Transactional and Value Creational Sources of Dependence

ABSTRACT

This paper critically reviews the nature and the role of the dependence construct in buyer-seller relationships. A distinction is made between transactional sources and value creational sources of dependence, and five different variables: goals, exchange partner actions mediating goals, motivational investments in goals, the availability of alternative exchange partners and switching costs are found to account for what we refer to as “dependence.” The proposed framework adds potential clarity to discussions and disagreements regarding the dependence concept in buyer-seller relationships by providing a unifying frame of reference that permits us to compare the insights generated by different theories. One important implication is that contradictory recommendations of different governance theories are not contradictory after all since they consider different dependence situations. Accordingly, governance choices should be based on assessments of how firms depend on each other, and not only on assessments of how high this dependence is.     

Betrayal intention in exporter-importer working relationships: Drivers,outcomes, and moderating effects

Betrayal is a very common, but relatively under-researched, dark side phenomenon in inter-firm relationships that warrants investigation. We propose a conceptual model of the factors reducing betrayal intention in exporter-importer (E-I) working relationships and its resulting effect on actual betrayal. Using a random sample of 262 indigenous exporters of manufactured goods based in Greece, we confirm that betrayal intention in their relationships with foreign buyers is significantly and negatively affected by four key parameters, namely, trust, communication, long-term orientation, and social bonds. An importer’s betrayal intention is subsequently very likely to develop into actual betrayal in the relationship. However, this likelihood is lower in the case of older relationships, as well as those characterized by contractual obligation between the interacting parties.     

The Impacts of Affective and Cognitive Social Conflict in Business-to-Business Buyer-Seller Relationships: A Comparison of New versus Ongoing Buyer-Seller Relationships

ABSTRACT

Purpose. The purpose of this paper is to report empirical research that examined the impact of conflict in two different buyer-seller situations, an ongoing relationship and a choice situation where the buyer had to choose between two or more alternative suppliers. Conflict was defined as social conflict and has two distinct types, affective and cognitive.

Methodology/Approach. The methodology used was two mail surveys to a random sample of purchasing association members who had buying responsibilities in their firms. In one survey respondents were asked to self-select a current buyer-seller relationship they had for a period of at least one year and to indicate the degree of perceived conflict they had with the key supplier representative as well as the amount of relationship loyalty they perceived they had with that supplier. The second survey randomly assigned respondents to evaluate either a supplier whom they gave business to in a choice situation or one they did not, thus establishing as the dependent variable the actual choice of whom they gave business to.

Findings. The findings are clear for affective types of conflict. When affective conflict is perceived as higher the chance of getting an order in a choice situation as well as the magnitude of the relationship loyalty perception is negatively related. Cognitive conflict is not as clear. In choice situations conflict was negatively related to choice, whereas in on going relationships there was no impact. There was no indication of cognitive conflict having a positive relationship.

Originality/Value/Contribution of the paper. This study is the first to examine perceptions of conflict with a significant other in a buyer-seller relationship to try to determine how those perceptions might relate to either buyer choice or loyalty. While the findings support the expected relationship between affective conflict and outcomes, the findings with regards to cognitive conflict suggest that this may be more complex then originally thought and further points out the difficulty in managing conflict across organizational boundaries.     

Loyalty or lethargy? Keeping sellers committed,not entrenched

While business sellers frequently enjoy long-term relationships with their buyers, not every extended association is based on a genuine sense of customer loyalty. Many organizations remain in relationships with providers for too long; while the seller has stopped providing value, the buyer sticks to the routine. Building from empirical research and theory on buyer-seller relationships, this research extends our understanding of customer complacency and seller entrenchment and introduces the concept of customer lethargy. Synthesizing theory from multiple domains with exploratory interviews conducted with business customers, this article offers insight into the functioning of organizational buying centers, the evolution of business exchanges over time, and how some exchanges can be undermined by various forms of relational dysfunction. I define customer lethargy, explore its root causes and offer business buyers a strategy which aims to help them self-audit their loyalty, avoid complacency and lethargy, and keep sellers committed, not entrenched.     

Partner Symmetries,Partner Conflict and the Quality of Joint Venture Marketing Strategy: An Empirical Investigation

Joint venture research has overlooked the potential impact of partner conflict on the quality of joint venture marketing strategy. We address this issue by developing formal hypotheses concerning the antecedents to and consequences of functional and dysfunctional conflict between joint venture parent organisations on joint venture marketing strategy. We then describe an empirical examination of our model. Data collection was undertaken via a mail survey of New Zealand joint venture companies. Forty usable responses were returned, corresponding to a response rate of twenty-five percent. Correlation analysis of the data indicates that the degree to which partners exhibit both functional and dysfunctional conflict is influenced by (a) the degree to which joint venture partners share strategic and operational fit, (b) partners' level of mutual commitment, (c) levels of mutual trust, (d) opportunistic behaviours and (e) the adoption of collaborative communication approaches. Furthermore, both functional and dysfunctional partner conflict appear to significantly influence the quality of joint ventures' marketing strategy formulation and implementation. We discuss the managerial implications forthcoming from these results.     

