Creating value in business relationships: The role of sales

Understanding the creation of value in business relationships has been a long-standing goal of researchers and managers alike. By adopting a relational perspective, recent research on business relationships has made much progress in understanding value-creating processes. As the sales function is thought to be a pivotal part of the value-creating processes in business relationships, the evolving view on creating relationship value clearly has implications for our understanding of the role of sales in these processes. In contrast to its importance, the question of how the sales function contributes to creating value in business relationships has been largely neglected in extant literature. The objective of our paper is to answer this question by systematically linking the relational value creating process to the sales function's content. Interpreting value creation as interaction process, we identify four features of value-creating processes in business relationships suggested in recent research (i.e., jointness, balanced initiative, interacted value, and socio-cognitive construction) and, based on these, outline a framework that is used to define a set of tasks that are key to creating value in business relationships and hence become critical for sales in its hitherto neglected role as co-creator of relationship value. We illustrate the various tasks of this new role of sales with data from 43 interviews with sales managers and salespeople. Along with related normative recommendations in extant literature, the interviews provide support for the validity and relevance of our framework for understanding the role of sales in creating relationship value. This framework puts forward a much-needed first effort towards a theory of sales' role in creating relationship value and offers several opportunities for future research.     

When arm's length is too far: Relationship banking over the credit cycle

We conduct face-to-face interviews with bank chief executive officers to classify 397 banks across 21 countries as relationship or transaction lenders. We then use the geographic coordinates of these banks’ branches and of 14,100 businesses to analyze how the lending techniques of banks near firms are related to credit constraints at two contrasting points of the credit cycle. We find that while relationship lending is not associated with credit constraints during a credit boom, it alleviates such constraints during a downturn. This positive role of relationship lending is stronger for small and opaque firms and in regions with a more severe economic downturn. Moreover, relationship lending mitigates the impact of a downturn on firm growth and does not constitute evergreening of loans.     

When using knowledge can hurt performance: the value of organizational capabilities in a management consulting company

This paper explores the possibility that utilizing the firm's knowledge resources to complete important tasks can backfire and undermine competitive performance. Drawing on organizational capabilities and knowledge‐sharing research, we develop a situated performance view that holds that the value of obtaining and using knowledge within a firm depends on the task situation. Using a data set of 182 sales proposals for client work in a management consulting company, we show that sales teams that had varying needs to learn and differentiate themselves from competitors derived different levels of value from obtaining and using electronic documents and advice from colleagues. Highly experienced teams were more likely than inexperienced teams to lose the sales bids if they utilized such knowledge. Teams that had a high need to differentiate themselves from competitors also had a lower chance of winning if they utilized electronic documents. There were situations, however, where teams performed better if they utilized the firm's knowledge resources. These results suggest that competitive performance depends not on how much firms know but on how they use what they know. Copyright © 2004 John Wiley & Sons, Ltd.     

Testing impact attenuation on California playground surfaces made of recycled tires

This study was conducted to determine whether rubberized playground surfaces made of recycled tires comply with state-mandated standards for impact attenuation (measured with an accelerometer), and whether their properties change in response to temperature or time. The Head Impact Criterion (HIC) standard of 1000 was found to be a more sensitive indicator of compliance than the G(max) standard of 200(g). Of 32 playgrounds tested, 22 (69 percent) failed the HIC standard. As the heights of playground structures increased, so did the likelihood that the rubberized surface below would fail the HIC standard. Rubberized surfaces gave stable readings for the first three months following installation, and higher values in response to increasing surface temperature. An excessively high percentage of playground surfaces made of recycled tires failed the state-mandated standards designed to prevent serious head injury from falls. Future failures might be prevented by requiring installers to perform post-installation testing to verify compliance.     

Law, Finance, and Growth during Transition: a Survey

This paper surveys the literature on law, finance, and growth and assesses its relevance to transition economies. It describes the contribution, as well as the limitations of the legal view literature with regard to our understanding of the causality between financial development and economic growth. The legal view demonstrates that, through its impact on the financial system, an effective legal system indirectly promotes economic development. However, the particularities of the transition process – notably the existence of soft budget constraints – are such that the methodology and the results of the legal view cannot be applied to transition economies without provisos.     

Sustainability of Small-Scale Ecotourism: The Case of Niue,South Pacific

This paper examines whether small-scale ecotourism is sustainable. For the purpose of the paper the term 'ecotourism' has been refined, and evaluation criteria compiled for small-scale community ecotourism comprising of three concepts: environmental sensitivity, socio-cultural appropriateness, and economic viability. The case study of Niue was chosen because it met the initial evaluation criteria, and was used to determine whether small-scale community ecotourism was sustainable. Niue's tourism industry was assessed in the areas of environmental, socio-cultural and economic viability and all three must exist in symbiosis to achieve sustainability. The results of the research show that Niue's tourism industry is sustainable only in environmental and socio-cultural aspects, however, due to insufficient visitor arrivals it is not economically viable. Niue is isolated, reliant on aid and is the most expensive destination in the South Pacific due primarily to the cost and frequency of the air service. Niue can increase its visitor numbers to achieve economic viability, or attract higher spending visitors to the island. Care must be taken not to exceed the island's carrying capacity, which would cause negative environmental and socio-cultural impacts. A balance needs to be made between the three concepts to achieve sustainability, with careful planning and monitoring.     

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