Chapter 2 The Traditional Perspectives on Professional Buying Behaviour
2.5 The Emergent Gaps Arising from the Review of Extant Literature
The gaps established through literature review relate to understanding the relationship building and power enhancing interaction that occurs between professional buyers and sellers as they engage in pre-sales interactions.
Through these interactions it has been established that buyers exhibit a
73 combination of behaviours which are either operationally focussed or have a focus which is commercially driven. However, the literature reviewed suggests that there is limited empirical understanding as to how buyers combine these behaviours. Finally, the need is recognised to develop research designs which are able to embrace the complexity inherent in these buyer-seller interactions. The nature of these gaps is now discussed in detail.
Day (2000:24) recognises that central to every market relationship is an exchange process and considers that these exchanges can be placed on a continuum. At one extreme the focus is on timely exchange of standard products at an acceptable price and any negotiation is likely to centre on establishing commercial terms and conditions. At the other end of the spectrum are collaborative exchanges, which feature close informational, social and process linkages. In these exchanges Day considers that there is no need for negotiation to take place, as all aspects of the exchange will be determined by maintaining a focus on the long-term benefits that are expected to accrue. Day (2000:25) presents his Relationship Spectrum (Figure 2.22) in a linear manner that contains an intermediate position in which he considers value adding exchange takes place, which is broadly analogous with the relational approach described in Section 2.2.2.
Figure 2.22: The Relationship Spectrum Source: Adapted from Day (2000:25)
A slightly different perspective is, however, taken by Narayandas and Rangan (2004:75) who consider that buyer-seller relationships in industrial markets do not neatly bifurcate into relationship and transactional dyads, and suggest that most buyer-seller relationships are characterised by the inclusion of elements of both approaches. Taking an example from the construction sector, Richardson (1972:885) illustrates this more complex interaction, by noting that while individual contracts may be awarded on the basis of
74 competitive tender, the relationship between the parties acquires a degree of stability, both to mitigate the risk associated with the application of specific specialist knowledge and also to permit the development of specifications and designs for mutual advantage. Richardson (1972:887) concludes that:
‘the presence of co-operation is a matter of degree’
A conceptual model of the interaction between collaborative and competitive behaviour is offered by Harwood (2002:339) (Figure 2.23) which is based on organisations, within a customer-supplier dyad, who are engaged in attempts to develop a strategic relationship and who are at the point of attempting to agree terms of trade. Harwood acknowledges that even when the negotiation style is expected to be predominantly collaborative there may still be contentious issues which result in competitiveness and overt bargaining behaviour.
Figure 2.23: Conceptual Model of Business Negotiations Source: Adapted from Harwood (2002:339)
While recognising that the combination of both collaborative and competitive behaviours are simultaneously relevant and applicable to the understanding of buyer-seller interactions, in reviewing both the literature originating from within the broad negotiation school and also the broad operational school it is clear that a considerable gap exits in the knowledge available as to how these approached are combined in practice.
This gap is illustrated by comparing the contrasting views to be found in literature. Emiliana (2003:108) considers that academics generally accept that power-based bargaining represents an immature and antiquated approach, while Bonoma and Johnston (1978:223), Gundlach and Cadotte (1994:516) and Cox (2004a:419) consider that the use of prevailing power
75 asymmetry across a trading dyad is key to shaping the relationship between buyer and seller. Cox (2004a:417) believes that further research in this area will be fruitful if it explains, in detail, what drive the parties involved in specific exchange transactions.
As noted in the discussion of the broad negotiation school in Section 2.1.5, Lax and Sebenius (1986:33) recognise that engaging in problem solving to enlarge the pie (or to achieve operational improvements), does not preclude the use of a more adversarial approach when the pie is divided (to claim commercial benefit). It is similarly recognised by Walton and McKersie (1965:165), as discussed in Section 2.1.5, that by playing the ‘Mixed Game’ it is possible to benefit from the combination of integrative bargaining to establish the maximum total sum available, while relatively hard, distributive bargaining may be used to claim the maximum share. The outline of the Walton and McKersie (1965:164) complex strategy model is replicated in Figure 2.24.
Figure 2.24: The Four Complex Bargaining Strategies Source: Adapted from Walton and McKersie (1965:164)
As previously discussed in Section 2.2.2.2 a similar approach is considered by Cox et al. (2004:79) in their development of the Four Basic Relationship Management Styles, as summarised in Figure 2.25.
76 Figure 2.25: The Four Basic Relationship Management Styles
Source: Cox et al. (2004:79)
Through the literature review conducted, it has been established that insufficient empirical research has been conducted which has taken as a premise the identified separation of operational and commercial outcomes in the manner identified by Walton and McKersie (1965:164), Lax and Sebenius (1986:33), Cox et al. (2004:79) and Meehan and Wright (2013:1250).
To summarise, the above discussion identifies two distinct gaps. The first of these gaps relates to the lack of empirical understanding as to the extent of buyers’ endeavour to identify co-operative, operationally focussed, strategies that will deliver outcomes, from which both parties will potentially benefit.
The second gap relates to the lack of empirical understanding as to the degree to which buyers seek to gain unilateral, commercial, advantage through enhancing their relative power position.
Throughout the literature reviewed there are many references to the inherent complexity of the buyer-seller interaction. For example, it was noted in the introduction to the literature review that Campbell (1985:35) considers the interpersonal interactions between buyer and seller to be ‘hard to unravel’
because of their inherent complexity. From within the broad negotiation school, Clyman (1995:48) specifically concludes that both the complexity and the richness of the specific negotiating setting must be understood. The Purchasing Portfolio Management Model derived by Kraljic (1983:111) has acknowledged limitations deriving from the complexity of the dimensions used. In reviewing both the conceptual and empirically derived models of the buyer-seller relationships (Section 2.3.3), it is recognised that there is
77 inherent complexity in buyer-seller interactions because they involve very many attributes which can impact the relationships. It was also noted in the Review of Previous Empirical Studies (Section 2.4.3), that the most frequently cited concern, especially by those who have adopted a positivist perspective, was that because of the complexity of the buyer-seller interaction, there may be significant influence from factors that do not affect the variables and constants under evaluation. Such potential is recognised by Ganeson (1994:14), Mohr and Spekman (1994:147), Kumar, Scheer and Steenkamp (1995:353), Carr and Pearson (1999:515), Cannon and Perreault (1999:447), Jap (1999:467), Leonidou, Palihawadana and Theododiou (2006:166), Plank, Reid and Newell (2007:62) and Ryu, Park and Min (2007:1231). The literature review has recognised that much of the research conducted has attempted to abstract away complexity, rather than adopting research protocols that are able to embrace the intricacy that is present. The third gap, therefore, is that of the need to develop research methods capable of dealing with the inherent complexity associated with the buyer-seller interaction.