A review of negotiation outcome:A proposai on deiimitation and subsequentassessment in joint venture negotiationsDra. M. Carmen Saorm-lborra*Universitat de Valencia

AbstractIn this study, we examine the outcomes of negotiationprocesses in joint ventures. Following a review of nego-tiation and strategy literature, we propose that satisfac-tion with the relationship created between partners is themost suitable indicator of negotiation outcome. Thisindicator is analyzed through the use of two parametersor variables: trust and uncertainty. The analysis is thenused to bridge the gap that currently exists in the litera-ture by proposing when a negotiation should be consid-ered successful in joint ventures. One important conclu-sion of our study is that nonagreement should not alwaysbe valued in negative terms as in certain circumstancesit can imply the most advantageous end to a negotiation.The scholarly and applied implications of our findingsare discussed.

JEL classification: Ml9

Keywords: joint venture; negotiation outcome; out-come assessment

ResumeCette etude examine les resultats de la procedure denegociation dans les entreprises communes. Apres unerevue des publications sur la negociation et la strategie,elle montre que la satisfaction que les partenaires tirentde la relation qui existe entre eux est I'indice le plusapproprie du resultat des negociations. Cet indice estanalyse a partir de deux parametres ou variables: laconfiance et Vincertitude. En proposant un cadre pourles negociations reussies, Vanalyse permet de comblerune lacune dans les publications actuelles. L'une desconclusions majeures de I'etude est que le desaccord nedoit pas toujours etre evalue negativement puisque danscertaines situations, il peut etre I'issu le plus souhai-table. Nous terminons par un examen des implicationsacademiques et pratiques de Vetude.

Mots-cles : entreprise commune; resultat de negocia-tion; evaluation du resultat.

A review of negotiation literature shows that theoutcome of negotiation processes has been definedusing a wide variety of indicators. Possible outcomesinclude an agreement, an impasse, a nonagreement, amutually satisfactory agreement for both sides, anagreement that represents victory for only one side or anagreement in which both sides have, to some extent,modified some of their initial objectives (De Dreu, Har-inck, & Van Vianen, 1999). The existence of such adiversity of outcomes calls for the need to questionwhether a particular outcome can be deemed as a suc-cess or failure with a view to guiding negotiation behav-iour towards a desired result. In an attempt to answerthis question, we have adopted a contingent, situational

*Dra. M. Cannen Saorin-Iborra, Departamento de Direccion deEmpresas. Juan Jos6 Renau Piqueras Universitat de Valencia Avda.Tarongers, s/n 46022 Valencia (Spain), email: Carmen.Saorin@uv.es

© ASAC 2006 237

focus in this study, centring on joint ventures as the con-text for our analysis.

The negotiation process in joint ventures is consid-ered to be central to an adequate implementation of strat-egy (Inkpen & Currall, 2004; Menguzzato, 1992; Reus& Ritchie III, 2004; Valdes, 1998). For example, Valdesstated that the processes of negotiation are the culmina-tion of all previous stages and a satisfactory basis shouldbe laid down for ensuring positive results in the future(p. 199). Altematively, as expressed by Menguzzato, theprocess not only defines the formal content of an agree-ment, but involves situations in which the different par-ties become acquainted, creating expectations on thefuture behaviour of business partners and a relationshipof trust between them. More recently, Reus and Ritchiem focused their attentions on three main journals in theirreview of literature on intemational joint ventures in thelast 15 years. They point out that negotiation in the for-

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mation of partnerships plays a critical role in influencinglater performance. According to Inkpen and Currall (p.586), "negotiating and forming a joint venture initiates adynamic relationship that must evolve if it is to be suc-cessful". One may therefore conclude that negotiationoutcome can be considered as the nexus between the for-mulation and implementation of strategy. Strategyimplementation will be a more or less conflictive affairdepending on the outcome of the negotiation process, asit represents and determines the basis of the subsequentfunctioning of the partnership. Analysing the outcome ofa negotiation process for joint ventures could be crucialdue to its implications for the correct functioning of theagreement.

Strategy literature points out the importance ofnegotiation outcome on the implementation and perfor-mance of joint ventures. However, "it is unclear whatprecisely constitutes successful negotiations" (Reus &Ritchie III, 2004, p. 381). In fact, in the review carriedout by these authors, they found just six articles devotedto joint venture negotiations in the three intemationallyrenowned joumals analyzed from the past 15 years.However, none of them tackled the question of preciselywhen a negotiation can be regarded as a success.

The objective of this article is therefore to bridge thegaps we have found in the existing literature and, basedon this review, provide arguments for a proposal on whatshould be considered the most suitable indicator fordefming the outcome of joint venture negotiations. Bear-ing in mind the importance of a stable relationshipbetween partners in long-term joint ventures, we proposethe perception of satisfaction, particularly with regard tothe relationship itself, as the indicator to be employed forthe outcome of joint venture negotiations. Satisfactionrepresents a major step towards a long-term commit-ment, thereby enabling the correct implementation ofstrategy and the desired performance. This consequentlyallows us to evaluate the outcome of the process (successor failure) and serves as a guide to company managerswho are frequently faced with this type of negotiationprocess. In this way, the study contributes to the existingliterature, not only due to the lack of studies currentlyavailable on joint venture negotiations, but also by tak-ing up the challenge of analysing and assessing the out-come of these processes.

Review of the Literature:Indicators of Negotiation Outcome

As the analysis of the literature suggests, severaldifferent indicators have been used in reference to nego-tiation outcome. Accordingly, evaluation appears to be asomewhat complex task. When can we consider negoti-

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ation to have been a success or failure in the face of suchdiverse ways of representing negotiation outcome?

We can observe the distinction made between twogeneral outcome situations: reaching an agreement andnot reaching an agreement (Lax & Sebenius, 1986).'Altematively, other authors such as Camevale, O'Con-nor, and McCusker (1993) have categorized these situa-tions into a greater number of possibilities by suggestingfour different possible outcome situations: nonagree-ment, the win Aose situation, compromise, and thewin/win situation.

Moreover, if we look at how empirical studies havemeasured negotiation outcome, the diversity of criteriaadopted by researchers increases (see Table 1). It is clearthat measuring negotiation outcomes is no easy task(Graham, Mintu, & Rodgers, 1994; Zartman, 1989).Thus, two more criteria are added to those of reaching ornot reaching an agreement: economic profit and satisfac-tion. The latter concept is understood to mean "a positiveaffective state resulting from the appraisal of all aspectsof a firm's working relationship with another firm"(Anderson & Narus, 1984, p. 66). In terms of self-regu-lation, satisfaction is considered as the reflection of theinexistence of discrepancy in relation to the standard setby the negotiator (Brett & Okumura, 1998).^

As can be observed in Table 1, profit has been used,above all, in laboratory experiments focusing on com-mercial negotiations. The criterion of satisfactionappears as an outcome indicator, regardless of the typeof negotiation being analyzed. Indeed, the satisfactioncriterion has been used not only in work of an interorga-nizational nature, but also in intraorganizational studies,as well as for laboratory experiments.

