The role of sales representatives in cross-cultural business-to-business relationships

This study responds to the call for the “internationalization of sales research” by collecting data from 160 international buyers spanning 33 countries and regions. Based on survey data, archival sales records and cultural-distance indices, this research examines the performance-enhancing effect of sales rep-owned commitment as well as its antecedents under varying degrees of cultural distance. Our results show a strong and direct impact of rep-owned commitment, independent of the effect of firm-owned commitment, on enhancing performance indicators including sales volume, importers' purchase share, and importers' future purchase intentions. Moreover, we find two important antecedents to rep-owned commitment: benevolence trust and capability trust. Interestingly, cultural distance moderates the effects of benevolence and capability trust on rep-owned commitment: the larger the cultural distance, the stronger the effect of benevolence trust but the weaker the effect of capability trust. We conclude with theoretical and managerial implications to international marketing research and practice.     

Testing the conflict-performance assumption in business-to-business relationships

There is little empirical research published testing the interdependency between conflict in business-to-business relationships and commercial performance. The “conflict-performance assumption”—all other factors being equal, relationships where conflict is low will outperform relationships where conflict levels are higher—remains central in the marketing channels' literature despite insufficient and contradictory empirical evidence. There are several explanations for the lack of a clear relationship between conflict and performance. Rosenbloom [J. Mark. 37 (1973) 26] theorises that the relationship between conflict and channel performance follows an inverted U-shaped curve, where conflict is most productive at moderate levels and least productive at very low or high levels. Others have argued for a simpler, linear relationship between conflict and performance, usually negative in nature. Various theories about the conflict-performance relationship are empirically tested in a large marketing channel, using a number of dyadic and monadic measures of conflict (latent, perceived, and affective) and two objective measures of performance (effectiveness and efficiency). A linear model (performance declining as conflict increases) is adequate to explain the relationship between dyadic measures of both perceived and affective conflict and channel effectiveness. A threshold model is found to be superior to a linear model in explaining the relationship between dyadic measures of perceived and affective conflict and efficiency. Conflict increases slowly as efficiency falls until a threshold is reached when conflict escalates. Practical implications include that companies need to consider whether performance criteria affecting efficiency are as important to their business partners as those affecting effectiveness. If they are not, then business partners should be rewarded for meeting any such criteria that are more important to the one side of a relationship dyad than to the other.     

Heterogeneous switching costs

We consider a two period model where consumers have different switching costs. Before the market opens an Incumbent sells to all consumers; after the market opens competitors appear. We identify the equilibrium both with Stackelberg and Bertrand competition and show how the presence of low switching cost consumers benefits the Incumbent, despite the fact that it never sells to any of them. Furthermore, we identify a free rider effect among consumers.     

Covalence and ionic bonding in business-to-business relationships: Insights from chemistry

The paper examines business-to-business (B2B) relationships using the framework of the covalence-ionic bonding theory in chemistry as an analogy to help make soft phenomena and relationships in B2B marketing more understandable to engineers and scientists in organizations and to managers with scientific and technical backgrounds. In the tradition of cross-fertilization of various scientific fields, the authors propose that the covalence-ionic bonding theory may provide insights in determining the factors that contribute to the emergence of bilateral, unilateral, and market relationships. This study compares and contrasts interparticle bonding with ways of managing B2B relationships. Beyond sheer analogy of the two phenomena, an explanation of B2B relationships and decision-making mechanisms is proposed. In adapting this concept theoretically, the meaning of the original parameters in physical science is assigned a new meaning in the marketing context. Furthermore, the paper extends conceptually the predictive capabilities of chemistry theories to relational behaviors in marketing. Drawing from a resource-based view of the firm, complementarity of resources and dependence levels are postulated to have critical roles in business bonding. Appropriate propositions are advanced, along with implications for managers and researchers.     

