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Article
Publication date: 22 March 2019

Sanjay Prasad, Ravi Shankar and Sreejit Roy

The purpose of this paper is to study the impact of bargaining powers of firms in supply chain coordination. It studies selected aspects of bargaining powers, namely…

1331

Abstract

Purpose

The purpose of this paper is to study the impact of bargaining powers of firms in supply chain coordination. It studies selected aspects of bargaining powers, namely, impatience, breakdown probability and outside options, and uses a bargaining-theoretic approach to analyze surplus allocation in a coordinated supply chain.

Design/methodology/approach

This paper proposes one-supplier one-buyer infinite horizon supply chain coordination game, where suppliers and buyers negotiate for the allocation of supply chain surplus arising out of supply chain coordination. Various aspects of the bargaining power of the negotiating parties are modeled and the paper studies impact of power levels on the results of the bargaining game.

Findings

A significance of impatience on the bargaining process and the surplus split has been established. This paper also demonstrates a rather counter-intuitive aspect of bargaining that the impatience (as perceived by the other party) can improve the bargaining position and therefore share of profits.

Research limitations/implications

This paper has limited its analysis to three key components of bargaining power. Future works can study other aspects of bargaining power, namely information asymmetry, learning curve, inside options, etc. Further, the paper has considered an infinite horizon model – this assumption can be relaxed in future research.

Practical implications

Equations to derive optimal split of the surplus have been derived and can be leveraged to design an autonomous bargaining agent to discover equilibrium profit splits in a cloud or e-commerce setting. Further, insights from this paper can be leveraged by managers to understand their relative bargaining power and drive to obtain the best profit split.

Originality/value

This paper establishes that impatience (in terms of counter-offer probability) has a significant impact on the bargaining position and on the split of the surplus that the firm can get for themselves. It establishes the advantage of higher levels of impatience, provided the other party recognizes the impatience and factors it in their decision-making process.

Details

Journal of Advances in Management Research, vol. 16 no. 3
Type: Research Article
ISSN: 0972-7981

Keywords

Article
Publication date: 1 October 2004

Yi‐Ru Regina Chen

China’s open‐market reform and rapid economic growth have generated a tremendous surge in activity and market investment by multinational corporations (MNCs). By 2000, 400…

3093

Abstract

China’s open‐market reform and rapid economic growth have generated a tremendous surge in activity and market investment by multinational corporations (MNCs). By 2000, 400 of the 500 most famous MNCs had invested in China. One distinctive feature of China’ s business environment, its authoritarian political system, requires MNCs to practise strategic public affairs to interact constantly with the different levels of Chinese government, respond to the policies and further influence business policy formation. This paper proposes a conceptual model of MNC‐government bargaining that is composed of international political economy, dependency theory and agency theory. It then examines (1) the international and domestic influences on MNC‐government bargaining in China and (2) the strategies MNCs employed to influence Chinese laws for foreign business in their interests. A case study of the Chinese ban on direct selling operations in 1998 and Amway’s strategies to remove the ban is presented. Results suggest that effective public affairs should engage in the following activities: (1) issues management, (2) constantly and systematically analysing the MNC’s bargaining power with the host government, (3) selecting public affairs strategies based on the analysis of MNC‐government bargaining, (4) exercising relationship management, and (5) being ethical in its practice.

Details

Journal of Communication Management, vol. 8 no. 4
Type: Research Article
ISSN: 1363-254X

Keywords

Article
Publication date: 2 October 2021

Jonathan I. Lee, Daisung Jang, Elizabeth A. Luckman and William P. Bottom

The medium negotiators choose for communication will influence both process and outcome. To understand how medium influences power expression, this paper aims to compare…

Abstract

Purpose

The medium negotiators choose for communication will influence both process and outcome. To understand how medium influences power expression, this paper aims to compare value claiming by asymmetrically powerful negotiators, using face-to-face and computer-mediated messaging across two studies. Following up on long-standing conjectures from prominent coalition researchers, the authors also directly tested the role of the apex negotiator's personality in coalition formation and value expropriation.

Design/methodology/approach

The authors conducted two laboratory experiments which manipulated communication medium (computer-mediated vs face-to-face) in three- and four-person bargaining. They also varied asymmetry of power so the apex negotiator either could not be left out of a winning coalition (Study 1) or could be (Study 2). The authors measured trait assertiveness along with multiple indicators of hard bargaining behavior.

Findings

Communicating using instant messages via a computer interface facilitated value claiming for powerful negotiators across both studies. Trait assertiveness correlated with hard bargaining behavior in both studies. An index of hard bargaining behavior mediated the effect of assertiveness on value expropriation but only in the context where the powerful negotiator held a genuine monopoly over coalitions.

