Literature Review: Negotiation's Role in Purchasing - Assignment 3

This assignment presents a literature review focusing on the role of negotiation in purchasing materials. It highlights the importance of negotiation in securing favorable prices and quality from suppliers, emphasizing its vital role in business development and supply chain management. The review covers various negotiation processes, including face-to-face and technology-based approaches, and discusses the shift from focusing solely on the lowest price to prioritizing long-term agreements with fewer vendors. It also distinguishes between distributive and integrative negotiation types, noting the importance of understanding negotiation strategies for maintaining effective relationships between buyers and suppliers. The research design incorporates a conceptual framework based on observation and deductive reasoning, utilizing secondary data collection methods to analyze the negotiation process and bargaining power, ultimately aiming to provide valuable insights into the role of negotiation in purchasing.

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Role of Negotiation
Assignment 3

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Abstract
The role of negotiation in purchasing material is the process to bargain with the suitable price
and the quality of products that buyers would get from the suppliers. This process is being
utilized in most of the company to get the material with the most valuable price with the superior
quality of service and the product. The primary activity of the purchasing professional is to deal
with the suppliers and get the best contract for their service as well as products. This effectively
helps both the parties to deal with the situation and provide their best to the field for delivering
the effective outcome of the products within the market.

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Table of Contents
Introduction.................................................................................................................................................3
Literature review.........................................................................................................................................3
Research design...........................................................................................................................................6
Conceptual framework............................................................................................................................6
Secondary/Primary data collection..........................................................................................................6
Data analysis method...............................................................................................................................7
Conclusion...................................................................................................................................................7
References...................................................................................................................................................8

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Introduction
Negotiation is the process that has been effectively utilized by the professionals to create the
trade association as well as to purchase the material from the market. This process is not the easy
one for the buyers or the suppliers as the process of negotiation required effective practice and
understanding to get the best deal on the products or the services. There are numerous process of
negotiation that could be developed by the purchasing professionals like the face-to-face
negotiation than through the technology process and so on. Negotiation is done in every aspect of
the business and this is considered to be the vital part of the firm. The primary purpose of the
paper is to provide an effective view on the role of negotiation in the purchasing material and
also provide the understanding on the impact of negotiation to the buyers, sellers as well as the
business process. The paper will also discuss the conceptual framework as well as the data
collection process and also the method for data analysis in the research paper.
Literature review
Negotiation is considered to be one of the most effective and vital parts of the business that is
being performed by the senior authorities after they have reached the aim of the agreement.
According to Lyu, & Oh (2014), the negotiation in the purchasing process effectively covers the
period from the time of first communication performed within the buyers and the suppliers till
the final signing of the contracts. Negotiation is the simple process like to obtain the discount on
the case of the safety gloves over and done with the complexities of the primary capital
purchases. It is the primary fact of the negotiation process that it needs to be done in the most
effective way. From the view of Martínez‐de‐Albéniz, & Simchi‐Levi (2013), it can be seen that
purchasing professional have to be successful in their process of negotiation with the suppliers
for obtaining the best price in the best condition for the each and every item. It entirely provides
the view that negotiation is the most effective and valuable process for the development of
business within the market. Managers and the senior authority of the firm perform negotiation to
get the best product within the best price for their business development.
As per Ribbink, & Grimm (2014), the negotiation process within the business is considered to be
the vital sector in the process of the supply chain as the company has the tendency to decrease
their expenditure as well as increase the purchasing power. This eventually provides the view
that the purchasing professionals within the business need to negotiate effectively for better rates

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with the suppliers to maintain or increase their quality as well as service. Furthermore, it can be
seen from the view of Murray (2018), that in the past business process the companies used to
have a long list for their suppliers from whom they will get their products and for that, it required
limited time to perform the negotiation process. The managers and the senior authority of the
firm get their best solution from the suppliers and compare the listed price as well as select the
vendor according to the listed lowest price. This trend of getting the listed price from the
suppliers has been rationalized and the company has entered the process of a long-term
agreement that also with the single sourcing. With the help of this process, the companies have
the effective ability to negotiate a lower price for the items that they are eventually purchasing
from the numerous vendors.
From the view of Thomas, Thomas, Manrodt, & Rutner (2013), it can be seen that the emphasis
in the negotiation has moved from the lowest price to negotiating with the minimum number of
vendors for obtaining the lowest price that also with best quality and service. It can be seen that
the aim of the company has changed within the world from the lowest price to the effective
vendor with the lowest price. Consequently, it is the fact that the company is in the process to
reduce their overall spending rather than performing the negotiation with the huge number of
vendors within the market. In the words of Mthembu (2018), it can be seen that the negotiated
long-term contract that also with the smaller suppliers within the market has effectively produced
a more effective relationship between the buyers and the suppliers. In this process negotiation
effectively allow the buyers and the suppliers to maintain their activity within the market and
provide the superior outcome from the products and service received from the suppliers.
Negotiation effectively allows the firm to understand their expense and their income process
within the development of view towards the firm for maintaining their effective and valuable
process. With the help of this process the organization effectively get their service and product of
superior quality from the market.
According to Araujo, Gadde, & Dubois (2016), there are two types of negotiation within the
market that effectively applied by the suppliers and the buyers. One of the negotiation types is
the distributive negotiation that involves people who have never performed any interactive
relationship. It can be seen that the purchasing of the products or the services are the most
common business process that performs distributive negotiation within the market. In the process

