From Supply Chains to Supply Ecosystems: Implications for Strategic Sourcing Research and Practice

Traditionally, sourcing decisions such as what to buy and from whom to buy it were viewed as clerical in nature. Today, however, many executives view sourcing decisions as strategic and these decisions are being made from more prominent positions within firms. Indeed, over time more companies are embracing the concept of strategic sourcing—making acquisition decisions with the intent of creating value and achieving a competitive advantage. In this article, we introduce the Special Topic Forum articles on strategic sourcing and performance. Each offers important implications for strategic sourcing research and practice. An overall implication is that some traditional supply chains appear to be giving way to supply ecosystems, which represent a set of interdependent and coordinated organizations that share common adaptive challenges and that collectively shape the creation and nurturing of a sourcing base that contributes to competitive advantage and superior performance. We offer several theoretical perspectives that hold promise for explaining supply ecosystem functioning and outcomes. In terms of practice, firms need to adapt their strategic sourcing to this evolution or run the risk of being weakened.     

Trends in Service Sourcing Practices

This paper identifies 12 current trends in sourcing practices in general and explores whether these trends are relevant for service sourcing in particular. Based on interviews with sourcing managers, it is, for example, concluded that service sourcing is becoming more systematic, formalized, and globalized with greater demands for trained staff, high-tech tools and focus on CSR. The authors have contributed equally to the article and appear in alphabetical order. The authors would like to express their gratitude to the respondents who made the study possible.     

Computer-supported cooperative negotiations

This article describes an environment for interactive negotiations based on current and emerging information technology. Over the past few years a suite of methods, tools, and techniques have emerged which promise to revolutionize the negotiations planning and decision-making processes. Some of these technologies include collaborative computing, electronic publishing, intelligent systems, and networked communications—all supported by a network of processors, applications, and data bases. This article explores these opportunities by examining how the methods, tools, and techniques might all combine to facilitate “computer-supported cooperative negotiations.”     

Analytical Support to Negotiations: An Empirical Assessment

Twenty-three cases of international negotiation are analyzed and compared to better understand the role of analytical and informational tools in supporting practical negotiators. For each case, data were gathered through interviews with Austrian diplomats on the type and amount of analytical support provided, associated bureaucratic support, and problems encountered, along with a host of key factors about the case itself-the issues, situation, strategies, process, structures, and outcomes. These data were coded and analyzed statistically. It was found that most analytical support is qualitative in nature and can be categorized as information organizing tools, comparison methods and creativity techniques; economic negotiations, in particular, tended to be supported more by quantitative methods, including forecasting and statistical models. Analytical support is particularly important to understand own and other side positions and strategies and to bolster complex negotiations that require issue packaging. A generational gap between senior and mid-level diplomats emerged: junior practitioners expressed a greater interest in analytical support tools. In general, the application of analytical support was perceived positively among practitioners and was correlated with the achievement of treaties and comprehensive solutions. These findings suggest that there needs to be greater investment in developing and providing practical analytical support to negotiators, more supporting infrastructure to facilitate the use of these techniques, and increased training opportunities.     

On automated e‐business negotiations: Goal,policy, strategy,and plans of decision and action

In recent years, there has been increasing interest in automated e‐business negotiations. The automation of negotiation requires a decision model to capture the negotiation knowledge of policymakers and negotiation experts so that the decision‐making process can be carried out automatically. Current research on automated e‐business negotiations has focused on defining low‐level tactics (or negotiation rules) so that automated negotiation systems can carry out automated negotiation processes. These low‐level tactics are usually defined from a technical perspective, not from a business perspective. There is a gap between high‐level business negotiation goals and low‐level tactics. In this article, we distinguish the concepts of negotiation context, negotiation goals, negotiation strategy, and negotiation tactics and introduce a formal decision model to show the relations among these concepts. We show how high‐level negotiation goals can be formally mapped to low‐level tactics that can be used to affect the behavior of a negotiation system during the negotiation process. In business, a business organization faces different negotiation situations (or contexts) and determines different sets of goals for different negotiation contexts. In our decision model, a business policymaker sets negotiation goals from different perspectives, which are called goal dimensions. A negotiation policy is a functional mapping from a negotiation context to some quantitative measures (or goal values) for the goal dimensions to express how competitive the policymaker wants to reach that set of goals. A negotiation expert who has the experience and expertise to conduct negotiations would define the negotiation strategies needed for reaching the negotiation goals. Formally, a negotiation strategy is a functional mapping from a set of goal values to a set of decision‐action rules that implement negotiation tactics. The selected decision‐action rules can then be used to control the execution of an automated negotiation system, which conducts a negotiation on behalf of a business organization.     