Building and Maintaining Effective Buyer-Seller Relationships

Abstract

O'Grady and Lane (1996) have observed that Americans and Canadians have difficulty establishing the rapport for effective buyer-seller relationships, and that Canadians are especially disadvantaged. This article explored the marketing activities that American and Canadian managers preferred to establish these relationships. Differences were found in both relationship marketing and marketing mix factors. The Americans were significantly more committed to relational activities, building relationships based on respect, shared goals, personal trust and making sure everyone received the expected benefits. The Canadians focused more on pricing, and helping out when asked or needed. To do lists are offered for making each more effective with the other.     

The interplay between cognitive- and affective conflict and cognition- and affect-based trust in influencing decision outcomes

Research on strategic decision-making has focused on both conflict and trust as important process variables that affect decision outcomes. Taking information processing perspective, the present study investigates the interplay between two types of conflict and two types of trust and argues that cognitive conflict and cognition-based trust are far more important than the affective conflict and affect-based trust in strategic decision-making teams. The perceptions of trustworthiness based on the competence of the executives enhance decision quality and commitment whereas the perceptions of trustworthiness based on relationships do not have any affect on outcomes. Multi-informant data from 109 hospitals revealed that cognition-based trust is a moderator in the relationship between conflict and outcomes whereas affect-based trust does not moderate the relationship. The implications of the divergence roles of both conflict and trust are discussed.     

Strategic agility,dynamic relational capability and trust among SMEs in transitional economies

Rapid growth and urbanizing populations are transforming Africa, despite environmental turbulence, uncertainty and relational complexity. Research highlights how small firms rely upon trust-based buyer-supplier relationships in such contexts. Our study adopts a micro-foundational perspective and builds on dynamic capabilities literature and psychological trust theory. Our conceptual model shows how relational dimensions (i.e. communication, social bonds, and knowledge), influenced by meta-capabilities (strategic sensitivity, resource fluidity and leadership unity) embedded in micro-foundational activities build trust in small business cross-border buyer-seller relationships to support dynamic relational capability and enhance strategic agility in transitional economies.     

The Effects of Conflict Types, Dimensions, and Emergent States on Group Outcomes

In this study, we examine three types of conflict (task, relationship, and process) and four dimensions of conflict (emotions, norms, resolution efficacy, and importance) in decision making groups. We also investigate emergent states (e.g., trust, respect, cohesiveness; Marks et al. 2001; Acad Manag Rev 26: 530–547) as mediating the effects of the conflict types and dimensions on group outcomes (productivity and viability). All three types of conflict decreased positive emergent states in groups and this led to a decrease in group viability (the ability of a team to retain its members through their satisfaction and willingness to continue working together; Balkundi and Harrison 2006; Acad Manag J 49: 49–68). This effect was alleviated by resolution efficacy (the belief that the conflict can be easily resolved) regarding process conflict, but could be exacerbated by any negative emotion associated with relationship conflict. Norms that encouraged task conflict also increased positive emergent states within groups, which marginally and positively influenced group performance.     

Critical success factors in relationship management for services outsourcing

This study examines the relationship between outsourcing motives, supplier–customer relationship and perceived customer value in non-core services outsourcing. 1,757 companies were randomly selected. 234 valid questionnaires were returned (13.4 % response rate). The structural equation method was used to obtain the best fit model. The most significant contribution of this study is that ‘relationship interaction’ (communication, cooperation, coordination, collaboration, conflict resolution and integration activities) has a greater impact on customer perceived value than ‘relationship quality’ (loyalty and trust) in services outsourcing. The perceived customer value is reflected in improved services quality, reliability and agility rather than the expected cost savings.     

Trust types,distrust, and performance outcomes in small business relationships: the pharmacy–drug warehouse case

This study attempts to investigate the linkage among trust types, distrust, and relationship performance outcomes in the context of long-term supply agreement-type alliances between small business dyads. The results suggest a significant positive relationship among goodwill trust and risk-taking tendency, cooperation, satisfaction, and conflict resolution and a negative relationship between goodwill trust and transaction costs. Competence trust is found to have a positive relationship with cooperation, conflict resolution, and satisfaction and a negative relationship with transaction costs. However, no significant relationship is found between competence trust and risk-taking tendency. Distrust, on the other hand, is found to have a negative relationship with cooperation, satisfaction, and conflict resolution and a significant positive relationship with transaction costs with no effect on risk-taking tendency.     