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of distributive negotiation, it can be seen that this process generally entails the single issue to
negotiate. Moreover, it can be seen from the view of Dzeng, & Wang (2017), integrative
negotiation is another type where the situation is almost win-win for both the buyers and the
suppliers. This process is generally involved in the agreement which better integrates the goal of
the negotiation parties with the help of creative as well as collaborative problem-solving skills.
Understanding the need for negotiation within the field allow the business to develop the
valuable as well as the most effective working function within the field. The professionals have
the ability to stabilize the situation and negotiate in term of business and also to maintain the
expense of the firm. This is effectively required within the business to develop their product and
their service.
The negotiation is the effective process that helps to maintain the service as well as the products
that are being provided by the suppliers. From the view of Geiger (2017), it can be seen that in
most of the cases supplier’s prices is always 10 percent above the market price. It is the most
effective and the valuable process that will help in the development of suppliers and buyers in
the process. It is the most effective and the working function of the suppliers to deal in the most
negotiated process. In the process of negotiation strategy is the most effective and valuable part
to deal with the suppliers. According to the view of Bellantuono, Ettorre, Kersten, &
Pontrandolfo (2014), it can be seen that negotiation is having the most valuable and effective
planning regarding the negotiation session then the tactics that could be used to develop effective
negotiation within the market. The behavior of the negotiator is essential for maintaining the
situation within the field to perform numerous working function within the field. In the words of
Xu, Cenfetelli, & Aquino (2016), it can be seen that the role of negotiation is the vital fact for
purchasing the best service and the products from the market. This is highly effective for
business to maintain their quality of products that also with the suitable price.
Negotiation is the most essential part within the business especially when the competitive
bidding is missing. It can be also seen from the view of Úbeda, Alsua, & Carrasco (2015), that
negotiation is essential when the service, as well as the quality, became vital in addition to the
price for purchasing materials. The negotiation within the business is being performed with
numerous techniques that eventually help the firm to enhance their business. As per Pan, & Choi
(2016), some of the techniques that could be utilized for negotiating within the field is to

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organize the issue, then learn from the unions, then negotiate on the home ground as well as the
determination of the concessions. These techniques are essential for the development of effective
skill and working function in term of negotiation within the field. Moreover, it can be also seen
from the view of Scheffler, Schiele, & Horn (2016) that the negotiation usually covers the
manufacture or the extent of the service that is needed to be provided to the buyers. This is the
most effective and the valuable process that could be utilized by the purchasing professionals to
get the best products that also within the suitable price and contracts.
Research design
Conceptual framework
The conceptual framework for the role of negotiation in the purchasing of the material is
considered to be both in the theoretical as well as the practical importance. The effective research
strategy is being designed to provide the valuable understanding of the planning of survey, then
the experiment and another form of inquiry. There is numerous research strategy that could be
developed by the examiner in term of the conceptual framework, but the primary strategy that
has been utilized in the research is the mode of observation. This is eventually adopted by the
research paper to analyze the negotiation process and the bargaining power of both the parties
within the market. The use of effective negotiation theory and strategy is also utilized within the
research paper to provide suitable understanding regarding the use of a negotiation process for
purchasing materials. It can be also seen that the deductive approach is being utilized within the
research paper to provide the fact regarding the role of negotiation that is eventually based on the
problem which is faced by the firm in term of their both the parties. The process of negotiation is
being discussed effectively in the field with the help of an effective theoretical framework.
Secondary/Primary data collection
The research paper provides the effective view of the development of data collection method for
understanding the facts and the figures within the field. It could be visualized that the research
paper has effectively utilized the secondary data collection process to understand the role of
negotiation within the business. In this data collection process, the entire information is being
gathered from the various sources which help to provide an effective understanding of the
concept of the role of negotiation in purchasing materials. Moreover, it can be also seen that the
type of data that is being collected in the qualitative data are generally from the figures. The role

