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Analysis of negotiation strategies between buyers and sellers: an applied study on crop protection products distribution

Análise das estratégias de negociação entre compradores e vendedores: um estudo aplicado na distribuição de defensivos agrícolas

Abstract

This paper aims to analyze how buyers and sellers use trading strategies considering the relationship between them and the transaction sequence. It also focuses on assessing what are the reasons associated with the use of each strategy. For this, we used a multiple case study method, analyzing the negotiations between distributors of inputs and rural producers. We studied 13 cases with a dyad approach (buyer's and seller's view on the same trading). Data were collected from interviews with the parties in six distributors, three in Brazil and three in the United States. The main result is that due to the importance of the relationship, the parties opt to use, in most of the time, integrative strategies. On one hand, in some cases sellers are willing to give up part of their earnings in order to maintain share in the customer purchases or due to a focus on the relationship continuity. On the other hand, in some cases producers tend to compete, seeking to protect their interests and the profitability of their business. Finally, it can be seen that the strategy adopted by the negotiators can change throughout the negotiation process, emphasizing the dynamic aspect of negotiation, being the central contribution of the study.

Keywords
Negotiation strategy; Buyer-seller relationship; Win-win

Resumo

O presente artigo teve como objetivo analisar como compradores e vendedores utilizam as estratégias de negociação considerando o relacionamento entre as partes e a sequência de transações que ocorrem, bem como avaliar quais motivos podem estar associados ao uso de cada estratégia. Para isso, foi utilizado o método de estudo de casos múltiplos, analisando as negociações que ocorreram entre distribuidores de insumos e produtores rurais. Foram estudados 13 casos com uma abordagem de díade (visão do comprador e visão do vendedor sobre a mesma negociação). Os dados foram coletados a partir de entrevistas com as duas partes em seis distribuidores de insumos, sendo três no Brasil e três nos Estados Unidos. Os principais resultados mostram que devido à importância do relacionamento das partes as estratégias integrativas são as mais utilizadas por ambos os lados. No entanto, em alguns momentos os vendedores estão dispostos a abrir mão de parte dos seus ganhos para não perder participação nas compras do cliente ou por foco na continuidade do relacionamento. Já os produtores em alguns casos tendem a competir, buscando proteger seus interesses e a rentabilidade do seu negócio. Por fim, pôde-se perceber que a estratégia adotada pelos negociadores pode mudar ao longo do processo da negociação, enfatizando o aspecto dinâmico da negociação, sendo essa a contribuição central do artigo.

Palavras-chave
Estratégia de negociação; Relacionamento comprador-vendedor; Ganha-ganha

Introduction

The research in the area of negotiation has presented several advances in the last decades (Martinelli, 2006Martinelli, D. P. (2006). Negociação, administração e sistemas: Três níveis a serem inter-relacionados. Revista de Administração, 41(4), 353-368.; Thompson, 2006Thompson, L. L. (2006). Negotiation Over view of theory and research. In L. L. Thompson (Ed.), Negotiation theory and research. Psychology Press, Taylor and Francis Group.), however, it has shown a lack of discussions with regard to the field of business, focusing on the political sense in which negotiation is part of day-to-day operations (Zachariassen, 2008Zachariassen, F. (2008). Negotiation strategies in supply chain management. International Journal of Physical Distribution & Logistics Management, 38(10), 764-781.). According to Fells, Rogers, Prowse, and Ott (2015, p. 119)Fells, R., Rogers, H., Prowse, P., & Ott, U. F. (2015). Unraveling business negotiations using practitioner data. Negotiation and Conflict Management Research, 8(2), 119-136., "although negotiations are central to business activities, there is a lack of information about what actually occurs during business negotiations".

Considering the business environment and the relationship between buyers and sellers, Herbst, Voeth, and Meister (2011)Herbst, U., Voeth, M., & Meister, C. (2011). What do we know about buyer-seller negotiations in marketing research? A status quo analysis. Industrial Marketing Management, 40(6), 967-978. highlight a latent opportunity for further studies that connect the issue negotiation and business relationship. Fells et al. (2015, p. 119)Fells, R., Rogers, H., Prowse, P., & Ott, U. F. (2015). Unraveling business negotiations using practitioner data. Negotiation and Conflict Management Research, 8(2), 119-136. argue that negotiation is part of day-to-day business. In that sense, "an in-depth understanding of how negotiators negotiate and how this process occurs in a business context can contribute more effectively to business negotiation practices".

One of the main sources of research is the study of integrative and distributive negotiation strategies (Thompson, Wang, & Gunia, 2010Thompson, L. L., Wang, J., & Gunia, B. C. (2010). Negotiation. Annual Review of Psychology, 61, 491-515.). Negotiation strategies are decisive for the success or failure of a negotiation (Lewicki, Hiam, & Olander, 1996Lewicki, R. J., Hiam,A., & Olander, K. W. (1996). Think before you speak: The complete guide to strategic negotiation. New York: John Wiley.). Thus, it is crucial that negotiators define what strategy they will adopt, thinking about the results they want to achieve. Several studies have been conducted in recent years analyzing negotiation strategies in the relationship environment between buyers and sellers (Ramsay, 2004Ramsay, J. (2004). Serendipity and the realpolitik of negotiations in supply chains. Supply Chain Management: An International Journal, 9(3), 219-229.; Thomas, Thomas, Manrodt, & Rutner, 2013Thomas, S. P., Thomas, R. W., Manrodt, K. B., & Rutner, S. M. (2013). An experimental test of negotiation strategy effects on knowledge sharing intentions in buyer-supplier relationships. Journal of Supply Chain Management, 49(2), 96-113.; Thomas, Manrodt, & Eastman, 2015Thomas, S. P., Manrodt, K. B., & Eastman, J. K. (2015). The impact of relationship history on negotiation strategy expectations: A theoretical framework. International Journal of Physical Distribution & Logistics Management, 45(8), 794-813.; Zachariassen, 2008Zachariassen, F. (2008). Negotiation strategies in supply chain management. International Journal of Physical Distribution & Logistics Management, 38(10), 764-781.). The initial discussion is that integrative strategies may favor the development of long-term business relationships (Sharland, 2001Sharland, A. (2001). The negotiation process as a predictor of relationship outcomes in international buyer-supplier arrangements. Industrial Marketing Management, 30(7), 551-559.; Thomas et al., 2013Thomas, S. P., Thomas, R. W., Manrodt, K. B., & Rutner, S. M. (2013). An experimental test of negotiation strategy effects on knowledge sharing intentions in buyer-supplier relationships. Journal of Supply Chain Management, 49(2), 96-113.), since the quality of negotiators' relationship is derived from the way that parties deal with each other during negotiations (Fisher & Ertel, 1995Fisher, R., & Ertel, D. (1995). Getting ready to negotiate. New York: Penguin Group.). However, some other studies (Ramsay, 2004Ramsay, J. (2004). Serendipity and the realpolitik of negotiations in supply chains. Supply Chain Management: An International Journal, 9(3), 219-229.; Zachariassen, 2008Zachariassen, F. (2008). Negotiation strategies in supply chain management. International Journal of Physical Distribution & Logistics Management, 38(10), 764-781.) show that, while negotiators are aware that integrative strategies are beneficial to relationships, some of them tend to adopt distributive strategies as a way of protecting individual interests and maintenance of power, even in situations where it is expected to develop a relationship.

In this sense, this study aims to analyze, from real negotiations, what are the strategies used by negotiators (buyers and sellers) in relational contexts and the reasons which lead negotiators to adopt such positions. To carry out this research, the agricultural input distribution industry was chosen, and negotiations between sellers of inputs (dealers) and buyers (farmers) were analyzed. The choice of this sector was due to the strong relational characteristic present in producers' buying decision process (Kool, Meulenberg, & Broens, 1997Kool, M., Meulenberg, M. T. G., & Broens, D. F. (1997). Extensive of farmers' buying processes. Agribusiness, 13(3), 301-318.), as well as the lack of existing studies focusing on the industry.

