability by pushing through several chargeable Change Controls and effectively
holding the buyer to ransom). The ‘sweeper clause’ effectively puts the responsibility
for delivering the expertise around the area of service provision, such that the seller
knows or should know all about the elements of the service they provide, and they
cannot abdicate their responsibility . It comprises of two elements. Firstly, anything
incidental to the primary service being provided is included with it and may not be
charged for as an extra to the price of the primary service. Secondly, the buyer is
relying on the seller for its expertise. If elements of the service have been omitted
from the contract due to the buyer’s lack of knowledge then the seller is obliged to
provide any and all such elements that would have been identified in a discovery
phase then it must be ‘swept up’ and included as part of the contracted service.
4.3.4.5 ‘Purposive contracts’
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Mike mentioned a fashion in Information Systems (IS) contracts around the
millennium (year 2000) for what were known as ‘purposive’ contracts. He described
them as follows:
“At the time exponents of these contracts claimed that it was unnecessary to specify their requirements in detail; all that was required was a high level service description, and the supplier would provide the service accordingly. This had the effect of shifting the workload involved in specifying the service to the post-contract phase.”
4.3.4.6 Minimise Legal involvement
Ben, a partner in a major London law firm specialising in negotiating IT and
outsourcing contracts recommended:
“Lawyers should be involved at the outset, and again at the end, but they don’t need to be involved through the whole negotiation process. If you are taking a standard offering from the supplier then you have little choice but to use their paperwork. However, if it’s a bespoke service, insist on your own. Get your legal advisor to spot the top ten or fifteen issues, both legal commercial points. Then go and negotiate the commercial deal. When that is done go back to the lawyers for a final ‘red flag’ review of the contract. That’s the most efficient way of maximising your legal protection while minimising your legal costs.”
4.3.4.7 Unwritten contracts
Large supermarkets deliberately did not agree formal written contracts with smaller
suppliers of goods for resale, enabling them to drop suppliers at a moment’s notice.
Commitments made to these small suppliers might be documented in letters or e-
mails, but were not formalised in contracts.
4.3.5 Major Outsource Contracts
4.3.5.1 First year
The first year of an outsource contract will usually be difficult and will fail to deliver
as anticipated, according to actor 16.
4.3.5.2 Failure to manage
It is common for large organisations to outsource processes and fail to put in place
any in-house provision for management of the outsourced contract, according to actor
16.
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4.3.6 Lack of negotiation expertise and experience
James had been surprised at the lack of expertise of senior individuals in his
organisation:
“What I quite often find is that the firm has lots of quite senior executives that are utterly superb at understanding their client’s business, or utterly superb at delivering a project, or an operation, or a service of some description. But when it comes down to basic negotiating with a third party – hopeless. They’ve just never done it before and it’s not their fault that they’re hopeless, they just haven’t had the experience.”
4.3.7 Global database of third party suppliers
James referred to a database that has been established in his global organisation which
has quickly proven its value by enabling savings of over 30% on one multi £million
deal alone. This is done by giving negotiators access to vital information about all
interactions globally between their organisation and every seller, both successful and
unsuccessful, between the organisation and all its technology suppliers and potential
suppliers. Only three actors have operated at this level globally, though all three
concurred with the benefits of such a database.
4.3.8 Dealing with major issues
Barbara had learned to her cost that it is unwise to leave big issues unresolved until
later into the negotiation process. On reflection she believed that these issues could
have been resolved in the earlier stages of the negotiation and failure to do so
demonstrated to the other negotiating team a lack of resolve, or a weakness, that was
repeatedly used against them each time the issues were addressed. This difficulty was
exacerbated by the linkage of several major issues by their opponent, which created a
chain of dependencies, none of which had been resolved.
4.3.9 Linkage of issues
Barbara had also encountered a problem caused by the linkage of separate issues,
some related and others unrelated, by an opponent in a major negotiation, which, on
reflection, should not have been allowed. By allowing the seller to link certain issues
they had in effect sanctioned a delaying tactic which was then used against them to
drag out the negotiation, and increase leverage against them. These linked issues then
became more difficult to resolve, primarily because they were linked together. The
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lesson for this actor was that they should never have agreed to the issues being linked,
but should have resolved each issue in turn.
4.3.10 Fear of retaliation
Ivor, a sales negotiator, revealed that a strong reason for not taking advantage of his
opposite number in negotiations, was fear of retaliation by a valued trading partner.
He articulated this by saying:
“A lot of what we do is because we do have a long term relationship with outsource vendors, and you are always looking at a bigger picture of what you do, and if there is a feeling that you’ve really done them over on something then that’s going to come back in the next set of negotiations.”
4.3.11 Feigned stupidity and persistence
Barbara contributed a technique which had proven successful on many occasions:
feigning stupidity by digging in your heels and keeping saying ‘no’. The feigned
stupidity ploy allows the negotiator to keep asking the same question over again, each
time eliciting more information, which assists in building a more credible defence.
Alternatively, the other party may just become so fatigued that they lose the will to
continue negotiating.
4.3.12 Culture of the organisation or sector
The negotiation approaches adopted by organisations and sectors are often dependent
upon the culture of that organisation or sector. Actors who worked in the construction
and supermarket sectors described them as being particularly brutal.
Harry believes that the negotiations he participates in nowadays are more
sophisticated than in his previous jobs, and in particular, compared to when he was
working in the construction industry, where the culture was brutal and negotiations
were crude power plays. He said:
“Keep calm. Keep your powder dry. I can defuse situations, those banging of the tables of years ago. - Nowadays, my negotiations with people are a lot more civilised, they can afford to be. . .”
4.3.13 Language obfuscation
The question regarding integrative and distributive approaches to negotiation revealed
that the interview actors were not impressed by the practice of inventing and using
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new words and expressions by academics. Obfuscation is the concealment of intended
meaning in communication, making communication confusing, intentionally
ambiguous, and more difficult to interpret.
4.3.13.1 Lower level of reporting
Where important or critical business processes are outsourced, the new managers of
these processes in the outsource provider will report into the buyer organisation at a
lower level than the in-house manager previously reported, demonstrating the arms-
length nature of most outsource contracts, according to actor 15.
4.3.14 Negotiation Team Structure
The research found that those negotiators involved in very large negotiations had
evolved similar structures for managing large negotiating teams by separating the
functions necessary to manage the way in which the negotiations were conducted,
including the vital roles of the Governance Team, the Negotiation Team and the
Support Team.
4.3.15 Reviewing lessons learned
Most buying negotiators confirmed that the final phase of reviewing how the
negotiation went and the lessons learned very rarely happens in practice whereas,
conversely, most sales organisations almost always conduct such reviews because it
has a direct input into improving their sales processes and future sales performance.
Buying negotiators were all too often sucked in to operationalisation of the contract as
soon as it was agreed.
4.3.16 Negotiation, a ‘seat of the pants’ activity, unplanned and disowned even in the most respected leading global companies
Even in the most respected leading global companies negotiation tends not to be a
formally planned activity and ownership of negotiation as a critical business function
tends not to be held or controlled centrally, but delegated randomly across the
organisation. This finding was clear from the negotiators interviewed and was
confirmed strongly by Huthwaite in their research (Kawamoto et al., 2009).
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4.4 Phase 2 – Findings from questionnaires
4.4.1 Questionnaire 1 - Perception of the importance of effective negotiator characteristics
The ranking of the order of importance of characteristics of effective negotiators
shown by the actors in this study in Questionnaire 1 (see Figure 4.6) is not generally
applicable beyond the sample of actors within this study. The ranking was obtained by
sorting in an Excel spreadsheet the characteristics scored by the actors from highest to
lowest in importance as ranked by the sample.
Subsequently a second ranked listing was produced (see Figure 4.7), which combines
the results from the interview responses with the results from the questionnaire
responses. It will immediately be apparent that there are several characteristics
identified in the interviews that were not included in the questionnaire. Otherwise
there is a fairly strong correlation between the results of the two responses.
What is interesting about this ranking is the scattering of personal ‘chemistry’
elements in the top 23, with listening skills, personal confidence, integrity and
understanding of the other party’s needs and interests all in the top 10, followed by
emotional intelligence and self-control in the top half of the list. Equally interesting is
that ‘attractive personality’ is so low in the list, and that ‘respected by the other party’
and open-mindedness and tolerance’ are in the lower half.
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Figure 4.6: Characteristics of effective negotiators – questionnaire responses
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6 - judgement and general intelligence
7 - decisiveness
8 - integrity
9 - preparation and planning skill
10 - understanding of other party's needs & interests
11 - internal organisation and communication
12 - subject knowledge of negotiation content
13 - ability to take on different negotiating roles
14 - emotional intelligence
15 - negotiating experience
16 - self-control
17 - problem solving and analytical abilities
18 - leadership (own team)
19 - ability to exploit power to achieve objective
20 - competitiveness
21 - respected by the other party
22 - debating skill
23 - open-mindedness and tolerance
24 - willingness to risk being disliked
25 - patience
26 - verbal expression
27 - non-verbal behaviour
28 - tolerance of uncertainty
29 - willingness to employ force
30 - compromising temperament
31 - rank (seniority) within the organisation
32 - attractive personality
33 - willingness to take high business risks
34 - trusting temperament
High
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Figure 4.7: Characteristics of effective negotiators – interview and questionnaire re-sponses compared
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7 - Clarity of thought under pressure
8 - Integrity
9 - Emotional intelligence
10 - Verbal expression
11 - Judgment and general intelligence
12 - Ability to understand and get on with people
13 - Personal confidence
14 - Ability to take on different negotiating roles
15 - Compromising temperament
16 - Appetite for a deal
17 - Hard skills
18 - Soft skills
19 - Negotiating experience
20 - Self-control
21 - Attractive personality
22 - Rank (seniority) within own organisation
23 - Problem solving and analytical abilities
24 - Vigilance
25 - Understanding of stakeholder's requirements
26 - Ability to recognise opponent's style and mirror it
27 - Numeracy
28 - Ability to flex their neural pathways
29 - An astute business person
Interviews answers Questionnaire answers
4.4.1.1 Soft skills
Listening skills emerges as the most important skill, ranked first in the interviews and
third in questionnaire 1. This links to three other ‘soft’ skills that all ranked in the top
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10, ‘understanding of the other party’s needs and interests’ (ranked 6), ‘integrity’
(ranked 8) and ‘emotional intelligence’ (ranked 9). The senior negotiators who
participated said that listening to the other party, understanding their needs and
interests, and behaving with integrity and emotional intelligence add up to what they
believe to be four of the most important characteristics of good negotiators. Together
these four characteristics present concerns for the other party that have not emerged
from the literature to date.
4.4.2 Questionnaire 2 - Negotiator perception preferences
The preferences shown by the actors in this study between collaborative or
competitive approaches in Questionnaire 2 (see Figure 4.8) are not generally
applicable beyond the sample of actors within this study.
4.5 Summary of findings
This chapter has presented the findings of all three phases of fieldwork conducted
with senior negotiating practitioners, in line with the research objectives. The data
from the interviews and questionnaires in the fieldwork has been presented. Many
actors spoke of events or circumstances, processes, methods or tactics that had arisen
in their negotiations that provided the researcher with new and unexpected
perspectives. Previous research has been largely based on negotiation simulations
using students or studies of negotiations in other fields, not commercial or
buyer/seller negotiations. This is the first time that research has obtained data from
‘real life’ senior negotiators of deals between buyers and sellers.
The main findings were as follows:
4.5.1 Profiles of Actors
All 20 actors had ten years or more experience as a professional negotiator. 13 were
buyers, four were sellers, and three conduct both buying and selling negotiations. 15
were male and five female. 14 industry sectors were represented.
4.5.2 Theme 1: Integrative Negotiations
Only one of the 20 actors had heard of the terms ‘integrative’ and ‘distributive’ in
relation to negotiations, and that actor had moved from a practitioner career into an
academic career. The terms are used exclusively by academics and are unknown to
practitioners. Negotiators believe that whether a negotiation position is adversarial or
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collaborative depends on how it is presented to the other party. It may be dressed up
as win-win, but it is often regarded as win-perceived win.
Figure 4.8: Negotiators’ Perception Preferences
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The world of negotiation is controlled by 'enlightened self-interest'
The world of negotiation is controlled by 'egocentric self-interest'
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Resource distribution is integrative in nature (both parties can win)
Resource distribution is distributive in nature (one party wins but the other loses)
3___________________________________________________________________
The goal of negotiation is a mutually agreeable solution
The goal of negotiation is to win as much as possible
4___________________________________________________________________
A negotiation usually leads to joint problem solving
A negotiation usually leads to conflicts and disagreement
A good Negotiator :
5___________________________________________________________________
Maximises returns for his organisation
Maximises tangible resource gains
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Makes reasonable opening demands
Makes high opening demands
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Focuses on common interests
Uses threats, power, confrontation and argument
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Understands merits objectively
Is not open to persuasion
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Considers needs/interests/attitudes of other side
Does not consider needs/interests/attitudes of other side
10__________________________________________________________________
Shares joint gains
Negotiates the majority or all gains for his own side
Sales negotiators believe that in the majority of negotiations the buyer is in a stronger
position than the seller.
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A common adversarial position by the buying negotiators was that the seller will keep
giving concessions until the deal becomes unprofitable for them. In the majority of
negotiations, the buying negotiators did not consider it their responsibility to concern
themselves with the profitability of their suppliers, especially on major high value
negotiations, as it was more important that they secured the best deal for their own
organisation.
It was clear from what the negotiators said, that they paid lip service to the concept of
win-win without buying into it. Selling negotiators in particular often referred to their
‘partnership’ with the buying organisation, whereas buying negotiators had become
‘jaded and cynical’ about the concept and found it irritating.
4.5.3 Theme 2: Use of Power and Coercion
All of the actors expressed views on the role of power in negotiations, and many
sources of power were quoted. 14 actors said that they favour using power in a
negotiation if they are in a position to do so. However, the research discovered that
two characteristics relating to power, ‘ability to exploit power to achieve objective’
and ‘willingness to employ force,’ ranked low in the questionnaire responses at 19th
and 29th respectively.
Sources of power used by buying negotiators were competition, particularly when
using reverse auctions; - having a real alternative to reaching a negotiated agreement
(BATNA); - the simple power of being the buyer in a market with several sellers; -
confidence, and concealment of information. A BATNA is not often available as a
genuine source of power. However, some negotiators believe it is part of their job to
create a credible alternative to negotiated agreement.
Selling negotiators were more circumspect about the use of power in negotiations, and
this supported the seller’s view that the power more usually rests with the buyer than
the seller.
Buying negotiators spoke about internal conflicts in their own organisations with
stakeholders who often hold on to the power of their positions within the organisation
and are reluctant to release sourcing decisions to Procurement. Often this is linked to
strong relationships with established suppliers. Several buying negotiators mentioned
the IT function in particular as being a difficult and uncooperative stakeholder,
especially in terms of source decision-making. IT Directors often still decide who
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they want to contract with and get their way regardless of the competitive processes
put in place.
4.5.4 Theme 3: Interpersonal ‘chemistry’ between negotiators
There are a number of underpinning theories dealing with interpersonal behaviours
and characteristics of negotiators, including emotional intelligence, adaptive selling
behaviour, subservient seller syndrome, and others. However, the focus of these
theories is on the behaviours and characteristics of individuals and not on the
interaction between negotiators. The interpersonal chemistry of how negotiators
interact in the context of the negotiation, commencing from the relationship building,
or rapport phase, is critical in determining the progress and outcome of the
negotiation, and this interpersonal chemistry may be categorised as positive or
negative. Thus, whether the personal relationship between negotiators that forms at
the initial stages of communication is positive or negative will determine the
subsequent interaction between them and, ultimately, the outcome of the negotiation.
This applies regardless of whether the meeting is face-to-face, on the telephone, or by
e-mail, although face-to-face communication is always preferred by sellers. This
explains why selling negotiators work so hard to influence the interpersonal chemistry
to be as positive as they can make it, and work so hard to get face-to-face meetings
with buyers, and why buying negotiators in competitive source selection processes
resist that influence as far as they are able, or attempt to limit access to such influence
equally across all competing sellers.
From the findings the interpersonal chemistry that had formed between negotiators as
a feature of particular negotiations was of major importance to several actors,
influencing their approaches and responses to negotiators of the other party. These
had left lasting impressions on the actors, both positive and negative, though the
negative ones were recalled more readily, and in several cases with raw emotion.
4.5.4.1 Ethics, Trust and Integrity
One of the findings was a state of ambiguity around the integrity of buyers in
negotiations. All of the actors were swift to state in strong terms their integrity, often
stating they would not tell lies in negotiations. However, when asked if they would
mislead the other party, correct the other party’s misunderstandings, or correct their
mistaken assumptions, they unanimously agreed that they would not correct them, but
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would mislead them. When asked if they would tell a seller that their price was not
competitive even if it was the lowest price, all of the buyers agreed they would.
Therefore, it is clear that although all actors regard themselves as being people of
integrity, they have a transparent idea of what this requires them to do and what is
allowable normal commercial practice (see Sheridan pp.47-48 of Literature Review).
Despite the ambiguity above, integrity was found to be of critical importance, and in
the event of a breakdown of trust between buyer and seller, then the end of the trading
relationship would follow shortly afterwards.
Often the breakdown of trust would be in the negotiators’ own organisations, and
would be instigated by senior stakeholders in the buying and selling organisations
having met informally, often over dinner or on a golf course, and agreed the outline of
a deal. This would undermine both buyer and seller and was usually a serious
demotivating factor.
The research found that most of the interviewees had been caught out by deliberate
deception ploys where the negotiator had agreed to give a concession but had not
incorporated it into the contract, hoping that the its absence in the draft would go
unnoticed. This had led to all of the actors not trusting their counterparts in major
negotiations and seeking to retain control of contract drafts and ensuring the use of
‘track changes’ in Word.