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of negotiation for the business is effectively understood by the help of suitable and effective data
that is being gathered from the scene and also from the various sources in term of the secondary
data.
Data analysis method
The method of data analysis help to understand the exact analysis process that could be utilized
to get the most appropriate result from the collected information. In the term of qualitative data,
it can be seen that the information are in-depth explanatory data that is from the small sample
and for the analysis, the pattern is drawn out from the concept as well as insights. In this research
paper, the qualitative data analysis is effectively utilized where the data collected can be
explained by the help of effective interpretation. Moreover, it can be seen that the Qualitative
Data Analysis is the process which helps to convert the vast information into the most simple and
effective form to provide valuable outcome regarding the process (Graue, 2015). It generally
revolves around the impressions as well as the interpretations of the primary researchers. It is the
most essential fact that the qualitative data analysis needs to be performed in the most systematic
way to maintain the information gathered from the various sources. For the statistical analysis of
the collected data, it can be seen that hypothesis testing can be utilized within the process
(Bonett, & Wright, 2015). This is commonly known as the t-testing which help to accrue the true
value for the data set or the population. This eventually helps to develop facts and figure analysis
with the help of the hypothesis of the research paper to provide the view on the effective process
to analyze the data and provides the value for the research paper.
Conclusion
The paper eventually concludes the fact that the role of negotiation is the most vital and the
crucial part in every business to purchase the best material within suitable from the market. The
paper also evaluates that the entire process of negotiation allows the buyers and the suppliers to
perform a contract and share the superior quality of service or products to the market. The
research on the role of negotiation is effectively performed with the help of effective strategy and
the negotiation theory and also the data is being collected in the most suitable form. Moreover, it
can be viewed from the paper that the data analysis method which has been utilized within the
paper is the qualitative data analysis along with the hypothesis testing to provide effective
outcome on the collected data regarding negotiation process.

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References
Araujo, L., Gadde, L. E., & Dubois, A. (2016). Purchasing and supply management and the role
of supplier interfaces. Imp Journal, 10(1), 2-24.
Bellantuono, N., Ettorre, D., Kersten, G. E., & Pontrandolfo, P. (2014). Multi-attribute auction
and negotiation for e-procurement of logistics. Group Decision and Negotiation, 23(3),
421-441.
Bonett, D. G., & Wright, T. A. (2015). Cronbach's alpha reliability: Interval estimation,
hypothesis testing, and sample size planning. Journal of Organizational Behavior, 36(1),
3-15.
Dzeng, R. J., & Wang, P. R. (2017). C-negotiation game: An educational game model for
construction procurement and negotiation. Automation in Construction, 75, 10-21.
Geiger, I. (2017). A model of negotiation issue–based tactics in business-to-business sales
negotiations. Industrial Marketing Management, 64, 91-106.
Graue, C. (2015). Qualitative data analysis. International Journal Of Sales, Retailing &
Marketing, 4(9), 5-14.
Lyu, S. O., & Oh, C. O. (2014). Recreationists’ constraints negotiation process for continual
leisure engagement. Leisure Sciences, 36(5), 479-497.
Martínez‐de‐Albéniz, V., & Simchi‐Levi, D. (2013). Supplier–Buyer negotiation games:
Equilibrium conditions and supply chain efficiency. Production and Operations
Management, 22(2), 397-409.
Mthembu, N. (2018). NEGOTIATION IN PURCHASING AND SUPPLY. Academia.edu.
Retrieved 21 September 2018, from
http://www.academia.edu/14481616/NEGOTIATION_IN_PURCHASING_AND_SUPP
LY
Murray, M. (2018). Negotiate Like a Pro During the Purchasing Process. Retrieved 21
September 2018, from https://www.thebalancesmb.com/negotiation-in-the-purchasing-
process-2221379

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Pan, A., & Choi, T. M. (2016). An agent-based negotiation model on price and delivery date in a
fashion supply chain. Annals of Operations Research, 242(2), 529-557.
Ribbink, D., & Grimm, C. M. (2014). The impact of cultural differences on buyer-supplier
negotiations: An experimental study. Journal of Operations Management, 32(3), 114-
126.
Scheffler, P., Schiele, H., & Horn, P. (2016). How to measure competition? The role of price
dispersion in B2B supply markets. International Journal of Procurement
Management, 9(5), 568-586.
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.
Úbeda, R., Alsua, C., & Carrasco, N. (2015). Purchasing models and organizational
performance: a study of key strategic tools. Journal of Business Research, 68(2), 177-
188.
Xu, J. D., Cenfetelli, R. T., & Aquino, K. (2016). Do different kinds of trust matter? An
examination of the three trusting beliefs on satisfaction and purchase behavior in the
buyer-seller context. The Journal of Strategic Information Systems, 25(1), 15-31.