With regard to the profit indicator, a clear evolutioncan be observed in its use in the literature. Althoughsome studies in the 1980s focused their attentions onindividual profit as the best indicator of outcome in bilat-eral business negotiations (e.g., Graham, 1983), towardsthe end of the 1990s other studies proposed the analysisof joint benefit as being more appropriate (e.g., Brett &Okumura, 1998; Pinkley & Northcraft, 1994). However,in relation to these studies, it should be stated that theydo not justify the use of the chosen criteria (Brett & Oku-mura; Graham; Pinkley & Northcraft) and one canassume that this is due to previous applications in simi-lar studies.

During the last two decades, though, there has beena proliferation of studies that simultaneously use bothprofit and satisfaction as criteria, for they are not con-sidered mutually exclusive indicators of outcome. Justi-fication for this simultaneous use differs and has evolvedfrom amongst the studies analyzed herein.

For example, in the work of Campbell, Graham,Jolibert, and Meissner (1988), Graham, Kim, Lin, and

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Table 1Negotiation Outcome Measurement Criteria Applied in the Empirical Studies

Negotiation type Author(s) (year) Study type Study characteristics

Outcome concept: Agreement/Non-Agreement

Jnterorganizational:Joint venture

Interorganizational:Joint venture

Interorganizational:Acquisition

Interorganizational:Acquisition

Laboratory experiment:commercial negotiation

Laboratory experiment:commercial negotiation

Laboratory experiment:commercial negotiation

Laboratory experiment:commercial negotiation

Laboratory experiment:commercial negotiation

Laboratory experiment:commercial negotiation

Weiss (1987) Qualitative Case:• GM-ToyotaInterviews to key participants in the negotiation process

Weiss (1997) Qualitative Cases:• GM-Toyota• Ford-ToyotaInterviews to key participants in the negotiation process

Commons (1985) Qualitative Case:• Natomas-DiamondInterviews to key participants in the negotiation process

Sebenius (1998) Qualitative Cases:• Acquisition negotiations by SMIInterview to the Board manager of SMI

Outcome concept: Profit

Graham (1983) Qualitative / - Simulation of bilateral negotiations between 44 Japan-Quantitative ese businessmen, 50 Brazilian and 38 American

- Correlations, Variance, Regression

Brett & Okumura Qualitative / - Simulation of bilateral negotiations: 30 negotiations(1998) Quantitative USA/Japan, 47 USA/USA and 18 Japan/Japan

- Anova, Manova, Correlations

Outcome concept: Profit + Satisfaction

Campbell, Graham, Qualitative / - Simulation of bilateral negotiations between 48 FrenchJolibert & Meissner Quantitative businessmen, 44 German, 44 British and 138 American(1988) - Correlations, Means

Graham, Kim, Lin Qualitative /& Robinson (1988) Quantitative

Adler, Brahm &Graham (1992)

Qualitative /Quantitative

- Simulation of bilateral negotiations with 138 Americanbusinessmen, 54 Chinese, 42 Japanese and 38 Korean

• Anova, Correlations

• Simulations of bilateral negotiations between40 Chinese businessmen and American

• Correlations

Graham, Mintu & Qualitative / — Simulations of bilateral commercial negotiationsRodgers (1994) Quantitative between 700 businessmen from 11 cultures

- Correlations, PLS, Regression

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Table 1 —

Negotiation

continued

type Author(s) (year) Study

Outcome concept:

type

Profit H

Study characteristics

h Satisfaction — continued

Laboratory experiment:Sales distributionnegotiation

Laboratory experiment:commercial negotiation

Interorganizational:a takeoverLaboratory experiment:take overs

Interorganizational:Exporter-Importer

Laboratory experiment:commercial negotiation

Pinkley & Qualitative /Northcraft (1994) Quantitative

Maxwell, Nye & Qualitative /Maxwell (1999) Quantitative

Kristensen (2000) Qualitative /Quantitative

Shankarmahesh,Ford & LaTour(2004)

Qualitative /Quantitative

Novemsky & Qualitative /Schweitzer (2004) Quantitative

• Simulation of bilateral commercial negotiationsbetween 150 MBA students

• Manova, Anova, Regression

• Simulation of bilateral commercial negotiationsbetween students

• Correlations, Anova

- Interviews with two head negotiators for a buying andselling company in a Swedish takeover

- Simulation of takeovers with 88 graduate students ofbusiness administration

- Anova, Regression

- Interviews with export sales executives andimporters

- Questionnaires (121 respondents)- Correlation, Factor analysis

- 5 simulations of bilateral commercial negotiations withundergraduate and MBA students

- Anova, Regression

Outcome concept: Satisfaction

Interorganizational:Joint venture

Walsh, Wang &Xin (1999)

Qualitative Interviews to managers of joint ventures USA/China

Outcome concept: Satisfaction of Interests

Interorganizational

Interorganizational

Interorganizational

Interorganizational

Tung (1982)

Weiss (1990)

Brouthers &Bamossy (1997)

Yuan (1998)

Quantitative - Survey to managers from 138 American companieswith businesses in China

- T-Tests, Factorial, Regression

Qualitative Case:• IBM-Mexican governmentInterviews to key participants in the negotiation process

Qualitative 8 CasesInterviews to managers from West Europe companiesand Eastern and Central Europe companies

Qualitative Case:• SC-CCInterviews to key participants in the negotiation process

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Table 1 —

Negotiation

continued

type Author(s) (year)

Outcome

Study type

concept: Satisfaction

Study characteristics

of Interests — continued

Interorganizational:Joint ventures

Intraorganizational(interdepartmental)

Intraorganizational

Yan & Gray (1994) Qualitative

Xie, Song & QuantitativeStringfellow (1998)

Kozan & Ergin(1999)

Quantitative

Cases:• 4 joint ventures USA/ChinaInterviews to key participants in the negotiation process

- Survey to 300 companies from Hong- Kong and 500companies from Japan, USA and United Kingdom

- Multiple Regression multiple (OLS)

- Survey to HHRR manager and all the personnel from40 public and private companies from Ankara (26) andother cities (the rest)

- Means

Outcome concept: Satisfaction

Interorganizational:Collaborationagreements

Anderson & Narus Qualitative /(1990) Quantitative

Laboratory experiment: Stuhlmacher & Qualitative /Labour negotiation Champagne (2000) Quantitative

Laboratory experiment: O'Connor &Labour negotiation Arnold (2001)

