For understanding bargaining and negotiations and help to merge economic considerations with psychological variables.
A. Contingent rewards make a difference in negotiation outcomes. The reward practices that exist today in purchasing put the buying organization at a distinct disadvantage.
ฺB. Purchasing organization need to be aware of the salesperson’s reward system. A purchasing representative also can take advantage of the seller’s own motivation to maximize some element of the negotiation by seeking important concessions on other elements of the negotiation.
C. Management must develop stronger contingencies to encourage purchasing effectiveness. This can be done by concentrating on the area of purchasing that are most critical, recognizing the most important variables involved in the negotiations for any given purchase, and improving performance appraisal process to reflect purchasing effectiveness in relation to the reward system.