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Increased understanding of buyer-seller negotiations (B2B): The Influence of Variable Pay on Negotiation Behaviour

Herking, A. (2019) Increased understanding of buyer-seller negotiations (B2B): The Influence of Variable Pay on Negotiation Behaviour.

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Abstract:To date, there are many questions unanswered regarding the influence of variable pay on buyer-seller relationships. One reason behind that is that most studies do not reflect the relationship between variable pay (VP) and negotiation behaviour. This study examines VP and how it impacts the negotiation behaviour in B2B settings from the buyer and seller perspective. Based on a small sample case study, this research offers important contributions to both theory and practice that can be used to promote a better implementation of variable pay schemes. This is a case study involving interviews with four buyers and three sellers engaged in B2B negotiations in Germany and the Netherlands. Qualitative data were collected involving seven buyers/sellers and then analysed, using the comparative method of Ragin (2014). Findings indicate that VP influences the negotiation behaviour. Negotiators use both integrative and distributive behaviours in order to satisfy the negotiating parties. Findings indicate that VP can be used as a motivational tool to increase employee’s productivity. Negotiators who receive VP act more aggressive and are even more focused at the project where they get the bonus. Limitations of this study include the small sample size, which can be increased in related future studies, to validate the findings. In addition to this, data was collected in Germany and the Netherlands only, thus, the paper cannot be generalised in an international context. Future research should investigate which amount of money affects the negotiation behaviour. Thus, where exactly the line is when the negotiators change their behaviour, in other words, when they use significantly more distributive behaviours. This paper offers an understanding about negotiation behaviours used in B2B negotiations. The findings have important implications for practitioners who need to be aware that VP may harm long-term relations. The originality of this paper lies in its consideration of behaviours used in B2B negotiations in the context of variable pay.
Item Type:Essay (Bachelor)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:International Business Administration BSc (50952)
Link to this item:http://purl.utwente.nl/essays/78540
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