Intraorganizational

Intraorganizational

Intraorganizational

Ury, Brett &Goldberg (1988)

Dyer & Song(1997)

Tjosvold,Morishima &Belsheim (1999)

Qualitative /Quantitative

Qualitative

Qualitative /Quantitative

Qualitative /Quantitative

- Initial interviews to Board managers for the surveydesign sent to 730 distributors and 635 manufacturers

- LISREL

- Simulation with 116 students from the North-easternand Midwestern university

- Correlations, Means, Typical deviations

- Simulation of a bilateral negotiation with students- Correlations, Regressions, Chow Test

Case:• Mines Caney CreekInterviews to managers and trade unions

- Interviews to some managers for the survey design(sample of 290 American managers and 653 Japanese)

- Manova, Duncan Test

- Interviews to 39 managers and 29 workers who weremembers of a trade union of a forestry productscompany from Canada

- Regressions

Outcome concept: Interests Satisfaction ± Relationship Satisfaction

Interorganizational:Joint venture

Yan & Gray (2001) Qualitative / - Interviews for the survey design sent to 90 jointQuantitative ventures USA/China

- Frequencies, Correlations, Multivariable analysis,Manova

Laboratory experiment: Butler (1999)Resources distributionnegotiation

Qualitative / - Simulation of bilateral negotiations with 324 studentsQuantitative - Logic, Regression

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Robinson (1988), and Graham et al. (1994) comes theidea of using the criteria of profit and satisfaction inresponse to the need to differentiate between seller andbuyer. In those studies it is maintained that, although themajority of laboratory experiments carried out from asocial psychological perspective have opted either to useprofit as a criterion (individual or joint) or satisfaction, itis the role played by the negotiator that justifies thischoice. Thus, they consider that if the negotiator acts asthe seller, profit should be used. If, on the other hand,their role is that of a buyer, it is more appropriate to usesatisfaction as the outcome indicator. Both criteria areconsidered to be indicators of the length of time the rela-tionship will last.

It must be added, however, that other arguments canbe found on the subject. Adler, Brahm, and Graham(1992) claim that the use of both criteria is more suitablebecause negotiators, apart from looking to maximizeprofit, attempt to keep the other negotiator satisfied. Thisstance is advocated by such relevant authors in negotia-tion literature as Fisher, Ury, and Paton (1983) and Laxand Sebenius (1986).

It is within this framework that most recent studieshave been developed, although we have found that thesatisfaction indicator has gained even more importancethan that of profit. These studies also indicate the con-cept of equity as a central aspect of the analysis of nego-tiation outcome as a prelude to perceived satisfaction onboth of sides of the negotiation. Amongst others, we cancite the example of research carried out by Kristensen(2000), Maxwell, Nye, and Maxwell (1999), andNovemsky and Schweitzer (2004).

Maxwell et al. (1999) showed that, in businessnegotiations, focusing on the perception of equity orfairness when establishing price allows the seller toincrease the satisfaction perceived on the part of thebuyer whilst not incurring a negative effect on profit,thus creating satisfaction on both sides. Equity allowsthe buyer's expectations to be modified.

As indicated by Kristensen (2000), the key factor inbuyer/seller negotiations is the perception of equity inthe established price as a way of achieving satisfactionfor all parties. He claims that this will provide the oppor-tunity for a long-lasting future relationship between theentities. However, this author emphasizes the fact thatfairness is a perception. The information possessed byeach side in negotiation is essential when making anevaluation of fairness and consequently plays a majorrole in shaping their perception of satisfaction.

This last concept is central to a recent study byNovemsky and Schweitzer (2004). The authors analyzethe effects on perceived equity and the subsequent satis-faction of two types of social comparison: one is anintemal social comparison and the other extemal. The

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first of these refers to a comparison with the other sidesof a negotiation process (i.e., seller compared to buyer),while the second implies a comparison with other agentsthat are extemal to the negotiation process (i.e., sellercompared with other sellers). They attempt to show that,despite being faced with what can objectively be calledthe same outcome, negotiators' perceived satisfactioncould vary according to the type of comparison beingmade. While an intemal social comparison maintains adirectly proportional relationship with the perception ofsatisfaction, an extemal comparison implies an inverse-ly proportional relationship. This clearly shows the diffi-culties involved in understanding the determining fac-tors of negotiators' perceived satisfaction as it relies onsuch a variety of factors: an idea we will discuss furtheron.

At this point, it can be observed that, although theprofit indicator is still used (thanks in particular to thenature of business negotiations due), it is the satisfactionindicator that has gained greater ground in negotiationliterature. Studies such as that of Ganesan (1993) supportthis claim. Moreover, in accord with the conclusions ofmore recent studies, it would appear that there is no rea-son to support the simultaneous use of the profit and sat-isfaction indicators with regard to the role played by thenegotiator (buyer/seller). We believe that, although theapplication of the profit indicator is important in certainnegotiation situations, there is always a final evaluationof profit in terms of equity and satisfaction. If establish-ing a price in a business negotiation situation falls with-in the negotiation zone (possible agreement zone) and isabove the reservation points set by negotiators and theirbest altematives to a negotiated agreement (Fisher et al.,1983 [BATNAs]), both parties can be expected to per-ceive satisfaction, although the degree of satisfactionmay vary according to the equity perceived by negotia-tors (Munduate & Medina, 2005).

Therefore, it is our view that satisfaction can be con-sidered as a suitable indicator of all negotiation out-comes, despite the fact that its application implies over-coming two main difficulties. The first is content; whatdo we gain satisfaction from? The other lies in percep-tion itself; how and why do we perceive satisfaction?With a view to tackling both questions, we base ourideas on the intersection of negotiation and strategy lit-erature and particularly on existing case studies thatfocus on the processes of joint venture negotiations,which is the context for our analysis.

As an indicator of negotiation outcomes, satisfac-tion brings about even greater confusion as the term canbe used to refer to different concepts. We fmd that someauthors refer to satisfaction in terms of the agreementreached, in other words, satisfaction of interests (e.g.,Brouthers & Bamossy, 1997; Shankarmahesh, Ford, &

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LaTour, 2004; Tung, 1982; Weiss, 1990; Yan & Gray,1994; Yuan, 1998), while other authors consider satis-faction in relation to the amount of trust generatedbetween the separate negotiating parties (e.g., Walsh,Wrang, & Xin, 1999) and, lastly, another group of stud-ies refers to the satisfaction obtained without specifyinghow it is related to the process (e.g.. Dyer & Song, 1997;Tjosvold, Morishima, & Belsheim, 1999; Ury, Brett, &Goldberg, 1988). Equally, there are studies in which thecriteria of satisfaction of interests and satisfaction withrespect to the established relationship are simultaneous-ly applied (e.g., Butler, 1999; Yan & Gray, 2001).