E-Alliance: A Negotiation Infrastructure for Virtual Alliances

In this paper we provide an overview of E-Alliance, a software infrastructure we are developing to support negotiation activities in concurrent inter-organisational alliances. Our baseline is to offer a collaboration framework which fully preserves the autonomy of organisations grouped in an alliance, while enabling concurrency of their activities, flexibility of their negotiations and dynamic evolution of their environment. We propose to support negotiation between the partners within such alliances by combining different technologies, such as software engineering techniques, middleware-level coordination facilities and multiagent systems support. We present our approach in the context of a sample scenario of an alliance where partners are printshops capable of (out/in) sourcing print jobs among them to better accomplish their customers' requests.     

Negotiation Engineering: A Quantitative Problem-Solving Approach to Negotiation

Although they are often complex, negotiations are practical problems that can be solved with the aid of specialized, ad hoc methods. We introduce a problem-solving approach to difficult negotiations inspired by the established solution-oriented discipline of engineering, which we term “Negotiation Engineering”. It is based on the reduction of problems to their most formal structures and the heuristic application of quantitative methods for problem solving. We argue that mathematical language in negotiations helps to increase logical accuracy in negotiation analysis and allows for the use of a variety of existing helpful mathematical tools to achieve a negotiation agreement. We demonstrate the practicability and usefulness of this approach using four case studies in the area of international diplomacy in which Negotiation Engineering was applied to achieve negotiation solutions.     

An Experimental Investigation of Virtual Negotiations with Dynamic Plots

Advanced information and communications technologies provide the basis for virtual negotiations where competitors continuously alter their assignments in real-time in response to market changes. Dynamic plots, which depict the competitors' possible profits and hints for how to improve them, provide a way to support these types of negotiation settings. This research reports on an experimental assessment of dynamic plots for visual interactive negotiations. Dynamic plots are compared to an alternative dynamic method of real-time negotiation support using selected conflict situations to test five hypotheses. The results of the laboratory assessment provide evidence for the hypotheses that dynamic plots stimulate negotiations, provide effective support to reach efficient, system optimal, and equitable solutions, and are well received as negotiation tools in real-time settings.     

Goals,Conflict, Politics,and Performance of Cross-Functional Sourcing Teams—Results from a Social Team Experiment

Strategic sourcing is carried out in cross-functional teams to account for the complexity and multidimensionality of modern procurement decisions. However, such teams not only enable the integration of distinct interdependent skill sets and viewpoints, they are also characterized by functional goal misalignment. We focus on the resulting behavioral challenges, namely conflict and politics, and their effects on team satisfaction and rationality, which ultimately leads to observed outcomes. We test our hypotheses in a structural equation model based on data gathered from 468 participants in a social team experiment. We find a mediated effect of goal misalignment on political behavior via two types of team conflict. Political behavior, in turn, obstructs rational team sourcing decisions and reduces team members’ satisfaction with the process. Our study indicates that behavioral challenges in the framework of Organizational Buying Behavior not only co-occur but affect each other via mediation. Hence, managers need to closely monitor the escalation chains’ origin, task conflict, which constitutes a necessary condition for further emotional dissent and political biasing. We contribute to the understanding of the challenges in cross-functional sourcing teams, thereby providing advice to executives in their pursuit to rationalize and improve sourcing team decisions and their outcomes.     

