Capturing value creation in business relationships: A customer perspective

Collaborative relationships in business markets are of growing importance to customers and suppliers alike. Customers need to decide whether to invest in a new supplier relationship, to maintain and develop a valued relationship, or to divest from a low-value relationship. Suppliers, in turn, face growing commoditization of products and seek to differentiate themselves through relationships. The measurement of value creation in buyer-seller relationships is still in its infancy, and a sound understanding of how firms create and deliver value in business relationships is needed. Emerging studies investigate relationship value based on dimensions derived from theory and lack a managerial perspective. Therefore, the present research explored relationship value from a grounded theory perspective. In-depth interviews with purchasing managers identified eight value drivers in manufacturer-supplier relationships. Implications for the measurement of the concept are discussed, and directions for further research are suggested.     

Reverse auctions and buyer-seller relationships: A rejoinder to Emiliani and Stec's commentary

In response to Emiliani and Stec's commentary, we present rebuttal to their specific points and further assessment of auctions' role in relationships. We fear the commentators represent a segment of procurement managers closed to using auctions. To help overcome their apprehension, we reemphasize statements in the original article and amplify the role of auctions by referring to the wider relationship marketing literature. The bottom line is that we still believe relational auction is not an oxymoron and our proposed design amendments can create an environment of transparency, fairness, and bilateral communication which leads to further relational strengthening.     

Buyers' perspectives of buyer-seller relationship development

Long-term buyer-seller relationships have been a focus of research for several years. The present study draws on interaction/network theory to test a model examining the interaction mechanisms and relationship characteristics of buyer-seller relationships during four progressive phases of relationship development. Data from 174 members of the Institute for Supply Management offer empirical support for the associations proposed in the model, as well as some surprising results. One of the most useful findings of the research is that the patterns of these associations vary as buyer-seller relationships progress through the four phases of relationship development. Specifically: in the awareness phase, joint problem solving increases buyer uncertainty; in the exploration phase, communication quality and joint problem solving increase relationship-specific investments; and in the expansion phase, joint problem solving increases relationship-specific investments and severe conflict resolution increases buyer uncertainty. Seller reputation moderates many of these relationships. The major conclusion of the research is that buyers and sellers should recognize that while information exchange and conflict resolution are important aspects of buyer-seller relationships, their use may not always lead to the desired relationship characteristics. Managerial implications of these findings and further research ideas are presented.     

Exercised power as a driver of trust and commitment in cross-border industrial buyer-seller relationships

The article reports the findings of a study conducted among 151 U.S. export manufacturers of industrial goods regarding their working relationships with foreign customers. Specifically, the emphasis is on the sources of power exercised and how these affect trust and commitment in the relationship through the mediating role of conflict and satisfaction. Using structural equation modelling, it was confirmed that the exercise of power derived from coercive sources increases conflict and reduces satisfaction, while the exercise of non-coercive power sources leads to lower conflict (but not significantly increasing satisfaction). Conflict was found to be negatively associated with trust, as opposed to satisfaction which enhances trust. Trust was subsequently revealed to foster commitment in the relationship. Conclusions and implications are derived from the study findings and directions for further research are provided.     

The impact of psychological contracts upon trust and commitment within supplier-buyer relationships: A social exchange view

Central to this study is the emerging body of knowledge describing how social exchange relationships are being nurtured. A random sample of 343 Australian distributor firms from within the motorized vehicle industry was used to test a model developed on the basis of social exchange theory. Psychological contracts are perceptual in nature and were found to encompass reciprocal obligations stemming directly from the relational orientation between suppliers and distributors. This construct was also shown to have a positive impact upon the level of trust and commitment within the relationship. These findings have significant managerial implications for the manner in which managerial decision makers are modelling the firm-customer relationship because trust and commitment are essential elements in the development and maintenance of such relationships. The theoretical and managerial implications discussed have highlighted the need for further studies because there are deficiencies in the marketing literature pertaining to this important construct.     

The antecedents and consequences of organizational and personal commitment in business service relationships

This paper explores the potential for business service customers to form separate bonds of commitment with the service firm and the service representative. It examines the role of the individual and identifies six potential antecedents to each type of commitment. It also proposes that both types of commitment will influence the degree of relational exchange between the customer and the service firm. The hypotheses are tested using multiple regression and data from a survey of marketing research managers. The results support the majority of the hypotheses.     

