A bilateral and multi-issue negotiation framework to support a supply chain of construction industry

Abstract

ABSTRACT. Any interaction involving individuals, whose objectives are conflicting with each other, may establish a negotiation process. In a negotiation, each party should develop his/her own strategy and, normally, a win-lose vision is frequently adopted. The main consequence of this behavior is a result, in which both parties lose, especially when the negotiation involves more than one aspect, such as negotiations resulting from purchases of material for construction industry, where aspects like price, quality and lead-time should be considered. Most of the negotiation involving construction industry adopts a win-lose vision; and, commonly, only the issue price is considered. The goal of this paper is to propose a framework to support negotiations between two parties (buyer and seller) in the supply chain of construction industry. The combination of a win-win strategy with a multicriteria analysis produces a best compromise solution for both parties. A simulation of negotiation using realistic data is presented.

Influence of Team Negotiations on Collaborative Value within Ashoka Fellows' Organizations in Africa

“…With the automated algorithm for negotiation, the negotiating team reaches an efficient contract with mutual gains. The study confirms that the mediation mechanism is constant in the context of a negotiation, as the negotiation team's behavior is predicted (Schramm & Morais, 2013). The combined use of business strategies and the investigation of the efficient frontier allow maximum results for both sides.…”

“…Team negotiations based on team strategy can either be a win-win or a lose-lose. Schramm and Morais (2013) propose a framework to support negotiations between buyer and seller teams in the construction industry's supply chain. In a buyer-seller team negotiation process, each team develops its strategy to achieve its objective; a possible consequence of this setting is that both parties lose, especially when the negotiation process involves other issues beyond the price.…”

“…In a buyer-seller team negotiation process, each team develops its strategy to achieve its objective; a possible consequence of this setting is that both parties lose, especially when the negotiation process involves other issues beyond the price. For example, from the buyer team view, they can attain the lowest price in the purchase; however, the acquired product or service may be of low quality; in which case, the seller team also loses since a product/service with low quality can affect the confidence between the parties (Schramm & Morais, 2013). The study proposes that team negotiation success rate can improve through a multicriteria additive framework that supports bilateral and multi-issue negotiations between buyer teams and material seller teams, where the teams reach a deal based on their business strategies.…”

“…The combined use of business strategies and the investigation of the efficient frontier allow maximum results for both sides. However, when negotiation teams do not accept the proposed framework's solution, a conflict situation may arise (Schramm & Morais, 2013). The team leadership study did not investigate what brings about contentiousness in team negotiations.…”