Managing business-to-business relationships under conditions of employee attrition: A transparency approach

Client-contact employee attrition can negatively affect client-supplier relationships, a problem all the more obvious within the knowledge-intensive service industry in which the untimely loss of employees adversely affects client relationships. From the client's perspective, employee attrition increases uncertainty over the perceived quality of service and results in the loss of valuable tacit knowledge from the provider. Drawing on case study materials, this paper seeks to develop a framework for understanding how firms can successfully manage client relationships despite threats of employee attrition. This paper suggests that relationship transparency based on the active transfer of information, knowledge retention and sharing, the implementation of succession plans, and timely intervention by the management, can reduce clients' perceived uncertainty, thereby fortifying a trusted relationship with their provider. This study offers a transparency-based conceptual framework that contributes to the business-to-business relationship literature within the knowledge-intensive service industry and discusses managerial implications.     

Measuring intangible value in business-to-business buyer-seller relationships: An intellectual capital perspective

The value that resides in a firm's relationships has both tangible and intangible aspects and both need to be developed and managed carefully. Marketing managers need to be able to understand these dimensions of value to manage them and to argue for their share of the firm's resources to effectively develop the value of the firm's relationships. This paper describes a study that adds to current knowledge of relationship value by testing a hypothesized model of the intangible part of the value that is manifested in buyer-seller relationships and by developing a set of scales to measure the hypothesized dimensions. The focus of the research, which synthesizes a conceptual framework from the intellectual capital literature, is on business-to-business situations and on the value of the relationship to the seller, rather than to the buyer. The analysis of data from a survey of relevant managers, using structural equation modeling techniques, gives support to the model and scales.     

Nature and evolution of trust in business-to-business settings: Insights from VC-entrepreneur relationships

While the importance of trust in B2B relationships has been well established, research is yet to investigate its processual nature. This study investigates the VC-Entrepreneur relationship – a special B2B relationship to outline the nature and evolution of trust across a venture's life cycle. Results suggest that early-stage relationships are characterized by asymmetric trust, which declines with time and impacts cooperation between both sides, access to funding and business networks, contract enforcement, feedback, mentorship, and knowledge sharing. Late-stage VC- Entrepreneur relationships suffer from symmetric distrust, which increases with time, resulting in an overt emphasis on contracts, syndicated investments, disagreements during decision making, and pressure to exit. This study extends B2B trust literature by offering a relationship-phase-contingent view of trust across a venture's life cycle, outlining specific contexts that question the reciprocal and symmetric assumption of trust in dyadic relationships. It highlights how the interplay among power, opportunism, and weak institutional environment dictate dyadic trust. And finally, the paper outlines three testable propositions on trust in VC- Entrepreneur relationships that can be extended to other emerging economies.     

Developing new business-to-business professional services: What factors impact performance?

Business-to-business professional services has been a high growth area for over a decade. Increasing complexity and high technology characterizes this sector, making new product development both essential and risky for firms. Surprisingly little research has been done to understand the industrial professional services sector and, in particular, to discover what factors lead to new product success or failure, however. This article reports the results of an investigation that examines how professional services firms develop new products and what factors impact the performance of these ventures.     

Trust and forms of capital in business-to-business activities and relationships

The IMP group's ARA model, with its emphasis on interaction, captures social and economic dimensions of exchanges. We draw on it to compare three cases and assess how actors act in skilful and nuanced ways in mobilizing resources, given the very different norms of social and economic capital. We prioritize action ahead of structure and, given the inherent uncertainties that actors encounter in connection with resources, argue that trust is a cognitive and heuristic dimension of action, distinct from resources, actor-bonds and social capital. We conclude that for business practice, managers should be mindful that in order to trust others, they need to act in the distinct realms of social and economic capital, tempting though it is to interpret and measure the costs of actions economically.     