The study contributes to the discussion that in situations of relationships between the parties, the integrative strategy is not necessarily the most appropriate to be used, as was concluded by Ramsay (2004)Ramsay, J. (2004). Serendipity and the realpolitik of negotiations in supply chains. Supply Chain Management: An International Journal, 9(3), 219-229. and Zachariassen (2008)Zachariassen, F. (2008). Negotiation strategies in supply chain management. International Journal of Physical Distribution & Logistics Management, 38(10), 764-781.. Also, it suggests that alternative strategies, such as compromise, can be used by the parties to maximize long-term results even if it is necessary to earn less at the first moment. The paper also presents a list of motivations for each type of strategy that may be the basis for understanding the behavior of buyers and sellers in relational negotiations. Finally, as the central contribution of the research and refinement of existing theories, it is observed that negotiators can change their negotiation strategy throughout the process. As an example, a negotiator can start a deal by adopting a competitive approach depending on the protection of his/her individual interests, and migrate to a collaborative strategy, considering the importance of the relationship between the parties.

To contribute to a better understanding of negotiation in business environments, this paper aims to analyze how buyers and sellers use negotiation strategies considering the relationship between the parties and the sequence of transactions, as well as to evaluate which motives may be associated to the use of each strategy.

Thus, in addition to this introduction, the paper is divided into four other sections. The first is the theoretical framework that addresses the discussion of integrative and distributive negotiation strategies, and compromise, followed by the discussion of strategies in relational contexts. The second part presents the method used to gather and analyze the results. The third one concerns the discussion of results. In the fourth, some implications of the results for the theory were presented from the cases that were used as the basis for the research. Last, but not least, the fifth section presents the final considerations and contributions of this research.

Theoretical framework

Negotiation strategies: distributive, integrative and compromise

According to Kersten (2001)Kersten, G. E. (2001). Modeling distributive and integrative negotiations. Review and revised characterization. Group Decision and Negotiation, 10(6), 493-514., integrative and distributive classifications were first introduced by the work of Walton and McKersie in the 1960s in which the authors studied negotiations in the workplace, analyzing the components of the process, as well as attitudes and perceptions of negotiators.

For Walton and McKersie (1991)Walton, R. E., & Mckerser, R. B. (1991). A behavioral theory of labor negotiations (2nd ed.). New York: McGraw-Hill (Original work published 1965). distributive negotiation happens in a situation of bargain, in the strict sense of the word. It may occur in situations where two parties have conflicting objectives and may move to the interpretation that one party must win and the other must lose. On the other hand, integrative negotiation takes place in situations where the parties do not necessarily have conflicting objectives or have a common problem. In the author's view, integrative negotiation can happen more easily at times when the nature of the problem offers the possibility of joint or distribution of gains without sacrificing the gains of the other party.

Although having presented integrative and distributive classifications, Walton and McKersie (1991)Walton, R. E., & Mckerser, R. B. (1991). A behavioral theory of labor negotiations (2nd ed.). New York: McGraw-Hill (Original work published 1965). did not highlight which of the two behaviors would be the most appropriate. Thus, both behaviors became the basis for study and development of various negotiation strategies (Kersten, 2001Kersten, G. E. (2001). Modeling distributive and integrative negotiations. Review and revised characterization. Group Decision and Negotiation, 10(6), 493-514.).

Due to the great focus of researches in these two strategies, integrative and distributive behaviors have received different names in the literature (Siedel, 2014Siedel, G.(2014). Negotiating for success: Essential strategy and skills. Van Rye Publishing, LCC.). Integrative approaches are also called win-win, cooperative, problem-solving or "enlarge the pie". On the other hand, distributional approaches are called win-lose, competitive, adversarial or "divide the pie" (Siedel, 2014Siedel, G.(2014). Negotiating for success: Essential strategy and skills. Van Rye Publishing, LCC.; Thomas et al., 2013Thomas, S. P., Thomas, R. W., Manrodt, K. B., & Rutner, S. M. (2013). An experimental test of negotiation strategy effects on knowledge sharing intentions in buyer-supplier relationships. Journal of Supply Chain Management, 49(2), 96-113.). Although win-win and win-lose nomenclatures are quite popular in the negotiation literature (Martinelli, 2006Martinelli, D. P. (2006). Negociação, administração e sistemas: Três níveis a serem inter-relacionados. Revista de Administração, 41(4), 353-368.; Thomas et al., 2013Thomas, S. P., Thomas, R. W., Manrodt, K. B., & Rutner, S. M. (2013). An experimental test of negotiation strategy effects on knowledge sharing intentions in buyer-supplier relationships. Journal of Supply Chain Management, 49(2), 96-113.), the terms "integrative" and "distributive", respectively, are the nomenclatures most commonly used by researchers (Thompson, 2006Thompson, L. L. (2006). Negotiation Over view of theory and research. In L. L. Thompson (Ed.), Negotiation theory and research. Psychology Press, Taylor and Francis Group.).

However, the association of the term "win-lose" with the term "distributive" is not always adequately made in the literature. The fact that gains are not necessarily symmetrical does not mean that one side has failed to win. "Even in simple negotiations, it is possible to identify more than one issue involved" (Thompson, 2009Thompson, L. L.(2009). O Negociador. Ed. São Paulo: Pearson Prentice Hall., p. 69). In this case, a negotiator will be willing to give in to what does not bring so much value to gain in another point that has more importance to him/her at that moment. Such negotiation, despite having one of the resources distributed between the parties, has its amount extended to something that favored the good result for both sides, being an integrative agreement (win-win). Also, the negotiator would not have reached an agreement if he/she realized that the viable solution would not exceed his/her best available alternative. Thompson (2009)Thompson, L. L.(2009). O Negociador. Ed. São Paulo: Pearson Prentice Hall. classifies this situation as an integrative solution level 1.

Distributive strategies focus on immediate results, without worrying about the development of the future relationships, in which the negotiators usually adopt harder behavior (Lax & Sebenius, 2006Lax, D. A., & Sebenius, J. K. (2006). 3D negotiation: Powerful tools to change the game in your most important deals. Boston: Harvard Business School Press.; Martinelli & Almeida, 1997Martinelli, D. P., & Almeida, A. P. (1997). Negociação: Como transformar confronto em cooperação. São Paulo: Atlas.). In addition, these negotiations are characterized by situations in which the parties seek to maximize individual outcomes without taking the other party into account, often assuming that the available resources are fixed (Krause, Terpend, & Petersen, 2006Krause, D. R., Terpend, R., & Petersen, K. J. (2006). Bargaining stances and outcomes in buyer-seller negotiations: Experimental results. Journal of Supply Chain Management, 42(3), 4-15.; Lax & Sebenius, 2006Lax, D. A., & Sebenius, J. K. (2006). 3D negotiation: Powerful tools to change the game in your most important deals. Boston: Harvard Business School Press.). It is possible to observe a situation of competition or even of mutually exclusive interests (Fisher, Ury, & Patton, 2011Fisher, R., Ury, W., & Patton, B. (2011). Getting to yes: Negotiating agreement without giving in (3rd ed.). New York: Penguin Books.; Spangle & Isenhart, 2002Spangle, M. L., & Isenhart, M. W. (2002). Negotiation: Communication for diverse settings. Sage Publications.). For Thompson et al. (2010, p. 494)Thompson, L. L., Wang, J., & Gunia, B. C. (2010). Negotiation. Annual Review of Psychology, 61, 491-515., they occur in negotiation situations in which participants "divide scarce resources among themselves".