Firstly, the satisfaction of interests has been mainlyused in studies of an interorganizational nature (e.g.,Brouthers & Bamossy, 1997; Tung, 1982; Weiss, 1990;Yan & Gray, 1994; Yuan, 1998), although intraorganiza-tional studies have also appeared (e.g., Kozan & Ergin,1999; Xie, Song, & Stringfellow, 1998).

Yan and Gray (1994) maintain that, in the case ofjoint ventures, objective measurements of performanceor outcome are not particularly adequate. They concludethat it is preferable to use subjective measurements suchas satisfaction of interests, as these are related to theexpectancies generated by the creation of joint ventures.

However, the study by Kozan and Ergin (1999) isthe only one that suggests that the use of satisfaction ofinterests has important limitations. They emphasize thefact that satisfaction is a question of perception andtherefore, whether satisfaction exists or not is dependenton each individual.

Secondly, the use of the satisfaction criterion with-out any kind of specification is characteristic in studiesof an intraorganizational nature (e.g.. Dyer & Song,1997; Tjosvold et al., 1999; Ury et al., 1988) althoughthis trait can also be found in some interorganizationalstudies (e.g., Anderson & Narus, 1990) and in some lab-oratory experiments (e.g., O'Connor & Arnold, 2001;Stuhlmacherr & Champagne, 2000).

Finally, the criterion of satisfaction with regard torelationship has been used as a measurement of negotia-tion outcome both as a single criterion (Walsh et al.,1999) and in conjunction with that of the satisfaction ofinterests (Butler, 1999; Yan & Gray, 2001). Indeed, itunderlines the importance of establishing a relationshipof trust between negotiating parties whose intention it isto create a long-term relationship. For this reason and forthis type of negotiation, it can be stated that establishinga relationship of trust is a good indicator of the outcome.It is not only essential to perceive satisfaction on theagreement reached but also on the kind of relationshipthe negotiators manage to create.

Independently of which aspect provides satisfac-tion, there is a consensus both in strategy and negotiationliterature on the direct relation that exists between satis-

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faction and the possibility of maintaining long-term, sta-ble relationships between partners (Munduate & Medi-na, 2005). It is suggested that the perception of satisfac-tion avoids the constant repetition of conflicts at a laterstage and makes it easier to resolve any conflict thatmight appear. As an example, in their well-known intra-organizational study, Ury et al. (1988) showed that satis-faction has an effect on long-lasting relationships, whichreduces the chances of incurring repeated disputes andthe accompanying increase in costs of controlling thefulfilment of the contract and renegotiations. In theinterorganizational field, and in particular in cooperationagreements. Ring and Van de Ven (1994) emphasize therelevance of satisfaction, obtained via the psychologicalrelationship created, for establishing long-term relation-ships. Kozan and Ergin (1999), also from an interorgani-zational perspective, underline the link that can be estab-lished between satisfaction and the possibility ofcreating a long-lasting agreement, indicating that resolv-ing conflicts should not only be measured through satis-faction, but also by its effect on the length of the rela-tionship in the long term. Along the same lines,Munduate and Medina claim that integrative solutions oroutcomes that entail satisfaction for all negotiating sidesare considered stable and long lasting. Although not allnegotiations are aimed at establishing long-term rela-tionships — and thus this reasoning does not have thesame value for all types of negotiation — it is an essen-tial argument for the case of negotiations in joint ven-tures. This kind of cooperation agreement is associatedwith the creation of a new firm with its own legal iden-tity. This new firm will be responsible for carrying outthe joint activity negotiated by the parties for a stipulat-ed length of time, though this may later be modified.Therefore, in a joint venture negotiation it is crucial toreach an outcome (agreement) that ensures a long last-ing, continuous relationship between the partners. Theoutcome of the negotiation should lay the foundationsfor the correct implementation of the negotiated agree-ment. We believe that negotiation outcomes must allowthe value created by the relationship to be maximized.We propose the criterion of satisfaction as the mostappropriate indicator of negotiation outcome in the caseof joint ventures, not merely because of its frequent usein negotiation literature (Ganesan, 1993), but alsobecause we see that satisfaction connects the negotiatingprocess with the impact of its outcomes. The likelihoodof carrying out a correct implementation of strategy willbe greater when a relationship is based on mutual satis-faction (Menguzzato, 1992; Morosini, 1998; Munduate& Medina,).

As we have previously mentioned, satisfaction canbe related to a variety of aspects due to the nature of per-ception (Kozan & Ergin, 1999; Shankarmahesh et al.,

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2004). In the case of joint ventures, satisfaction withregard to the agreement itself (satisfaction of negotiators'interests) presents certain limitations in its application.On reaching an agreement that implies the fulfilment oftheir interests, negotiating parties will perceive satisfac-tion. In other words, a negotiation outcome situated with-in the zone of possible agreement and which is better thanthe respective BATNAs of all sides is considered to be amutually satisfactory agreement (Fisher et al., 1983; Lax& Sebenius, 1986). However, this seemingly obviousrelationship requires a more complex analysis due to theoccasional difficulties involved in identifying theBATNA itself. A common trap that negotiators often fallinto is that of an unrealistic, overoptimistic stance(Thompson, 2001), where the real BATNA becomes con-fused with the desires of the negotiator. It may also be thecase that the sides are entirely unaware of their BATNAsand thus are irrational in their negotiations (Bazerman &Neale, 1983). Both situations may lead negotiators toaccept or reject an agreement that may not be the bestalternative and therefore leave possible gains on thenegotiating table (Fisher et al; Lax & Sebenius). Theresult is that, despite an initial feeling of satisfaction,there is a high chance of this satisfaction not playing itscrucial role as a prelude to a long-term relationship oncethe real BATNAs come to light after the agreement hasbeen reached. This knowledge may also uncover anydegree of manipulation on the part of one of the sides dur-ing the negotiation as a result of their previous experienceor knowledge of the other's real BATNA, causing themto accept a comparably unfavourable agreement. In sucha case, relations between negotiators would be damagedalong with the subsequent negative effects on satisfactionand commitment to a long-term relationship. It should beremembered that the correct identification of BATNAs isvital for negotiators to establish their negotiation reserva-tion points (Munduate & Medina, 2005).

In joint ventures, firms have expectations on reach-ing an agreement that will serve their interests thatshould be based on BATNAs. According to Altimira(2000), there are two types of BATNAs: (a) altemativesto partners with whom one can negotiate and (b) altema-tive strategies to joint ventures where the same goals canbe achieved.