Fundamental transformations of trust and its drivers: A multi-stage approach of business-to-business relationships

This research tests a multistage model of trust in business-to-business (B2B) relationships. The model contains three forms of trust, each with unique drivers and consequences for buyer–supplier relationships. An exploratory qualitative study (N = 38) and four quantitative studies (N_Total = 616) validate the distinct stages (N1 = 140, N2 = 144, N3 = 152) and provide an overall test of the model (N4 = 180), using structural equation modeling techniques. The results support the proposed modeling of the stages and highlight a positive effect of reputation on calculative trust. Conflict resolution, communication, and sympathy positively affect cognitive trust. However, shared values do not significantly drive affective trust. Interdependence also exists among the three trust forms, both directly and indirectly. That is, calculative trust does not affect investments in relationship or confidential communication, but cognitive trust influences these constructs indirectly, through the mediation of affective trust. Affective trust also leads directly to greater investments in relationship and generates additional confidential communication.     

An analysis of international business-to-business relationships based on the Commitment-Trust theory

Business-to-business relationships are characterized by an exchange between two or more parties. Research has identified several factors that enhance marketing and management in business relationships, mainly with a focus on large manufacturing firms. However, less is known about how service firms develop and maintain international relations during the establishment of a business. To analyze the relevance of the key mediating variable (KMV) model [J. Mark. 58 (1994) 20-38.], which maintains that business-to-business relationship requires commitment and trust, interviews were conducted with five different service entrepreneurs in Sweden, Australia and the UK. The findings demonstrate the importance of commitment, trust, relation termination costs and benefits, shared values and communication between the exchange partners.     

A framework for offshoring marketing processes in business-to-business marketing relationships

Outsourcing has been a prominent aspect of business strategies in the last three decades. Outsourcing of manufacturing processes is now complemented with outsourcing of various marketing process as well. More importantly, outsourcing to foreign locations — offshoring — has increased for marketing processes in recent years. In this context, the present paper develops a model that identifies the types of marketing interactions and processes that can be offshored in business-to-business markets. We suggest that the decision to offshore marketing processes and interactions depend upon the interaction process that is preferred and the importance of interaction process itself. Marketing interactions that are not critically important and/or those that can be performed through technology can be easily offshored. However, other marketing processes need to be examined in depth before being offshored. Implications for research and practice in the area of offshoring, as well as in the broader area of outsourcing, are also highlighted.     

Multi-dimensional analysis of perceived switching costs

The creation of switching costs for customers is an important aspect of strategic planning in today's competitive environment. These costs enable firms to address variations in customer preferences and competitor influence in attempting to gain their customers' loyalty. Although the recognition of the importance of such switching costs has long existed in a variety of contexts, the conceptualization and measurement of the construct is lacking in clarity and consistency. This study proposes that perceived switching costs (PSC) constitute a higher-order construct made up of six dimensions that reflect the customers' perception of the time, effort, and money involved in the switching process. The study also proposes that each of the six dimensions has a distinctive set of antecedents and outcomes. The test of the model is an empirical study in the Spanish insurance sector. The results confirm the validity of the higher-order formative construct of PSC and provide insights for specific strategies to address the perceptions of various customers with regard to switching costs.     

The changing importance of affective trust and cognitive trust across the relationship lifecycle: A study of business-to-business relationships

The purpose of this paper is to examine affective trust and cognitive trust and their effects on business relationship outcomes. Within a relationship marketing framework, the influence of affective trust and cognitive trust on the success of business relationships at the early and mature phases of the relationship lifecycle is examined. Both affective and cognitive forms of trust are demonstrated to be multidimensional constructs that indirectly influence relationship performance via the mediating variables commitment and liking.The development and use of five elements of trust to explain relationship performance extends existing understanding of relationship marketing. By combining five elements of trust (three cognitive and two affective) and testing them in two different relationship lifecycle phases, insights are generated into how a relationship can succeed. The model tested in this paper highlights the importance of affective trust in the early phase and cognitive trust in the mature phase of the relationship lifecycle. Further, the mediating roles of commitment and liking between trust and relationship performance are also developed. Hence, the research increases understanding of how relationships evolve, in particular the role of affective trust and cognitive trust in influencing relationship performance.The context of this research is business-to-business relationships in small and medium enterprises. A survey of 458 businesses people is used to evaluate both the early and mature relationship lifecycle phases. The data are analysed with structural equation modelling where the basic structural model testing is extended with multigroup analysis.     