On the other hand, integrative negotiations or win-win can be characterized by the search for long-term relationships by maximizing gains of the parties involved and construction of joint value (Lax & Sebenius, 2006Lax, D. A., & Sebenius, J. K. (2006). 3D negotiation: Powerful tools to change the game in your most important deals. Boston: Harvard Business School Press.; Martinelli & Almeida, 1997Martinelli, D. P., & Almeida, A. P. (1997). Negociação: Como transformar confronto em cooperação. São Paulo: Atlas.), since negotiators can perceive the existence of mutual interests in negotiation to benefit both sides (Spangle & Isenhart, 2002Spangle, M. L., & Isenhart, M. W. (2002). Negotiation: Communication for diverse settings. Sage Publications.). Thompson et al. (2010, p. 493)Thompson, L. L., Wang, J., & Gunia, B. C. (2010). Negotiation. Annual Review of Psychology, 61, 491-515. define integrative negotiations like those in which the results of negotiations satisfy "the interests of both parties", so that the results achieved "cannot be improved without hurting one or more of the parties involved". Still, according to Thompson (1990)Thompson, L. (1990). Negotiation behavior and outcomes: Empirical evidence and theoretical issues. Psychological Bulletin, 108(3), 515-532., some integrative situations do not necessarily need to have a pure coordination to be integrative. For the author, some situations can be classified as integrative if the gain of one of the parties is not equivalent to the loss of the other party. However, it is important that there is no greater possibility of gain for both parties. It is noted that "true integrative negotiations leave no underutilized resource" (Thompson, 2009Thompson, L. L.(2009). O Negociador. Ed. São Paulo: Pearson Prentice Hall., p. 70). Therefore, this approach has been defended by several authors as more favorable to achieve positive results for both sides, as well as the prosperity of relationships (Kersten, 2001Kersten, G. E. (2001). Modeling distributive and integrative negotiations. Review and revised characterization. Group Decision and Negotiation, 10(6), 493-514.).

There is a classic example given by several authors that can be applied to explain situations in which an integrative strategy is used (Martinelli & Almeida, 1997Martinelli, D. P., & Almeida, A. P. (1997). Negociação: Como transformar confronto em cooperação. São Paulo: Atlas.; Martinelli, 2006Martinelli, D. P. (2006). Negociação, administração e sistemas: Três níveis a serem inter-relacionados. Revista de Administração, 41(4), 353-368.; Thompson et al., 2010Thompson, L. L., Wang, J., & Gunia, B. C. (2010). Negotiation. Annual Review of Psychology, 61, 491-515.; Thompson, 2006Thompson, L. L. (2006). Negotiation Over view of theory and research. In L. L. Thompson (Ed.), Negotiation theory and research. Psychology Press, Taylor and Francis Group.). The example reports that two children were playing in a backyard when they saw a single orange in an orange tree in the garden of the house. The children began to fight for the orange until they had the idea of cutting the fruit in half. To the surprise of the children's mother, after the splitting of the orange, one girl wanted the rind because she was interested in giving it to the mother to make a cake and the other one had the pulp because she was interested in the juice of the orange.

It can be said that the child who wanted the juice attributed zero value to the rind, as well as the child who wanted the rind assigned zero value to the juice. However, if the real needs had been mapped throughout the negotiation (which resulted in the splitting of the orange), both children could have maximized the gains by one getting the whole peel and the other getting all the fruit juice.

The lack of mapping the needs led negotiation to a compromise approach, as the children lost some of the individual gains by reaching an agreement, not maximizing the potential gains in that situation (Thompson et al., 2010Thompson, L. L., Wang, J., & Gunia, B. C. (2010). Negotiation. Annual Review of Psychology, 61, 491-515.). It is noteworthy that the children (negotiators) may not have perceived this during the negotiation, realizing that they stopped winning something only when the negotiation ended. However, it must be emphasized that compromise can be an alternative to negotiations in which win-win is not possible (Martinelli & Almeida, 1997Martinelli, D. P., & Almeida, A. P. (1997). Negociação: Como transformar confronto em cooperação. São Paulo: Atlas.). Fig. 1 presents a summary of the main characteristics of each of the strategies: distributive, compromise and integrative.

Fig. 1
The continuum of negotiationapproaches.

It is noted that negotiation strategies should not be seen as one or the other, as highlighted in the discussion above, but as extremes of a continuum, being possible to observe intermediate behaviors according to the negotiation faced by the participants.

Finally, according to Siedel (2014)Siedel, G.(2014). Negotiating for success: Essential strategy and skills. Van Rye Publishing, LCC., it is worth noting that the negotiator must be clear about which approach to use before starting a negotiation, since, depending on the situation, one approach may be more suitable than the other. However, the author cautions that even if the negotiator enters into a distributive negotiation, it is important to raise the real interests and needs.

Negotiation strategies in relational contexts (buyer-seller)

The research of Dwyer, Schurr, and Oh (1987)Dwyer, F. R., Schurr, P. H., & Oh, S. (1987). Developing buyer-seller relationships. Journal of marketing, 51, 11-27., one of the pioneers in the study of the relationship between buyers and sellers, already emphasized the importance of the study of negotiation, considering the interactions that occur between the parties as a process of bargaining. Considering the importance of effective negotiation, proposed by Martinelli and Almeida (1997)Martinelli, D. P., & Almeida, A. P. (1997). Negociação: Como transformar confronto em cooperação. São Paulo: Atlas., for situations in which long term is the main objective, it is necessary to discuss negotiation strategies and possible impacts on the relationship between parties.

The study of negotiations considering the transactional dichotomy (discrete contracts) and relational (long-term strategic alliances) has evolved considerably in recent times. In transactional situations, the mechanisms of regulation are economic structures (prices and incentives). On the other hand, in relational situations, the rules of cooperation and obligations between the parties are based on trust between the parties (Ness & Haugland, 2005Ness, H., & Haugland, S. A. (2005). The evolution of governance mechanisms and negotiation strategies in fixed-duration interfirm relationships. Journal of Business Research, 58(9), 1226-1239.). However, "recent research shows that more complete contracts strengthen relational governance, and both improve performance in operating alliances, suggesting that relationships complement rather than substitute for well-designed, complete contracts during the negotiation stage" (Shenkar & Reuer, 2005Shenkar, O., & Reuer, J. J. (Eds.). (2005). Handbook of strategic alliances. Sage Publications., p. 140). The results of Ness and Haugland (2005)Ness, H., & Haugland, S. A. (2005). The evolution of governance mechanisms and negotiation strategies in fixed-duration interfirm relationships. Journal of Business Research, 58(9), 1226-1239. show that the coexistence of governance mechanisms is complex and is developed gradually. It can be emphasized that the two dimensions of negotiation (integrative and distributive) not be necessarily bipolar (Shenkar & Reuer, 2005Shenkar, O., & Reuer, J. J. (Eds.). (2005). Handbook of strategic alliances. Sage Publications.). Even in negotiations where the amount of resources created (size of the pie) by negotiators has been increased (integrative amount), it is noted that at some point it will be divided as it needs to be distributed between the parties (Perdue & Summers, 1991Perdue, B. C., & Summers, J. O. (1991). 'Purchasing agents' use of negotiation strategies. Journal of Marketing Research, 175-189.; Thompson, 2009Thompson, L. L.(2009). O Negociador. Ed. São Paulo: Pearson Prentice Hall.).

The importance of the integrative approach (win-win) in the context of business relationships in which the needs and interests of both parties are met was already highlighted by Graham (1986)Graham, J. L. (1986). The problem-solving approach to negotiations in industrial marketing. Journal of Business Research, 14(6), 549-566.. Integrative strategies are more effective and have proven to bring better financial results to suppliers and more satisfaction to customers, considering the analysis of the two parties involved in a negotiation. This strategy can not only be desired in the short term but can also be a basis for profitability and the structuring of long-term relationships between the parties (Graham, 1986Graham, J. L. (1986). The problem-solving approach to negotiations in industrial marketing. Journal of Business Research, 14(6), 549-566.). This view can be supplemented by the comments of Sharland (2001)Sharland, A. (2001). The negotiation process as a predictor of relationship outcomes in international buyer-supplier arrangements. Industrial Marketing Management, 30(7), 551-559., who emphasizes that a distributive approach will hardly lead to a long-term business relationship.