4.5.5 Theme 4: Persuasion Techniques
As mentioned above in Theme 2, the findings from the field research indicate that of
the five traditional persuasion techniques, coercion is most likely to be used initially,
if either negotiator believes that he or she is in a position of power over the other. If
that succeeds, then the negotiation is won by the more powerful party. If not, then
logical persuasion is more likely to be favoured than the other remaining traditional
techniques, which are bargaining, emotion and compromise.
Several actors even stated that they are more likely to continue with logical reasoning
even when it is not working, rather than shift to another technique. The actors
expressed difficulty in dealing with illogical negotiators who either genuinely did not
follow the logical argument put to them or pretended not to follow it in order to hold
their negotiating position.
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Two important points emerged from the research regarding bargaining, the first being
that it is fundamental to negotiation. Of all the negotiation techniques available, it is
bargaining that is the core negotiation activity around which all others should be
centred. Bargaining is negotiation, and negotiation is bargaining. The second and
equally important point was that all statements in the bargaining context must be
predicated on the word ‘if’. The key to bargaining is the concept of exchange, and
conditional offers. Without the offer of exchange, then it is not bargaining, but merely
discussion.
The majority of actors mentioned emotion as a negotiation technique they did not
favour, although eight actors did favour it. This was a surprise to the researcher as
emotion has traditionally been taught as being an important technique, particularly by
Paul Steele and his training company PMMS.
Compromise was another technique not favoured by the majority of actors. This was
stated to be because it seemed like a failure to compromise when all other attempts to
negotiate had been lost. Another reason was because there was ambiguity in the minds
of some of the actors regarding whether compromise meant simply splitting the
difference, rather than compromising in a positive manner, as part of bargaining.
Two additional persuasion techniques emerged from the research, that have not been
traditionally identified as negotiation techniques, these being promises, and
understanding the other party’s genuine objectives.
4.5.6 Other findings from interviews
4.5.6.1 Behaviours of effective negotiators
The research found that the actors believe that effective negotiators are good at
listening, planning, thinking ahead, thinking on their feet, communicating effectively,
focusing on the target outcome, and developing alternatives to a negotiated agreement
(BATNAs). All of the actors emphasised the importance of thorough preparation and
planning to effective negotiators. However, there was little consensus on how to
prepare effectively, and no consensus on how the detailed planning process should be
approached.
The research found that the five traditional persuasion techniques used in negotiation
are not properly explained in the CIPS level 4 syllabus, and require a greater
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understanding, particularly the importance of bargaining as central to negotiation, and
the concept of exchange in bargaining.
The research also found that negotiators are influenced by their personal feelings
about their opposing negotiators and how they interact with them. These personal
interactions emerge around whether they like or dislike, trust or distrust, respect or
hold in contempt, consider them fair and reasonable, and whether they perceive
integrity or deceit.
The research also found that if negotiators are in a position of power over their
opponents they will use it, but they resent power being used against them.
The research also found that there are only four possible responses to a proposal:
accept, reject, counter-propose or ignore.
The research also found that negotiators are motivated by personal drivers, which may
or may not be the same as the drivers of the organisation on whose behalf they
negotiate. These motivating factors may not be assumed; in major negotiations it is
important to understand the personal motives of the other party’s negotiators.
The research also found that most negotiations are adversarial in nature; collaborative
negotiations happen rarely and only in special circumstances, a perceived exception
being those negotiators who adopt the approach of ‘understanding the other party’s
genuine objectives’ discussed in this research.
Finally, the research found that female negotiators are at an advantage over males
because men don’t feel that they are losing face when they concede to a woman as
much as they would in conceding to another man.
In the next chapter these findings are discussed in line with the research objectives
and the extant literature covered in Chapter 2.
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CHAPTER 5: DISCUSSION OF FINDINGS
5. Introduction, chapter overview, aims and objectives
Chapter 4 identified the findings from the different phases of field research. This
chapter evaluates the outcomes of the research from Chapter 4 in line with both the
extant literature on negotiations between buyers and sellers and the research aims and
objectives. The specific objectives of this chapter are to:
· Evaluate the results in line with the research questions.
· Discuss the results in line with the extant literature on major negotiations
between buyers and sellers and the theoretical debates underpinning them.
· Synthesise the underpinning theoretical concepts from the secondary data (the
literature review) and the primary data from the interviews and the
questionnaires to arrive at a set of negotiation principles.
· Present the contribution to knowledge and practice in buyer-seller
negotiations, via a number of negotiation principles which apply to
commercial negotiations between buyers and sellers.
· Identify the limitations of this research.
· Present the implications of the findings for professional practice.
5.1 Additional analysis
Following the initial submission of this work, the researcher went back and carried
out further analysis of the primary data collected from the interview and questionnaire
phases. This work is now incorporated and the underpinning theoretical concepts
identified are further developed throughout the thesis.
5.2 Theme 1: Integrative Negotiations
The research found that most negotiations are adversarial in nature; collaborative
negotiations happen rarely and only in special circumstances. The two dominant
discourses in the literature concerning this topic are challenged. These being firstly,
that there are two approaches to negotiation, integrative and distributive, and
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secondly, that distributive negotiation is an old-fashioned, traditional, arms-length and
adversarial approach that has no place in modern procurement, and which has been
largely discontinued in favour of a more integrative, collaborative approach in
negotiations between buyers and sellers.
Buying and selling negotiators do not recognise the terms ‘integrative’ and
‘distributive’ negotiations (19 out of 20 actors). Even though not familiar with the
terms, negotiators are familiar with the terms collaborative (win-win) and adversarial
(win-lose) negotiations. The main finding on this topic from the research is that in
business negotiations between buyers and sellers representing their organisations,
there is a limited role for an integrative approach to negotiation, especially as far as
buyers are concerned. Actors repeatedly stated that as a negotiator they would not be
doing their job if they approached negotiations in a collaborative, or ‘win-win’ style.
They reasoned that as they are paid to negotiate the optimum deal for their employer,
they could not be getting the best deal for their own organisation if they adopted some
sort of a notional responsibility for looking after their opponent’s organisation, and it
would be confusing their moral obligations. Secondly, they would be opening up their
position as negotiator to be exploited by their opponent, and this was contrary to all
their natural inclinations. Actors repeatedly said that business is not, and has never
been conducted, in this way and that a fundamental of business is that it uses all forms
of competition to succeed financially over its rivals.
Buying negotiators stated that that longer term ‘partnerships’ and contracts rarely
serve the buying organisation with any quantifiable advantage or benefit, beyond
security of supply and in some cases, price certainty. One writer, Ramsay, stood out
alone in the literature review, consistently maintaining that the academic theories
around collaborative negotiation were just plain wrong. These conclusions about
negotiations between buyers and sellers being primarily adversarial or at least ‘arms-
length’ and only occasionally collaborative, exclude one specific negotiation
technique: ‘understanding the other party’s genuine objectives’. It may be that this
technique is mistaken in some circumstances for a collaborative approach. The
theoretical debate around integrative negotiations is extended by the following
propositions, derived from the findings:
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· Sellers frequently talk about ‘partnerships’ and ‘special relationships’ when
there is no underlying partnership, joint venture or any other factual intent to
partner with the customer.
· This abuse of the terms ‘partnership’ and ‘win-win’ have been overplayed by
sellers since collaborative negotiation became fashionable in the early 1980s.
· Buying negotiators found this selling technique irritating and tedious, and it
has a negative impact on the buyer-seller relationship.
· Regardless of the fact that they may pay ‘lip service’ to these concepts, buying
negotiators at best may describe these arrangements as ‘win-perceived win’,
but in reality regard them as commercial transactions.
· In most negotiations these statements by sellers are ignored by buying
negotiators.
5.3 Theme 2: Use of Power and Coercion
One of the research questions is: “Who has the power in major negotiations between
buyers and sellers?” A subsidiary question is “What factors determine the balance of
power?”
The findings showed that the majority believed that power in buyer-seller negotiations
is most often held by those who are most effectively prepared, those who have real
alternatives (BATNAs), and those who are genuinely prepared to walk away: the
factors which are perceived to affect the balance of power between buyers and sellers.
They also demonstrated that the majority believed that power rests more with the
buyer than the seller, especially where competitive bargaining is used in the sourcing
process. The research also found that if negotiators are in a position of power over
their opponents they will use it, but they resent power being used against them. The
use of power to coerce the other party was much favoured by the actors, second only
to logical reasoning in the number of times it was supported (14 actors).
The actors made two statements which recurred regularly throughout the interviews
relating to power: firstly, that they would have no hesitation in using (abusing) power,
if they were in a position to do so, if it enabled them to achieve their objectives, and
secondly, that the majority of them had suffered bullying by opponents in the past and
spoke about it leaving them with memorable wounds, which they would never forget.
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They spoke about seeking retaliation and revenge on those who had treated them in
this manner. The paradox is that the same negotiators would have no hesitation in
doing exactly the same to their opponents. Although the actors had much to say about
use and abuse of power in negotiations, and identified 30 different sources of power,
the researcher was unable to obtain a clear statement of how power is actually
evaluated and then used in a negotiation. If Francis Bacon (1597) was correct when he
reputedly said that ‘knowledge itself is power’, it is not clear just how this knowledge
might be converted into usable negotiation leverage. The concept becomes even more
elusive when viewed from the perspective that says that power is in the mind of the
negotiator who believes that he or she has it.
Porter and his ‘Five Forces of Competition’ (Porter, 1980) (see Figure 2.1) were not
used by any of the actors. The actors were asked whether they were aware of Porter’s
‘Five Forces’ or Kraljec’s Portfolio Matrix or any other well known (in academic
circles) techniques. None of the actors related to these in any way. The actors gave
their own views of the sources of power in negotiations (Figure 4.3). There was an
intense depth of feeling by Actor 1 over the bullying he had suffered in his small
company at the hands of several large supermarket chains. The theoretical debate
around coercive negotiations is extended by the following propositions, derived from
the findings:
5.3.1 Test of the Power Balance between the Parties
The use of power in the form of coercion is one of the other traditional five persuasion
techniques used in negotiation. The initial phase of a negotiation is a test of the power
balance between buyer and seller. If, during this initial stage, one of the parties
emerges as dominant over the other, and this results in an agreement that both parties
are prepared to accept, then the negotiation is over, and has been determined by the
power balance favouring one party over the other.
There was unanimous agreement that when in a position of power over their
opponent, all of the negotiators would take advantage of it.
At that point there are two possible outcomes:
In some circumstances, the negotiation may end at that point, because the outcome is
at variance with the expectations of one of the parties to such an extent that the party
decides to withdraw to reconsider its position.
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Alternatively, if the initial test of the power balance between buyer and seller is
inconclusive, and neither party emerges as dominant over the other, then the
negotiation may enter a second phase, in which other factors are brought in to play.
This is when the many ‘interpersonal chemistry’ elements become more important.
It is possible that a negotiation could take place and the balance of power between the
parties not be tested, for a variety of reasons; for example, the party with the power
may not realise they have it, or the parties may not explore the situation in sufficient
depth to expose the power position of one over the other. Either or both parties may
not be properly prepared. Either or both negotiators may be inexperienced.
5.3.2 Control of contract drafts
No references to this practice were identified in the existing literature. It was found
that experienced negotiators prefer to control the drafting process. Similar to the
advantages to those who control minutes of meetings, this responsibility carries a
certain power. At one end of the spectrum this could be simply influencing the
drafting, which will always be subject to interpretation and can be excused for slight
misinterpretation. At the other end, agreed points may be missed out completely and
they will only be picked up if there is a vigilant negotiator on the other side who is
keeping accurate notes and methodically reviewing them against the latest draft each
time one appears.
5.3.3 Removal of a negotiating opponent
No references to this practice were found in the literature review. In the previous
chapter it was found that four buying negotiators had identified that if they had been
dissatisfied with the leading sales negotiator they had exercised the power of their
position and requested the removal of that negotiator. This highlights that the balance
of power identified here in most circumstances favours the buying organisation, that
controls the buying process, and can request the removal of the sales negotiator. In the
reverse situation, the selling organisation does not normally have the option of
requesting the removal of the buying negotiator. This contributes to the belief of sales
people that the power usually rests on the side of the buying organisation.
5.3.4 Database of commercial interactions
No references to this practice were found in the literature review. James’ organisation
had introduced a global database of all commercial interactions with suppliers and
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potential suppliers. This is the purchasing equivalent to marketing’s Customer
Relationship Management (CRM) database. It is an invaluable negotiation aid for
buying negotiators in global organisations, whether they have adopted a centralised or
decentralised procurement structure. Organisations with effective databases of this
type are rare, and require an investment of resources to enable them to be populated,
but once they are implemented they yield rich rewards. It is frequently the case that
selling organisations have put forward proposals, negotiated the details, and either
concluded a contract or not, with another part of the global organisation. Often this
can be the case in several countries. Without the ability to bring all of this data
together in a single database across all geographies in which the organisation
operates, that organisation is seriously hampered and will miss out on opportunities to
pick up deals already offered to the organisation elsewhere.
5.3.5 The "fait accompli" / hiding behind policy or rules
No references to this practice were found in the literature review. Ben, Head of
Commercial Practice in a city law firm, claimed that this feigned ‘policy’ works
almost all of the time. This is bullying by blaming the higher authority of the policy
for what they clearly believe is morally wrong. The stance of the negotiators is
interesting - they themselves don't think the policy is reasonable either and in a
different organisation they would probably accept those same terms. However, what
is interesting is that they do know that it is an optimum position not to give way: they
are often content with the result itself, and even more so that they can get to this result
without having to make the refusal themselves because they can rely on the power of
a dictate coming down from a higher authority.
5.4 Theme 3: Interpersonal ‘chemistry’
A number of underpinning theories dealing with interpersonal behaviours and
characteristics of negotiators were identified in the literature review, including
emotional intelligence, adaptive selling behaviour, subservient seller syndrome, and
others. However, the focus of these theories is on the behaviours and characteristics of
individuals and not on the interaction between negotiators. The interpersonal
chemistry of how negotiators interact in the context of the negotiation, commencing
from the relationship building, or rapport phase, is critical in determining the progress
and outcome of the negotiation, and this interpersonal chemistry may be categorised
as positive or negative. Thus, whether the personal relationship between negotiators
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that forms at the initial stages of communication is positive or negative will determine
the subsequent interaction between them and, ultimately, the outcome of the
negotiation. This applies regardless of whether the meeting is face-to-face, on the
telephone, or by e-mail, although face-to-face communication is always preferred by
sellers. This explains why selling negotiators try to influence the interpersonal
chemistry to be as positive as they can make it, and strive to get face-to-face meetings
with buyers, and why buying negotiators in competitive source selection processes
resist that influence as far as they are able, or attempt to limit access equally across all
competing sellers.
From the findings the interpersonal chemistry that had formed between negotiators as
a feature of particular negotiations was of major importance to several actors,
influencing their approaches and responses to negotiators of the other party. These
had left lasting impressions on the actors, both positive and negative, though the
negative ones were recalled more readily, and in several cases with raw emotion. Six
inter-personal behaviours, collectively part of ‘interpersonal chemistry’, were
identified from the interviews as having significantly influenced major negotiations in
which the actors had participated. These were: establishing rapport, showing either
respect or contempt towards the negotiator, liking or disliking the negotiator (whether
the negotiator knew or not), trusting or mistrusting the negotiator, and being perceived
to demonstrate integrity, fairness and/or charisma, or not. The research found that
negotiators are influenced by their personal feelings about their opposing negotiators
and how they interact with them. One of the important findings that emerged was that
these perceptions of negotiator behaviour are not necessarily mutual. If one negotiator
perceives a negative behaviour or trait in the other that they find offensive, then that is
all that is required to kill the negotiation. Minimal information emerged from the
literature review about negotiators liking or disliking each other. Russill (1997, p.165)
said that one of the four most important characteristics for a successful negotiator was
being likeable. No other reference was found to support the notion that negotiators are
influenced by whether they like or dislike their negotiating opponents.
Many of these feelings arise as a result of the behaviours and interactions of
negotiators. This is believed to be an important finding. The actors were never more
vehement in their accounts of how they felt about particular negotiations than when
describing the behaviours and characteristics of negotiating opponents. In summary, if
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they warmed to the person on the other side of the table, then anything and everything
could be achieved without much difficulty. If the reverse was true, then very little
would be achieved. There would be resentment harboured and the possibility of future
business would be unlikely. A further set of factors relate to how the persuasion
techniques may be applied - with humility, with empathy, with integrity and trust,
with charm, with fairness and reasonableness, with credibility, with understanding,
with intent to deceive, with a short-term adversarial approach. These factors,
characterised as personal interactions, emerged as highly important to the negotiators
participating in the research.
While some of these characteristics and behaviours appeared in the literature (see
section 2.4.4), particularly personality and conflict styles, they do not appear as a
comprehensive mix of factors. The solitary alert to the importance of these
interpersonal relationships is found in Brown et. al. (1966) where they warn against
the use of coercion as a negotiation technique because it is ineffective. All of the
actors, with not one exception, recounted memories of negotiators they had either
liked or disliked. These memories clearly did not fade over time and remained to
influence their attitudes towards these individuals in the future. The buying negotiator
can request the removal of the selling negotiator fairly easily in most situations.
Conversely, the selling negotiator has no such opportunity in most circumstances.
5.4.1 Test of the Relationship between the Parties
Only when one negotiator is not in a dominant position is it that the emotional
intelligence elements come into play. At this point in a negotiation, the power balance
between the parties has been tested, but no agreement has been reached. One of two
situations now exists: either a) neither party has emerged dominant over the other, or
b) the party in the weaker position does not accept the current status as a basis for
reaching agreement.
It is now of critical importance how the parties behaved to each other in the previous
phase, and in particular how each party perceives the other, in relation to trust and
integrity. The actors constantly repeated that it was these interpersonal ‘chemistry’
issues that dominated the outcome in many major negotiations, and left lasting
impressions on the negotiators. According to them, the traditional influences on
negotiation success, such as preparation and planning, or choice of persuasion
techniques employed, were of less importance than the relationships that occurred
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between negotiators around these elements. These include the importance of
establishing a rapport between the parties from the start, or prior to the negotiation.
