Proponents of the political economy framework for comparative analysis have recently proposed that one of the important variables that influences the way in which uncertainty affects focal organizations is its critical source. This dissertation investigates the relationship between the critical source of perceived environmental uncertainty and the political processes of the channel dyad. Political processes are operationalized as the dominant sentiments or relations of conflict and cooperation which characterize the negotiation process. lt was hypothesized that uncertainty as perceived in the lateral (competitive) environment increases cooperation and decreases conflict among bargainers in a mixed-motive setting. Conversely, uncertainty as perceived in the vertical (input-output) environment increases conflict and decreases cooperation. It was found that lateral uncertainty affected dyadic sentiments as expected. However, vertical uncertainty had no effect on the dominant sentiments of bargainers. The amount of uncertainty as perceived in the external environment as a whole, affected the dominant sentiments of those bargainers who perceived the outcome to not be in their favor. Here a moderate amount of perceived uncertainty led to cooperation, but a high amount led to conflict. Thus it was concluded that perceived environmental uncertainty affects the dominant sentiments of bargaining dyads differently, depending upon: a) its critical source, and b) the amount. / Ph. D. / incomplete_metadata