Ramsay (2004)Ramsay, J. (2004). Serendipity and the realpolitik of negotiations in supply chains. Supply Chain Management: An International Journal, 9(3), 219-229. emphasizes that the distribution of the value generated in the interactions between buyers and sellers are important issues for any negotiation between these parties. For the author (p. 223), "both buyer and supplier depend for their continued survival on revenue (and thence profit) flowing from the buyer's customer(s)". Besides that, Fisher and Ertel (1995)Fisher, R., & Ertel, D. (1995). Getting ready to negotiate. New York: Penguin Group. point out that the quality of the relationship between negotiators is the product of the way we deal with the other party.

Thomas et al. (2013)Thomas, S. P., Thomas, R. W., Manrodt, K. B., & Rutner, S. M. (2013). An experimental test of negotiation strategy effects on knowledge sharing intentions in buyer-supplier relationships. Journal of Supply Chain Management, 49(2), 96-113. point out that when companies look at negotiations as a short-term event (transactional), there is a tendency for the use of distributive strategies. On the other hand, in relational contexts, the use of these strategies can be considered myopia by both sides involved in a negotiation. For the authors, buyers and sellers who use this strategy must consider relational costs and the negative impact on communication and information exchange.

Thomas et al. (2015)Thomas, S. P., Manrodt, K. B., & Eastman, J. K. (2015). The impact of relationship history on negotiation strategy expectations: A theoretical framework. International Journal of Physical Distribution & Logistics Management, 45(8), 794-813. emphasize that although negotiation strategy studies normally focus on economic aspects, the results found in their study highlight the importance that relational results have for the negotiations, considering future negotiation expectations.

However, by analyzing the context of business negotiations, Ramsay (2004)Ramsay, J. (2004). Serendipity and the realpolitik of negotiations in supply chains. Supply Chain Management: An International Journal, 9(3), 219-229. highlights some results that, in his view, are somewhat unexpected. The author's study was based on an investigation with market professionals (experienced buyers from the service and manufacturing industries). The results presented by the author show several reasons that justify the use of competitive strategies in business negotiations such as the existence of a power difference between the parties (power of dependence or threat and punishment). Because integrative strategies are appropriate for situations where the parties think in the long run, some buyers may simply compete because they are not seeking long-term partners. Also, some performance measures used by the companies they represent may favor the use of distributive strategies, since buyers need to reduce their budget index. The author points out that these results cannot be generalized. Based on his conclusions, it can be inferred that the metrics used to evaluate the performance of sellers can also influence a more competitive position, focusing their discussion on the price of the product.

Though, the study of Zachariassen (2008)Zachariassen, F. (2008). Negotiation strategies in supply chain management. International Journal of Physical Distribution & Logistics Management, 38(10), 764-781. brings the discussion raised by Ramsay (2004)Ramsay, J. (2004). Serendipity and the realpolitik of negotiations in supply chains. Supply Chain Management: An International Journal, 9(3), 219-229. and presents some results that confirm the 2004 study's findings concerning the use of integrative strategies. According to Zachariassen (2008)Zachariassen, F. (2008). Negotiation strategies in supply chain management. International Journal of Physical Distribution & Logistics Management, 38(10), 764-781., it is noted that in business negotiations between buyers and sellers, both parties feel uncomfortable in disclosing strategic information to the other party, besides feeling some loss of power. Under these circumstances, the adoption of a distributive approach at the beginning of a relationship can be a form of protection. Thus, the present study seeks to analyze the use of negotiation strategies based on the investigation of negotiations between buyers and sellers inserted in a relational context.

Methods

An exploratory research of qualitative nature was developed to reach the proposed objectives for this research. As Herbst et al. (2011)Herbst, U., Voeth, M., & Meister, C. (2011). What do we know about buyer-seller negotiations in marketing research? A status quo analysis. Industrial Marketing Management, 40(6), 967-978. showed, the research that relates studies of negotiation in contexts of the relationship between buyers and sellers still needs more attention. Moreover, the reason for choosing the qualitative method is the need to understand the subjects studied in greater depth. In this paper, we present some of the results of a more comprehensive study on negotiations between buyers and sellers, following the considerations of Fells et al. (2015)Fells, R., Rogers, H., Prowse, P., & Ott, U. F. (2015). Unraveling business negotiations using practitioner data. Negotiation and Conflict Management Research, 8(2), 119-136.. Thus, the phases described below present the steps followed in the elaboration of the study, highlighting the specificities of the steps presented in this study.

Collection method

For this research, the case study method was adopted considering the study of real negotiations between farmers (buyers) and distributors of agricultural inputs (sellers). The adequacy of case studies in qualitative research is related to their ability to highlight the real context in which the phenomenon occurs (Eisenhardt & Graebner, 2007Eisenhardt, K. M., & Graebner, M. E. (2007). Theory building from cases: Opportunities and challenges. Academy of Management Journal, 50(1), 25-32.).

Although reaching similar results when comparing samples of students trained in negotiation with experienced professionals (Herbst & Schwarz, 2011Herbst, U., & Schwarz, S. (2011). How valid is negotiation research based on student sample groups? New insights into a long-standing controversy. Negotiation Journal, 27(2), 147-170.), the conduct of research in simulations does not take into account the impacts of continuous relationships in negotiations between buyers and sellers in a business context (Greenhalgh, 1987Greenhalgh, L. (1987). Relationships in negotiations. Negotiation Journal, 3(3), 235-243.; Thomas et al., 2015Thomas, S. P., Manrodt, K. B., & Eastman, J. K. (2015). The impact of relationship history on negotiation strategy expectations: A theoretical framework. International Journal of Physical Distribution & Logistics Management, 45(8), 794-813.). In this sense, this research used case study to broaden the understanding of the negotiations in the analyzed context, following the steps suggested by Yin (2005)Yin, R. K.(2005). Estudo de caso: Planejamento e métodos (3rd ed.). Porto Alegre: Bookman. and De Massis and Kotlar (2014)De Massis, A., & Kotlar, J. (2014). The case study method in family business research: Guidelines for qualitative scholarship. Journal of Family Business Strategy, 5(1), 15-29..

Unit of analysis definition

Meinberg, Tomanini, Teixeira, and Peixoto (2011)Meinberg, J. L., Tomanini, C., Teixeira, E., & Peixoto, L. C. (2011). Gestão de vendas (5th ed.). Rio de Janeiro: FGV. state that companies are embedded in a context of interdependence, where there is a flow of ownership of goods and services between them, and also where negotiation is the basis for the conclusion of such agreements. In most situations, these negotiations are led by buyers (or the purchasing team, depending on the size of the organization) and by sales people (sales staff), and the main contact is led by two people: a buyer and a seller (Cunningham & Turnbull, 1982Cunningham, M. T., & Turnbull, P. W. (1982). Inter-organizational personal contact patterns. In H. Håkansson (Ed.), International marketing and purchasing of industrial goods: An interaction approach (pp. 304–316). Chichester, New York: John Wiley and Sons.).

Based on this discussion, the target negotiation is the one that occurs in the process of buying and selling (exchange of products and services) of pesticides for crops, considering a producing company as a buyer (rural producer) and a company that sells agricultural inputs as a seller (retailers and distributors). Negotiations that occurred in previous harvests were analyzed, specifically in the harvest that began in 2015.

Determination of the number of cases

For this research, six Brazilian cases and seven international cases (United States) were selected. The choice of international cases was based on the importance of carrying out comparative studies considering the relationship between buyers and sellers (Rocha & Luce, 2006Rocha, A. D., & Luce, F. B. (2006). Relacionamentos entre compradores e vendedores: Origens e perspectivas no marketing de relacionamento. Revista de Administração de Empresas, 46(3), 87-93.), as well as the representativeness of the two countries for the input distribution sector (Castro, 2008Castro, L. T. (2008). Incentivos em canais de distribuição: Um estudo comparativo entre o Brasil e os EUA no setor de defensivos (Dissertation). São Paulo, São Paulo: Faculdade de Economia, Administração e Contabilidade, Universidade de São Paulo.).

