Academic journal article Canadian Journal of Administrative Sciences

A Review of Negotiation Outcome: A Proposal on Delimitation and Subsequent Assessment in Joint Venture Negotiations

Academic journal article Canadian Journal of Administrative Sciences

A Review of Negotiation Outcome: A Proposal on Delimitation and Subsequent Assessment in Joint Venture Negotiations

Article excerpt

Abstract

In this study, we examine the outcomes of negotiation processes in joint ventures. Following a review of negotiation and strategy literature, we propose that satisfaction with the relationship created between partners is the most suitable indicator of negotiation outcome. This indicator is analyzed through the use of two parameters or variables: trust and uncertainty. The analysis is then used to bridge the gap that currently exists in the literature by proposing when a negotiation should be considered successful in joint ventures. One important conclusion of our study is that nonagreement should not always be valued in negative terms as in certain circumstances it can imply the most advantageous end to a negotiation. The scholarly and applied implications of our findings are discussed.

JEL classification: M19

Keywords: joint venture; negotiation outcome; outcome assessment

Résumé

Cette étude examine les résultats de la procédure de négociation dans les entreprises communes. Après une revue des publications sur la négociation et la stratégie, elle montre que la satisfaction que les partenaires tirent de la relation qui existe entre eux est l'indice le plus approprié du résultat des négociations. Cet indice est analysé à partir de deux paramètres ou variables: la confiance et l'incertitude. En proposant un cadre pour les négociations réussies, l'analyse permet de combler une lacune dans les publications actuelles. L'une des conclusions majeures de l'étude est que le désaccord ne doit pas toujours être évalué négativement puisque dans certaines situations, il peut être l'issu le plus souhaitable. Nous terminons par un examen des implications académiques et pratiques de l'étude.

Mots-clés : entreprise commune; résultat de négociation; évaluation du résultat.

A review of negotiation literature shows that the outcome of negotiation processes has been defined using a wide variety of indicators. Possible outcomes include an agreement, an impasse, a nonagreement, a mutually satisfactory agreement for both sides, an agreement that represents victory for only one side or an agreement in which both sides have, to some extent, modified some of their initial objectives (De Dreu, Harinck, & Van Vianen, 1999). The existence of such a diversity of outcomes calls for the need to question whether a particular outcome can be deemed as a success or failure with a view to guiding negotiation behaviour towards a desired result. In an attempt to answer this question, we have adopted a contingent, situational focus in this study, centring on joint ventures as the context for our analysis.

The negotiation process in joint ventures is considered to be central to an adequate implementation of strategy (Inkpen & Currall, 2004; Menguzzato, 1992; Reus & Ritchie III, 2004; Valdés, 1998). For example, Valdés stated that the processes of negotiation are the culmination of all previous stages and a satisfactory basis should be laid down for ensuring positive results in the future (p. 199). Alternatively, as expressed by Menguzzato, the process not only defines the formal content of an agreement, but involves situations in which the different parties become acquainted, creating expectations on the future behaviour of business partners and a relationship of trust between them. More recently, Reus and Ritchie III focused their attentions on three main journals in their review of literature on international joint ventures in the last 15 years. They point out that negotiation in the formation of partnerships plays a critical role in influencing later performance. According to Inkpen and Currall (p. 586), "negotiating and forming a joint venture initiates a dynamic relationship that must evolve if it is to be successful". One may therefore conclude that negotiation outcome can be considered as the nexus between the formulation and implementation of strategy. Strategy implementation will be a more or less conflictive affair depending on the outcome of the negotiation process, as it represents and determines the basis of the subsequent functioning of the partnership. …

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