Due to the difficulty involved in knowing theBATNA of others and the possibility of erroneouslyidentifying one's own, satisfaction of interests does notconstitute a particularly reliable indicator for assessingthe effectiveness of a negotiation process. It should beremembered that, in the case of joint ventures, the nego-tiation outcome constitutes a nexus with the implemen-tation of strategy. It is not possible to talk of a positiveoutcome if it does not truly represent a situation that laterallows the correct implementation of the agreement.

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The satisfaction of interests has a close relationshipwith the perception of equity. Evaluating whether anoutcome is fair in terms of satisfying interests presentstwo challenges. According to Munduate and Medina(2005), the first is that equity is not always a synonymof high joint profits and the second is based on the factthat whether negotiators see an outcome as being fair ornot is more important than the objective distribution ofinterests. Novemsky and Schweitzer (2004) show thatthe subjective assessment of equity and the subsequentperceived satisfaction depends on the type of socialcomparison made. For these authors, the same degree ofsatisfaction is not gained via a comparison with theother negotiating sides (intemal comparison) as is thecase with extemal agents (extemal comparison). Theinfonnation and experience obtained influences theevaluation of the agreement reached and the consequentsatisfaction. This line of thought is supported by thework of Brett, Northcraft, and Pinkley (1999) and Weiss(1990) and Brett, who state that despite the fact that sat-isfaction has been used as an outcome concept in stud-ies focused on joint venture negotiations, it representsan important limitation. The initial interests of the nego-tiating parties can become modified at any point in thenegotiation process as a result of communicative inter-action. Therefore, the evaluation of the degree ofachievement of those interests becomes complex. Ifinterests change, so does the reference point of theirassessment. The interests of negotiating sides in jointventures are related to a series of aspects that character-ize this type of cooperation agreement. Interests existwith regard to contributions to be made in terms of cap-ital and knowledge (of the market, production systems,design, innovation, etc.), delimiting the objective of theagreement, the period of time for the development of thejoint activity, and the distribution of control in thenewly created venture (e.g., Menguzzato, 1992, p. 65 -70). From among these, the distribution of control isconsidered to be one of the most conflictive areas.Depending on the agreement reached, the joint venturewill have a different goveming structure: dominant par-ent joint ventures, shared management ventures, orindependent ventures (Killing, 1983).^ Faced with sucha diversity of interests, we can find numerous negotia-tion outcomes as possible combinations of interestsattained on all parts. Each outcome implies a perceptionof satisfaction according to the identification of BAT-NAs, the zone of possible agreement and the negotia-tion reservation points as we said earlier. Once more wecan observe the difficulty involved in applying satisfac-tion as an indicator of negotiation outcome. One shouldalso take into account other factors that affect the per-ception of satisfaction such as the national and organi-zational culture of negotiators.

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Despite all the limitations described above withregard to the use of satisfaction of interests as an indica-tor of negotiation outcome, this does not imply it shouldbe excluded from the analysis. Instead, we propose thatit should be considered as an indicator of negotiationoutcome of a complementary nature in joint ventures.We see satisfaction obtained from reaching an agreement(interests) as an indicator of negotiation outcome thatdoes not reflect aspects of processes or the developmentof the negotiation as directly as satisfaction with the rela-tionship between partners. Indeed, we consider that evenif they feel satisfied at seeing the expectations of theirinterests come to fruition, any or all sides of the negoti-ation may be unsatisfied with how the negotiation devel-oped and consequently unhappy with the relationshipcreated between the parties that have to work side-by-side in the joint venture after the agreement has beensigned.

We therefore conclude that the most suitable type ofsatisfaction for use as an indicator of negotiation out-come in this analytical context is that which reflects theperception of the relationship created between negotia-tors. Achieving a positive relationship and a long-termcommitment must constitute the main objective for part-ners in joint ventures. Therefore, being satisfied with therelationship created will enable the correct implementa-tion of the agreement and achieve a better performancelater on. According to Luo (2001, p. 179) a close rela-tionship between partners is "a source of enduring com-mitment from each party over time". As stated by Stam-ato (2004), forming a sound relationship with partners ina negotiation is, to a large extent, what allows us toestablish a strong commitment to the agreement enablingqualitative, harmonious implementation.

However, satisfaction with the relationship createdin a negotiation for joint ventures is also an entirely sub-jective indicator of outcome, which we believe should bemade more explicit. To this end, we propose that the rela-tionship can be defined using at least two parameters.

Indicators of Negotiation Outcomes in Joint Ventures:Relationship Satisfaction

As has been previously made clear, the term satis-faction is extremely complex. This complexity can alsobe applied to each of the types of satisfaction mentioned.In this section, we will attempt to delimit the indicator ofnegotiation outcome proposed for joint ventures, that is,the satisfaction with the created relationship. We proposetwo variables for this definition: trust and uncertainty.Both variables have close links with satisfactionobtained in negotiations within a given strategy, as theyenable the attainment of intelligent (mutually satisfacto-

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ry) agreements (Fisher et al., 1983). All relationshipscreated between partners are determined by a level oftrust and a level of uncertainty. Both parameters provideinformation on satisfaction with aspects related to thedevelopment of the negotiation process.

Trust

Fisher et al., (1983) emphasize the importance ofcreating a favourable, trusting relationship betweennegotiating parties in order to reach intelligent agree-ments. For his part, Kaufman (1989) states that tmst pre-dicts the outcome of a negotiation. Along the same linesas these previous ideas, we discover that Raiffa andSebenius (1989) underline the relevance of relationshipsbased on trust for reaching long-lasting agreements innegotiations, an aspect which is of utmost importance inthe case of joint ventures. The more recent study byShankarmahesh et al. (2004) can be cited as an example,as it demonstrates a direct relationship between the exis-tence of trust among the different sides of a negotiationand their perception of satisfaction. These authors con-clude that when the relationship between negotiators isbased on trust, it increases not only the sense giving'* butalso the sense making^, thus enabling greater fiexibilityand reducing perceived conflict. This greater fiexibilityand less perceived, generated confiict are the prelude tothe perception of satisfaction and subsequently providethe possibility of maintaining a long-term relationship.

In the area of interorganizational relations, and moreexactly in that of joint ventures, there exists a consensusof opinion on the importance of creating a relationship ofcommitment and trust during negotiation with the objec-tive of enabling satisfaction on all sides, as well as thesubsequent implementation of the agreement (Arino etal., 2001; Currall & Inkpen, 2002; Demirbag, Weir, &Mizra, 2002; Dyer & Chu, 2000; Escriba, 1999a, b;Inkpen & Currall, 2004; Luo, 2001; Menguzzato, 1992;Parkhe, 1993; Reus & Ritchie III, 2004; Ring & Van deVen, 1994).

