Chapter 5: Managing Interpartner Negotiations In Strategic Alliances

The purpose of this chapter is to propose a strategic framework for understanding interpartner negotiation dynamics in alliances. We define interpartner negotiations as a process of reconciling and integrating the interests of the partners in an alliance, and consider four types of interpartner negotiation strategies— problem solving, contending, yielding, and compromising—and then discuss the dynamics of these negotiation strategies in the formation, operation, and outcome stages of alliance development. The framework makes clear that the four types of interpartner negotiation strategies identified in the chapter need to be appreciated as having differential impact at each stage of alliance development. As interpartner negotiations occur at all stages of alliance evolution, future research may seek to empirically assess the impact of different interpartner negotiation strategies. We also discuss how alliance managers can deploy effective interpartner negotiation strategies for achieving alliance objectives at each of the three developmental stages. The chapter responds to the need of managers with alliance responsibilities for a framework to help identify and exploit the most effective ways to conduct interpartner negotiations in alliances for productive interactions at different alliance development stages.