It became clear from the frequency of reference to them, that these interpersonal
issues, and one of the elements of emotional intelligence in particular,
conscientiousness and integrity, seemed to dominate and kept returning to the fore in
many of the interviews. These elements emerged as a number of variables that
frequently occurred together, power, integrity, trust (fairness) and emotion. These
variables played out in negotiations and these were recurring themes in the way they
were reported by the participants: the negotiator commented on whether he or she had
used power (coercion) to achieve their aim, whether the other negotiating party had
integrity, the emotions the negotiator had felt at the time (and in many cases still felt)
and whether the other negotiating party was perceived to be fair.
From the interviews emerged several areas which could be described as personal
characteristics, which are currently grouped together and extend the concept currently
collectively known as emotional intelligence. These elements recurred throughout the
interviews as actors kept returning to issues around emotional intelligence which had
significantly influenced their major negotiations. Emotional intelligence is a term
used to group together seven sub-elements, 1. Self awareness, 2. Conscientiousness
and integrity, 3. Motivation, 4. Emotional resilience, 5. Intuitiveness, 6. Influence, and
7. Interpersonal sensitivity (Higgs and Reynolds (2002)).
The issues circled around whether the negotiators held each other in respect or
contempt, liked or disliked each other, trusted or distrusted each other, and whether
the behaviours they saw demonstrated integrity, fairness or charisma. One of the
factors which could influence the perception of these elements was the self-
confidence of the negotiators.
Emotion has long been established as one of the traditional five persuasion techniques
used in negotiation (Harwood, 2006). Emotion was identified at different levels in the
interviews: firstly it had played an important role in some of the most memorable
negotiations that the interviewees recalled, either their own emotions or those
displayed by their counterparty to the negotiation; secondly, emotion was closely
linked to the concepts of integrity and fairness, and these concepts were mentioned
together to a notable extent; thirdly, these recollections clearly stirred up emotions in
the participants just by recalling these negotiations, even though in several cases they
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had occurred some years ago. Finally, emotion was also closely linked to the use or
abuse of power, usually where the negotiator had been subjected to coercion by the
other party.
5.4.2 Two critical variables
The outcome of every negotiation is determined by a combination of these two
variables, the power balance and the interpersonal chemistry between the negotiators.
Regarding the power balance, there are four possible outcomes:
a) one of the parties emerges as dominant over the other, and this results in
an agreement that both parties are prepared to accept
b) one of the parties emerges as dominant over the other, but the weaker
party does not accept the terms offered, and continues to negotiate.
c) one of the parties emerges as dominant over the other, but the weaker
party does not accept the terms offered, and the negotiation breaks down
with no agreement reached.
d) neither party emerges as dominant over the other, therefore the
negotiation continues into a second phase.
Regarding the ‘interpersonal chemistry’, there are two possibilities for the relationship
between the negotiators, it is either positive or negative.
5.4.3 Integrity
The field research exposed an area of ambiguity and duplicity of standards that
applied across all actors. The contradictory views identified in the literature review,
where negotiators are expected to hold a special position of trust and at the same time
are expected to use Lewicki et al’s (1985) “lying and deceit are an integral part of
effective negotiation”, were reflected with the same ambiguity in the findings. During
the interviews discussions on integrity frequently started out with high moral
statements in which the actors protested their integrity in hypothetical terms.
However, when the subject homed in on specifics they all either shifted position or
presented a different slant on how they negotiate in practice. The researcher was left
in no doubt that Lewicki’s statement is true in almost all cases. Only one actor who
participated in the research staunchly held to her views that she would not mislead the
other party in a negotiation in any way, and even she said that she could not be
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responsible for the other party making incorrect assumptions based on what she had
or had not said to them.
However, further analysis of the findings around the dichotomy regarding the
ambiguity and apparent duplicity of standards led to the conclusion that integrity is
perceived by negotiators at two different levels, a high, almost superficial level, in
which conventions of the way business is negotiated include Lewicki et al’s (1985)
“lying and deceit”, and a deeper, more fundamental level of integrity, which is more
important in determining negotiation outcomes. It is this deeper level of integrity
which the actors held firm views on, and which they were not prepared to
compromise. It was only after this conclusion was reached that the complex and
conflicting perceptions of the actors around integrity made sense. Further and more
detailed analysis of this dichotomy, ambiguity and apparent duplicity of standards led
to the conclusion that there were, in fact, two levels on which integrity is perceived by
the actors.
5.4.4 Personal motivations
One of the research findings uncovered that negotiators are motivated by personal
drivers which may or may not be the same as the drivers of the organisation on whose
behalf they negotiate. Indeed, the personal motivations of the seller in particular,
primarily around the selling negotiator’s remuneration, are often in conflict with the
apparent motives of the selling organisation. Therefore these motivating factors may
not be assumed; in major negotiations it is critically important for the buying
negotiator to understand the personal motives of the other party’s selling negotiators.
Figure 5.1: Selling negotiators’ possible personal motivations
Sign new customerSign contractCommission schemePayment conditionsRecurring monthly revenues
The finding identified in 4.2.4, namely that a sales negotiator had been set a target
which did not involve revenue or profit but getting a single project established with
the supplier, were a revelation, which raised a number of observations around what
would have happened if the seller had not volunteered the information, or offered the
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consulting work free of charge, and what would have happened if the buyers had not
discovered the underlying motives of the seller.
The literature review identified the traditional importance of preparation and planning
in negotiation, and in the field research all of the actors emphasised the importance of
thorough preparation and planning to be effective as negotiators. However, there was
minimal consensus on how to prepare effectively beyond preparation in order to
support logical reasoning, and to create credible and convincing alternatives
(BATNAs). There was little discovered in the literature review about researching the
individual negotiators and their personal motivations. This emerged from the
interviews, where it became clear that buying negotiators try to understand the
personal motivations of the selling negotiator, as these may be at variance from the
reasonable suppositions of the motivations of the selling organisation. By exposing
the components of the motivational package of the selling negotiator, the buying
negotiator may identify components of a deal that fall outside of the selling
negotiator’s motivational package, and which are therefore likely to be less contested
than components which form part of it.
5.5 Theme 4: Persuasion Techniques
The literature review identified five traditional persuasion techniques that have been
established in the literature on negotiation over the past three decades since they were
first identified by Steele et al. (1989). These are shown in Figure 5.2.
Figure 5.2: Persuasion techniques – traditional
BargainingLogical persuasionCoercionCompromiseEmotion
Source: (Steele et al., 1989)
However, Steele et. al. op. cit. contains no references indicating the source of these
persuasion techniques. They had earlier appeared in Farrington (1980), described as
‘attitudinal structuring’ techniques where the source was identified as Brown et al.
(1966). In fact Brown quotes earlier sources for these ‘processes that lead to an
accommodation of viewpoints’ in the middle stages of negotiation as part of their
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detailed analysis of ‘negotiations with antagonists’, these being (Berrien, 1944) and
(Joy, 1955). There were many different answers to the question ‘what persuasion
techniques exist in negotiations?’ many of which covered techniques, such as
collaborative and adversarial, which were identified as the main approaches from the
CIPS negotiation syllabus (see Figure 4.4 on p.102). The recognisable techniques
were categorised as techniques and analysed accordingly. However, others of these
responses, such as ‘respect’ and ‘liking’ were more aligned to behaviours, or
personality traits or characteristics, than techniques, and these were appropriately
categorised and analysed. As was seen from the analysis in Figure 4.4, logical
persuasion was the technique which was most commonly cited by the actors (15 out
of 20), followed by ‘power, the use of coercion’ (14 out of 20).
5.5.1 Logical Persuasion
Logical persuasion usually comes first in any list of persuasion techniques (Harwood,
2006, CIPS, 2011), and it is the one technique most mentioned by the actors. Six of
the actors favour logical persuasion as their primary negotiation technique preferred
above all others. This accords with the literature review – that logical reasoning is
probably the most commonly used persuasion technique in business negotiations
(Steele and Beasor, 1999). Steele’s earlier caution (Steele, 1990), “Don’t depend
solely on logic – vary your style”, seems appropriate advice given that it is so much
the preferred technique of choice among the actors. It is almost as though they realise
that they should not be relying on logical argument so heavily but cannot help
themselves.
Actors highlighted two reasons not to rely on logical persuasion too heavily. Firstly, it
assumes that the other party is logical and will follow your logic. However, some
negotiators are not logical, and no matter how often a logical argument is repeated,
they will not accept the logic presented. Business negotiators rarely act completely
rationally (Herbig, 1991). This was discovered in the literature review. Secondly,
some negotiators will accept the logic of the argument but refuse to change their
negotiating stance. This was identified during the interviews (Actor 2). This can be
more difficult to deal with. When someone accepts your logic but refuses to change
their position, how do you move forward? The only option left is to use a persuasion
technique other than logic. Only one actor said that he preferred to use a combination
of logical reasoning backed up by an emotional argument (Actor 2).
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Of the 15 actors that favoured logical persuasion, six claimed that this was their
primary negotiation technique above all others and were reluctant to be shifted from
it, even when it was clear that it was not having the desired effect on the other party.
Maintaining this commitment to their favoured course of action even when that
commitment constitutes irrational behaviour on the part of the negotiator, is an
example of a psychological phenomenon known as ‘escalation of commitment’
(Brockner, 1992).
5.5.2 Bargaining
The only reference that appears in the CIPS Syllabus on negotiation (Harwood, 2006)
on the subject of bargaining is:“The use of concessions, based on a bundle of variables to reach agreement. Again, both parties participate.”
‘Derived from Steele et al. (1989)’
Although the source is quoted as ‘derived from Steele et al (1989)’, this is not an
accurate summary of what Steele et al. op. cit. has to say on the subject of bargaining,
rather it is a misrepresentation, because they actually give four rules of bargaining, the
fourth one of which states ‘get a return for any concession you make’. The original
source does make it clear that in bargaining there is some form of trading concessions.
However, it does not emphasise the nature of exchange. It omits the key concept of ‘if
. . . then’. It leaves the situation vague enough that one may think that bargaining
commences with a concession, in the hope that a reciprocal concession may be
forthcoming in return. This point about conditional offers was identified as an
important principle in negotiation, though it was identified in a text book and not in
the academic literature by Kennedy (1982). Kennedy (1982) made the point forcefully
that he was hostile towards any unilateral conceding under any pretext whatsoever, or
for any purpose. He kept reinforcing his point that bargaining, the heart of the
negotiation process, is an exercise in exchange, where concessions are traded, never
given away. This point has never been incorporated into the academic literature.
5.5.3 Emotion
The findings related to emotion as a negotiation technique were interesting in that 12
of the 20 negotiators did not favour using emotion in any circumstances. This was
unexpected, although there may be two possible explanations. Firstly, it is clear from
examining the interview transcripts that there was a common belief among the actors
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that use of emotion was synonymous with making an emotional pleading to the other
party. This is a misconception. As Huthwaite (2004) observed, effective negotiators
revealed their emotions nearly twice as much as average negotiators, and emotion was
closely linked with the ability to build trust with the opponent. Secondly, there are
repeated warnings about the dangers of exposing negative emotions in negotiations
throughout the literature, of which Steele et al. (1989) is typical, warning ‘Control
your emotions; don’t let them control you’. Contrary to the above concerns eight of
the negotiating actors were quite comfortable using emotion as just one of the tools in
their negotiating armoury.
5.5.4 Compromise
The findings related to compromise as a negotiation technique were mixed in the
extreme. Whereas nine of the 20 negotiators did not favour compromise and some of
them spoke in a derogatory manner about compromise and those who use it, one very
senior negotiator spoke in glowing terms about compromise as a ‘noble endeavour’.
Oliver, the senior negotiator, went on to say that he had never done a deal where some
element of compromise wasn’t present. There could be similar reasons for the
negative perception of compromise as those for emotion. Firstly, Steele et al.’s (1989)
advice never to compromise except as a very last resort, and secondly, the fact that
compromise has got a bad reputation for being a 50/50 ‘split down the middle’.
However, that is not the only way to compromise. There is an alternative which is
more akin to bargaining, whereby a compromise solution is negotiated because
neither party is able to get what it ideally wants on a particular element of the deal.
5.5.5 Revealing two new Persuasion Techniques
In addition to the five persuasion techniques seen above in Figure 5.2 that have
Figure 5.3: Seven Persuasion techniques
BargainingLogical persuasionCoercionCompromiseEmotionPromisesUnderstanding other party’s genuine objectives
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become established over the past three decades there are two additional techniques
which need to be added into the tools of professional negotiators. These are,
‘understanding the other party’s genuine objectives’ and promises. Both are discussed
below.
5.5.6 Understanding the other party’s goals and objectives
This was one of the most interesting findings of the research. The literature review
highlighted that there was a lost, sixth persuasion technique, or ‘attitudinal structuring
technique’ identified by Farrington (1980). Despite being correctly referenced and
attributed to Brown et al. (1966), this became lost and the other techniques became
established after they were repeated in Steele et al.’s (1989) popular work on
negotiation which contained no source references. This would have been
inconsequential had there been no place for this lost technique in negotiations
between buyers and sellers. However, the findings of this research identified that this
technique is used in negotiations, and identified that two senior negotiators rely on
this technique as their most fundamental and relied upon approach to negotiation. It
would therefore confirm that Brown et al. op. cit. were correct when they included it
as one of their six ‘attitudinal structuring’ techniques almost half a century ago.
There could be a number of reasons why this technique lost favour amongst writers
and academics teaching the subject of negotiation. Firstly, it is easy to give simple
examples of how the other five traditional persuasion techniques can be used, whereas
it is not as straightforward to give convincing examples of how an understanding of
the other party’s goals and objectives moves a negotiation forward. The actors who
use this technique described with enthusiasm how they had found the key to a
successful negotiation outcome emerged as soon as they understood the underlying
motives of the other party with whom they were negotiating.
5.5.7 Promises
The idea of making a promise to the other party in a buyer-seller negotiation in
exchange for a concession was not found in the literature review. On reflection, given
the six other ‘persuasion techniques’ include threats, it seems rather odd that it does
not also include promises. The research revealed that several of the negotiators said
that they commonly give promises in exchange for gaining concessions.
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5.6 Female negotiators
The research found that female negotiators may be at an advantage over males
because men don’t feel that they are losing face when they concede to a woman, at
least not as much as they would in conceding to another man. The literature review
identified that where studies have compared negotiators by gender, females tend to
come out as less successful (Faes et al., 2010). The finding from this research
contradicts that and suggests that female negotiators are actually at an advantage over
their male counterparts. This may be due to the fact that the actors in this study are all
very senior negotiators whereas the negotiators studied in previous research may have
been less senior. It may be that average female negotiators adopt feminine ‘girlish
behaviours’ as outlined by Frankel (2004), rather than the grown up and more man-
like behaviours which Frankel advocates for women to be successful in business, but
this would need to be investigated.
5.7 Discussion of other findings
Many other findings emerged from the research that were outside of the scope of the
main aims of the research and the four research questions. These are believed to be of
interest to those researching the subject of negotiations between buyers and sellers, so
are included here.
5.7.1 Planning and Preparation
The research found that negotiators confirm the ubiquitous perspective from the
literature, that planning and overall preparation are key to success in negotiation. The
literature review identified that effective planning is an essential requirement for
success in negotiation (Lewicki et al., 2006) although the method for doing this varies
according to different authors (Atkinson, 1990, Fisher and Shapiro, 2005), and it has
been established that negotiation planning is the exception rather than the rule
according to Huthwaite (Kawamoto et al., 2009). All of the actors in this study
identified preparation as a very important part of negotiation. However, reinforcing
what was found in the literature, there was little consensus on how this preparation
should be done, with three separate areas of focus. Some believed that their
preparation work should focus on the subject matter of the negotiation, complete with
analysis of the opening position, and predicted bargaining range etc. A second group
held a broader view of preparation, incorporating assessment of the opposing
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organisation, their negotiation team, and the individuals within it. A third group was
more interested in researching the background, reputation and negotiating
characteristics and behaviours of the individuals they were going to face in the
negotiations, rather than preparing for the actual negotiation itself. The Huthwaite
organisation (Kawamoto et al., 2009) identified that average negotiators tend to spend
time on preparation but little time on actual planning for the negotiation, and this was
borne out by the actors.
The topics commonly researched during the preparation and planning process are
shown in Figure 5.4.
Figure 5.4: Traditional topics for research
Subject matter (content of the negotiation)Definition of the issuesDefinition of the parties’ interestsSupply marketSupplier organisationNegotiator(s)
Preparation for several of the actors consisted of information gathering, covering a
broad range of tasks including information on the subject matter to be negotiated, the
supply market, the leading suppliers in that market, trends in the market and,
something not found in the literature, information about the individuals they will be
negotiating with. The subject matter of the negotiation is key, and fundamental to
success in the negotiation. The supply market and the supplier organisation(s) have
also traditionally been researched by negotiators as a matter of course. Areas that have
traditionally been covered less thoroughly are definition of issues and interests of the
parties, and the least researched area, the negotiator(s) on the other side of the table.
The revised list for preparation and planning below shows that the subject matter, the
supply market and the supplier organisation(s) are still key.
Figure 5.5: Comprehensive topics for research
Subject matter (content of the negotiation)Definition of the issuesDefinition of the parties’ interests and rightsDefinition of power balanceSupply marketSupplier organisation
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Negotiator(s)
However, the next three elements requiring preparation and planning are now brought
together, definition of issues, interests and rights, and the power balance. It will be
noted that although interests are combined with rights, they are often perceived as
closely related, especially in relationships where there is a history. Lewicki et al.