Trust has been defined in different ways. We findthat Ring and Van de Ven (1994) consider trust to be ourexpectations of good faith on behalf of the other party aswell as the fulfilment of those expectations. Accordingto Anderson and Narus (1990), trust is the expectation offair negotiations in a situation where opportunism maycreep in. In all negotiations, there are imbalances ofinformation that favour the existence of opportunistbehaviour. Due to this fact, it is argued that a relationshipof trust reduces costs associated with such imbalancesthat are typical of corporate exchanges (Zaheer,McEvily, & Perrone, 1998). In fact, authors such asParkhe (1993) and Ring and Van de Ven maintain (and inthe first case demonstrate) that the psychological rela-

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tionship (trust) created during the negotiation stage ofstrategic alliances replaces the need for laying downcontractual safeguards designed to ensure the subse-quent fulfilment of obligations and conditions agreedduring the process. Research carried out by Escriba(1999a) demonstrates the vital role played by trust in theevolution or implementation of cooperation agreements,thus favouring improvements in performance.

As Inkpen and Currall argue (2004, p. 586), "exten-sive literature examines the role of trust as a key jointventure management issue". (....) "In negotiating a jointventure, initial conditions are created that should supportcontinued collaboration". One of those initial conditions,in their opinion, is trust between the partners. They pointout that alliances remain vulnerable to many types ofdestabilizing factors over their lifespan. In this sense, asan initial condition, trust creates the climate that shapespartner interactions and allows a leaming process tobegin, favouring conflict-solving joint decision-makingand, overall, maintains continuous collaboration. Equal-ly, Demirbag et al. (2002) show that trust between part-ners in joint ventures is a key dimension to understand-ing performance.

Therefore, we can conclude that the creation of trustin negotiations, considered a social component related tothe quality of the relations in joint ventures (Reus &Ritchie III, 2004), favours the perception of satisfaction,which has repercussions on resolving future conflicts byavoiding opportunism, and thus helps to establish andmaintain a long-standing relationship. For this reason,we propose that trust can be considered a suitable vari-able for gauging the chosen indicator of negotiation out-come (satisfaction with the relationship).

Uncertainty

The second variable proposed for defining the rela-tionship created in joint ventures is uncertainty aboutkey aspects related to this type of cooperation agree-ment. Focusing our attention on strategy literature, itwould appear essential for negotiators to conclude theprocess having defined the conditions or main character-istics of the relationship in terms of the contributions tobe made by each party; the moment when the joint ven-ture would begin to function as such; its objective; eachpartner's level of participation in controlling the venture;and even the safeguards to be applied should any of thepartners fail to comply with the stipulations of the agree-ment, among others (Menguzzato, 1992; Morosini,1998). The created relationship should not only be basedon an essential degree of trust but also on a minimumdegree of uncertainty about the basis of the interorgani-zational relationship. Given the very nature of joint ven-tures, it is impossible to foresee all the events that may

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occur later on in the negotiation. This means that anyagreement reached will always be somewhat incomplete(e.g., Menguzzato & Renau, 1995; Urban, 1996; Valdes,1998)*. However, topics that are basic to the relationshipshould indeed be discussed, thereby reducing uncertain-ty as much as possible. Creating a relationship based ontrust and reducing uncertainty as much as possible dur-ing the negotiation process will allow the implementa-tion of the joint venture to start with a certain amount oflong-term stability and orientation. A relationship oftrust and a lesser degree of uncertainty leads to long-term commitment to the relationship on the part of nego-tiators through the perception of greater satisfaction(Anderson & Narus, 1990; Menguzzato, 1992; Morosi-ni, 1998; Saorin, 2004a, b; Zeira & Newburry, 1999)

These ideas also appear in negotiation literaturewith regard to reaching win/win agreements as theobjective of all negotiation, which necessarily impliesperceived trust in relation to the other party and thereduction of uncertainty in expectations, an elementwhich is always present at the start of any negotiationprocess and even more so when it is a question ofinterorganizational relations (Ghauri, 1996; Menguz-zato, 1992; Morosini, 1998; Ury et al., 1988). There-fore, it is considered essential to pay attention to keyareas in order to enable the relationship to functioncorrectly.

Therefore, we propose that outcomes reached injoint venture negotiations be valued according to therelationship established, not only defined by the degreeof trust that exists between the sides concerned, butalso via the degree of uncertainty that still exists withregard to the basis of the relationship. In this way, it isnot only the outcome as such that is being valued butalso, though more indirectly, how the negotiationprocess has been carried out. We see this as being anindicator of how the subsequent implementation ofstrategy will develop in which all sides will have toface unexpected challenges and even conflicts whileunder the umbrella of an orientation towards maintain-ing a long-term commitment.

We are aware that evaluating satisfaction in terms oftrust and uncertainty is not without its difficulties. Forexample, perception will depend upon culture or the typeof negotiated joint venture (governance mechanisms).Discussion on how a series of factors can infiuence thedegree of perceived satisfaction with regard to the rela-tionship between partners is beyond the scope of thiswork. This does not undermine the validity of our pro-posal given the fact that, when joint venture negotiationsare concluded, there always exists a perception of satis-faction with the partners that, although subjective innature, is easy to measure. It is information that canalways be obtained.

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Table 2Outcome Situations by Carnevale, O'Connor and McCusker (1993) in Relationship Satisfaction Terms

Outcome situation Correspondences in relationship satisfaction terms

WIN/WINCOMPROMISEWIN / LOSENONAGREEMENT

Mutual and totally satisfactory relationshipMutual and partially satisfactory relationshipPartially unsatisfactory relationshipNo agreement

Assessment of Outcome in Joint Ventures

Once the indicator of negotiation outcome isdefined, and having opted to describe it through the vari-ables of trust and uncertainty, the question of when anegotiation should be considered a success or a failure injoint ventures now remains. To find the answer, we startby proposing and considering the existence of four dif-ferent outcomes based on those of Camevale et al.(1993). As shown in Table 2, we use the four outcomesituations put forward by Camevale et al., taking theestablished parallelism as our starting point in terms ofsatisfaction. The identification of a larger number of out-come situations is more in line with the realities of nego-tiating processes than the agreement/nonagreementdichotomy proposed by other authors. According toO'Connor and Amold (2001), the agreement/nonagree-ment dichotomy can equally be expressed in terms ofsatisfaction.

On the other hand, bearing in mind our proposal foran indicator of negotiation outcomes, we established acontinuum rather than a dichotomy. Satisfaction with arelationship created between negotiating sides in termsof trust and uncertainty should not be considered adichotomy, as it is possible to attain differing degrees ofsatisfaction with this relationship. Although the continu-um of outcome possibilities could be further extended,with a view to simplifying the analysis, we have optedfor a continuum represented by four positions or out-come situations.

The win/win situation is that which provides great-est results on both sides (Camevale et al., 1993) and it isthus associated with obtaining a higher degree of satis-faction with the relationship.

