Renegotiations – empirical analysis of impacts on business relationships

Abstract

Purpose Renegotiations not only promise an economically relevant improvement of the original negotiation outcome for the communicator of the demand but also imply a potential threat to the business relationship. The purpose of this paper is to examine the impact of renegotiations in detail and to provide practical implications for the optimal usage of renegotiations by analyzing potential renegotiation strategies. Design/methodology/approach Structural equation modelling was used to analyze the data of 255 negotiation experts collected via a standardized online questionnaire. Findings Social psychological outcome of renegotiations has the most relevant impact on relationship continuity (RC). The impact of economic outcomes is wholly mediated by the social psychological outcome. Regarding the use of different renegotiation strategies, other-oriented strategies and direct communication are most successful, whereas self-oriented strategies correlate negatively with all results. Research limitations/implications The study’s sample is drawn from Germany, which requires careful consideration of the results’ generalizability. Practical implications When demanding renegotiation, practitioners should apply strategies characterized by other-orientation and direct communication to increase the probability of RC. For the sake of the business relationship, self-oriented strategies should be avoided. Originality/value This paper presents the first detailed analysis of the impact of renegotiations on business relationships and investigates the effects of different renegotiation strategies on renegotiation outcomes and RC; hence, it is of great value for practical usage and may serve as a stepping stone for further research.

Friends or strangers? Attempts at reactivating buyer–supplier relationships

“…Previous research has shown that both the conclusion (Halinen and Tähtinen, 2002) and the reactivation (Poblete, 2017) of business relationships are processes that take time and require effort. When doing business again with a former business partner, aspects such as price, product features, order quantities, quality levels, delivery scheduling, transportation arrangements and terms of payment might need to be negotiated (Liu et al, 2015;Voeth and Lenzing, 2017). Both parties may need to air experiences and knowledge about each other and discuss expectations regarding future business exchanges (Voeth and Lenzing, 2017;Rao and Perry, 2002).…”

“…When doing business again with a former business partner, aspects such as price, product features, order quantities, quality levels, delivery scheduling, transportation arrangements and terms of payment might need to be negotiated (Liu et al, 2015;Voeth and Lenzing, 2017). Both parties may need to air experiences and knowledge about each other and discuss expectations regarding future business exchanges (Voeth and Lenzing, 2017;Rao and Perry, 2002). This can be seen as a dialogue between representatives of the firms aimed at agreeing on different needs and goals for the future in the business relationship (Ariño and Reuer, 2004;Voeth and Lenzing, 2017).…”

“…Both parties may need to air experiences and knowledge about each other and discuss expectations regarding future business exchanges (Voeth and Lenzing, 2017;Rao and Perry, 2002). This can be seen as a dialogue between representatives of the firms aimed at agreeing on different needs and goals for the future in the business relationship (Ariño and Reuer, 2004;Voeth and Lenzing, 2017).…”

“…In line with Leach and Liu (2014) and Polonsky et al (2010), this suggests that although earlier experiences with the former supplier can be a critical determinant, they can also function as deterrents when reactivating the relationship. Accordingly, the buying firm may need to counter strong negative attitudes and overcome negative feelings stemming from issues that contributed to the ending of the relationship (Cespedes and Poblete, 2019;Leach and Liu, 2014;Liu et al, 2015) when negotiating (Voeth and Lenzing, 2017). Firms may have to identify which aspects can be resumed and which cannot, and what needs to be developed in terms of new resources and activities.…”

Influence of Team Negotiations on Collaborative Value within Ashoka Fellows' Organizations in Africa

“…Teams also renegotiate. Voeth and Lenzing (2017) investigated the impact of teams' renegotiation on relationship continuity. The first step of the analysis pursued a better understanding of renegotiation outcomes and their impact on relationship continuity, and the second step analyzed the conceptualization and detailed negotiation strategies and their impacts on renegotiation results.…”