The effect of outcome and process accountability on customer–supplier negotiations

Your gain my pain? The effects of accounting information in uncertain negotiations

“…Specifically, studies have shown that behavioral perspectives help to understand exchange partners' collaborative behaviors and outcomes (Chang et al 2013;Coletti et al 2005;Drake and Haka 2008). In the setting of buyer-supplier negotiations, social exchange theory (e.g., Walton and McKersie 1965) has been used extensively as it offers a theoretical foundation for incorporating social and behavioral factors into the analysis of relationships.…”

“…A second argument is more behavioral: refined accounting information supports 'integrative behaviors' that are characterized by joint problem solving and cooperation. These studies, however, also recognize the reservations that firms have in sharing such information because of concerns about distributive partner behavior, which can result in partners withholding information and forgoing potential gains (Chang et al 2013;Dekker 2003;Drake and Haka 2008; Van den Abbeele et al 2009). We consider in our experiment accounting information that is unrelated to the source of (payoff) uncertainty, does not directly help to reduce it and thus will not directly assist the negotiation partners in finding the most optimal agreement.…”

“…enhancing opportunities in the supply chain (Baiman and Rajan 2002;Chang et al 2013;Dekker 2003;Drake and Haka 2008;Van den Abbeele et al 2009). …”

“…The negotiation stage is considered critical to this end as the process of negotiation sets the stage for future behaviors and can be instrumental in the outcomes that partners achieve. While an extensive literature on negotiation research identifies conditions that influence negotiators' behaviors and outcomes, prior accounting studies have particularly considered the potential of accounting information in stimulating cooperative negotiation behavior (e.g., Chang et al 2013;Coletti et al 2005;Drake and Haka 2008;Masschelein et al 2012; Van den Abbeele et al 2009). These studies indicate that particularly refined accounting information such as total cost of ownership (TCO) information can (but does not always) stimulate negotiators to act cooperatively, producing better joint outcomes.…”

“…On the other hand, uncertainty may stimulate negotiators to exchange information and seek better outcomes, which thus could mitigate negative effects on behavior. This would be [3] particularly the case when negotiators possess refined information that enables them to identify mutually beneficial tradeoffs (Chang et al 2013; Van den Abbeele et al 2009). …”