(2010) introduced three approaches to dispute resolution, being interests, rights and
power, and these elements of any negotiation must be adequately covered by the
competent negotiator in the preparation and planning phases. New topics added to this
traditional list are gaining an understanding of the balance of power between the
parties, and understanding the negotiator as an individual.
5.7.2 Behaviours, skills and characteristics of effective negotiators
The literature review showed that beyond a few behaviours, there was little consensus
on what constitute the behaviours of effective negotiators. Several writers (Kennedy,
1982, Steele et al., 1989, Sheridan, 1991, McCormack, 1995, Moffett and Youngdahl,
1999, Farrington, 2006) said that effective negotiators regard everything as
negotiable. Steele op. cit. (p.66) said that effective negotiators envisaged a far wider
range of potential variables, openings and outcomes than average negotiators.
McCormack (1995) took an aggressive position towards the other party in a
negotiation and he:
a) Took exception to every point made by the other party as a unilateral decision
made without his agreement.
b) Believed that most negotiation environments had been specially constructed in
order to give additional power and leverage to the other party.
c) Anticipated that he would encounter various blocking tactics and that he needed to
be mature and experienced enough as a negotiator to deal with them without reacting
emotionally.
The top ten skills and behaviours of effective negotiators from this study presented in
the previous chapter were extracted from the combined results of the interviews and
questionnaire one (see Figure 4.7 on p.120). The negotiators put listening skills at the
top of their list of top ten skills and behaviours in the interviews, followed by focus,
persistence and determination, subject matter knowledge, and in sixth place,
understanding the other party’s needs and interests. Russill (1997, p.165) said that
145
these behaviours or characteristics came down to four things; confidence, skill as a
person-watcher, being likeable and ability to manage themselves and the situation in
the heat of the debate. The literature review also identified the Huthwaite organisation
as the source of the most thorough and robust research into negotiations between
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Characteristics in rank order (Raiffa, 1982) Characteristics in rank order (Harwood, 2002) Characteristics in rank order (This study, 2009) Level of importance
1 preparation and planning skill 1 verbal expression 1 clarity of thought under pressure High2 subject knowledge of negotiation content 2 judgement and general intelligence 2 persuasiveness High3 clarity of thought under pressure 3 clarity of thought under pressure 3 listening skills High4 verbal expression 4 subject knowledge of negotiation content 4 persistence and determination High5 listening skills 5 open-mindedness and tolerance 5 personal confidence High6 judgement and general intelligence 6 integrity 6 judgement and general intelligence High7 integrity 7 listening skills 7 decisiveness High8 persuasiveness 8 attractive personality 8 integrity High9 patience 9 respected by the other party 9 preparation and planning skill High
10 decisiveness 10 negotiating experience 10 understanding of other party's needs & interests High11 respected by the other party 11 preparation and planning skill 11 internal organisation and communication High12 problem solving and analytical abilities 12 internal organisation and communication 12 subject knowledge of negotiation content Medium13 self-control 13 trusting temperament 13 ability to take on different negotiating roles Medium14 emotional intelligence 14 self-control 14 emotional intelligence Medium15 persistence and determination 15 persistence and determination 15 negotiating experience Medium16 ability to exploit power to achieve objective 16 ability to exploit power to achieve objective 16 self-control Medium17 understanding of other party's needs & interests 17 patience 17 problem solving and analytical abilities Medium18 leadership (own team) 18 decisiveness 18 leadership (own team) Medium19 negotiating experience 19 problem solving and analytical abilities 19 ability to exploit power to achieve objective Medium20 personal confidence 20 debating skill 20 competitiveness Medium21 open-mindedness and tolerance 21 personal confidence 21 respected by the other party Medium22 competitiveness 22 competitiveness 22 debating skill Medium23 internal organisation and communication 23 understanding of other party's needs & interests 23 open-mindedness and tolerance Low24 debating skill 24 persuasiveness 24 willingness to risk being disliked Low25 willingness to risk being disliked 25 compromising temperament 25 patience Low26 ability to take on different negotiating roles 26 rank (seniority) within the organisation 26 verbal expression Low27 rank (seniority) within the organisation 27 emotional intelligence 27 non-verbal behaviour Low28 tolerance of uncertainty 28 ability to take on different negotiating roles 28 tolerance of uncertainty Low29 non-verbal behaviour 29 non-verbal behaviour 29 willingness to employ force Low30 compromising temperament 30 tolerance of uncertainty 30 compromising temperament Low31 attractive personality 31 willingness to risk being disliked 31 rank (seniority) within the organisation Low32 trusting temperament 32 willingness to take high business risks 32 attractive personality Low33 willingness to take high business risks 33 leadership (own team) 33 willingness to take high business risks Low34 willingness to employ force 34 willingness to employ force 34 trusting temperament Low
Figure 5.6: Characteristics of effective negotiators ranked in importance from different studies
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buyers and sellers over the past thirty years (Huthwaite, 2004). Unfortunately, this was
always focused on the seller’s perception of the negotiation, aimed as it is at increasing
sales for negotiators on their training courses.
5.7.3 Focus on the end result
Three other related characteristics, ‘Focus on target outcome’ (ranked 2nd in the interviews),
‘Persistence and determination’ (ranked 3rd in the interviews and 2nd= in questionnaire one)
and ‘Clarity of thought under pressure’ (ranked 1st in questionnaire one and 7th in the
interviews), combine to present a level of focus and determination to see the required end
result not identified from the literature review. This goes further than simply setting targets,
as identified in the literature review (Russill, 1997); (Lewicki et al., 2006) or even detailed
negotiation planning advocated by Fisher and Shapiro (2005) and even more thoroughly
Atkinson (1990). Perhaps if their ideas of detailed planning had been incorporated into the
mainstream purchasing and supply management syllabus and teaching then the focus on
target outcome and persistence and determination may have become recognised as essential
drivers in negotiations. The actors are saying that these characteristics are very important in
negotiations.
5.7.4 Questionnaire 1 - Perception of the importance of effective negotiator characteristics
The list of 34 negotiator characteristics in this questionnaire instrument were first used by
Karrass (1968). However, it is not an exclusive list of all possible characteristics and this
became apparent because other characteristics were identified by the actors in the interview
phase as also being of high importance to them.
5.7.5 Comparison with earlier studies of effective negotiator characteristics
The most notable differences between the findings of the earlier research by Raiffa (1982)
and Harwood (2003), and this study (see Figure 5.4) are as follows: Whereas the senior
negotiators in this study believe that persistence and determination are very important
(ranked fourth out of thirty-four characteristics), in the earlier research it was only of
medium importance. Similarly, the actors in this study determined personal confidence to
be of high importance, whereas the earlier studies ranked it as low as 20th and 21 st
respectively. What is surprising is that these senior negotiators did not rank preparation and
planning as important (ninth out of thirty-four) as the actors in the Raiffa (1982) study
(first). It is interesting to note that ‘understanding the other party’s needs and interests’ was
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considered more important than in the earlier studies. Moreover, a further surprise is that
this sample of senior negotiators did not consider subject knowledge of negotiation content
as important compared to its importance in the earlier studies, and do not consider
negotiation experience very important compared to the earlier studies.
5.7.6 Linkage of issues
Linkage of issues was identified in the literature review, as part of the second step in the
planning process. However, Lewicki et al. (2006, p.118) only refer to the linking of issues
which are genuinely connected. It does not appear that Lewicki et al. (2006) considered that
this may be used as a tactic in negotiations whereby unconnected issues might be linked,
and thus used as a delaying and escalation tactic. Several negotiators had been caught out
by this tactic being used against them and were now wary of it.
5.7.7 Response options
The research also found that there are only four possible responses to a proposal, whether
in a negotiation or not. They are accept, reject, counter-propose or ignore. This theory was
originated by Brian Leapman (Leapman, 2003). It was not found in the extant literature on
negotiation.
5.7.8 Contracts - The ‘sweeper’ clause
A finding from three actors was the ‘sweeper clause,’ which is a device for closing down
opportunities for changes (uncontrolled by the buyer) deliberately introduced to a contract
in order to generate additional revenues for the seller.
5.7.9 Questionnaire 2 - Negotiator perception preferences
The dominant preferences identified in the previous chapter (see Figure 4.8 on p.122)
showed that of a total of 200 votes available to the actors for either collaborative or
competitive choices, there was a predominant preference of 148 against 52 for
collaborative approaches from the sample. The researcher was surprised by this finding, as
it was not what the interviews had indicated was likely to be the outcome, particularly
everything that had been stated about ‘partnership sourcing’, indicating that the negotiators
who believe that collaborative approaches can and do work in practice was a small
minority. There may be a number of explanations for this:
a) The discrepancies may be explained by reading precisely what each respondent said in
reply to the interview question, in that few of the replies were a clear cut affirmative or
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negative, but reflected the negotiators’ perceptions of the matter as they were able to
articulate them. These did not necessarily easily fit into a yes/no tick box categorisation. A
good example of this would be Actor 3’s reply, indicating that he believed that whether a
negotiation approach is adversarial or collaborative is entirely how it is presented to the
other party. He maintained that the approach should be dressed-up as win-win, but is really
win-perceived win.
b) Most of the questionnaire responses were slow in being returned by the actors, and,
although a 100% response was eventually received, this required considerable expediting
by the researcher. This may mean that the questionnaire was perceived as ‘a stage too far’
in imposing on the busy schedules of the actors. Many may have been completed hurriedly
to get them out of the way with less contemplation of the options presented than during the
interviews, and little consideration of how their questionnaire responses supported or
aligned with what the actors had said in their interviews, which in several cases had been
many weeks prior to completion of the questionnaires. This is known as ‘response bias’,
and it applies to all forms of data collection (Campbell and Stanley, 1963). However,
questionnaires also suffer from what is known as ‘instrument bias’ Campbell and Stanley
op. cit., as in this case where only two respondents asked for clarification of some of the
questionnaire questions, the rest just responded in what may have been a careless manner
due to time pressure. A third bias, ‘measurement history bias’ Campbell and Stanley op.
cit., exists in questionnaires, in that if the respondents were sent the questionnaire a second
time, the chances are they will answer some of the questions a bit differently. In this second
questionnaire instrument, which originated from Murray’s (1986) study, it became apparent
that the list of pairs of variables contains some options which are laden with bias.
Following in Figure 5.7 are the options that scored so low in terms of responses that they
raise questions about their viability.
On reviewing these low scoring responses yielded from the study, some of the variables
appear so biased as to be untenable or at least unreasonable options, which may have
steered the respondents towards the other, more reasonable, option. Unfortunately, this did
not become apparent until the questionnaire responses were analysed.
5.7.10 Detached observer
In very large negotiations between large negotiation teams it is advantageous to deploy an
observer, with no responsibilities to participate in the negotiation, to do no more than
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observe closely the behaviours and particularly the reactions of the other team’s negotiators
for clues to their thinking and motivations that contradict what they say.
5.7.11 Language obfuscation
The questions concerning integrative and distributive approaches to negotiation and zero
sum and non-zero sum negotiation outcomes irritated the actors to varying degrees. The
effect of obfuscation is to mystify the subject leaving the recipient baffled and bewildered.
Where the obfuscating language has been created by academics, writing in the emerging
field of knowledge of negotiations between buyers and sellers, it has had the effect of
creating and preserving a gap between practitioners and academics. Within the scope of this
thesis there are a number of terms that have been coined by academics over the years.
These terms have not helped by bringing clarity to debate but have the reverse effect: of
obscuring any clarity of expression and introducing mud into the clear water. This appears
to be a deliberate intent on the part of academia, designed to avoid useful debate or indeed
any contact between the academic and practitioner communities. The following terms have
added no value to useful debate, are largely unknown to practitioners, and in the
researcher’s opinion should not be used because they subtract value:
1. ‘integrative’ meaning collaborative
2. ‘distributive’ meaning adversarial
3. ‘business exchange’ and ‘buyer and supplier exchange’ meaning a purchase (or
sale)
4. ‘positive sum outcome’ meaning a ‘win-win’ outcome
5. ‘negative sum outcome’ meaning ‘lose-lose’ outcome
6. ‘zero sum outcome’ meaning a ‘win-lose’ outcome
7. ‘non-zero sum outcome’ meaning a ‘win-partial win’, or ‘partial win-partial
win’ outcome.
8. ‘dyad’ meaning two units regarded as a pair.
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Figure 5.7: Non-preferred Negotiation Preferences from Questionnaire 2
8
5
5
4
4
2
2
1
1
0 2 4 6 8 10 12 14 16 18 20
______________________________________________________________________
The world of negotiation is controlled by 'egocentric self-interest'
A good Negotiator :______________________________________________________
Maximises tangible resource gains
A good Negotiator :______________________________________________________
Makes reasonable opening demands
______________________________________________________________________
The goal of negotiation is to win as much as possible
______________________________________________________________________
A negotiation usually leads to conflicts and disagreement
______________________________________________________________________
Resource distribution is distributive in nature (one party wins but the other loses)
A good Negotiator :______________________________________________________
Uses threats, power, confrontation and argument
A good Negotiator :______________________________________________________
Is not open to persuasion
A good Negotiator :______________________________________________________
Does not consider needs/interests/attitudes of other side
9. ‘countervail’ meaning counter balance, or of equal and opposite force.
Counterbalancing might be a more commonly used equivalent word, but that
would not convey the implication that countervailing means acting against an
often detrimental influence or power. This word is almost inextricably linked
with power and rarely seen in any other context.
5.8 Summary – Negotiation principles
From the findings of the field research, a number of separate factors came together to form
the constituent elements of a new perspective of negotiation. These include: some of the
traditional persuasion techniques combined with the response options available in a
negotiation, the personal traits or behaviours which individual negotiators display when
involved in negotiation interactions, the preferences and aversions of negotiators in terms
of opposing negotiators and how they relate to them, and the motivational characteristics of
those negotiators who place their own personal needs above those for whom they are meant
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to be negotiating. These have been combined into an integrated suite of variables, all of
which have an impact on buyer-seller negotiations, grouped together as principles of
negotiation. Thus the contribution to knowledge of this work is the synthesis of the
following negotiation principles:
1. Most negotiations are adversarial in nature; collaborative negotiations happen
rarely and only in special circumstances.
2. Whilst sellers frequently talk about ‘partnerships’, ‘special relationships’ and
‘win-win’, buyers treat negotiations as adversarial unless there is a formal
partnership or joint venture between buying and selling organisations.
3. It is clear that the use of power by coercion takes precedence in any negotiation
where either negotiator is in a position of power and able to exploit it. Each
negotiation is a test of the balance of power between the two parties.
4. The buyer has the power over the seller in a negotiation up to the point when a
contract is signed especially where competitive sourcing is used. From the point
of contract signature the power shifts to the seller, especially if there are
subsequent changes to the contract that were not in scope from the outset.
5. Female negotiators often hold more power in negotiations over males because
men do not feel that they are giving in when making concessions to a female
negotiator.
6. Each negotiation is a test of the ‘interpersonal chemistry’ between the
negotiators, in particular how each party perceives the other, in relation to trust,
integrity and like or dislike.
7. Integrity is perceived by negotiators at two different levels, a higher, almost
superficial level, in which lying and deceit are commonplace, and a deeper,
more fundamental level, which negotiators regard as of critical importance.
When a negotiator believes that this fundamental level of integrity has been
violated by the other negotiator, then there is little chance that a mutually
satisfactory outcome may subsequently be achieved.
8. Negotiators use the five established persuasion techniques, logical argument,
coercion, bargaining, emotion and middle ground compromise. In addition they
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commonly use promises and gaining an understanding of the true motivations of
the other party.
9. Buying negotiators try to understand the personal motivations of the selling
negotiator, as these may be at variance from what might be the expected
motivations of the selling organisation. By exposing the components of the
motivational package of the selling negotiator, the buying negotiator may
identify components of a deal that fall outside of the selling negotiator’s
package, and which are therefore likely to be less contested than components
which form part of it.
This chapter has reviewed the findings of the field research and evaluated them in the light
of both the extant literature that was discovered from the literature review in chapter 2 and
the research aims and objectives. The next chapter presents the conclusions drawn from the
answers to the research questions, assesses the contribution to knowledge and practice of
the research, and suggests recommendations for future research in the subject area of
negotiations between buyers and sellers.
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CHAPTER 6: CONCLUSIONS
6. Introduction, chapter overview, aims and objectives
The specific objectives of this chapter are to:
· Present the conclusions from this research in the form of responses to the research
questions outlined in Chapter 1.
· Present the contribution to knowledge and practice of this research.
· Outline the importance of this research
· Outline plans for dissemination of the new knowledge
· Identify the limitations of this research.
· Recommend areas for future research into major negotiations between buyers and
sellers.
6.1 Conclusions
6.1.1 Neglect of negotiation as a subject
The subject of negotiation between buyers and sellers has been neglected, overlooked and
underestimated for as long as procurement has been emerging as a recognisable function of
business. Ramsay (2007) challenged the neglect of negotiation by the academic community
in the field of purchasing and supply management and found it difficult to comprehend.
This research has found that the senior buying and selling executives who practice
negotiation in high level business to business deals consider what they do as critically
important to their businesses. The tools and techniques they use, and the depth of their
knowledge of their subject cannot be described as basic. Yet the academic literature has
chosen to ignore negotiation between buyers and sellers as a field worthy of research and
continues to do so.
6.1.2 Responses to the research questions
The thesis has filled the gaps in the extant knowledge on negotiations between buyers and
sellers, and answered the research questions as follows:
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6.1.3 Integrative negotiations
The research discovered that ‘integrative’ negotiations do not happen between buyers and
sellers in the normal course of buyer-seller negotiations. There was no consensus among
practicing negotiators that integrative, collaborative negotiation is the prevailing approach
used, and indeed the consensus was that ‘integrative’ negotiations are not used at all. The
nature of collaborative negotiations, such as they do take place, is limited to those special
circumstances where formal partnership or collaborative ventures exist between buying and
selling organisations. These responses to the research questions led to the formulation of
the first and second negotiation principles, namely:
1. most negotiations are adversarial in nature; collaborative negotiations happen
rarely and only in special circumstances.