This way, each dyad (seller-buyer) is considered as a case. It should be emphasized that the view of the two parties involved in the process is fundamental when considering the negotiation context and the relationship between the parties, since this broader approach favors the understanding of the negotiation dynamics (Gelfand, Major, Raver, Nishii, & O'Brien, 2006Gelfand, M. J., Major, V. S., Raver, J. L., Nishii, L. H., & O'Brien, K. (2006). Negotiating relationally: The dynamics of the relational self in negotiations. Academy of Management Review, 31(2), 427-451.).

Each negotiation presents unique characteristics, however, to broaden the discussion of the results, negotiation dyads in different companies were chosen, since each inputs distributor may have characteristics that affect the negotiations conducted. Consequently, three companies in Brazil and three companies in the United States were selected. For each of them, two dyads were chosen, except one company in the United States where three dyads were analyzed. The distributors (companies) did not follow the criterion of convenience, but of purposeful choice (Pratt, 2009Pratt, M. G. (2009). From the editors: For the lack of a boilerplate: Tips on writing up (and reviewing) qualitative research. Academy of Management Journal, 52(5), 856-862.), to strengthen data collection. In this way, we opted for companies that had well defined management practices and sales controls. The choice of distribution channels participating in the research was made with the assistance of two specialists in agricultural inputs distribution in Brazil and with the support of two specialists in the study of agricultural inputs distribution in the United States.

For both contexts, the specialists were asked to list five names of distributors, considering the size, the importance for the region of operation, the importance for the manufacturers, as well as a qualitative view of the management level of the distributors, which contributed to the fact that the analysis of results was not affected by poorly defined management practices. Of the five distributors contacted for the study in each country, we obtained the interest of three in each country.

Due to participants' request, names of companies, as well as descriptive characteristics that could demonstrate which companies participated in the study, were omitted. Thus, a codification was created so that the reader can identify which company is being considered in the presentation and discussion of the results. For Brazilian distributors, the letter "B" was used followed by a number (1, 2 and 3); for US distributors, the letter "E" was used followed by a number (1, 2 and 3). In the end, 13 dyads (cases) were selected, distributed among the six participating companies. It was possible to perceive a theoretical saturation with the evolution of the interviews, which was a criterion used to close the number of cases. Fig. 2 presents a summary of some characteristics of each dyad studied.

Fig. 2
Summaryofthedyadsstudied.

Collection of information

As Cunningham and Turnbull (1982)Cunningham, M. T., & Turnbull, P. W. (1982). Inter-organizational personal contact patterns. In H. Håkansson (Ed.), International marketing and purchasing of industrial goods: An interaction approach (pp. 304–316). Chichester, New York: John Wiley and Sons. pointed out, sellers and buyers are often the main points of contact in transactions and relationships between firms. By the part of producers, interviews were carried out with those responsible for purchasing/final decision-making. By the part of distributors, interviews were carried out with those responsible for sales to producers. These are the ones who are directly involved in negotiations. Thus, semi-structured scripts were elaborated for the interviews with sellers and producers, which were conducted in person by the researchers. All interviews were recorded, with the permission of the participants, for later transcription and analysis. In general, the script sought to evaluate the various dimensions of the negotiation that took place during the sale/purchase process for the conclusion of the agreement.

The basic questions for collecting the information presented in this study were:

  • Seller: What strategy did you adopt during the sales process for the customer (collaborative/win-win or competitive/win-lose) and why did you decide to adopt it? Could you exemplify how this strategy was implemented?

  • Buyer: What strategy did you adopt during the buying process (collaborative/win-win or competitive/win-lose) and why did you decide to adopt it? Could you exemplify how this strategy was implemented?

To facilitate the understanding of the interviewees we used the terms collaborative/win-win as synonyms of integrative strategies, and competitive/win-lose as synonyms of distributive strategies, as pointed out by Siedel (2014)Siedel, G.(2014). Negotiating for success: Essential strategy and skills. Van Rye Publishing, LCC.. However, a certain care was taken in the analysis of the results to verify whether they were integrative or purely distributive, avoiding the interpretation of a distribution of resources, resulting from an integrative strategy (increase of the amount and the gains) such as win-lose, which was highlighted in the theoretical framework of this study.

The questions were elaborated by the authors to be as open as possible and to allow the content analysis of the respondents' answers. The objective was to evaluate the strategic posture adopted by the participants, aiming at identifying the main factors that influence choices. "The standardized open-ended interview allows the participants to contribute as much detailed information as they desire [...] allowing the researcher to ask probing questions as a means of follow-up" (Turner, 2010Turner, D. W. (2010). Qualitative interview design: A practical guide for novice investigators. Qualitative Report, 15(3), 754., p. 756). Still, according to Turner (2010)Turner, D. W. (2010). Qualitative interview design: A practical guide for novice investigators. Qualitative Report, 15(3), 754., the nature of open questions can allow participants to express their points of view and experiences with more intensity. The choice of open questions was based on the need to capture participants' point of view, but at the same time explore details that allow the interpretation of behaviors and strategies used.

The interviews were conducted following the steps outlined in the case study protocol based on Yin (2005)Yin, R. K.(2005). Estudo de caso: Planejamento e métodos (3rd ed.). Porto Alegre: Bookman.. The collection method was the same for both Brazilian and North American contexts. However, the scripts suffered minor adjustments to adapt to the local context (such as area unit - hectares Ô acres), and the translation into English. Dyads were studied in the context of six companies together with the interviews with the managers, totaling 26 interviews.

Evaluation, analysis, and presentation of data

As pointed out by Eisenhardt (1989)Eisenhardt, K. M. (1989). Building theories from case study research. Academy of Management Review, 14(4), 532-550. data analysis is one of the most critical phases of the case study. Therefore, the collected data were analyzed with the support of the technique of content analysis, following the steps proposed by Bardin (2008)Bardin, L. (2008). Análise de conteúdo (5ª ed., pp. 70). Lisboa: Edições.: transcription of interviews, reading, clipping, and notation, and definition of empirical thematic categories. Categories were defined a posteriori. The analysis of the results was strengthened by the recommendations of Burnard, Gill, Stewart, Treasure, and Chadwick (2008)Burnard, P., Gill, P., Stewart, K., Treasure, E., & Chadwick, B. (2008). Analysing and presenting qualitative data. British Dental Journal, 204(8), 429-432.. The authors propose the definition of initial categories, defined from the transcripts made, which are bases for the definition of final categories. According to the authors, the objective is to allow the researcher to explore and interpret the qualitative data in greater depth. The authors still claim that the use of software to carry out this process can be recommended to facilitate analysis. However, manual analysis does not impair the quality of the research, since the most important is that the researcher can go through the initial and final coding phases, generating consistent and organized data for discussions. In this sense, it was decided to carry out the analysis without the help of information systems. The use of coding, besides being a more current way to demonstrate qualitative data, allows researchers to give more rigor to their analyzes (Burnard et al., 2008Burnard, P., Gill, P., Stewart, K., Treasure, E., & Chadwick, B. (2008). Analysing and presenting qualitative data. British Dental Journal, 204(8), 429-432.).

Presentation of results

In this section, we present the main results obtained in interviews with buyers and sellers. The strategies were evaluated according to transcripts of questions asked for the parties, which were highlighted in the method section of this study. To make the understanding simpler, the question was asked considering the two extremes (collaborative/integrative and competitive/distributive), However, through the theory studied, the authors sought elements in the discourses that allowed an interpretation of the strategy that was used by the parties. For the presentation of the results, the terms collaborative, competitive and compromise will be worked in this study. The use of open-ended questions allowed interviewees to discuss more the strategies that were used, highlighting the main motivations for using each strategy. The results are evaluated in two stages: The first stage aims to identify initial codes from the transcripts of the interviews and the classification of the type of strategy that was used by the negotiator; The second one makes a grouping of the initial coding into final coding, seeking to reduce the number of categories identified, highlighting the main motivations for the use of negotiation strategies.

