Manuel HefnerChoosing and Optimizing Negotiation Modes

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The classic way of generating deals and selecting business partners within the B2B sector are interaction-based negotiations. In the mid-1990s, procurement managers started replacing or complementing classic negotiations by (electronic) procurement auctions. Their aim was to reach lower prices by enhancing competitive pressure on suppliers.

Generally, classic negotiations and procurement auctions count as two generic negotiation modes within the B2B sector having their own mode-specific characteristics. Whereas classic negotiations are shaped by the offer exchange and interaction between the counterparties, auctions are defined by their specific auction (bidding) rules set by one party. Prior research also introduced possible combinations of both modes.

Procurement managers face an important strategic decision on which mode performs best for a certain procurement case. On a tactical level, there are mode-specific options that increase the chances to improve economic and non-economic outcomes for tactic users.

This work therefore focuses on the informed choice between different negotiation modes (classic negotiation, procurement auction or combination) by developing and introducing a novel decision model. Moreover, it explores the beneficial use of certain mode-specific tactics (package concession tactics in negotiations, bonus-malus communication in procurement auctions) that potentially increase users’ outcomes.

By considering an informed strategical choice and a beneficial tactical use of a negotiation mode, this work aims to contribute to practice and research in this important area.

Ihr Werk im Verlag Dr. Kovač

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