2. whilst sellers frequently talk about ‘partnerships’, ‘special relationships’ and
‘win-win’, buyers treat negotiations as adversarial unless there is a formal
partnership or joint venture between buying and selling organisations.
These are new findings, and it is surprising to discover these principles, given that the
conventional wisdom is that integrative, collaborative negotiation has emerged as the
prevailing approach used according to much of the academic literature over the past 25
years.
6.1.4 Power
The research discovered that power is used in buyer-seller negotiations often, and the initial
encounter in a negotiation, following the establishing of a rapport, is a test of the power
balance between the organisations. This may itself determine the outcome, and the party
with more power will dictate terms to the one with less power. If the test of the power
balance does not lead to a deal being struck, then the negotiation will move on. Porter’s
‘five forces of competition’ model is not used by any of the negotiators who took part in
the study. The actors believe that the seller has more power than the seller up to the point of
the signature of the contract. The actors believe that power originates from seven sources,
power of the buyer over the seller; power of the seller over the buyer; personal power of the
individual; power of superior knowledge or preparation; power of the stakeholder; power
caused by dependency; and finally, if both parties believe that one of them holds a more
powerful position then that party is more powerful. The research also found that negotiators
will always use power against the other party when they have it, but strongly resent power
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being used against them when they find themselves in a less powerful position. A minority
of five of the actors had heard of the BATNA, and only three of them believed that a real
BATNA often exists in negotiations. Two of these believe that it is the buying negotiator’s
responsibility to create a credible and convincing alternative, as a ploy. The research found
that females often have more power than males when negotiating with another male.
These responses to the research questions led to the development of the third, fourth and
fifth negotiation principles, namely:
3. it is clear that the use of power by coercion takes precedence in any
negotiation where either negotiator is in a position of power and able to exploit
it. Each negotiation is a test of the balance of power between the two parties.
4. the buyer has the power over the seller in a negotiation up to the point when a
contract is signed especially where competitive sourcing is used. From the point
of contract signature the power shifts to the seller, especially if there are
subsequent changes to the contract that were not in scope from the outset.
5. female negotiators often hold more power in negotiations over males because
men do not feel that they are giving in when making concessions to a female
negotiator.
These are new findings. It is surprising that no previous research had identified the strong
propensity of negotiators to conduct a trial of the power balance between the parties in the
early stages of a negotiation, and that, given they find themselves in the position of power
over the other party, they will not hesitate to use it to their advantage. It is also surprising to
discover that female negotiators are often in positions of power over their male
counterparts, when the conventional wisdom from the extant literature indicated that the
reverse was true.
6.1.5 Interpersonal chemistry
The research identified that interpersonal chemistry is critically important to negotiators,
and frequently influences the negotiation outcome. This is not emotional intelligence, or the
individual characteristics of one of the negotiators, but the chemistry of how they interact
together in the negotiation. This is often established very early when the negotiators meet
or come into contact initially. If they establish a good rapport, then things are likely to go
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well. If not, then the reverse is the case, and achieving a mutually acceptable agreement is
unlikely. This finding from the research led to the sixth principle of negotiation:
6. Each negotiation is a test of the ‘interpersonal chemistry’ between the
negotiators, in particular how each party perceives the other, in relation to trust,
integrity and like or dislike.
This represents new knowledge. Previous research has identified emotional intelligence and
other individual characteristics as influences over negotiation outcomes, but it has not
previously been understood that the interaction between the negotiators held such an
important influence over the negotiation outcome.
6.1.6 Integrity and deceit
The research identified that negotiators perceive integrity and deceit as critically important
to them, and they frequently influence negotiation outcomes. Furthermore, it identified that
negotiators perceive integrity on two levels, firstly, an almost superficial level, in which all
negotiators expect that lying and deceit are commonplace and to be expected in
negotiations, and secondly, a deeper and more fundamental integrity which is of greater
concern. This discovery followed the initial uncovering of a confusing array of ‘mixed
messages’ around integrity and deceit, which seemed contradictory. All negotiators
deliberately deceive their opponents in negotiations to an extent, and expect their
opponents to lie to them. However, if a negotiator feels that the fundamental integrity of the
other party is in question then this will have an important influence on the likely outcome.
This finding from the research led to the seventh principle of negotiation,
7. Integrity is perceived by negotiators at two different levels, a higher, almost
superficial level, in which lying and deceit are commonplace, and a deeper, more
fundamental level, which negotiators regard as of critical importance. When a
negotiator believes that this fundamental level of integrity has been violated by the
other negotiator, then there is minimal chance that a mutually satisfactory outcome
may subsequently be achieved.
This is a new finding in negotiations between buyers and sellers. The author is optimistic
that future research will further investigate this phenomenon.
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6.1.7 Persuasion techniques
The research found that buying and selling negotiators are less aware of the five traditional
persuasion techniques than may be expected given that they have become established in the
extant literature over more than three decades (Farrington, 1980, Steele et al., 1989), albeit
in text books rather than the academic literature. There was a tendency among negotiators
to adhere to their preferred negotiating technique, even when it clearly did not work. There
was also a marked reluctance to use emotions among the actors who participated in this
study. However, the research also identified that there are two additional persuasion
techniques in common use by negotiators, not previously recognised among the traditional
ones. These are promises, and also the technique of gaining an understanding of the
genuine underlying motives and objectives of the other party. Promises are often made in
negotiations, sometimes with the genuine intent of the promise being fulfilled, other times
not. Many of these promises are outside of the scope of what finally becomes documented
as the contract between the parties, and often this is intentional deliberate practice by the
party making the promise. The technique of gaining an understanding of the genuine
underlying objectives of the other party was found to be a favoured technique, much relied
upon by some of the participants. These findings were incorporated into the eighth
negotiation principle,
8. Negotiators use the five established persuasion techniques, logical argument,
coercion, bargaining, emotion and middle ground compromise. In addition, they
commonly use promises and gaining an understanding of the true motivations of the
other party.
The finding of promises being made in negotiations is new. The finding that the technique
of gaining an understanding of the genuine underlying objectives of the other party was a
favoured technique is not new; it existed in the original source of the traditional five
techniques, (Berrien, 1944) and its successor, (Brown et al., 1966), but was mysteriously
lost from the subsequent literature on negotiations. It is surprising that this technique had
been identified in the specific field of negotiations around peace settlement negotiations
with hostile parties, but was not brought across into the literature on commercial
negotiations between buyers and sellers.
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6.1.8 Personal motivations
The research found that negotiators are often personally motivated by targets contrary to
the expectations of negotiators of the other party. It is of critical importance for buying
negotiators to discover the personal motivations, namely key elements of the remuneration
package, identifying the specific target areas for individual bonuses, in order to take
advantage of those elements that are not part of the personal motivators of the negotiator.
This finding led to the ninth negotiation principle,
9. Buying negotiators attempt to understand the personal motivations of the selling
negotiator, as these may be at variance from what might be the expected
motivations of the selling organisation. By exposing the components of the
motivational package of the selling negotiator, the buying negotiator may identify
components of a deal that fall outside of the selling negotiator’s package, and which
are therefore likely to be less contested than components which form part of it.
It is surprising that this level of investigation into the personal motivations of the
negotiators of the other party is not identified in the extant literature. It is undoubtedly
difficult to uncover this information and takes a considerable investment of time and
resource of negotiators to obtain it. Often the only way to obtain such information is from
the negotiator of the other party, by establishing a strong rapport, but it is possible, and can
yield rich rewards.
6.1.9 Importance of bargaining
The literature review identified the importance of the word ‘if’, in the negotiator’s
vocabulary, which has the effect of making every concession or proposal conditional on the
receipt of something in return. This point about conditional offers was identified as an
important principle in negotiation, though it was identified in a text book and not in the
academic literature by Kennedy (1982). Kennedy (1982) made the point forcefully that he
was hostile towards any unilateral conceding under any pretext whatsoever, or for any
purpose. He kept reinforcing his point that bargaining, the heart of the negotiation process,
is an exercise in exchange, where concessions are traded, never given away. This point has
been missing from the academic literature since the publication of the text book in 1982,
and is added here as a principle of negotiation:
10. Bargaining is an exchange process, in which concessions are traded between the
negotiators. Negotiators never give away anything without receiving something in
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return, and always try to concede something of minimal value in exchange for
something more valuable to themselves.
It is surprising that this principle, which has been emphasized by Kennedy countless times
in many of his textbooks, has never passed into the academic literature, despite the fact that
senior practitioners are aware of it and use it, having learned it from public training courses
on negotiation. (It has been incorporated in the courses run by Huthwaite for many years.)
6.2 Other findings
6.2.1 Behaviours of successful negotiators vs average negotiators
The research has found that successful negotiators:
a) spend more time in detailed planning and preparation than average negotiators,
b) spend more time building rapport with the other party’s negotiators. They will often
devote an entire initial meeting doing nothing other than building the relationship with the
other negotiators,
c) treat the other party with respect,
d) maintain focus on the end-game at all times and relentlessly pursue achievement of it,
e) use power to full advantage if it is available to them,
f) remain flexible in the persuasion techniques they employ, switching from one to another
in order to gain concessions, and if one technique is not working,
g) understand the genuine goals and objectives of the other party.
Thus it can be seen that there are significant differences between successful and average
negotiators.
6.2.2 Importance of preparation to successful negotiators?
The research has found that preparation and planning is critically important to successful
negotiators. By thorough planning and preparation, successful negotiators understand in
detail all of the important issues. By understanding the issues more effectively than the
other party, they control those issues, and are best positioned to win each point in turn.
The research has highlighted that the way in which negotiators prepare and plan for
negotiations varies significantly. Negotiators in buyer seller relationships are likely to have
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prepared by studying the subject matter to be negotiated, and the respective positions of the
two potential trading organisations, but are less likely to have studied the individual
negotiators they will encounter across the table, their issues or their interests. Anticipating
these other elements can give them a major advantage.
6.2.3 Importance of contracts between buyers and sellers?
The research has found that despite there existing much rhetoric about contracts being
largely unnecessary, the reality today is that large organisations conduct almost all of their
business in formal legal contracts. All of the actors confirmed this except for one, who
singled out the large supermarket chains, which did not use contracts when dealing with
small suppliers. Mainstream procurement staff would not contemplate any other way of
doing business, because they are employed to minimize risk.
6.2.4 Four response options
There are only four possible responses to a proposal: accept, reject, counter-propose or
ignore. This is an existing theory evolved by Leapman (2003) as his Universal
Request/Response Negotiation Pattern, part of his Universal Process Architecture. It was
not found in the literature, but put forward to the researcher by Leapman at the presentation
of initial findings to the CIPS Beds and Herts Branch on 7th July 2009.
6.3 Contributions to knowledge and practice
This research makes a number of contributions to the extant knowledge on negotiations
between buyers and sellers, primarily through the negotiation principles synthesised from
the findings via the discussion. These principles are aligned to what the actors say they do
as they approach negotiations in their day-to-day business. The contribution to practice is to
bring an enhanced understanding to the practice of negotiation via the negotiation
principles, which may be used as a checklist, once disseminated to practitioners.
6.4 Importance of this research
This research is important because negotiations between buyers and sellers has been
neglected in the purchasing and supply management (p&sm) field for over four decades
since Chester Karrass completed his doctoral research in 1968. It is also important because
it is the first research to bring empirical data from practising negotiators into the body of
knowledge on the subject. A study on negotiation in buyer seller relationships was
produced by Harwood in 2003 in the field of marketing. However, this study focused on
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the various relational development stages of Key Account Management (KAM) and its
findings are confined within that limited context. A strength of this work is that the
research was conducted with practitioners who were prepared to talk openly to the
researcher about how they actually go about negotiations, and how they feel about what
works and what doesn’t work in practice, and also how they feel about the people they have
negotiated with. Rather than many of the research studies conducted on negotiation
previously, which have been conducted using either simulated negotiations to try to model
or predict what happens in negotiation situations, for example, Karrass (1968). This
research is supported by empirical evidence from professional negotiators at the highest
level in procurement and sales.
6.5 Implications of findings for practitioners
This research has discovered several new findings not previously known or contained
within the extant literature on the topic. There is a significant gap in the academic literature
between the conventional wisdom and the reality in practice revealed by this work. These
are all contained within the negotiation principles. Following dissemination of this new
knowledge, the principles should be of value to practitioners by giving them a checklist of
options that they will almost certainly never have considered before, to assist in preparation
prior to engaging in a negotiation, and to use during the negotiation.
6.6 Dissemination of new knowledge
The new knowledge is intended to be disseminated to three separate populations, the
academic community, the practitioner community connected in some way to CIPS, and the
practitioner community unconnected to CIPS. The contribution to knowledge will be
disseminated to the academic community by submitting a paper summarising the findings
to the academic journal ‘Journal of Purchasing and Supply Management’ and following
peer review, will be amended if necessary according to the demands of the reviewers, in
order to meet the criteria for publication, and achieve publication. The contribution to
knowledge and practice will be consolidated by submitting a practitioner article distilled
down from the academic paper mentioned above, using non-academic language, to ‘Supply
Management’, the journal of the Chartered Institute of Purchasing and Supply. This will be
reinforced by submitting proposed additions and amendments to the syllabus on effective
negotiation of CIPS, either at its current Level 4 or higher. It is recognised that not all
practising buying negotiators are members of CIPS, and therefore the contribution to
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practice will be consolidated by submitting non academic articles to other journals such as
‘CPO Agenda’ and ‘Negotiation Journal’.
6.7 Research limitations
The research was conducted using a robust research design and utilised three separate
phases in order to obtain triangulation and feedback on the initial findings, in order to add
to the reliability and validity of the results. However, some limitations will still exist in all
research projects and the author recognises that this study is no exception.
6.7.1 Sample size
While having high internal validity, the research sample of 20 is relatively small, although
the actors took place in detailed interviews. Furthermore, as with all qualitative research,
each actor brings his or her own bias to the research based on their own perception of the
negotiations that stand out to them as memorable for whatever reason.
6.7.2 Sample of convenience
The sample of senior negotiators was a sample of convenience selected from contacts in
CIPS who hold senior management positions in large organisations. They were all available
for interview in London.
6.7.3 Questionnaire format
The questionnaire format, although used in previous research studies, is not free from bias.
The list of 34 negotiator characteristics in the questionnaire first used by Karrass (1968) is
not fully comprehensive in that other characteristics were identified by the actors in the
interview phase as being of high importance to them. Moreover, the second questionnaire,
originating from Murray’s (1986) study listed of pairs of variables, contains options which
are laden with bias. On reviewing the responses yielded from the study some of the
variables appear so biased as to be untenable or at least unreasonable options, which seem
to have steered the respondents towards the other more reasonable alternative. The bias
identified in these statements is discussed in the previous chapter.
6.7.4 Geographic scope
The sample of senior negotiators was confined to the UK, in order to minimise costs and
access difficulties. However, the negotiators were not confined to negotiations in the UK,
and were mostly negotiating in global markets.
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6.7.5 Responses to Questionnaires
A further limitation is that the participants were not pre-warned when they were first
contacted about the request for them to complete a questionnaire after they had completed
the interview. This led to some of the participants needing to be followed up to the point of
harassment in order to get them to fully complete and return the questionnaires. The further
implication of this is that whilst all of the participants had been willing to be interviewed,
their participation in the questionnaire was less enthusiastic, and may well have been
completed hurriedly, with less consideration of the questions than in the interviews. This
undoubtedly had an impact on the validity of the results and to an extent negated their value
for triangulation purposes.
6.7.6 Exploratory interviews
A fourth limitation is that the exploratory interviews with CIPS and Huthwaite were not as
valuable as they may have been, had they been conducted after, rather than prior to the core
interviews. Several issues regarding the lack of perceived benefit of CIPS by the senior
procurement negotiators could have been addressed, but this was not possible.
6.8 Recommendations for future research
6.8.1 Negotiations in different circumstances
The principles of negotiation were derived from a sample group of 20 experienced buyers
and sellers across a broad cross section of industry sectors. However, this study only looked
at commercial negotiations between buyers and sellers. It may be that these principles
could be found to apply to a greater or lesser extent in negotiations conducted by less
experienced negotiators, or conducted in particular industry or market sectors, or in
commercial negotiations not between buyers and sellers. Thus future research could refine
the understanding of how, and in what particular circumstances these principles of
negotiation apply. It could also refine the understanding of some particular circumstances
in buyer-seller negotiations where one or more of these principles do not apply.
6.8.2 Personality types
In view of the importance of personality traits and characteristics and their behaviours to
negotiation outcomes identified in this research, it is recommended that further research be
conducted to investigate any correlation between personality types and behaviours with
negotiator characteristics or preferences, in negotiations between buyers and sellers. For
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example, a study could be conducted to discover whether particular Myers Briggs
personality types have any corresponding negotiator traits or characteristics.
6.8.3 Investigate the relationship between power and negotiation
The use of power via coercion or explicit threats is one of the five persuasion techniques of
negotiation established in the literature. However, one of the major questions raised by this
work is whether power is more than just a sub-set of negotiation. Is it an over-arching
phenomenon that may determine the outcome of a negotiation almost regardless of the
skills of the negotiators and the strategies, tactics and techniques that they employ? There is
a potential research project here to discover how power and negotiation interact together in
the real negotiation environment. One aspect of this would be to establish the relationship
between different aspects of power and the other options open to negotiators. Further
research into the use of power in buyer-seller relationships, beyond the conceptual
framework developed by Meehan (2007) could investigate the process whereby buyers and
sellers determine what power they have available to them and how they utilise it, vis a vis
other persuasion techniques.
6.8.4 Develop a tool for the selection of negotiators
There is potential to investigate further the behavioural traits shown in Figures 4.6 and 4.7
and develop these into a Belbin (1981) or Myers-Briggs (Myers, 1952) type of selection
tool to assess the traits of individuals most suitable to become skilled negotiators. These
traits are not, for the most part, teachable skills as they would require extensive behaviour
modification. It may be more expedient, therefore, to select candidates for jobs involving
negotiation based on their aptitude in relation to those traits and characteristics rather than
trying to teach them the required skills.
