Renegotiations – empirical analysis of impacts on business relationships

Purpose Renegotiations not only promise an economically relevant improvement of the original negotiation outcome for the communicator of the demand but also imply a potential threat to the business relationship. The purpose of this paper is to examine the impact of renegotiations in detail and to provide practical implications for the optimal usage of renegotiations by analyzing potential renegotiation strategies. Design/methodology/approach Structural equation modelling was used to analyze the data of 255 negotiation experts collected via a standardized online questionnaire. Findings Social psychological outcome of renegotiations has the most relevant impact on relationship continuity (RC). The impact of economic outcomes is wholly mediated by the social psychological outcome. Regarding the use of different renegotiation strategies, other-oriented strategies and direct communication are most successful, whereas self-oriented strategies correlate negatively with all results. Research limitations/implications The study’s sample is drawn from Germany, which requires careful consideration of the results’ generalizability. Practical implications When demanding renegotiation, practitioners should apply strategies characterized by other-orientation and direct communication to increase the probability of RC. For the sake of the business relationship, self-oriented strategies should be avoided. Originality/value This paper presents the first detailed analysis of the impact of renegotiations on business relationships and investigates the effects of different renegotiation strategies on renegotiation outcomes and RC; hence, it is of great value for practical usage and may serve as a stepping stone for further research.