Originality/value

The authors contribute to the literature on multiparty negotiations by demonstrating persistent media effects on power utilization and by finally confirming the conjectures of prominent coalition researchers regarding personality. Though personality traits generate consistent effects on behavior, their influence on negotiation outcomes depends on the power structure. Negotiation theory needs to incorporate structural and situational factors in modelling effects of enduring traits. Negotiation research should move beyond a rigid focus on dyads.

Details

International Journal of Conflict Management, vol. 33 no. 1
Type: Research Article
ISSN: 1044-4068

Keywords

Article
Publication date: 27 March 2020

Wenxue Lu, Yuxin Wei and Rui Wang

This paper aims to reveal the effects of an organisation’s bargaining power on its negotiating behaviours (including integrating, obliging, compromising, dominating and…

1058

Abstract

Purpose

This paper aims to reveal the effects of an organisation’s bargaining power on its negotiating behaviours (including integrating, obliging, compromising, dominating and avoiding) in the context of inter-organisational conflict in construction projects and investigate how organisational power distance orientation moderates the relationship between the organisation’s bargaining power and its negotiating behaviours.

Design/methodology/approach

The authors conducted a questionnaire survey among practitioners in the Chinese construction industry with the final sample consisting of 219 responses. A structural equation model was used to analyse the data and test the hypotheses.

Findings

The results reveal that an organisation’s bargaining power is positively associated with dominating and integrating behaviours but negatively associated with obliging and avoiding behaviours. Additionally, bargaining power is found to be negatively associated with compromising behaviour when the organisation has a high power distance orientation. Finally, a higher degree of power distance orientation strengthens the positive effect bargaining power has on dominating behaviour.

Practical implications

The findings can help practitioners to predict the negotiating behaviours of a counterpart according to its bargaining power and the power distance in its organisational culture. This can then enable practitioners to adjust their strategies accordingly and steer the negotiations towards a win–win outcome.

Originality/value

This study applies the approach-inhibition theory of power to inter-organisational negotiations and empirically tests the relationship between an organisation’s bargaining power and its negotiating behaviours in the context of construction projects. Additionally, this study reveals that organisational power distance orientation moderates this relationship.

Details

International Journal of Conflict Management, vol. 31 no. 5
Type: Research Article
ISSN: 1044-4068

Keywords

Book part
Publication date: 25 March 2010

Yang Xie, John M. Brooks, Julie M. Urmie and William R. Doucette

Objective – To examine whether local area pharmacy market structure influences contract terms between prescription drug plans (PDPs) and pharmacies under Part D.Data …

Abstract

Objective – To examine whether local area pharmacy market structure influences contract terms between prescription drug plans (PDPs) and pharmacies under Part D.

Data – Data were collected and compiled from four sources: a national mail survey to independent pharmacies, National Council for Prescription Drug Programs (NCPDP) Pharmacy database, 2000 U.S. Census data, and 2006 Economic Census data.

Results – Reimbursements varied substantially across pharmacies. Reimbursement for 20mg Lipitor (30 tablets) ranged from $62.40 to $154.80, and for 10mg Lisinopril (30 tablets), it ranged from $1.05 to $18. For brand-name drug Lipitor, local area pharmacy ownership concentration had a consistent positive effect on pharmacy bargaining power across model specifications (estimates between 0.084 and 0.097), while local area per capita income had a consistent negative effect on pharmacy bargaining power across specifications(−0.149 to −0.153). Few statistically significant relationships were found for generic drug Lisinopril.

Conclusion – Significant variation exists in PDP reimbursement and pharmacy bargaining power with PDPs. Pharmacy bargaining power is negatively related to the competition level and the income level in the area. These relationships are stronger for brand name than for generics. As contract offers tend to be non-negotiable, variation in reimbursements and pharmacy bargaining power reflect differences in initial insurer contract offerings. Such observations fit Rubinstein's subgame perfect equilibrium model.

Implication – Our results suggest pharmacies at the most risk of closing due to low reimbursements are in areas with many competing pharmacies. This implies that closures related to Part D changes will have limited effect on Medicare beneficiaries’ access to pharmacies.

Details

Pharmaceutical Markets and Insurance Worldwide
Type: Book
ISBN: 978-1-84950-716-5

Article
Publication date: 1 April 1971

Reed Moyer

Examines the roots of bargaining power in the nature of market structure, financial resources, sub‐situation possibilities and the innate skills of those doing the…

Abstract

Examines the roots of bargaining power in the nature of market structure, financial resources, sub‐situation possibilities and the innate skills of those doing the bargaining. Looks at the effects of these in pricing strategy. Concludes that, although highly “visible” bargaining is not the main determinant of price, but rather one of a series of factors.