6.8.5 Quantitative study
The methodology selected for this study was qualitative. It may be that a study adopting a
quantitative methodology could have reached different findings and conclusions.
6.9 Summary
This is the first academically rigorous research undertaken investigating the relationship
into negotiations between buyers and sellers conducted in the purchasing and supply
management field for over four decades. The neglect of research in this field has led to a
body of literature and also a syllabus structure in the leading professional body in the field,
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that is outdated and irrelevant. This is because lessons such as the importance of bargaining
and the conditional nature of all offers in true negotiation, were lost and remained missing
from the extant body of knowledge. Over the same period inappropriate theories have been
imported from other fields into the literature unchallenged, and unsupported by empirical
research, such as the conventional wisdom that there are two approaches to negotiation,
collaborative and adversarial, that collaborative negotiations are mutually beneficial to
buyers and sellers, and that collaborative negotiations have become the predominant
approach to negotiations between buyers and sellers.
This research has produced findings that re-establish some important elements of
negotiation, increase the emphasis on some that were understated in the literature, and
introduce new ones that were not previously identified. The findings have been synthesised
into a set of negotiating principles which make a genuine contribution to the knowledge on
the subject, and should enable negotiating practitioners to enhance their skills and
techniques, by consolidating for them lost and underemphasised elements in the literature,
along with new techniques as used by leading negotiators in the field.
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Table 6.0 GLOSSARY OF TERMS AND ACRONYMS
ABC Activity-based costingABM Activity-based managementACR Arms-length Contractual Relationship – model developed by
Sako (Sako, 1992) based on Williamson’s (1975) transaction cost economics model. (see also OCR)
ALCATEL PERIOD The Alcatel Mandatory Standstill Period is a period of at least ten calendar days following the notification of an award decision in a contract tendered via the Official Journal of the European Union, before the contract is signed with the successful supplier(s). Its purpose is to allow unsuccessful bidders to challenge the decision before the contract is signed. It is named after a pair of linked European Court of Justice cases which are jointly known as the Alcatel case. Within the UK, it was introduced by the Office of Government Commerce in 2005.
ANCHORING [(Lax and Sebenius, 1986 P.134)]APPROVED SUPPLIER A supplier approved to supply goods or services to an
organisation, often otherwise known as a Preferred Supplier, usually held on a Preferred Supplier List (PSL).
AQL Acceptable quality levelARMS-LENGTH The arm's length principle (ALP) is the condition or the fact
that the parties to a transaction are independent and on an equal footing. Such a transaction is known as an "arm's-length transaction". It is used specifically in contract law to arrange an equitable agreement that will stand up to legal scrutiny.
ASYMMETRIC INFORMATION
A situation where negotiators have different knowledge about the subject of the negotiation (i.e. one party has more knowledge than the other). This is most likely to occur in large and complex negotiations, such as mergers and acquisitions, and outsourcing contracts. In such cases, the seller usually has more complete information than the buyer.
ASYMMETRIC MUTUALITY
A situation where neither party to a negotiation has complete information, but their lack of information about the subject of the negotiation is roughly equal.
ATNA Alternative To a Negotiated Agreement – not the best alternative, just an alternative.
AVIP (Russill, 1997) Affirmative Vendor Improvement Programme. The supplier is made to feel ‘A Very Important Part’ of the customer’s business. See also Lopez: PICOS programme, possibly the largest and most successful practical application of such. (An element in Russill’s ‘Organising for the planning performance’).
B2B Business to BusinessB2C Business to ConsumerBA Bidder Attributes
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BAIT AND SWITCH This is a common tactic in the sales of consulting services. The bait is normally the ‘A team’ that demonstrates its expertise during the selling phase. Once the contract is signed, the actual team that will conduct the work arrives, and to the astonishment of the customer, no-one from the ‘A team’ is present. Instead there are lots of raw graduate recruits on their first work assignment. The way to counter this ploy is to incorporate named ‘key personnel’ in the team that will do the work, with remedies for those key personnel not being available.
BARGAINING MIX The package of issues for negotiation (Lewicki et al., 2006)BARGAINING RANGE Also sometimes known as the ‘Settlement Range’ or ZOPA.BATNA Best Alternative to a Negotiated AgreementBATNEEC Best Alternative Technology Not Entailing Excessive CostBCN Back-Channel Negotiations - officially sanctioned
negotiations conducted in secret between the parties to a dispute. These extraordinary negotiations operate in parallel with, or replace, acknowledged front channels of negotiation.
BDR Behavioural Decision ResearchB/E Bill of ExchangeBFO Best and Final OfferBILATERAL OLIGOPOLY
A market with the combination of a few sellers (oligopoly) and a few buyers (oligopsony) is a bilateral oligopoly.
BLOCKER Defined by Miller and Heiman (Miller et al., 1985) as a person within a buying organisation who prevents access to the Economic Decision Maker.
B/N (Russill, 1997) Bid versus Negotiate Matrix. (An element in Russill’s ‘Organising for the planning performance’).
BOGEY Term invented by Chester Karrass. Alternatively known as the ‘Mother Hubbard’. The tactic is to approach the seller with "I love your product but have only so much money". The salesperson tends to respond in a positive, friendly fashion. How can you be hostile towards someone who likes you and your product? The salesperson gets involved with the buyer and the budget problem. All that remains between them and a closed sale is a little problem-solving. This permits the negotiation to move away from a competitive affair to one of co-operation.The term has developed to mean a tactic where the negotiator pretends that an issue is of little or no importance rather than admitting it is quite important to him, the idea being to deflect attention from its importance ((Lewicki et al., 2006).
BOGOF Buy One Get One Free – A standard offer in most major supermarket chains, and one which traditionally has been funded by the supplier, at the insistence of the customer.
BOM Bill of MaterialBOULWARISM Strategy named after Lemuel Boulware, former vice-president
of the General Electric Company, who rarely made concessions in wage negotiations; he started with what he deemed to be a fair opening offer and held firm. This is
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commonly referred to as Boulwarism (Raiffa, 1982).BRA Commonly referred to as the MFP or Most Favourable
Position (Michael Hartley-Brewer)BREAK POINT The point at which parties would prefer to break off
negotiations rather than settle beyond it (Kennedy et al., 1980 p.15)
BUSINESS-TO-BUSINESS (B2B)
Is a marketing strategy which involves the transaction of goods or services between businesses (as opposed to relations between businesses and other groups, for example consumers or public administration)
BUSINESS-TO-CONSUMER (B2C)
Also business-to-customer, describes activities of commercial organisations serving the end consumer with products and/or services
BUYER DOMINANCE Cox BUYER’S REMORSE Is an emotional condition whereby a person feels regret after
making a purchase (usually of a higher value item). The common condition is brought on by an internal sense of doubt that the correct decision has been made. This is exacerbated by the fear that one may have acted without full and complete information. Sometimes known as the Winner’s Curse.
CA Competitive Advantage Matrix (Russill, 1997; an element in Russill’s ‘Organising for the planning performance’).
CALL-GIRL PRINCIPLE
“There is a rule of economic life that every seller should remember. The call-girl principle states that the value of services is greater before they are rendered than after. Plumbers know that the time to negotiate a price is when the basement is full of water.” Chester Karrass (1974)
CAPTIVE BUYER See BENSAOU 1999CAPTIVE SUPPLIER CARTEL A group of formally independent producers whose goal is to
increase their collective profits by means of price fixing, limiting supply, or other restrictive practices. Cartels typically control selling prices, but some are organised to control the prices of purchased inputs.
CAVEAT EMPTOR ‘Let the buyer beware’ – a notion enshrined in English Law for centuries until The Sale of Goods Act offered the buyer some protection.
CCR Capital Cost RateCDT Contract Decision Tree (Russill, 1997; an element in Russill’s
‘Organising for the planning performance’).CENTRALISED PURCHASING FUNCTION
Centralised purchasing is a model where all purchasing is conducted through a single central organisation. While fully leveraging an organisation’s total spend, standardising processes and sharing best practice, centralised purchasing has the disadvantage of losing local supply market and consumption patterns. The risk of maverick buying also increases when local supply managers do not fully agree with the centrally taken decisions that impact local supply, quality or reaction time.
CENTRE LED ACTION See CLAN
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NETWORK CENTRE LED PURCHASING FUNCTION
In a centre led purchasing function, a centre of excellence focuses on corporate purchasing strategy, strategic commodities, best practices and knowledge sharing while leaving individual purchases and tactical execution to the business units. Theoretically, the model has all the advantages of centralised and decentralised models with minimal disadvantages. The centre led model is based on cross-functional teams that represent all key business units, it allows the creation of flexible supply chain processes and commodity strategies.
CFR Cost and Freight – (Incoterm)CIF Cost, Insurance and Freight – (Incoterm)CIP Carriage and Insurance Paid – (Incoterm)CIPS Chartered Institute of Purchasing and SupplyCLAIMING VALUE STRATEGIES
Distributive, win-lose, or adversarial negotiation strategies.
CLAN - CENTRE LED ACTION NETWORK
Devised by Dr Dick Russill in the early 1990s, this was a model for centre-led procurement networks operating alongside users and stakeholders in the business (Russill, 1991, p.32-33)
CLOSING Defined by Rackham as ‘A behaviour used by the seller which implies or invites a commitment, so that the buyer’s next statement accepts or denies commitment’ (Rackham, 1995 p.154)
CM Cost Modelling (Russill, 1997; an element in Russill’s ‘Organising for the planning performance’).
COGNITIVE DISSONANCE
A psychological state that describes the uncomfortable feeling when a person begins to understand that something the person believes to be true is, in fact, not true. The term describes conflicting thoughts or beliefs (cognitions) that occur at the same time, or when engaged in behaviours that conflict with one's beliefs. In academic literature, the term refers to attempts to reduce the discomfort of conflicting thoughts, by performing actions that are opposite to one's beliefs.
COGNITIVE POWER RESOURCESCOM Commitment Process (Russill, 1997; an element in Russill’s
‘Organising for the planning performance’).CONFLICT A clash of interests, values, actions or directions. Conflict
refers to the existence of that clash. The word conflict is applicable from the instant that the clash occurs. (de Bono, 1985 p.5)
CONFLICTION A new word invented by Edward de Bono, meaning the process of setting up, promoting, encouraging or designing conflict. It covers all those deliberate things which happen before the conflict is established (de Bono, 1985 p.5). See also De-confliction.
CONTINGENT CONTRACT
A contract which contemplates several variable outcomes and provides different alternatives for the actual outcome that
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materialises (Bazerman and Gillespie, 1999).CPA Contract Price AdjustmentCPT Carriage Paid To (Incoterm)CREATING VALUE STRATEGIES
Integrative, win-win, or collaborative negotiation strategies.
CRIT Evaluation Criteria (Russill, 1997; an element in Russill’s ‘Organising for the planning performance’).
CRM Customer Relationship ManagementCUSTOMER PREFERENCING
Specific targeting of potential customers over others, based on the ROI return on the cost of sale.
DCF Discounted Cash Flow (Russill, 1997; an element in Russill’s ‘Organising for the planning performance’).
DDP Delivered Duty Paid (Incoterm)DDU Delivered Duty Unpaid (Incoterm)DeB Debrief of Unsuccessful Suppliers (Russill, 1997; an element
in Russill’s ‘Organising for the planning performance’).DE-CONFLICTION A new word invented by Edward de Bono, meaning the
opposite of ‘confliction’. It refers to the designing away or dissipation of the basis for the conflict. De-confliction does not refer to negotiation or bargaining or even to the resolution of conflicts. De-confliction is the effort required to evaporate a conflict (de Bono, 1985 p.5).
DECENTRALISED PURCHASING FUNCTION
In the traditional decentralised organisational model for purchasing, each business, function or geographic unit within a corporation is responsible for its own purchases. By providing business units with autonomy and control over their own processes it often improves the overall satisfaction with the purchasing function. However, the decentralised model does not allow corporations to leverage the corporate spend or align BU objectives with the overall objectives for the corporation. With little of no coordination, best practice, templates and strategic know-how are unevenly distributed throughout the organisation. Operating costs are often high.
DECISION MAKER Defined by Miller and Heiman (Miller et al., 1985) as the Economic Buyer or Economic Buying Influence, being the one Decision Maker who has the power to give final approval to a purchase
DEQ Delivered Ex Quay (Incoterm)DES Delivered Ex Ship (Incoterm)DUAL SOURCE The purchasing practice of buying an item from two separate
suppliers, dividing the business between them.DYAD Academic term from the Greek word for ‘two’, meaning a
group of two, usually referring to negotiations between two parties.
E Evaluation of Offers (Russill, 1997; an element in Russill’s ‘Organising for the planning performance’).
EBI Early Buyer InvolvementESI Early Supplier InvolvementeMARKETPLACE Virtual area that enables companies/individuals to offer their
goods or services for sale Also enables people to purchase
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goods or services electronicallyePROCUREMENT Ability to purchase/sell through electronic trading via the
InternetECONOMIC BUYER (ECONOMIC BUYING INFLUENCE)
Defined by Miller and Heiman (Miller et al., 1985) as the one Decision Maker who has the power to give final approval to a purchase
ENDOWMENT EFFECT The phenomenon that people demand more money to give up an object then they are willing to pay to buy the same object.
ESCALATION The use of progressively heavier contentious tactics - SmythESCALATION Nine stages of escalation by GlaslESCROW A legal arrangement in which an asset (often money, but
sometimes other property such as a deed of title, a website, or software source code) is delivered to a third party (called an escrow agent) to be held in trust pending a contingency or the fulfilment of a condition or conditions in a contract such as payment (usually called a trigger event). Upon the event occurring, the escrow agent will deliver the asset to the proper recipient, otherwise the escrow agent is bound by his or her fiduciary duty to maintain the escrow account (source: Wikipedia).
EXCHANGE Academic term used to describe transaction representing a sale to the seller and a purchase to the buyer; the exchange of goods or services for money.
EXPLODING OFFER A particular form of ultimatum in which one party presents the other with a no-win offer that has a deadline attached to it forcing the other party to decide on a less-than-attractive offer or run the risk of going without anything (Robinson, 1995). Such offers have several other components, including:· A clear asymmetry of power between the parties· A pressure-inducing test of faith for the receiver· A restricted set of options· A lack of consideration and respect for the offeror by the
respondent· An apparent lack of good faith on the offeror’s part
(Robinson, 1995 p.278-279)EXW Ex Works (Incoterm)FACILITATION PAYMENTS
Bribes; A facilitation payment is typically the payment of a small amount to a government official to secure or expedite a routine governmental action, often to avoid bureaucratic delays or inaction if payment is not made. In most countries such payments are illegal but in some, particularly developing countries, they are commonplace and often accepted as a necessary supplement to the low incomes of junior officials, and may be part of an organised system with a percentage going to superiors. How a global company deals with this issue is not helped by the fact that OECD countries have taken differing approaches in their legislation on bribery of foreign officials. For example, the US specifically excludes facilitation payments from its definition of bribery but the UK, the Netherlands and Japan makes no distinction, although in
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their initial guidance they indicated that they were unlikely to prosecute companies for making small payments in countries where the practice is common-place. Most major companies explicitly forbid such payments but some accept that employees may need to make such payments, subject to certain conditions such as an obligation to report all such payments to the company’s compliance unit and often only make them with approval from the company’s lawyers. (Source: The Woolf Committee Report into BAE Systems plc, 6th May 2008).
FARPOINT GAMBIT A tactic designed as a counter to an ‘exploding offer’. (Robinson, 1995)
FAS Free Alongside Ship (Incoterm)FBP Fall Back PositionFCA Free Carrier (Incoterm)FINAL OFFER ARBITRATION
Under final offer arbitration, if negotiators do not reach an agreement, they must submit a "final offer" to the arbitrator. Rather than compromising, the arbitrator must choose the final offer of one of the parties.
FOB Free On Board (Incoterm)FOTE Full, Open, Truthful Exchange (Raiffa, 1982).FRACTIONATING A method of issue control that involves dividing a large
conflict into smaller parts ((Fisher, 1964)FRAMING According to (Neale and Bazerman, 1985), framing is a
cognitive bias, The manner in which negotiators frame the options available in a dispute can have a significant impact on the process and outcome of negotiation.
FTS Face Threat Sensitivity – Sensitivity to the threat of losing face, or self-esteem, particularly during negotiations.
FUD Fear, Uncertainty and Doubt. Defined by Gene Amdahl after he left IBM to found his own company: “FUD is the fear, uncertainty, and doubt that IBM sales people instil in the minds of potential customers who might be considering [Amdahl] products.” The idea, of course, was to persuade them to go with safe IBM gear rather than with competitors' equipment. This implicit coercion was traditionally accomplished by promising that Good Things would happen to people who stuck with IBM, but Dark Shadows loomed over the future of competitors' equipment or software. After 1990 the term FUD was associated increasingly frequently with Microsoft, and has become generalized to refer to any kind of disinformation used as a competitive weapon.
GATEKEEPER Defined by Miller and Heiman (Miller et al., 1985) as the Technical Decision Maker who has the power to give technical approval to a purchase.
GRIT Graduated and Reciprocated Initiatives in Tension Reduction (Osgood, 1962)
GUANXI The Chinese practice of valuing personal relationships and alliances.
HNP Harvard Negotiation Project
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HvS Hard versus Soft Money (Russill, 1997; an element in Russill’s ‘Organising for the planning performance’).
IBN International Business Negotiator IC Interest Cycling (Russill, 1997; an element in Russill’s
‘Organising for the planning performance’).ICE Interests, concerns and emotions. Source: Kathleen Kelly
Reardon.IMP Industrial Marketing & Purchasing group – a group of writers
on relationships based on Williamson’s (1975) transaction cost economics model, brought together in the work of Hakansson (1982), and supported by both Lamming and Cox.