Price equivalent tariffs and quotas under a domestic monopoly

Price-equivalent import tariffs and quotas are compared when domestic production is controlled by a monopolist, say an agricultural marketing board with the power to restrict domestic supply, under endogenous terms of trade. Welfare comparisons boil down to sourcing costs comparisons. Quotas tend to dominate at high domestic prices, ad valorem tariffs at intermediate prices and specific tariffs at low domestic prices. Welfare maxima are achieved with more restrictive policies than under perfect competition. These results rationalize separate negotiations for sensitive products in the Doha Round and the setting of tariff-rate quotas that mimic import quotas for these products. Finally, in ascertaining the robustness of our policy ranking to the choice of variable anchoring the comparisons, we found that specific tariffs unambiguously dominate ad valorem tariffs and quotas when government revenue or imports anchor the comparisons. However, some quota revenues and import levels cannot be achieved with tariffs.     

Comparative Analysis of Text Data in Successful Face-to-Face and Electronic Negotiations

Various combination of Natural Language Processing and Machine Learning methods offer ample opportunities wherever texts are an important element of an application or a research area. Such methods discover patterns and regularities in the data, seek generalization and in effect learn new knowledge. We have employed such methods in learning from a large amount of textual data. Our application is electronic negotiations. The genre of texts found in electronic negotiations may seem limited. It is an important research question whether our methods and findings apply equally well to texts that come from face-to-face negotiations. In order to confirm such more general applicability, we have analyzed comparable collections of texts from electronic and face-to-face negotiations. We present our findings on the extent of similarity between these two related but distinct genres. In this study we have analyzed similarities in the text data of electronic and face-to-face negotiations. The results show that – in certain conditions – vocabulary richness, language complexity and text predictability are similar.This is an expanded version of a paper published in the Proceedings of FINEXIN 2005 (Workshop on the Analysis of Formal and Informal Information Exchange during Negotiations), 31–42, Ottawa, Canada, May 2005.     

The integrated use of social media,digital, and traditional communication tools in the B2B sales process of international SMEs

Social media and digital tools are gradually changing the way firms market themselves. Understanding how these communication tools are used by sales functions within business-to-business (B2B) markets could clarify the dynamics underpinning the sales process in an increasingly technology-mediated world. This paper explores how social media, digital, and traditional sales communication tools are leveraged during the three main phases of the B2B sales process within international SMEs.The article’s grounded-theory approach illustrates that social media can be particularly helpful in engaging international prospects. Digital communication tools seem to be most prevalent in the persuasion phase, whereas more traditional communication tools still prevail in customer relationship management. However, there seem to be some important potential boundary conditions, including relationship culture, location proximity, technology innovation/resources, and strategic importance of the customer that affect the way international SMEs use different communication tools during a sales process. We develop a framework for understanding the B2B sales process flow with sales communication tools included for international SMEs.     

Reform of the EU Sugar Market

After years of negotiations, the European Union finally reformed its sugar market in November 2005. Unilateral trade concessions, ongoing WTO negotiations and internal pressures were pushing the EU for a change. The following short article highlights some of the key features of the reform and the implications for EU member countries, world sugar markets and countries that currently enjoy preferential access to the EU market.      

The antecedents of renegotiations in practice—an exploratory analysis

In order to support business negotiations with electronic tools effectively, a deep understanding of real-life business negotiations is required. Comparing the settings usually applied in negotiation experiments with the every-day experiences of business negotiators, it can be stated that the work of business negotiators is much more iterative and embedded. Renegotiations appear on a regular basis. This observation stresses the importance of flawless communication in business negotiations and raises questions regarding the reasons for renegotiations and the role of information technology in this context. This paper investigates data gathered in a 2005 survey study in order to identify the context factors that drive B2B renegotiations using a preliminary regression model. The rules of interaction, task complexity, and business relationship are found to be significant predictors of the renegotiation likelihood while media richness does not impact the likelihood of renegotiations in practice.     