Do the magnitude and asymmetry of specific asset investments matter in the supplier–buyer relationship?

Abstract

Despite a body of literature on specific asset investments, the extant literature falls short of exploring the magnitude and symmetry of specific asset investments in supplier–buyer relationships. This paper builds on prior research to identify and examine the impact of total and asymmetric specific asset investments on commitment, trust, and conflict in supplier–buyer relationships. Covariance structure analysis is used to analyse survey data. The results show that total SAI are positively related to commitment and trust, while asymmetric SAI are negatively related to trust and positively related to conflict in supplier–buyer relationships. Decision-making uncertainty affects trust, commitment, and conflict more than any other variables. Therefore, firms should work to strengthen their relationships by increasing the magnitude of specific asset investments with the aim of increasing trust and commitment. We also discuss the limitations of this study and suggestions for future research.     

American Keiretsu:

ABSTRACT

This paper explores the cultural dimension of organizing international buyer-seller relationships. Based on studies of national cultures, it is argued that economic actors will reproduce their social order when interacting across cultural boundaries. Differences in the organization of international buyer-seller relationships can thus be explained by cultural differences. When testing the hypotheses of cultural differences in the context of international distribution channels for Norwegian farmed salmon, only minor cultural differences were detected. This may be due to the fact that the fisheries is a very international industry, and a specific culture within the international fisheries industry may exist.     

Dimensions and Levels of Trust: Implications for Commitment to a Relationship

Previous research has found that trust is positively related to commitment in buyer-seller relationships. However, the validity of this finding is questionable because trust has been operationalized in many different ways. For example, prior research has not distinguished among levels of trust (interpersonal or organizational trust) and dimensions or motives of trust (credibility or benevolence). In this study, we distinguish among the levels and dimensions of trust. The results indicate that trust in a sales representative (interpersonal credibility) is more strongly related to commitment than trust in an organization (organizational credibility). In contrast, trust based on organizational benevolence is a stronger predictor of commitment than interpersonal benevolence.     

An Identification-Based Model of Supplier-Retailer Communication

ABSTRACT

The theoretical basis of the current thinking on supplier-retailer communication is refined and an alternative model is offered and empirically tested. It is argued and empirically demonstrated that identification is an important mediator in bringing about relational outcomes in a supplier-retailer relationship. Specifically, collaborative communication (higher rather than lower frequency, informality, bidirectionality, and indirectness of communication) from the suppliers is found to be positively related to their coordination with the retailers directly and indirectly through identification, trust, and commitment.     

Guanxi,Communication, Power,and Conflict in Industrial Buyer-Seller Relationships: Mitigations Against the Cultural Background of Harmony in China

Purpose: This research aims to investigate how guanxi influences conflict occurrence and conflict-related behavior in transactions of equipment with state-owned enterprises (SOEs) against the cultural background of harmony in China. The influence of guanxi on conflict-avoidance behaviors is discussed, and a model is proposed depicting the relationship between guanxi, the selection of communication modality, the exercise of power, and manifest conflict.

Methodology/Approach: Data was collected from persons selling equipment in the oil industry. The partial least squares method is applied to analyze the collected data.

Findings: Guanxi at the individual level positively influences the use of informal communication and the exercise of non-coercive power and negatively influences the use of formal communication and the exercise of coercive power at the organizational level. The use of informal communication is inversely related to the intensity of conflict, whereas the use of formal communication and the exercise of coercive power are positively related to the intensity of conflict. The combination of these effects is that the guanxi between representatives of business partners is negatively related to manifest conflict at the organizational level.

Contribution: This empirical research is among the earliest studies attempting to examine how guanxi influences interorganizational conflict occurrence and conflict-related behavior in industrial buyer-seller relationships in China, and it reveals a significant relationship between guanxi and the selection of communication modality, the exercise of power, and the occurrence of conflict in a guanxi-intensive market in China.

Practical Implications: First, our findings will help members of the seller's management team, especially foreign members, to better understand the behavior of their Chinese employees. Secondly, our findings should help sellers improve the effectiveness of their conflict management to increase good word-of-mouth and maximize reorders. Thirdly, our findings should help the purchasing managers of SOEs to better understand how to manage conflict to lower the project risk. Lastly, firms doing business with SOEs should take both cultural and political factors into account in their business activities.     