IN TRADE e-HUB Operated by Infobank, provides the backbone technology that enables large companies to introduce their own trading exchanges. It provides the infrastructure to support the development of an eCommerce market place.
IO Interpersonal Orientation (Rubin and Brown, 1975)IS Ideal Settlement – another term for MFP.ITT Invitation to TenderKAM Key Account ManagementKRALJIC (pronounced Kra-litch)KRALJIC MATRIX Matrix devised by Pieter Kraljic and popularised by his
landmark 1983 study (Kraljic, 1983)LANCER Linkage, Alignment, Needs, Control, Evaluation, and
Reading.LATERAL THINKING A term invented by Edward de Bone defined as ‘the ability to
escape from existing perceptual and conceptual patterns in order to open up new ways of looking at things and doing things.’
LCCS Low-Cost Country Sourcing LEWICKI (pronounced Lev-itski) LIEN A lien is a form of security interest granted over an item of
property to secure the payment of a debt or the performance of some other obligation. The owner of the property, who grants the lien, is the lienor, and the person who has the benefit of the lien is the lienee (source: Wikipedia)
LIQUIDATED DAMAGES
Liquidated damages clauses must be a genuine pre-estimate of the loss to be suffered by the party in the event of a breach. The failure to do so runs the risk of the clause being classified as a penalty clause. Whether the term is a penalty clause or not is determined as at the time the contract was formed and not at the time the contract was breached.(Source: Gillhams Solicitors and Lawyers website, www.gillhams.com)
LOCK-IN Contractual commitment from a buying organisation to a selling organisation over a protracted period, resulting with the buying organisation being locked-in to that one selling organisation, locking out competitors for the duration of the contract, and requiring no further selling resource until the
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contract expiry approaches.M&C Monopolies and Cartels (Russill, 1997; an element in Russill’s
‘Organising for the planning performance’).MACHIAVELLIAN A concept linking personality to bargaining behaviour
developed by Christie and Geis (1970)MATERIALS MANAGEMENT
Organisational model dating from the 1970s in which purchasing and other materials functions were integrated in an early form of ‘supply management’ model (see Farmer (Farmer, 1985 p.86).
MFP Most Favourable Position (Kennedy et al., 1980 p.15) – The ideal positions of each party which create the boundaries of the zone of possible agreement (ZOPA) called the ‘ideal’ by Steele (1989), and referred to as the ‘resistance point’ by Lewicki et al. (2006).
MI Market Intelligence (Russill, 1997; an element in Russill’s ‘Organising for the planning performance’).
MICE Money, Ideology, Compromise or Ego. MIL (Kennedy et al., 1980)
Must, Intend, Like; objectives you Must achieve, those you Intend to achieve, and those you would Like to achieve.
MINDFULNESS Aform of meditation derived from Buddhist tradition that emphasises present moment awareness. Has been applied to mediation and dispute resolution.
MO Motivational Orientation (Rubin and Brown, 1975) - MONOPOLY a persistent market situation where there is only one provider
of a product or serviceMONOPSONY (From the Greek word μόνοψώνιο = only one buying) is a
market form with only one buyer, called a "monopsonist," facing many sellers. It is an instance of imperfect competition, symmetrical to the case of a monopoly, in which there is only one seller facing many buyers. The term "monopsony" was first introduced by Joan Robinson in 1933. The term "monopsony power", in a manner similar to "monopoly power" is used by economists as a short hand reference to buyers who face an upwardly sloping supply curve but that are not the only buyer; better, but more cumbersome terms may be oligopsony or monopsonistic competition.
“MOTHER HUBBARD” Technique of insisting on a lower price by claiming you can’t possibly afford the asking price.
MSCLS Marketing & Sales Closed Loop SystemMPP Maximum Plausible Position – more commonly referred to as
the MFP or ‘ideal’, or ‘target point’.MULTI-SOURCING The purchasing practice of buying an item or service from
several (more than two) suppliers, dividing the business between them.
MUTUALITY [ ] see ASYMMETRIC MUTUALITY AND IDEAL OR SYMMETRIC MUTUALITY
MvB Make versus Buy (Russill, 1997; an element in Russill’s ‘Organising for the planning performance’).
NBI Negotiable Bid Issues NEGOTIAUCTION A hybrid combination of a negotiation and an auction, used for
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the sale of high value assets. (Not to be confused with FreeMarkets reverse procurement auction software.) High profile negotiauctions have included the sale of RJR Nabisco in the late 1980s, Paramount’s sale of the hit sitcom ‘Frasier’ to NBC in 2001, Vivendi Universal’s sale of its Universal division in 2003 to General Electric for $14 billion, and the sale of Glenmorangie, the Scotch whisky distiller to LVMH for £300 million in 2004.Common features of negotiauctions are:1. Several potential buyers, usually between 3 and 10.2. Asymmetric information between the seller and buyers
(the seller knows more about the asset than potential buyers, at least initially)
3. One-to-one meetings similar to standard negotiations between the seller and potential buyers.
4. One or more rounds of bidding among potential buyers in ways that resemble auctions.
(Subramanian and Zecknauser, 2005)OBB Organisational Buying BehaviourOCR Obligations Contractual Relationship – model developed by
Sako (1992), based on Williamson’s (1975) transaction cost economics model. (see also ACR)
OEM Original Equipment ManufacturerOLIGOPOLY A market dominated by a few sellersOLIGOPSONY A market in which there are few buyersOPPORTUNISM Self-interest with guile (Cox, 2004 p.30) OSB Organisational Seller BehaviourP2P Purchase To PayPARASITIC INTEGRATION
Instances where value created by negotiators is taken from parties who are not at the bargaining table. Such arrangements are parasitic because the benefits achieved by negotiators come at the expense of others. (Created by Gillespie and Bazerman.)
PARETO PRINCIPLE The idea that in terms of purchases, a large majority of the value of a portfolio of purchases (80%) are concentrated in a few key items (20%).
PENALTY CLAUSE Penalty clauses are terms of contracts that seek to impose upon a party to the contract the obligation to pay a sum of money in the event that the contract has been breached, and the terms of the contract cannot be properly classified as a liquidated damages clause. Under English law sums specified as being payable under penalty clauses are not recoverable, as opposed to liquidated damages, which are. (Source: Gillhams Solicitors and Lawyers website, www.gillhams.com)
PEST see PESTLEPESTEL Political, Economic, Social, Technological, Environmental
and Legal factorsPETARD TACTIC A petard was a medieval small bomb used to blow up gates
and walls when breaching fortifications. The word remains in modern usage in the phrase ‘to be hoist by one's own petard’,
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which means "to be harmed by one's own plan to harm someone else" or "to fall in one's own trap".As a negotiation tactic it is a device aimed at trying to get an opponent to state a view which supports one’s owns concerns, in order to take advantage of it oneself and incorporate it into the proposed agreement. (Lax and Sebenius, 1986)
PICOS Program for Improvement and Cost Optimisation of Suppliers, established by Lopez in General Motors. A later article in the Wall Street Journal defined PICOS as Purchased Input Concept Optimisation with Suppliers.
PLANT Someone planted in a crowd, or more likely on the floor in an auction, to encourage others unaware of the set-up to purchase particular goods or services.
PM Procurement Marketing (Russill, 1997; an element in Russill’s ‘Organising for the planning performance’).
PQQ Pre Qualification QuestionnairePREFERRED SUPPLIER
Supplier placed on a list of preferred suppliers, to be given preference over unknown suppliers. May also be known as an Approved Supplier.
PSL Preferred Supplier ListPSS Post-Settlement SettlementPTN Post Tender NegotiationPurposive Contract Outcome-based contract which aims to describe the desired
end result without specifying the component parts in detail RBT or RBV Resource-Based Theory or Resource-Based View –
(Wernerfelt, 1984, p172; Rumelt, 1984, p557-558, Prahalad & Hamel) add references.
REL Relationship Positioning (Russill, 1997; an element in Russill’s ‘Organising for the planning performance’).
RESISTANCE POINT Lewicki’s term for the point beyond which each negotiating party will not go.
REVENUE RECOGNITION
Rules imposed under the Sarbanes-Oxley legislation in the USA (following the spectacular Enron, Worldcom collapses due to false accounting methods) regarding the timing that revenue can be recognised. Commonly used by salesmen as an excuse for not agreeing to negotiate.
RFP Request for ProposalRFQ Request for QuotationRM Risk Management (Russill, 1997; an element in Russill’s
‘Organising for the planning performance’).RMFP Revised Most Favourable Position – Kennedy et al. (1980)RMKT Reverse Marketing (Russill, 1997; an element in Russill’s
‘Organising for the planning performance’).ROI Return on InvestmentROMALPA CLAUSE A clause covering retention of title of goods being sold until
they have been paid for in full by each successive customer along the supply chain.
RP Reservation PriceRPM Relationship Portfolio Mapping – An approach to marketing
and sales which focuses on the relationship management
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choices that sellers must make in any transaction (Cox et al., 2004).
RS Realistic Settlement – an alternative term for Resistance Point. [check – is this correct or does it mean the opposite?]
RSZ Realistic Settlement Zone, more commonly known as ZOPA (‘The Pocket Negotiator’, Michael Hartley-Brewer).
SA Supplier Appraisal (Russill, 1997; an element in Russill’s ‘Organising for the planning performance’).
SC Supplier Conditioning (Russill, 1997; an element in Russill’s ‘Organising for the planning performance’).
SCA Sustainable Competitive AdvantageSCS Search for Competitive Source(s) (Russill, 1997; an element in
Russill’s ‘Organising for the planning performance’).SD Source Dependency (Russill, 1997; an element in Russill’s
‘Organising for the planning performance’).SERVICE CREDITS - SETTLEMENT RANGE Also known as the bargaining range or ‘ZOPA’, usually
defined as the difference between the least a seller will take and the most a buyer will pay. Karrass (1974) goes further and defines it as the difference between ‘the buyer’s estimate of the seller’s minimum’ and the ‘seller’s estimate of the buyer’s maximum’. The range is based on each party’s estimate of the situation, not the situation itself.
SHILL North American term for an associate of a person selling goods or services, who pretends no association to the seller and assumes the air of an enthusiastic customer. The intention of the shill is, using crowd psychology, to encourage others unaware of the set-up to purchase said goods or services.
SINGLE SOURCE The purchasing practice of buying an item from one supplier, even though more suppliers are available.
S.I.T.O. Supranational Independent Thinking Organisation. A term created by Edward de Bono for a proposed conflict resolving body to offer assistance to parties in conflict situations.
S/M Single/Multiple Source (Russill, 1997; an element in Russill’s ‘Organising for the planning performance’).
SMART Specific, Measurable, Attainable, Results oriented and Time based
SOLE SOURCE The only known available (or viable) supplier of a particular item or service.
SNT Single Negotiation Text - A single-text negotiating strategy is a form that employs the use of a single document that ties in the interests of the negotiating parties, who add, subtract and refine the text, which represents a "placeholder agreement" and is intended to be the foundation for a final ratified agreement. Since all parties must agree to the final document and offensive entries may lead to a cessation of the process, parties must be sensitive to how their changes to the text will be perceived by the other parties.Fisher (1981) attributes the device to Louis Sohn (Lax and Sebenius, 1986)
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SP Supplier Positioning (Russill, 1997; an element in Russill’s ‘Organising for the planning performance’).
SPIN-Selling Situation questions, Problem questions, Implication questions, Need-payoff questions (Rackham, 1987)
SPO Supplier Preference Overview (Russill, 1997; an element in Russill’s ‘Organising for the planning performance’).
SRM Supplier Relationship ManagementSTEEP see PESTLESTEP see PESTLESTRATEGIC MISREPRESENTATION
Raiffa adopted this phrase from game theorists and mathematical economists to describe common exaggerations in negotiations, otherwise known as lies (Raiffa, 1982 p.142).
STRATEGIC PARTNERSHIP
An agreement between two organisations to co-operate for mutual benefit and understanding of business needs and requirements – not a partnership in the legal sense. (Greenhalgh, 1995, Annex A, p.A4)
STRUCTURAL POWER RESOURCESSUBSERVIENT SELLER SYNDROME (SSS)
(Cotter and Henley, 2009)
SUPPLIER DOMINANCESUPPLIER PREFERENCING
Originated by Paul Steele and Brian Court in the mid 1990s this model enables purchasing functions to understand how a supplier might value its account with them.
SUPPLY CHAIN MANAGEMENT SWEEPER CLAUSE A technique employed in a contract to protect the buyer from
unscheduled chargeable contract changes by a service provider. The contract clearly specifies in one place all obligations on the buying organisation, and the ‘sweeper clause’ sweeps up all other responsibilities for providing the service, whether identified or not, and places them firmly on the service provider.
SWOT Strengths, Weaknesses, Opportunities and ThreatsSYMMETRIC MUTUALITY
A state that exists between negotiating parties when they each have the same information available to them about the subject of the negotiation.
TAC Total Acquisition CostTARGET POINT Lewicki et al.’s (2006) term for the ‘ideal’ or ‘MFP’.TC Total Cost (Russill, 1997; an element in Russill’s ‘Organising
for the planning performance’).TCE Transaction Cost Economics (or, according to Cox,
Transaction Cost Economising)TCO Total Cost of OwnershipTHE NEGOTIATOR’S DILEMMA
A concept, or metaphor, devised by Lax and Sebenius (1986) which suggests that every negotiator has a choice between adopting an integrative or win-win approach, which they characterise as ‘creating value’, or taking a distributive win-
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lose approach, which they term ‘claiming value’. THE WINNER’S CURSE
The winner's curse is a phenomenon akin to a pyrrhic victory that occurs in common value auctions with incomplete information (asymmetry of information). In short, the winner's curse says that in such an auction, the winner will tend to overpay. (Wikipedia) The expression carries implications that any object’s most likely buyers are those who overestimate its worth, and an object of uncertain value is more likely to be owned by people who overestimate its value than by people who underestimate it. A variation on buyer’s remorse.
TQM Total Quality Management (Deming)TUPE Transfer of Undertakings Protection of EmploymentUSER Defined by Miller and Heiman (1988) as the Decision Maker
who has the power to give End User approval to a purchaseUSP Unique Selling PropositionVA Vulnerability Analysis (Russill, 1997; an element in Russill’s
‘Organising for the planning performance’).VFM Value for MoneyVI Vendor Intelligence (Russill, 1997; an element in Russill’s
‘Organising for the planning performance’).VMI Vendor Managed InventoryW.H.A.T. (Shapiro et al., 2001 p.122) A questioning template:
Why? Hypothesise. Answer. Tally (summarise)
ZEUTHEN’s Conflict Avoidance model – a two stage process to determine how much conflict you will accept in a negotiation. First compare the value of sticking to your current position with that of accepting the other party’s offer. Second, evaluate the potential for a conflict or a breakdown in negotiations if you stick to your offer, and decide whether the conflict is worthwhile.
ZOPA Zone of Possible Agreement - also sometimes known as the ‘Settlement Range’ or ‘Bargaining Range’
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APPENDIX 1: Core Interview Negotiation Questions
These questions all seek to discover your views, based on your personal experience of
negotiations, based on what you do.
The questions asked in the core interviews covered thirteen key areas evolved as follows:
1. What makes a good negotiator?
2. Phases
2a) What would you say are the main phases or stages in a negotiation?
2b) Do you deliberately cover the phases in any particular order, or is that not important?
i) Preparation
How do you prepare for a negotiation?
Do you set limits or targets?
Do you ever have to deviate from your plan?
ii) Relationship building
iii) Information gathering
iv) Information using
v) Bidding
vi) Closing the deal
vii) Implementing the agreement
viii) Documenting the contract
ix) Reviewing the process - lessons learned
3. Techniques
3a) What persuasion techniques exist in negotiations?
3b) Do you have a favoured approach that works better than the others for you?
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Do you use the following: Y/N
i) An exercise in logical persuasion
What would be your advice about opening offers in negotiations?
Can the opening offer determine the outcome of a negotiation?
ii) An exercise in exchanging mutual concessions - Bargaining
How useful is this approach in a negotiation?
iii) A use of power & coercion
iv) Use of compromise
What are your views on compromise as an approach in a negotiation?
v) Use of emotion
How useful is this approach in a negotiation?
vi) Understanding the other party's genuine objectives around an issue
How useful is this approach in a negotiation?
Could you estimate what proportion of your effort in a negotiation would be directed
towards each of the above approaches?
Are there any other approaches or techniques not mentioned above?
4. Ethics & Integrity
Tell me your view of personal integrity in negotiations?
Do you ever deliberately deceive your opponent in negotiations?
5. Personal Styles
How would you describe your personal negotiation style?
6. Approaches
Integrative vs Distributive
Confrontation vs Collaboration
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Have you heard the description of negotiations as integrative and distributive?
Have you heard the description of negotiations as collaborative and adversarial?
Have you heard the description of negotiations as win-win and win-lose?
Do you think these descriptions are true in your experience?
Is there a continuum from one to the other?
Tell me about your experience of adversarial (distributive) negotiations
Tell me about your experience of collaborative (integrative) negotiations
Can you recall examples of collaborative negotiations you have been involved in?
If so, were there any particular circumstances that led to the negotiation being
collaborative?
What % of all buyer-seller negotiations that you've been involved in would you say have
been collaborative?
7. Power
Tell me about the power relationship in negotiations, based on your personal experience?
To what extent is the balance of power just the perception in the negotiators' minds?
To what extent is the perception of the balance of power agreed & understood between the
parties?
What gives a buyer power in a negotiation?
What gives a seller power in a negotiation?
Tell me about the relative size of the organisation as a power attribute?
How much is the dependency of your organisation upon the other party an attribute of
power?
Do you think power is exploited differently by skilled and unskilled negotiators?