The initial coding of the sellers is highlighted in Fig. 11 (Appendix A Appendix A Fig. 11 Initialcoding-interviewwithsellers. No. of Dyad Interview Transcripts (Sellers) Initial Coding Strategy adopted D1 "by the relationship [...] sometimes there is one thing (product) that will not work for the guy and you know, [...] (but) you have the goal of that product, [and] (if) I know it will not suit him, I will not want to sell to him.[...]I -think the customer gives a lot of value to those who are collaborative,of course you can not forget your side, the side of the company. [...] "I also come from a family of rural producers, so you know how much it is complicated"(V1). - Influence of the relationship of the parties - Producers value a collaborative approach - Increased earning potential for the seller - Enables mutual gains Collaborative D2 "I never go there thinking about selling a product to him only to meet the goal of the store.Because he's a person who has too much trust in me " (V2). - Maintenance of trust Collaborative D3 "I can not make room for the other (supplier) to access this client. If we're already inside, then why should I let another come? We'll protect him" (V3). - Account Protection - Move the competitor - Continuity of the relationship in search of long-term gains Compromise D4 "It's been 20 years that I sell crop after crop to him.If I open the door there it's not that I will not sell anymore,I will, but I'll have to conquer again. [...] Sometimes it's worth doing this (sacrificing something) so you do not open the door to the competitof(V4). - Existing relationship - Move the competitor - Account Protection - Continuity of transactions in the future' Compromise D5 even if you do not win this time, it will help you win in the future. [...] Once you are sent away (from the farm), or lose the chance to a competitor, it is much harder to gain his trust again and get the customer back" (V13). - Need for Mutual Gains - Influence on reaching the agreement - Need to show the value of the offer Collaborative D6 "I never think of win -lose because I need the customer next year. He can not have a bad feeling"(V6). - Long -term earnings support. - Maintenance of the relationship - Generate client satisfaction Collaborative D7 "when it's a relationship, I know, you know and we balance everything,and we both define a plan and we trust each other " (V7). - Strategy influenced by existing relationship - Presence of mutual objectives - Maintenance of trust Collaborative D8 "always competitive [...] there are always several people trying to do the work you do [...] but you are the person who has the business [...] With clients who are more negotiators it is a little easier for you to lose the account, they are not in a relationship,they do not care what you do" (V8). - Need to defend one's own interests - Protection of the competitive position - Acting competitively,due to the fact that the other side is competitive Competitive D9 "because we both had to give in to define the final products and prices " (V9) - Need of satisfaction on both sides for conclusion of the business, but without maximizing the gains - Give and take - Division of earnings Compromise D10 "I always try to play win -win. [...] I look for information and try to understand where I can go". (V10) - Own Style Collaborative D11 "I always trv to show that I'm working for him and not for my company,because if he knows it he'll feel better about his decision. [...] If you can prove that you are in his team you will build more confidence and have a better relationship " (V11). - Generate client's satisfaction - Building Trust - Strengthening the relationship Collaborative D12 "The main point is that we are a business enterprise (and) we need to be profitable. [...] (But) We always try to reduce the cost, not to hurt our business, but to benefit the producer'. - Generate mutual gains - Satisfaction of both sides Collaborative D13 "even if you do not win this time,__________ it will help you win in the future. [...] Once you are sent away (from the farm), or lose the chance to a competitor, it is much harder to gain his trust again and get the customer back " (V13). - Business continuity in the future - Maintenance of trust - Move the competitor - Maintenance of the relationship Compromise Source: Preparedbytheauthors. ). Fig. 11 presents the excerpts from the transcribed interviews, which enabled an initial codification of the factors that may motivate the definition of the negotiation strategy that was adopted by the sellers. Also, a classification of the adopted strategy is presented. In general, sellers used three strategies: collaborative, compromise and competitive.

After the initial coding, a final coding was elaborated, adding the codes in broader concepts, to avoid repetitions and to define consolidating categories. Fig. 3 shows the motivators of the collaborative strategy use by sellers. Thus nine categories were defined, which were formed from the consolidation of the analysis of Fig. 11.

Fig. 3
Finalcoding-sellers-collaborativestrategy.

Fig. 4 shows the categories that motivate the use of the compromise strategy. Two major categories can be highlighted: long-term maximization of return and the need to reach an agreement and complete the negotiation.

Fig. 4
Finalcoding-sellers-commitmentstrategy.

Finally, Fig. 5 presents the two categories that emerged after the initial codification, motivating the use of the competitive strategy.

Fig. 5
Finalcoding-sellers-competitivestrategy.

The same analysis was made for the responses given by buyers (farmers). Firstly, the excerpts from the transcribed interviews were analyzed, and initial codes were identified. In addition to the initial codes, an analysis was made on the strategy that each negotiator adopted based on the interpretation of the initial responses and codes identified. As well as in the analysis of the sellers, the use of three strategies was also identified: collaborative, compromise and competitive. Fig. 12, highlighted in Appendix B Appendix B Fig. 12 Initialcoding-interviewwithbuyers. No. of Dyad Interview Transcripts (Buyers) Initial Coding Strategy adopted D1 "I am more competitive, because who will defend my company, my interests, my branch is me. If he is making the price, it is because he has the condition to make.I try to squeeze to the max " (C1). "sometimes when the volume is large [...]you try to earn a few cents per liter. A little you win makes a good difference.So I try not to lose" (C1). - Defense of self-interest - Search for the walkaway point (reservation value) on the other side - Attempt to increase individual gains (cost management) - Focus on Substantial Results Competitive D2 "I think on my side, but I do not miss seeing the seller's side too"(C2). "the company and the seller are a set. [...]. Then you can discuss the price [...] of a product, because you have friendship. Now, if you do not have friendship with the person, you can not do it"(C2). - Earnings distribution - Influence of the existing relationship between the parties Compromise D3 "I'm not very collaborative,I think I'm harder in the negotiations. [...] My personal style [...] little German blood [...] we are very pragmatic" (C3). - Personal style influencing the negotiation strategy Competitive D4 "this familiarity helps a lot. You end up thinking about the other side. [... ] The fact of the help he (the seller) gives me. [...]When you need him, he's there to help. Now there are companies that are a mere salesman. They do not get involved. So why are you going to be collaborative? You have to see both sides, you end up helping who helps you" (04). - Existing relationship between the parties - Commitment in the relationship - Generate mutual gains Collaborative D5 "in his situation is more win-win, taking into account the assistance he gives me.For other companies, I am usually win-lose, I end up being harder.I cut him some slack. That's where the relationship comes in."(C5). - Existing relationship between the parties Collaborative D6 "you have to win on both sides, you have to think about the continuity of the partnership. It's no use trying to step on the person's neck, take out the last penny, and they will not make money.They need to have some margin" (C6). - Generate mutual gains - Continuity of the relationship - Satisfaction of the other party Collaborative D7 "I'm more win-win, because I'm going to keep dealing with this business next year. [...] If people have an agreement that they can not fulfill anymore, this does not work in the long run " (C7). - Continuity of the relationship - Generate mutual gains Collaborative D8 "I feel that at some point there should be a consensus. [...] we will reach a consensus on price and product and we will make an agreement.Maybe not the price he wants, or more than I intended to pay, but there will be a consensus" (C8). - Satisfaction of both sides - Divide the difference to reach an agreement - Give and take Compromise D9 "it is win-lose. I paid less,so I won and they lost " (C9). - Pressure for Price Reduction - Focus on individual results Competitive D10 "I do not want to push my supplier because he may consider it is painful to do business with me.[...] I ask them the best price and I trust they are bringing me the best price. [...] I'm not going to keep asking him to lower the price, because I want them to stay in business, so I can do business with them next year". (C10) - Generate mutual gains - Satisfaction of the other party - Continuity of the relationship - Being able to count on the supplier next year Collaborative D11 "we have a phrase: shared growth, shared success.If I grow, he grows and we're both successful. [...] I can not negotiate price with him.I do not want him to lose his job, because I want to pay a better price than everyone else" (C11). - Share gains - Satisfaction of the other party - Strengthening the relationship (future) through trust Collaborative D12 "Ialways try to be win-win,because if I am doing business with you [... ] and I always make money, and you always lose money, very soon you will not be in business anymore. And I will not be able to use your business anymore. Everyone has to win". (C12) - Share gains - Continuity of the commercial relationship Collaborative D13 "because we want to save money. loyalty may disappear at times because of price.This is not something that people like to hear. If you are buying the same products you can save a few dollars per acre. It's hard not to go with the cheapest when you have the same product or similar. It's a competition, pure competition.Even more so now with the low commodity price"(C13). - Focus on Substantial Results - Uniformity of alternative offers (comparative level of alternatives) - Low Commodity Prices -Decrease in Revenue Competitive Source: Preparedbytheauthors. of the paper, presents the consolidation of these analyzes.