Give your hunger a new option: Understanding consumers' continuous intention to use online food delivery apps using trust transfer theory

The recent growth of online food delivery apps (OFDAs) centralized the restaurant's business in electronic distribution platforms. Recently, a few researchers have attempted to understand consumer behaviour towards using OFDAs. However, various aspects related to the usage of OFDAs have not been explored. Drawing from trust transfer theory, the purpose of this study is to fill this gap by investigating the trust transfer from OFDAs to restaurants and to address the boundary condition of trust transfer by examining the moderating effect of perceived effectiveness of dispute resolution (PEDR) between trust in OFDAs and trust in a restaurant. The model was tested via structural equation modelling (SEM) using data obtained from 836 users of OFDAs through structured questionnaire. The results show that trust in OFDAs positively influence the trust in restaurant, which ultimately leads to the consumers' continuous purchase intention. Further, PEDR positively moderates the relationship between trust in OFDAs and trust in a restaurant. Additionally, disposition to trust and online reviews significantly develops consumer trust in OFDAs. The present research makes substantial theoretical and practical contributions as it develops a trust transfer mechanism by considering an emerging mobile-commerce field. The study provides a first theoretical outlook on consumers' continuous intention to use OFDAs, using trust transfer theory, which has not been considered so far. The findings provide information for food delivery platforms on how to manage conflict resolution to succeed in the market and help restaurants in selecting the most effective food delivery platforms with which to collaborate.     

Evidence-Based Electronic Contract Performance Monitoring

One aspect of the development of e-market services for the facilitation of business-to-business electronic commerce concerns the provision of automated support for contract performance assessment. Assessing the parties' performance of an agreement, once it comes into force, requires reasoning with the contract terms (obligations, rights, powers and other legal relations that obtain between parties) as parties go about conducting their business exchange, sometimes complying and sometimes deviating from their pre-agreed prescribed behaviour. Compliance with prescribed behaviour is typically evaluated individually by each partner to an agreement and where parties' views differ, disputes arise that require some form of resolution.In this paper we present a simple architecture for an e-market, where an artificial (controller) agent undertakes such resolution. The controller's decision-making is informed by the agreement and each party's view of whether its own and the counter-party's behaviour comply with it. Thus, the controller forms an opinion on the basis of such evidence (and possible additional recommendations from agents representing the parties), in similar spirit to a (human) judge's process of reasoning in arriving at his ruling. We consider this as a belief formation problem and explore the potential of using subjective reasoning to represent an individual's (possibly partial) views and to reason about their joint conflict and consensus formation. We comment on the relation of such belief formation on the establishment of trust between partners to an agreement and between the latter and the controller of an e-market.     

Effects of relationship climate, control mechanism, and communications on conflict resolution behavior and performance outcomes

In this two-year study we develop and test a comprehensive model of conflict management. The conceptual model commences by demonstrating the importance of channel members’ past history of interactions as ‘setting the stage’ for members’ present ability to interact, that is, communicate, resolve conflict disputes, and ultimately, culminate in performance outcomes (financial as well as relational). In effect, we track the full gamut of conflict management related constructs in the conceptual model, from antecedent conditions to the consequents of conflict management. Empirical results, utilizing a sample of 282 retailing agents affiliated to a large North American supplier (principal) across two years, indicate strong evidence for fourteen of the eighteen hypotheses drawn from our conceptual model. Specifically, among other effects, data reveal that past history of cooperative versus conflictive orientations and bureaucratic versus trust-based governance mechanisms significantly influence the communication strategies adopted, which in turn determine whether the distributive or integrative conflict resolution behaviors are adopted. Further, the choice of conflict resolution behaviors adopted commensurately influences relational performance, and the type of communication strategy adopted influences financial performance. The paper concludes with a series of managerial implications and an agenda for future research.     

Firm-employee relationship strength—A conceptual model

This paper posits a model of firm-employee relationship strength that permits the future measurement of an index of the strength of intra-firm relationships between the firm and the employees of that firm. The relationship marketing literature currently provides no clear direction as to how to represent and measure the strength of firm-employee relationships. The proposed model emerges from an examination of previous marketing and non-marketing literature through exploration of possible concepts to represent measuring strong and productive work relationships, focusing on relationship strength as the construct of interest. The review of the literature on the concept of relationship strength results in the development of an index model of firm-employee relationship strength predicted by cooperation, balanced power, communication, attachment, shared goals and values, trust and the absence of damaging conflict. The article concludes with a list of contributions that the model provides to the relationship marketing literature, as well as suggestions for future research. This includes examination of the impact of the relationship that a firm has with employees on external firm relationships, most particularly with customers.