Perceptual gaps and similarities in buyer-seller dyadic relationships

The research aims to develop a conceptual framework to explore dyadic relationships across a range of industries, involving firms of different size (Medium Sized Enterprise (MSE) suppliers and Multinational Enterprise (MNE) buyers). The purpose is to explore dyadic views of three different relationship durations, identify where perceptual gaps may exist at the various stages, and address these in order to improve relational exchange. A triangulated methodology is implemented with data initially obtained from fifty-four dyads. These findings suggest: a) similar views are associated with the performance and importance attached to four relationship dimensions measured, b) significant perceptual differences are more apparent in shorter term relationships, c) overall suppliers have stronger views of the relationship, and d) relationships may not necessarily follow a linear development path over time. Three case studies offer qualitative insights, several managerial implications are extracted, and a strategic matrix developed related to the management of different typologies of relationship exchange.     

Diverging expectations in buyer-seller relationships: Institutional contexts and relationship norms

Many firms assume that outsourcing partnerships may allow them to strengthen their overall competitiveness. Lured by its intuitive appeal, several enter into such partnerships, only to realize that they represent a marginal rather than a magical solution to their quest for increasing market performance. An important reason for this is the diverging beliefs and expectations held by both parties in the buyer-seller dyad. The purpose of this contribution is to develop a framework for understanding the divergences in expectations and relationship norms in cross-cultural business relationships among SMEs. We discuss four relational expectations derived from the B2B literature on relational norms for addressing these divergences: Quality, frequency and scope of communication, role specifications and coordination of work nature of planning horizons, and trustworthiness and link these to relationship performance. We explore the proposed impact of diverging relationship norms on relationship expectations using data from an ongoing field study of Danish buyers and Chinese suppliers. We link these diverging expectations to the business practices of Danish buyers and Chinese and their institutional contexts. In the concluding part of the paper, we discuss our findings and outline implications for management and academia.     

The role of functional conflict in international buyer-seller relationships: Implications for industrial exporters

In their attempt to compete successfully in foreign markets, exporting firms must comprehend the decision-making and attitude of their overseas customers. Yet, there is a noticeable lack of research dealing with the import behavior of the firm. Focusing on import distributor firms trading with export manufacturers of industrial products, this study investigates the role of functional conflict in importer-exporter relationships. Results indicate that functional conflict is related positively to exporter cultural sensitivity and asset specificity and negatively to exporter opportunism. More importantly, importers' future purchase intentions are associated negatively with opportunism and positively with asset specificity and functional conflict. Theoretical and managerial implications of the findings are discussed along with suggestions for future research.     

Interaction in business relationships: A time perspective

Interaction is central to the relationship framework in business markets. Yet there is some theoretical imprecision with regard to the way interaction works in time. Clarification of this nexus further develops the interaction concept and provides theoretical support for the dynamic view of business relationships being developed by the industrial marketing and purchasing (IMP) group.The role of time as a backdrop for interaction is elaborated in conjunction with the cognitive ability of humans to arrive at an understanding of interfirm interaction. This elaboration extends the concept of horizontal relationship time (i.e., past, present, future), illustrates constraints on interfirm interaction, and analytically distinguishes between interaction as exchange versus adaptation while also displaying the importance of the actor in business relationships. In addition, theoretical grounds are provided for dismissing business relationship life cycle theories. Finally, the cognitive nature of time and relationships provides a means for theory development and management implications free from cultural and normative overtones.     

Emotions, trust and relationship development in business relationships: A conceptual model for buyer-seller dyads

Existing research on buyer-seller relationships has focused on the role played by trust in shaping the dynamics of interpersonal interaction between the buyer and the seller. While this is undoubtedly an important variable in governing the interactional dynamics it is by no means the only variable. The paper begins by reviewing the existing literature on buyer-seller relationships. The role played by emotions is articulated. Finally, it is recognized that the emotions that emerge in a buyer-seller relationship do so at multiple levels. A model and propositions highlighting the impact of emotions on interpersonal relationships are developed. Illustrative cases are used to ground the propositions empirically.     

Dark side of relationships: A tensions-based view

By drawing on the tensions-based view to depict the components of the dark side of relationships, this study presents a conceptual model explaining how the dark side of relationships can moderate the positive relationship between relationship quality and relationship function. The authors test the hypotheses via a mail survey involving 136 manufacturing firms. The results support the hypotheses, which posit that relationship quality is positively associated with relationship function. Moreover, the empirical results partially support the argument of the author that the influence of relationship quality on relationship function is strengthened or weakened when three relationship tensions (namely, behavioral, structural, and psychological tension) are balanced or imbalanced. Theoretical and managerial implications are extracted from this study, and potential future research directions.     