The significance of trust and renqing in the long-term orientation of Chinese business-to-business relationships

While business relationships with China are receiving increased attention in both practitioner and academic discourse, very little empirical work however, has been undertaken to isolate and examine measures that focus on business-to-business relationships, and as such, research in this area is somewhat scant. In an attempt to bridge this gap, and add to the knowledge in this emerging discipline, the research aims to develop a conceptual framework to explore the relationship between trust and the long-term orientation in Chinese business-to-business market relationships. Based on a survey with Hong Kong companies that have a buyer-seller relationship with Chinese companies, the empirical findings indicate the mediating role and significance of ‘renqing’ for enhancing trust and contributing towards the long-term stability in relational exchange. The results highlight several implications for practicing managers to consider when aiming to establish and develop relationships in a Chinese business-to-business context.     

Adding co-creation as an antecedent condition leading to trust in business-to-business relationships

Trust enjoys wide acceptance among scholars as a key facilitator of inter-organisational relationship development, and successful relationship development demands an understanding of what drives the propensity to trust between organisations within both cognitive and affective dimensions of trust. The six most salient antecedents of trust within contemporary trust literature have been identified as satisfaction, communication, competence, shared values, benevolence and integrity. This research suggests that co-creation is also an important antecedent of trust in business-to-business relationships. Co-creation is described here as the active participation, interactions and collaboration of the buyer and seller and other actors in the marketing exchange to develop a deeper understanding of the customer problem solving context.The relative strength of the cognitive and affective aspects of trust antecedents, the moderating influence of business experience and seniority on the relationship between significant antecedents and trust is also explored. The analysis uses statistical tools and then probes deeper using fuzzy-set qualitative comparative analysis (fsQCA).     

Reducing the level of switching costs in mobile communications: The case of Mobile Number Portability

Switching costs are one of the most important economic forces that affect market competition in mobile communications. Both theoretical and empirical studies have shown that switching costs reduce market competition leading to higher prices, lower product and service quality, and lower customer welfare. Given their negative consequences, national regulatory authorities have designed policies aimed at reducing switching costs and fostering competition. One of the most important of these, in the mobile communications industry, is mobile number portability (MNP). The aim of this paper is to investigate the effect of MNP on switching costs in mobile phone services. First, a hierarchical Bayes model is proposed to measure switching costs at the customer level and to investigate the impact of MNP on them. Second, this study examines the drivers of MNP adoption by customers using a binary logit specification. The results reveal that this regulatory policy has significantly reduced the cost of switching and that MNP adoption partially depends on customer-related variables.     

The impact of cultural differences in U.S. business-to-business export marketing channel strategic alliances

Given slower growth and fierce competition in the domestic market, combined with increasing opportunities in many overseas markets, more and more U.S. companies are going international. While many doing so may initially use a direct exporting approach that relies on foreign channel members to distribute the product in the host country, over time, strategic alliances among distribution partners may form based on trust, commitment, and cooperation. For these alliances to succeed, the partners' perceptions of these variables need to be congruent so that expectations on each side of the dyad are reasonably similar. However, what happens when the cultural backgrounds of each channel partner are substantially different? This study empirically examines whether cultural differences do affect trust, commitment, and cooperation in international marketing channel alliances between U.S. exporters and their foreign distribution partners. Based on the survey responses from 149 U.S. exporters with marketing alliances abroad, cultural differences do affect trust, commitment, and cooperation. The greater the cultural differences between channel partners, the lower the levels of trust, commitment, and cooperation. Managerial implications are discussed, and study limitations are identified.     

The antitrust implications of electronic business-to-business marketplaces

Electronic marketplaces (e-marketplaces) allow networks of buyers and sellers to conduct business online and to exchange information more efficiently using Internet technology. Despite the benefits that e-marketplaces potentially afford firms, concerns have been raised that these markets may damage competition and potentially violate antitrust laws. This study considers the antitrust legislation related to e-marketplaces and examines the possible antitrust concerns that they raise. Potentially anticompetitive features of e-marketplaces are examined and guidance for firm conduct when creating or participating in an e-marketplace is offered.