Disentangling the effects of organizational capabilities, innovation and firm size on SME sales growth

This paper focuses on certain drivers of SME sales growth related to knowledge and innovation. Building on the dynamic capabilities literature, we test whether two organizational capabilities (external sourcing and employee involvement in renewal activities) predict sales growth, and if so, whether such effects are mediated by process and/or product innovation. Based on survey data from a panel study of Dutch SMEs, and controlling for several firm characteristics (firm size, sector, age and family business), we conclude that external sourcing has direct effects on both product and process innovation, with an indirect effect (mediated by process innovation) on sales growth. In line with our hypothesis development, we also find that employee involvement, while positively affecting process innovation, has a negative effect on sales growth. Firm size moderates the effects of two of the variables (external sourcing and product innovation) on sales growth, with more positive effects found for the smallest firms, results supporting the nimbleness (versus resource-based) view.     

Dynamics of channel negotiations: Contention and reciprocity

We examine the dynamics of channel negotiations in terms of two useful notions: contention and reciprocity. Contention refers to the degree of overall tension between bargaining opponents. It expresses itself in all areas relevant to the negotiation process: economics, communications, and perceptions. In fact, level of contention is a dimension that ties these areas inseparably to each other. Reciprocity is the mechanism through which contention is maintained at the same or comparable levels among bargaining opponents. Reciprocity can be observed in all tactics and perceptions that cause or indicate contention. We examine these notions in two negotiation experiments and establish baseline behaviors in bargaining encounters. © 1993 John Wiley & Sons, Inc.     

中国企业国际采购发展阶段特征的案例分析

随着中国企业国际化的发展,国际采购必将为中国企业国际竞争力的提高与可持续发展作出越来越重要的贡献。国际采购不仅是企业的运作职能,更是企业的战略职能。运作层次国际采购向战略层次国际采购的发展可以划分为不同阶段。本文采用案例研究方法对不同阶段中国企业国际采购的特征进行实证分析。研究结果表明,中国企业国际采购发展的初级阶段主要是追求海外供应的高质量和高技术,随着国际采购阶段的深入,中国企业国际采购能力建设将更为完善,将追求更为多样化的战略利益。中国企业国际采购所面临的硬性成本与外部障碍的重要性下降,软性成本和内部障碍越来越重要。对于国际采购发展程度较高的企业,内部障碍对企业国际采购能力建设提出了更高的要求。但软性成本的阶段性特征表现得不明显,文化与商业习惯差异是比较普遍的软性成本,其他软性成本类型主要与企业特征或行业类型有关。     

Bluffing in labor negotiations: Legal and ethical issues

This paper presents an analysis of bluffing in labor negotiations from legal, economic, and ethical perspectives. It is argued that many forms of bluffing in labor negotiations are legal and economically advantageous, but that they typically constitute lying. Nevertheless it is argued that it is generally morally acceptable to bluff given a typical labor-management relationship where one's negotiating partner is familiar with and most likely employing bluffing tactics him/herself. We also consider whether it is an indictment of our present negotiating practices and our economic system as a whole that, given the harsh realities of the marketplace, bluffing is usually morally acceptable.     

Institutional entrepreneurs' social mobility in organizational fields

This study examines how institutional entrepreneurs with marginalized social positions use institutional change to become more influential members of organizational fields. We analyze how the Rainforest Action Network (RAN) used rhetoric to garner more influence as it altered a key sourcing practice in the retail home-improvement field. Our findings indicate that RAN relied on three rhetorical practices, comprising an encompassing process, to cultivate positive associations between the new sourcing practices and its social position in the field. Overall, by specifying a marginalized entrepreneur's methods for leveraging one type of change to enact another, we enhance theory at the intersection of institutional entrepreneurship, institutional work, and rhetoric.