From the initial coding, a second refinement of the data was made for the definition of final categories, seeking a consolidation of themes, organizing them by type of strategy adopted. Fig. 6 shows the five categories that motivate the use of the collaborative strategy by buyers.

Fig. 6
Finalcoding-buyers-collaborativestrategy.

Another strategy adopted was a compromise. From the initial coding, it was possible to identify three final categories motivating the use of this strategy. Fig. 7 summarizes the final coding defined based on the initial codes raised. Three categories were defined.

Fig. 7
Finalcoding-buyers-compromisestrategy.

Finally, Fig. 8 presents the five categories that were identified from the analysis of the initial coding as motivators of the use of the competitive strategy.

Fig. 8
Finalcoding-buyers-competitivestrategy.

After analyzing the data, the following section presents a discussion of the results, as well as the cross-analysis of the data.

Cross-analysis and discussion

To begin the analysis, Fig. 9 presents a summary of the main reasons that led buyers and sellers to define their negotiation strategy. It is noted, on both sides (buyers and sellers), the use of strategies of collaborative, competitive and compromise.

Fig. 9
Reasonstoadoptspecificnegotiationstrategies.

A discussion of the results will be deepened, initially, focusing on the seller's side. By analyzing the strategy of the sellers, it is possible to observe that in eight dyads (1, 2, 5, 6, 7, 10, 11 and 12) there were a collaborative strategy. In addition to using collaborative strategies with the aim of structuring or strengthening a relationship with clients, it can be noted that this strategy is used for several other purposes, such as building trust between the parties or even increasing the value of negotiations. These results confirm the findings previously presented in theory.

Moreover, it is observed that the existing relationship between the parties may impact on the seller's choice of collaborative negotiation strategy, since there is a relationship of trust that allows the discussion of the interests of the parties, seeking to reach the results which are satisfactory to both sides: "when it is a relationship, I know, you know, and we balance everything, and we both define a plan, and we trust each other" (Seller dyad 7).

Besides collaborative strategy, the use of two other strategies was observed: competitive and compromise. Thus, salespeople who seek to structure a relationship do not always use integrative strategies. The maintenance of the relationship with the client, allowing the conclusion of the agreement and the maximization of long-term return is one of the objectives of the compromise strategy:

"I can not make room for the other (supplier) to access this client" (Seller dyad 3)

"Sometimes it is worth doing this (sacrificing something), so you do not open the door to the competitor" (Seller dyad 4).

The importance of continuing the relationship with producers is considered even if they have to give up part of the gains. This behavior can be justified by the possibility of relational results obtained, which will allow the continuity of the business in the future. Also, it is noted that the compromise strategy is used in situations that negotiators recognize the need to cede to meet demand from the other side. However, they do not stop charging some interests.

Finally, the competitive strategy appears on the part of the seller at times when the improvement of short-term results is necessary, or when the negotiator has to defend his own interests: "Always competitive [...] there are always several people trying to do the work you do [...] but you are the person who has the business [...] With clients who are more negotiators it is a little easier for you to lose the account [...] they do not care what you do" (Seller dyad 8). It is also observed that competitive posture may be a strategy used in situations in which the seller expects the other side to adopt a competitive attitude.

It is worth mentioning that the customer of the dyad 8 has a strong bargaining power due to its size, as well as having other suppliers at its disposal as alternatives. Also, the relationship between the parties is at a more initial stage, according to the seller, which leaves the relationship with a more transactional character. This result is in line with the conclusions of Thomas et al. (2013)Thomas, S. P., Thomas, R. W., Manrodt, K. B., & Rutner, S. M. (2013). An experimental test of negotiation strategy effects on knowledge sharing intentions in buyer-supplier relationships. Journal of Supply Chain Management, 49(2), 96-113..

By analyzing Fig. 9, on the buyer's side, it was possible to see that some producers (4, 5, 6, 7, 10, 11 and 12) use collaborative (integrative) strategies thinking about strengthening/maintenance of the supplier due to the influence of the existing relationship or about improving the satisfaction of the seller.

On the influence of the existing relationship between the parties, we observe an interesting fact: negotiators can vary their strategy according to the level of the relationship. In some moments, they can adopt a collaborative attitude and in others, with less relational suppliers, they may adopt a competitive attitude: "in his situation is more win-win, taking into account the assistance he gives me. For other companies, I am usually win-lose. I end up being harder. I cut him some slack. That is where the relationship comes in." (Buyer dyad 5). Based on this result we can highlight evidence that the intensity of the relationship may impact on the choice of strategy to be used.

In addition to collaborative strategy, it is noted that other strategies can be used by buyers even in a context in which the relationship between the parties is important.

Thus, it is possible to highlight the use of competitive strategy by buyers. This strategy was verified in four dyads: 1, 3, 9 and 13. Among the reasons found, the defense of one's interests, the availability of equivalent alternatives, the reduction of prices paid on inputs, interest in substantial results, or the need to reduce costs, can motivate the use of this strategy. These results confirm the conclusions of Ramsay (2004)Ramsay, J. (2004). Serendipity and the realpolitik of negotiations in supply chains. Supply Chain Management: An International Journal, 9(3), 219-229. and Zachariassen (2008)Zachariassen, F. (2008). Negotiation strategies in supply chain management. International Journal of Physical Distribution & Logistics Management, 38(10), 764-781., highlighting that even in relational contexts negotiators can use distributive strategies.

Here arises a reflection on the possibility of expanding the value of negotiations. Since cost reduction is important to customers, sellers may think of ways to reduce costs through their offerings or they can also look for ways to increase producers' productivity (gains) without changing the price of products, expanding the value of the negotiations.

Still, regarding the use of the competitive strategies, it is observed by the results of the research that the style of the negotiator and personality traits can influence in the way the parties will act in negotiations. This fact can be observed not only by the buyer, according to the section highlighted by the producer of dyad 3 and 9, but also by the seller, as observed in the dyad 10:

"I am not very collaborative; I think I am harder in the negotiations. [...] My personal style [...] a little German blood" (buyer dyad 3)

"I paid less, so I won, and they lost" (buyer dyad 9)

"I always try to play win-win" (seller dyad 10)

It was not the objective of this paper to evaluate the impact of the negotiators' style in the definition of the strategy, however, new studies could explore this research problem, since the definition of the strategy that will be used may not only depend on the importance of the substance and relational results that are intended to achieve through negotiations.

Finally, it was identified the use of compromise strategies on the part of buyers, notably by the influence of the existing relationship, or by the intention of improving the satisfaction of both sides involved in the negotiation.