Compromise refiects a midway point between theinitial offers made by both parties (Camevale et al.,1993, p. 119), which leads us to see it as an intermediatedegree of satisfaction. On the other hand, the win/losesituation is regarded as a "victory" on behalf of one ofthe parties. In this case, we can conclude that there willbe a degree of dissatisfaction on the part of the "losing"

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negotiator. This refers to a situation in which one of thesides is unsatisfied with the relationship created as theyconsider that a good deal of uncertainty exists on thefuture of the relationship or because they do not see theother partner as being tmstworthy.

Lastly, the nonagreement outcome, from our view-point, constitutes a category or situation outcome whichis different from the rest and whose qualification interms of satisfaction is complex. The various reasons forthis complexity lie in the different motives for the non-attainment of an agreement (Lax & Sebenius, 1986;O'Connor & Amold, 2001), an idea that we will go on todevelop. Due to this, we have decided not to analyze anyassociation in terms of satisfaction.

Therefore, we perceive these situations as beingbased on a relationship of trust and a degree of uncer-tainty. Satisfaction will be greater when there is a moresolid relationship of trust and when uncertainty in expec-tations has been further reduced through the treatment ofkey issues during negotiation.

Parting from this definition of the four possible out-come situations (though they should be considered, asproposed here, as a continuum), we will now lay downhow they should be assessed, bearing in mind the impli-cations for their subsequent implementation in the jointventure. The four situations which may arise out ofnegotiation are: (a) a mutual and completely satisfactoryrelationship, (b) a mutual and partly satisfactory rela-tionship, (c) a partially unsatisfactory relationship, and(d) nonagreement.

Reaching an agreement can have three different sit-uation outcomes. It can imply either partial or total sat-isfaction related to the created relationship on all sides,or, an agreement can mean dissatisfaction on the part ofat least one of the parties. Although the mutual, partiallysatisfactory agreement and the partially unsatisfactoryagreement may appear to be identical, we believe thatthey are two different situations. Satisfaction is a per-ception and it is therefore not the same thing to perceivepartial satisfaction as to perceive a certain degree of dis-satisfaction. The effects on long-term commitment and

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Table 3Negotiation Outcome Situations Assessment

OUTCOME SITUATION ASSESSMENT

Mutual and totally satisfactory relationshipMutual and partially satisfactory relationshipPartially unsatisfactory relationshipNo agreement

SUCCESSSUCCESSFAILUREUNDEFINED

consequently on later implementation would not be thesame.

Although a mutual, entirely satisfactory agreementis a possibility, we consider it a rarity and that the mutu-al, partially satisfactory agreement is the more commonsituation outcome. Limited rationality and the cognitiveerrors that accompany it make it difficult for agreementsto be reached in which all negotiators are completely sat-isfied. When negotiations are brought to a close, there isalways a probability of future opportunist behaviour. Inother words, there may be an initial relationship of trustbut unless the parties have had a previous relationship(for example other cooperation agreements), the trustmay not be absolute. Trust that exists due to previoussuccessful relationship is known as unconditional trust(Jones & George, 1998). As we pointed out previously,agreements or contracts signed in joint ventures are of anincomplete nature in the case of joint ventures and thuscarry with them a margin of uncertainty. We can there-fore conclude that there is a higher chance of reachingoutcomes that imply more of a partial perception of sat-isfaction rather than total satisfaction with the createdrelationship in this type of negotiation process.

Given our choice of satisfaction as the best indica-tor of a negotiation outcome in joint ventures (particu-larly satisfaction with the relationship created) we pro-pose that different situation outcomes can be valued as asuccess or a failure, as shown in table 3.

Firstly, most important is to reach an agreement thatis positive for all parties involved in the negotiations, asargued previously, due to the effects on implementation.Neale and Bazerman (1992) suggest that it is sometimesbetter to not reach an agreement at all if the altemative isone that is not satisfactory to all parties. A negotiation canbe described as a success when it has led to an agreementthat is totally or partially satisfactory to all parties and islong-lasting. Butler (1999); Fisher et al. (1983); Raiffaand Sebenius (1989); Sebenius (1998); and Zartman(1989) have all stated their support for this argument.

In joint venture negotiations, agreements are notends unto themselves but represent means of reaching

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defined objectives of partner firms. Therefore, reachingan agreement does not necessarily imply attaining objec-tives in the implementation of the agreement if a long-term commitment is not maintained once a satisfactoryrelationship has been created between the partners. It isessential not to confuse negotiation interests with theultimate interests or objectives of the joint venture. Theagreement reached can mean achieving certain interestsexclusively in the creation of the joint ventures (in thepercentage of control over the joint ventures, contribu-tions to be made, the timescale for carrying out the jointactivity, etc.), but which do not imply reaching the max-imum objectives or interests after the implementation ofthe agreement, be they financial or non-financial.^

For that reason, as we have already stated, we pro-pose satisfaction with the relationship created in thenegotiation as a measurement of the negotiation outcomeand process which comes closer to the idea of the possi-bility of fulfilment of performance objectives in a jointventure. Therefore, once a mutually satisfactory agree-ment with respect to the relationship has been reached,we can assess such an outcome as being a success.

However, we consider that it is possible to talk offailure in an agreement that results in a win/lose situa-tion, which, in terms of satisfaction, would be associatedwith an outcome with a certain degree of relationshipdissatisfaction on the part of one of the negotiators. Thenegotiating side that perceives satisfaction can regard thenegotiation as a success. We believe that it is moreimportant to assess the negotiation from an overall per-spective and to assess it based on repercussions on thefuture of the relationship. Not achieving satisfactioncould hinder relations in the long term. Consequently,the negotiation outcome that implies a reduction or noincrease in trust and no reduction in uncertainty, due tothe negative repercussions on the subsequent implemen-tation of the agreement, must be considered a failure. Itis for this reason that abandoning the negotiation processcan be beneficial in joint ventures.

Faced with these possible outcome situations, despitethe fact that there is willingness on both parts to come to

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an agreement, the process can end in nonagreement. Thissituation has scarcely been analyzed (Weiss, 1997) asmost research in the field has focused attention on study-ing the factors that facilitate reaching agreements.^

The nonagreement situation is that which is mostproblematic to assess, as there are many possiblemotives to consider. Therefore, we do not believe thatnonagreements can be assessed in the same way, irre-spective of whether they occur in a zone of possibleagreement or not. Consequently, we do not believe thatnot reaching an agreement can be considered as a syn-onym of failure, as this will depend on each individualsituation (Ertel, 1999; O'Connor & Amold, 2001). Wethen propose that it is incorrect to speak of a poor out-come when, during interaction between the parties, theycome to the conclusion that there is no zone of possibleagreement and they thus decide to break off negotiations(O'Connor & Amold). This situation arises when BAT-NAs and reservation points have been correctly identi-fied and negotiators are aware that there are better alter-natives to be found away from the negotiating table.