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.     

Shifts in buyer-seller relationships: A retrospective on

One of the most highly cited papers in the Industrial Marketing Management journal was published 17 years ago, and proposed a strong linkage in the elements of buyer-seller trust, asset specificity, contracts, and supply chain performance. In this paper, explore the question of “what has changed”? We note that the emergence of 1) real-time analytic technologies, 2) new governance models that span multiple parties across organizations in a supply chain network, and 3) new digital innovation requiring partnering with new entities are required to produce end to end analytical capabilities. We offer three new propositions that provide some insights towards future research areas, and we also note that although interpersonal buyer-seller relationships will remain important, digital transformation is changing the nature of how these will unfold. Our propositions provide insights on how the role of technology and other shifts in the supply chain ecosystem is shifting the role of buyers and sellers in the industrial landscape. I offer these insights in the hope that they may provide a basis for future researchers to engage in research in the field of emerging industrial buyer-seller relationships, and devote this paper to the memory of Christian.     

Changes in sales call frequency: A longitudinal examination of the consequences in the supplier-customer relationship

Sales calls are one of the most valuable and expensive resources available to industrial sales managers. The main purpose of this research was to look at the relationship between an increase in sales call frequency and some important outcomes in the buyer-seller relationship. To do so, we adopted a longitudinal research design where data from 357 customers of one industrial supplier were obtained over a two-year period of time. Results indicated that an increase in call frequency has a positive effect on sales volume, perceived service quality, perceived value for money and overall customer satisfaction. Furthermore, these effects tend to diminish as relationships become longer, and are stronger at higher levels of hierarchy in the buying company.     

Till death do us part…but not always: Six antecedents to a customer's relational preference in buyer-seller exchanges

Since its emergence in the early 1990s as marketing's newest paradigm or school of thought, research in the area of relationship marketing has been proliferating. From the customer's perspective, initial attempts to become lifelong partners with key sellers or suppliers were appealing. However, as these propositions multiply in number and carry with them increasing burdens in terms of time and commitment, customers are reticent to enter into long-lasting relationships with all sellers. In this paper, we consider relationship formation from the customers' perspective and examine the antecedents to a customer's preference for a relational exchange orientation versus a transactional exchange orientation. Our belief is that, depending upon a set of contextual factors surrounding the exchange, customers will opt for a relational orientation with suppliers in some cases and for a more transactional orientation in others.     

Antecedents and consequences of commitment in marketing research services: The client's perspective

Commitment is one of the most frequently studied variables in business-to-business relationships and several researchers propose it is the main antecedent of customer loyalty. However, while marketing relationships researchers agree on the importance of the construct, differences remain in its conceptualization and operationalization. This study examines commitment from the customer's perspective, consisting of three components: calculative, affective and normative. Relationships were tested between the three dimensions of commitment and social bonds, trust and satisfaction in the context of professional business services providers and their clients. The results of the model that was tested in Central and Eastern European companies show that affective commitment is the only one of the three components that significantly influences customer loyalty. Trust and social bonds have no significant relation either to normative or to calculative commitment while a relation of overall satisfaction with normative and calculative commitment is negative. The theoretical and managerial implications for the model to assist in the development of appropriate strategies to achieve affective commitment and loyalty in business relationships are discussed.     

Securing and managing an organization's network legitimacy: The case of Motorola China

This study combines concepts from institutional and network theory to explain the currently observed behaviors of organizations in securing their network legitimacy. Organizations secure their network legitimacy by engaging in business, social, and political activities, with key network actors and institutions. This is achieved within an institutional framework of rules, regulations, and ideologies, including any consequential contextual changes. But while network legitimacy plays an important part in an organization's survival, limited attention has been paid to the development of a conceptual framework. In this article we provide one such framework and, specifically examine attributes of successful network legitimacy through an inductive, interpretative case analysis of Motorola China, in a transitional Chinese telecommunication sector.     

A relationship strategy perspective on relationship portfolios: Linking customer profitability,commitment, and growth potential to relationship strategy

The paper develops a three-dimensional portfolio model for business relationships which distinguishes among six different categories. Based on assessments of customer profitability, customer commitment, and growth potential, the positioning of a given customer relationship in the portfolio allows managers to determine appropriate customer relationship strategies and appropriate performance indicators. Results from applying the portfolio model are reported and managerial implications and future research are discussed.