Implications of results for negotiation strategy theory

This section presents a synthesis of the implications of the results for negotiation strategy theory. Based on the results presented previously, it is possible to emphasize that the main contribution of this study is the perception of the temporal changes of the strategies. The study shows indications that negotiators' strategy may not be fixed during the same negotiation process since in some dyads it was possible to perceive a change in the strategy used during the negotiation process.

The first example to be highlighted represents the posture of the buyer Dyad 5, who initially adopted a competitive stance and then moved to a collaborative stance, which can be noted from the seller's speech: "I told the customer that it was not good for me and he realized that it had to be good for me and then he started to do some analysis and went back to negotiating, and we had a deal" (Seller dyad 5).

When analyzing the speech of the buyer of the dyad 5, in relation to the situation of the negotiation analyzed, it is noted that the buyer is willing to adopt a different strategy with this seller, especially due to the value of the relationship existing between the parties: "in his situation is more win-win, taking into account the assistance he gives me. For other companies, I am usually win-lose. I end up being harder. I cut him some slack. That is where the relationship comes in.". By analyzing the two phrases highlighted, it can be noticed that the style or worldview of the buyer influences the initial strategy (competitive). However, throughout the negotiation, it was altered since it was influenced by the relationship between the parties.

In the passage highlighted by the buyer Dyad 13 ("Loyalty may disappear at times because of price") there are indications that, due to external pressures and the number of alternatives, the negotiator may have moved from a collaborative position to a competitive position.

Another passage shows that the negotiator, due to the long relationship with the other party, may have entered the negotiation seeking a collaborative position. However, as a strategy of protection against the attack of competitors in the short term for the continuity of the relationship, the negotiator may have adopted a compromise strategy. "Sometimes it is worth doing this (sacrificing something), so you do not give access to the competitor" (Seller Dyad 4).

A secondary contribution of the research is the importance of both sides adopting a collaborative stance so that economic and relational gains could be maximized. By analyzing the terms negotiated and discussed in each of the dyads, it is noted that in dyads 7, 11 and 12 there was no price bargain. The terms negotiated were the package options, which products are more suited to customers' needs, as well as the performance of protection and earnings programs. Thus, even though it has been a well-known point for some time in negotiation theory (beginning of game theory), it is noted that if only one side adopts a collaborative strategy and the other side adopts any of the other strategies (compromise or competitive), there is the possibility that a portion of the agreement value is left at the negotiating table. The outcome of the negotiation may be less integrative.

Fig. 10 shows a graphical representation of a matrix created from the results of this research. It is proposed that the maximization of the negotiation value for both sides occur in situations in which both parties adopt an integrative negotiation strategy. In situations when one party uses a compromise or competitive approach may occur the division of negotiation value.

Fig. 10
Matrix of buyer-seller negotiation strategies.

Final considerations

The present study aimed to analyze, from real negotiation situations between buyers and sellers and also inserted in a relationship, how both parties use negotiation strategies and what motives may influence their use.

It could be noticed that even in situations where the relationship is important for the parties, they use strategies that go beyond integrative. On the part of sellers, the use of compromise strategies can be seen as a technique to make the producer more satisfied without harming the relationship between them, seeking the maximization of long-term results. Moreover, compromise approaches were presented as a defense by sellers, since they are willing to lose a little in the current negotiations but to continue their business with the producer next year.

On the side of the producer (buyer), it is noted that some of them use collaborative strategies thinking about mutual gains. However, it is also observed the use of competitive strategies, which was mainly motivated by the need to take care of the profitability of the business. Also, it is observed that the negotiation environment can influence this behavior in situations of low commodity prices.

Thus, the study contributes to the theory of negotiation and relationship between buyers and sellers as it advances in the discussion raised by Ramsay (2004)Ramsay, J. (2004). Serendipity and the realpolitik of negotiations in supply chains. Supply Chain Management: An International Journal, 9(3), 219-229., Zachariassen (2008)Zachariassen, F. (2008). Negotiation strategies in supply chain management. International Journal of Physical Distribution & Logistics Management, 38(10), 764-781. and Thomas et al. (2013)Thomas, S. P., Thomas, R. W., Manrodt, K. B., & Rutner, S. M. (2013). An experimental test of negotiation strategy effects on knowledge sharing intentions in buyer-supplier relationships. Journal of Supply Chain Management, 49(2), 96-113., highlighting the possibility of adopting strategies of compromise besides integrative and distributive. Also, this research broadens the list of reasons that lead buyers and sellers to use the three strategies. These conclusions make room for the development of new researches that could expand the verification of these results through studies with broader samples.

In addition to broadening the theoretical discussion pointed out above, this article has as its central contribution the fact that negotiators can change their negotiation strategy throughout the process, as it could be observed in some dyads. In previous studies, such as Ramsay (2004)Ramsay, J. (2004). Serendipity and the realpolitik of negotiations in supply chains. Supply Chain Management: An International Journal, 9(3), 219-229. and Zachariassen (2008)Zachariassen, F. (2008). Negotiation strategies in supply chain management. International Journal of Physical Distribution & Logistics Management, 38(10), 764-781., the focus of the considerations was on the fact and the reasons that could lead negotiators to adopt negotiation positions in relational situations other than collaborative. However, we noted that even in relational situations, in addition to using other strategies (competitive and compromise) during negotiations, parties can migrate their strategy throughout the negotiation process considering the three positions: collaborative, compromise and competitive. In particular, it was observed that these changes were motivated by the need to protect the account (offers of competitors), external pressures and number of alternatives, and also by the strengthening of the relationship between the parties.

This observation reinforces the dynamic and systemic aspect of negotiation in non-simulated business environments. For instance, even in situations where negotiators plan to adopt an initial collaborative stance influenced by the interest in the relationship, their strategy may shift to a competitive one to defend their personal goals. On the other hand, thinking about individual objectives, a competitive strategy may change to collaborative, once negotiators realize the importance of the relationship between the parties.

Therefore, the study opens up opportunities for further research that can explore the motives that lead negotiators to change strategy throughout the process, as well as other motives that may appear.

As managerial contributions, the present study opens the door to a better understanding of professionals on the reasons that can lead the parties to adopt their negotiation strategies, allowing a greater preparation of both parties for situations of purchase and sales of agricultural inputs. Also, it draws the attention of professionals to the dynamic nature of negotiation strategies, as it was highlighted above.

A possible limitation of this study is the exclusive focus on negotiation strategies, since other elements of the negotiation may impact the results achieved by the parties. As an example, it was noted that styles and personality traits might also influence the way negotiators to behave. However, these analyzes were not deepened, since the research did not aim to map the style of the negotiators interviewed. Finally, the fact of being a study with a small sample (qualitative) prevented to carry out comparative strategy analyzes between the two countries in which the survey was conducted (Brazil and the United States). However, the dimensions raised here may serve as a basis for the preparation of future quantitative studies to compare the two realities.

Although not generalizable, the conclusions found here may be used to expand studies on the subject in other sectors, which also present strong relational characteristics, such as agricultural input distribution sector.

  • Peer Review under the responsibility of Departamento de Administração, Faculdade de Economia, Administração e Contabilidade da Universidade de São Paulo - FEA/USP.
  • Scientific Editor: Flavio Hourneaux Junior

Acknowledgements

The authors acknowledge financial support from Coordenação de Aperfeiçoamento de Pessoal de Nível Superior - Brasil (Capes) - PDSE, two anonymous reviewers for their helpful suggestions and comments and Professor Allan W Gray, from Department of Agricultural Economics at Purdue University for all the helpful insights.

Appendix A

Fig. 11
Initialcoding-interviewwithsellers.

Appendix B

Fig. 12
Initialcoding-interviewwithbuyers.

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Publication Dates

  • Publication in this collection
    Apr-Jun 2018

History

  • Received
    18 Aug 2016
  • Accepted
    06 June 2017
  • Published
    02 Feb 2018
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