In terms of the relationship created, let us considerthe implications of concluding negotiations whilst thereis still a lack of trust between the partners and where thebasis of the relationship is fairly uncertain despite thefact that a mutually satisfactory agreement has beenreached for the interests of all parties. This situation,however, could be deemed a failure, if, when a zone ofpossible agreement does exist, the parties do not manageto reach an agreement whilst creating a mutually satis-factory relationship due to the evolution of the negotia-tion process. O'Connor and Amold (2001) show that notreaching an agreement when there is a zone of possibleagreement is valued as an unsatisfactory outcome andtherefore a failure. In other words, a zone of possibleagreement can be established in terms of the relationshipcreated (trust and uncertainty). In this case, BATNAsshould be considered as altemative partners or strategiesthrough which a relationship can be created betweenpartners (in terms of tmst and uncertainty) that allows itssubsequent correct implementation. This study proposesanother way of interpreting or applying the concepts ofpossible agreement, BATNAs, and negotiation outcomefor the case of joint ventures.

Conclusions

Recent decades have seen an enormous boom injoint ventures in domestic as well as intemational busi-ness. However, the rate of failures experienced by theseventures is still surprisingly high.

Nonetheless, we have witnessed a growing trendtowards the study of negotiating processes involved in

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this strategy, which brings to light the key role that theseprocesses (and hence their outcomes) play in correctstrategic implementation and subsequent performance(e.g., Altimira, 2001; Newburry & Zeira, 1997; Saorin,2004a, b; Yan & Gray, 1994, 2001; Zeira & Newburry,1999). However, few studies currently exist and, withregard to their results, there is no clear consensus onwhat should be considered as a successful outcome(Reus & Ritchie III, 2004).

The framework of this study runs precisely alongthese lines. Notwithstanding the fact that we considernegotiation to be the nexus between the formulation andimplementation of strategies, after an exhaustive reviewof the literature and the plethora of theories found there-in we propose that satisfaction is the criterion of negoti-ation outcome which should be applied in the interorga-nizational field and, in particular, in the case of jointventures.

Satisfaction appears as a prelude to long-term rela-tions by reducing the likelihood of repeated confiict lateron, a situation that would put strain on the relationship.However, satisfaction is a perception, which means it isessentially difficult to define, not only in terms of con-tent (on what provides perceived satisfaction), but alsoon how the perception of satisfaction comes about (itsdetermining factors).

With respect to the content of satisfaction in jointventure negotiations, as an outcome of these processes,this may basically refer to the satisfaction of interests(the agreement reached) or to the satisfaction with therelationship created between partners. In this sense, ithas been stated and argued that the perception of satis-faction with the agreement itself presents a great deal oflimitations for application in our analytical context. Onecan cite, amongst others, possible mistakes in the identi-fication and assessment of a negotiator's own BATNAsor those of others leading to irrational negotiations (Baz-erman & Neale, 1983) or taking action based on unreal-istic optimism (Thompson, 2001). At the same time, wesee this type of satisfaction as having a weak relation tothe possibility of reaching a long-term commitment.Thus, the satisfaction of interests can be linked with theperception of dissatisfaction with the development of theprocess, which has negative repercussions for the subse-quent implementation of strategy. For all these reasons,we propose satisfaction with the relationship createdbetween negotiating sides as the indicator of outcome forjoint venture negotiations, claiming that it has a moredirect relation with correct implementation, long-termcommitment and achieving better performance. With aview to clarifying further this indicator of outcome, wehave proposed a definition via the use of two parametersor variables: tmst and uncertainty. Both variables arefundamental to the processes of negotiation in joint ven-

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tures, as they constitute the basis of a long-term com-mitment. Definitively, they are variables that have adirect bearing on the creation of value in this strategy.We believe that all perception of satisfaction with regardto the key aspects of the relationship created betweenpartners during negotiations can be expressed in terms oftrust and uncertainty.

Defining the outcome of the negotiation mentionedhere has allowed us to pinpoint when the process canbe considered a success. In this sense, we have put for-ward a proposed means of evaluation using the fouroutcome situations that Carnevale et al. (1993) suggestcould occur in any negotiation, although in this case itis expressed in terms of relationship satisfaction, as thisis the chosen criterion. We maintain that the nonagree-ment situation should not be regarded as a failure inevery case, as when a zone of possible agreement doesnot exist nonagreement should be positively valued. Inthis sense, another notable contribution to this study isthe idea of extending the model proposed by Fisher etal. (1983), in relation to the definition of the conceptsof BATNAs, of the zone of possible agreement, and ofnegotiation reservation points. Bearing in mind theindicator of outcome proposed herein, in the case ofjoint venture negotiations we believe that all conceptsdescribed above should be defined in terms of per-ceived satisfaction with the relationship createdbetween partners.

It is our opinion that all the ideas put forward hereshould be contrasted in future research with specialemphasis on the impact our delimitation of outcome andits evaluation on the implementation of the strategy ofjoint ventures has had. Moreover, future research shouldfocus on the determining factors of the perception of sat-isfaction with the relationship created between partners.Amongst others, it should analyze the infiuence of fac-tors such as national or organizational culture, the indus-tries involved in joint ventures and the differing gover-nance mechanisms as key determinants of the perceptionof satisfaction with the relationship.

Notes

t This situation has also been called "failure in order toagree" (Pruitt, 1981)

2 Brett & Okumura (1999: 440) define the standard of thenegotiator as "that which one is attempting to achieve"

3 According to Killing (1983, p. 16) the three categoriesthat exist are: "ventures dominated by one parent, these tobe called dominant parent joint ventures; those in whichboth parents placed an active role, labelled shared man-agement ventures; and independent ventures, in whichneither parent placed a strong role".

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4 "Sense-giving is a concept based on verbal communica-tion where one articulates one's own position on a situa-tion" (Shankarmahesh et al., 2004. p. 426).

5 "Sense-making is essentially a cognitive concept focusedon one's understanding of the situation" (Shankarmaheshet al., 2004, p. 426).

6 For a review of the key issues for negotiation in coopera-tion agreements, see Menguzzato (1992)

7 In the literature review done by Escriba (1999b), we find,among others, objectives of the partners with financialcharacter, the profit increase of the companies, theincrease of the sales of the partners, the increase of thecapital availability or the financial risk reduction. As non-financial objectives, are among others, the partnershipduration, the stability of the relationship or the alliancesurvival.

8 It is generally considered that nonagreement may corre-spond to different factors such as the existence of certainincompatibilities with respect to characteristics of the par-ties involved, as well as the relationship created during theprocess (Saxton, 1977; Weiss, 1993).

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