Details

European Journal of Marketing, vol. 5 no. 4
Type: Research Article
ISSN: 0309-0566

Keywords

Article
Publication date: 1 January 1974

Z.A. SPINDLER

Many modern microeconomic theory textbooks similarly conclude that the bilateral monopoly equilibrium price and quantity are theoretically indeterminate given the usual…

Abstract

Many modern microeconomic theory textbooks similarly conclude that the bilateral monopoly equilibrium price and quantity are theoretically indeterminate given the usual assumptions of the theory of the firm; they usually state that additional assumptions about bargaining power or firm behaviour are required for a determinate solution. The past literature on bilateral monopoly generally supports the textbook position with respect to price but not with respect to quantity. For example, von Stackelberg (1952, 182–9) and Fellner (1947, 523–8) argued that quantity is determinate at the joint profit maximizing level for bilateral monopoly between profit maximizing firms which employ “all or none” offers; price, however, must still be determined by relative bargaining power which is unspecified.

Details

Journal of Economic Studies, vol. 1 no. 1
Type: Research Article
ISSN: 0144-3585

Article
Publication date: 6 September 2013

Candy P.S. Fong

The purpose of this paper is to examine how consumers set bargaining goal when they negotiate price of relatively less expensive shopping products with salesperson. The…

Abstract

Purpose

The purpose of this paper is to examine how consumers set bargaining goal when they negotiate price of relatively less expensive shopping products with salesperson. The impact of bargaining goal on bargaining outcomes is also discussed.

Design/methodology/approach

To increase realism and external validity, actual transactions in the shopping malls of two cities of China were observed unobtrusively, followed by a matched survey with the consumer to collect data on variables that could not be observed.

Findings

Product knowledge, presence of purchase plan and shopping companion, posited to reflect consumer ' s bargaining power, are found to influence the bargaining goal set by the consumer. Satisfaction toward the transaction outcome depends on the extent of goal achievement rather than the ultimate concession obtained or the perceived fair price of the product, and such satisfaction affects future patronage likelihood.

Originality/value

A different research methodology is used to study retail price negotiation. Instead of only using student subjects to understand how consumers negotiate price in a hypothetical setting, the current study collected data from actual transactions. This enables us to study how contextual variables such as shopping companion and purchase plan affect negotiation goal which in turn influences satisfaction and future patronage. A comparison of the reference standards adopted for evaluating bargaining outcome is also performed.

Details

Asia Pacific Journal of Marketing and Logistics, vol. 25 no. 4
Type: Research Article
ISSN: 1355-5855

Keywords

Article
Publication date: 1 March 1980

P.B. Beaumont, A.W.J. Thomson and M.B. Gregory

I. INTRODUCTION In this monograph we point out and analyse various dimensions of bargaining structure, which we define broadly as the institutional configuration within…

Abstract

I. INTRODUCTION In this monograph we point out and analyse various dimensions of bargaining structure, which we define broadly as the institutional configuration within which bargaining takes place, and attempt to provide some guidelines for management action. We look at the development, theory, and present framework of bargaining structure in Britain and then examine it in terms of choices: multi‐employer versus single employer, company versus plant level bargaining, and the various public policy issues involved.

Details

Management Decision, vol. 18 no. 3
Type: Research Article
ISSN: 0025-1747

Article
Publication date: 25 October 2019

Shale Horowitz and Min Ye

In explaining ethno-territorial conflicts, leadership preferences have an odd status. In case studies, leadership preferences are often viewed as highly significant causes…

Abstract

Purpose

In explaining ethno-territorial conflicts, leadership preferences have an odd status. In case studies, leadership preferences are often viewed as highly significant causes but are not usually defined and measured explicitly. In large-sample statistical studies, leadership preferences are only captured by weakly related proxy variables. This paper aims to fill this gap by developing suitable theory, which can be used consistently in both case study and statistical applications.

Design/methodology/approach

Formal bargaining models are used to examine the expected impact of variation in leadership preferences. Relevant leadership characteristics are then used to construct measures of variation in leadership preferences, which are applied in case studies.

Findings

In bargaining models, variation in leadership preferences is expected to have a significant impact on ethno-territorial conflict outcomes. More extreme nationalist leaders and, more conditionally, strongly power-seeking leaders, should be more likely to be willing to use force to modify the status quo – although more moderate nationalist leaderships are also willing to do so under certain conditions. In five case studies, these formally derived hypotheses receive initial empirical support.

Originality/value

Theoretically and empirically, further refinement of research on variation in leadership preferences promises to add significant value. Formally, it is worth investigating the expected impact of additional preference types. Empirically, it is important to invest in measures of leadership preferences across large samples.

Details

Indian Growth and Development Review, vol. 13 no. 2
Type: Research Article
ISSN: 1753-8254

Keywords

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