8. BATNA
In your experience, how often does a negotiator have a real Alternative? (BATNA)
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How do you deal with a negotiation where it is becoming clear that it is not going to deliver
your desired outcome?
change tactics/techniques
break
compromise
9. Lessons
What key lessons have you learned from your experience of difficult negotiations?
10. Personality
Are the personalities involved in a negotiation separate from the subject matter being
negotiated?
11. Opponents
How do you rate the opponents that you typically come up against in major (high value)
negotiations?
12. Contract
How important is the written contract when agreement has been reached?
How common is it for major deals not to be documented in the form of contracts?
If a contract is silent on a particular issue, is this likely to favour the buyer or the seller, or
both equally?
Is it true that the contract is only important when things go wrong?
13. Influence & Corruption
Have you experience of 'golf course' deals being made outside the normal work
environment?
Can you give me an insight into one or two examples?
Are major sourcing/outsourcing decisions usually taken for the right reasons?
Are such decisions usually taken at the right level within the organisation?
Are such decisions usually taken with an appropriately detailed level of due diligence?
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Have you ever seen bad decisions (for an organisation) imposed by very senior people
within it?
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APPENDIX 2: Agreement of Informed Consent
Steve Hubbard
Barclay House, Watling Street, Little Brickhill, Bucks., MK17 9NB
Telephone Home 01525 261383 mobile 07801 561269
e-mail: [email protected]
Agreement of informed consent
Dear [Actor],
NEGOTIATIONS BETWEEN BUYERS AND SELLERS
What happens when buyers and sellers negotiate?
I am most grateful for your agreement to help me with my research for a doctoral thesis on the above subject, which I am undertaking at the University of Glamorgan, by participating in an interview and completing a questionnaire. The research will be conducted in accordance with the attached IPSERA Code of Ethical Research Conduct. In addition I wish to reassure you that you are free to withdraw from this research at any time. Your participation is entirely voluntary.
The purpose of my research is to answer the question:
“Are the dominant concepts and theories developed in the academic literature regarding negotiations between buyers and sellers supported by evidence from professional negotiators?”
The outcome of this research will be submitted to the University of Glamorgan in the form of a thesis, and in addition anonymous outcomes may be published and/or presented in academic publications and/or conferences and to non-academic groups as well as publications and/or conferences including possible broadcasts on radio or TV. Your confidential data will not be shared with other actors.
The interview will be recorded and transcribed for analysis. The recorded interview, the transcription and any related analysis will be used for the purposes of this research. Your name and organisation will remain anonymous at all times. In the event that this data is required for any unrelated research, I shall seek your separate agreement to use it again for that different purpose. The data collected will remain in my possession and ownership, but you will be able to gain access to it at any time on request.
Signed ___________________________ ___________________________Stephen Grant Hubbard [Actor][Date] [Date]
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APPENDIX 3: Non-specialist ethical guidelines for research
University of GlamorganPrifysgol Morgannwg
Non-Specialist Ethical Guidelines for Research
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INTRODUCTION
Scope of these guidelines
These guidelines relate to research in general and should be complied with by all researchers within the University, whether they are members of staff or post-graduate or undergraduate students. Research includes market and corporate research.
These guidelines do not replace those covering research in specialist areas. People carrying out research in these areas should adhere to specialist guidelines and seek whatever approval is required from specialist bodies as well as approval from School Ethics Committees (see below).
Because of the close correlation with ethical issues, when dealing with human subjects and compliance with the Data Protection Act 1998 researchers are strongly advised to consult the University’s Handbook on Data Protection or the University’s Data Protection Officer.
Responsibility for carrying out these guidelines
Ultimate responsibility for applying these guidelines and for day-to-day compliance with them lies with individual researchers, whether staff or students. Ethics Committees can only carry out overseeing and advisory roles.
Members of staff with responsibility for undergraduate, postgraduate or post-doctoral research projects, as well as for research by members of staff, are responsible for ensuring that all researchers are aware of and agree to abide by these guidelines. Staff are required to give their School Ethics Committee evidence that they have read the guidelines and have taken or will take appropriate action. Details of how to do this are given in the final section of these guidelines.
GENERAL ETHICAL RESPONSIBILITIES.
Ethics is a complex field, but in professional contexts its fundamental concerns are to:
· respect the autonomy of individuals
· avoid causing harm
· treat people fairly
· act with integrity
· use resources as beneficially as possibleDilemmas arise when these concerns conflict. When this happens the concerns must be weighed against each other. Individuals can either aim for compromise between them, or give priority to one concern over another. There may be no ethically correct course of action, only the one the individuals judge to be appropriate after considering all these ethical concerns. The following paragraphs apply these concerns to research activities.
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1.0 Respect the autonomy of all actors
It is the responsibility of researchers to respect the autonomy of everyone involved in research: these include fellow researchers, subjects and those who may not be actively involved in the research but about whom data is used. To respect autonomy researchers should obtain informed consent and avoid practices and methodologies which involve deceit, dishonesty, invasion of privacy, breaking confidentiality and using data for purposes not clearly explained to actors.
1.1 Informed Consent.
The new Data Protection Act is based on the idea that “informed consent” is “Any freely given, specific and informed indication of wishes by which the data subject signifies his agreement to personal data relating to him being processed.”
1.1.1 Research should be based on the freely given informed consent of those under study.
1.1.2 It is the responsibility of the researcher to explain as fully as possible, and in terms meaningful to the actors, the aims and the nature of the research, who is undertaking it, who is funding it, its likely duration, the possible consequences of the research and how the results are to be disseminated and all the likely disclosures of personal data.
1.1.3 The power imbalance between researcher and researched should be addressed. Care should be taken to ensure that the latter are not pressurised into participation. Research actors should be aware of their right to refuse participation whenever and for whatever reason and should not be given the impression that they are required to participate. It should also be recognised that research may involve a lengthy data-gathering period and that it may be necessary to regard consent not as obtained once and for all, but subject to renegotiations over time.
1.1.4 The researcher should explain how far research actors would be afforded anonymity and confidentiality. Actors should have the option of rejecting the use of data-gathering devices such as tape-recorders and video cameras.
1.1.5 If there is a likelihood of data being shared with or divulged to other researchers, the potential uses of the data should be discussed with the actors and their agreement to such use should be obtained.
1.1.6 While the researcher should take every practicable measure to ensure the confidentiality and anonymity of research actors, s/he should also take care not to give unrealistic assurances or guarantees of confidentiality. Research actors with easily identifiable characteristics or positions within an organisation should be reminded that it may be difficult to disguise their identity without distorting the data.
1.1.7 Where research actors are young children or other vulnerable groups such as older, disabled or sick people or people with learning difficulties, whose understanding is impaired in some way so that they are unable to give full informed consent, it may be necessary to use a proxy in order to gather data. In this case great care must be
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taken not to intrude upon the privacy of the vulnerable actors. The researcher should consult relevant professionals, parents/guardians and relatives, as appropriate. Researchers should attempt to obtain the informed consent of children and their parents and in relation to school children those in loco parentis.
1.2 Covert Research
With the exception of medical research, it is difficult to see whether any research involving covert methods could be legal under the Data Protection Act. This specifies that for personal data obtained on the data subject to be fair, it is necessary to take account of whether any person from whom the data is obtained has been misled or deceived as to the purpose of the processing.
1.2.l It is recognised that there is a continuum of covert-overt research and therefore difficulty in defining research as entirely covert or overt. Researchers should, however, endeavour to avoid the use of deception in their research methods since this violates the principle of informed consent and may invade the privacy of those under study, particularly in non-public places. If it appears that the employment of covert research methods is the only means to obtain the required data, the researcher should consult the Data Protection Officer.
Covert research in non-public places or experimental manipulation of research actors without their knowledge should be a last resort when it is impossible to use other methods to obtain the required data. It is particularly important in such cases to safeguard the anonymity of actors. The researcher should consult the University’s Data Protection Officer in these circumstances.
1.2.2 If covert methods are employed and informed consent has not been obtained prior to the research, every attempt should be made to obtain this post hoc.
1.2.3 Researchers should consider whether the likely benefits of research justify the ethical unacceptability of using covert methods.
1.3 Confidentiality and Anonymity
1.3.1 The anonymity and privacy of research actors should be respected and personal information relating to actors should be kept confidential and secure. Researchers must comply with the provision of the Data Protection Act and should consider whether it is proper or appropriate even to record certain kinds of sensitive information.
1.3.2 Threats to the confidentiality and anonymity of research data should be anticipated by researchers and normally the identities and research records of actors should be kept confidential, whether or not an explicit pledge of confidentiality has been given.
1.3.3 Where possible the researcher should anonymise the personal data such that it would not be possible for the University, its staff or students or the researcher, to identify the individual from that data and any other data held.
2.0 Avoid harm
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2.1 A primary responsibility of researchers is to avoid causing harm. This consideration should be an over-riding factor at all stages in a research project, such as the formulation of objectives, design and development of methodology, conduct of research, and presentation, dissemination and use of findings. Harmful effects may also occur some time after cessation of the research process and publication of results. The possible consequences of every stage should be assessed and every step taken to ensure safety and prevent adverse effects on researchers, subjects, individuals about whom data is used, others in the community in which the research occurs and those who could be affected by the results of the research.
2.2 Harm includes physical and psychological damage and stress to individuals, invasion of their privacy, damage to their self esteem and damage to the social fabric of their community. Harm may also include damage to the reputation of the research discipline and University and damage to the interests of future research. These can be caused by a project which is ill-conceived, carelessly executed or irresponsibly used.
2.3 If the objectives of a piece of research cannot be achieved without risk of harm researchers should consider abandoning the project. They should only apply for approval to continue if they can provide an overwhelming justification for doing so. Should approval be granted, they must ensure that every effort is made to reduce the risk and must make clear to all who may be involved in the project or affected by it that the risk exists.
N.B. If researchers think there is a possibility of harm occurring, they should consult with the University’s Data Protection Officer. If harm occurs the research exemptions under the Data Protection Act cannot be used.
3.0 Treat everyone fairly, whether actors or not
To treat everyone fairly, researchers should attempt to:
3.1 Meet the needs of everyone
Researchers have a responsibility to ensure that the needs of everyone who may be affected by the research are met as far as possible.
Needs include sufficient information, guidance, equipment, support and other resources to:
· participate fully in the research process
· deal with any effects of the execution and cessation of the research and the
dissemination of its findings.
Communities as well as individuals may have needs arising from the execution and consequences of research.
3.2 Give equal consideration to the interests of everyone.
Care should be taken to ensure that the values and attitudes of researchers do not result in the interests of some people being given unequal consideration. It is easy, for example, to regard the interests of people peripheral to the research activity as of no concern to the
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researcher. But if people may be affected by the research, however minimally, then steps should be taken to protect their interests.
4.0 Carry out research with integrity
4.1 Research is carried out with integrity when researchers genuinely strive to achieve the objectives of sound research by ensuring valid methodology, objective research processes and well-grounded findings. Research which lacks integrity is ethically unacceptable as it not only misrepresents what it claims to be but also mis-uses resources.
4.2 The objectivity and impartiality of research can be threatened if it is in any way dependent on a sponsor, institution or actors who have particular interests or values. Researchers should therefore ensure that the objectives of all parties are clearly articulated at the outset, and that the research is set up in such a way that it is independent of any special interests. It will then avoid being invalidated by “hidden agendas”.
5.0 Use resources as beneficially as possible
5.1 Resources include funding, institutional facilities, input of researchers and subjects, and sources of material – such as archives, experimentation and data about individuals and communities. Resources also include research opportunities: funding may be available for only a limited number of research projects in a particular discipline, and there may be a limit to how many times fieldwork can be carried out in a particular locus.
5.2 It is the responsibility of researchers to obtain the greatest benefits they can from the resources they use. In general terms benefits may be seen as whatever promotes the welfare of living beings. In practical terms most research is likely to contribute to this goal by aiming for more limited objectives. Researchers should design projects to achieve the most beneficial use of resources. If it is evident that a particular project will not do this they should consider using fewer resources or putting forward an alternative project.
What you should do next...
Whatever type of teaching and research you are involved in, you are asked to participate in the following procedures:
For EXISTING teaching and research:
Since Fields are responsible for the delivery of academic work the University requires them to appraise the ethical aspects of their existing work collectively in a meeting. A Field may therefore ask you to discuss ethical aspects of your current teaching and research in a meeting and to note any ethical issues which have been identified. Minutes of this meeting will be sent to the relevant School Ethics Committee.
Existing teaching and research includes:
· all undergraduate and postgraduate teaching modules, dissertations and approved study
schemes
· MPhil/Ph.D projects and postdoctoral projects
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· staff research projects
· externally funded projects
· consultancies
For PROPOSED new teaching and research:
All teaching proposals - whether for new work or work that is to be revalidated - must be approved by a School Ethics Committee before they are submitted for validation. Whenever possible Fields should consider the ethical aspects of proposals before they are sent to the School Ethics Committee.
Similarly, proposals for new research work must be approved by a School Ethics Committee before the work begins. Where appropriate, the ethical aspects of research proposals should be considered by a Field, research committee or research unit before they are sent to the School Ethics Committee. Evidence that details of proposed projects have been approved by your SEC will be required by RPC/DRPC for registration/transfer purposes.
Once the ethical aspects of a teaching or research proposal have been considered a copy of form SECTR should be completed and submitted with the proposal descriptor to the School Ethics Committee. Normally one copy of the form should be completed for each proposal. However, if a Field considers that several modules present no ethical issues it may attach the modules of them all to a single copy of SECTR on which the modules are listed.
In some cases SEC approval for research may be conditional upon approval by outside professional bodies.
Proposed teaching and research activities include:
· all teaching and research modules and all study schemes that are to be (re)validated
· newly planned student research projects and newly-planned staff/postdoctoral research
projects.Your SEC will advise you how it wishes to receive information on proposed undergraduate and postgraduate dissertations. It may use form SECTR or collect data through a different route.
Once a teaching or research proposal has been approved by SEC and put into operation the day-to-day responsibility for reviewing and monitoring the ethical aspects of the project rests with its current module leader or director of studies.
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APPENDIX 4: IPSERA Code of ethical research
1.0 Purpose
The association believes that researchers should conduct themselves with honesty and integrity and with regard to the welfare of humans, fellow researchers and the natural environment. The over-arching aim of research in the purchasing and supply field should be to improve the lives of humans through improvements in business practice based upon an increased understanding of business phenomena and techniques. The process of research should thus be regarded as a professional, ethically-based activity, subject to certain principles defining and delineating acceptable conduct. Those principles are summarised in this document.
We are aware that many educational and research institutions possess their own codes of ethical conduct, and this document is intended to supplement rather than replace any existing in-house guidelines.
2.0 Methods and methodology
IPSERA members should:
1. choose research strategies, designs, data collection methods and data analysis techniques solely on the basis of their ability to produce valid and reliable results in the research environment in which they are working.
2. prevent their personal preferences, prejudices and biases, or those of their data providers, clients or funding sources, from colouring or influencing their empirical, findings, or the interpretation of those findings. withdraw from any research processes in which the client, source of funding or employer’s interests and wishes conflict with and/or prevent the uncovering and description of the empirical truth.
3. remain aware at all times of the difficulties of unequivocally determining causal relationships in empirical research into business phenomena containing elements of human opinions, influence or control.
3.0 Data sources/research subjects
IPSERA members should:
1. insist upon honesty in all aspects of funding application, bid submission, research design, data collection, analysis and results dissemination.
2. be aware of the needs and rights of human research subjects. The conduct and output of research should never directly cause, or indirectly facilitate, harm to human subjects.
3. pay special attention to the needs and rights of vulnerable human subjects such as children, the elderly and the mentally impaired, or individuals with low status positions within commercial organisations, who may be unaware of, or unable to effectively protect, their own rights.
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4. be aware of the limited ability of smaller companies to defend their interests when in conflict with larger trading partners.
5. respect research subjects’ requests and requirements with respect to personal anonymity or the confidentiality of both primary and secondary data, unless such requests conflict with the law of the land.
6. respect subjects’ privacy needs, and avoid excessive impositions on their time. 7. avoid exposing clients to loss of income, revenue or competitive advantage 8. clearly explain to subjects, before investigations commence, the researcher’s
intentions for the likely future uses of research outputs. 9. seek approval from the original research subjects for any new output application(s)
whenever circumstances change and new applications for the outputs of research emerge after completion of the data collection process.
10. obtain research subject approval prior to the start of peer review processes whenever research leads to, or is likely to lead to, the publication of results in the public domain.
11. never use deceit or deliberate untruths with research subjects in order to circumvent or modify their wishes, preferences or rights.
12. seek ethical reviews of the proposed procedure in advance, and on completion, from independent senior peers, whenever some degree of deception, that does not threaten research subjects’ individual rights, is unavoidable in order to obtain valuable information.
13. declare in their published output any conflicts encountered; be they with personal financial interests, or the interests of friends, colleagues, clients or research subjects.
14. ensure that the conduct of research fulfils any relevant legal requirements in the country(ies) where data is collected or results are published.
4.0 Other researchers
IPSERA members should:
1. always acknowledge the contributions and intellectual property of others. 2. expose and report to their employing organisation, dishonest or unprofessional
research practices in the purchasing and supply field. 3. be prepared to undertake tasks that serve the wider interests of the field such as
academic editing and reviewing, or supporting the activities of relevant professional bodies.
5.0 Wider society
IPSERA members should:
1. support and encourage research whose conduct or outputs may lead to improvements in human welfare and the natural environment.
2. avoid involvement in research whose conduct or output encourages, facilitates or directly involves the abuse or exploitation of any person or the natural environment.
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3. seek to disseminate as widely as possible to practitioners, academics and the wider society any improved understanding of processes, concepts, theories and techniques in the purchasing and supply field.
Proposed by: J. Ramsay June 2003
Circulated for comment to all IPSERA members during 2003
Approved by: The IPSERA AGM on 5.4.2004 in Catania, Sicily
Last amended: 15.4.2004
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REFERENCES
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APPENDIX 11
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