Creativity in buyer–seller relationships: The role of governance

This research proposes a framework for relating governance mechanisms (power, contracts, and trust) to the generation of creative approaches to business activities in buyer–seller relationships. The framework is tested with a survey of 262 purchasing agents. The results indicate that trust and contract affect the three facilitators of inter-organizational creativity: (1) knowledge-sharing routines (resources), (2) learning orientation (motivation), and (3) managerial support and open-mindedness (managerial practices). Also, the effects of trust and contract on the creativity in buyer–seller relationships are fully mediated by the above three facilitators. In particular, trust plays a more influential role in stimulating creativity. While power is not significantly associated with any of the facilitators, its overall effect on creativity is negative.     

Strategic fit, contractual, and procedural governance in alliances

This paper focuses on the simultaneous mediating and moderating effects of different governance mechanisms on the relationship between conditions for alliance formation and outcome. Alliance governance takes two distinct forms: contractual integration and procedural coordination. While contracts may help set the legal parameters of the alliance agreement, it is day-to-day coordination of activities and processes that determine the effectiveness of such contracts. The proposed framework explains how knowledge outcome of collaborative relationships may be determined by the match of partner motives, influenced by the mix of contractual and procedural governance. A series of testable propositions helps answer the following question. Do combinations of contractual and procedural governance mechanisms, given specific strategic fit, explain knowledge performance differentials?     

The role of flexibility in online business

Companies are trying to be more competitive by establishing a presence on the fast-growing Net. At the same time, the Net's business environment is growing more complex and uncertain. Management literature argues that flexibility can enhance corporate responsiveness to such an environment. However, research on e-businesses has focused mainly on the idea of customizing online offerings. Here is a holistic view of flexibility, investigating how online companies can become flexible through the different functional aspects of their business—technology, human resources, operations, marketing, finance, and management. What are the related opportunities and pitfalls? And what guidelines can managers follow?     

The role of customer satisfaction in enhancing customer loyalty in Malaysian Islamic banks

This study examines the role of customer satisfaction in enhancing the loyalty of Muslim and non-Muslim customers in the Malaysian Islamic banking industry. Respondents are the customers (Muslim and non-Muslim customers) visiting the bank counters and have an account with Islamic banks. A total of 660 questionnaires were distributed, and 440 were returned. The results indicate that customer satisfaction has a statistically significant positive effect on customer loyalty and intentions to switch for Muslim and non-Muslim customers. However, there were significant differences in the effects of customer satisfaction on customer loyalty and intention to switch for Muslim and non-Muslim customers. The effect of customer satisfaction on customer loyalty and intention to switch is greater for the non-Muslim than the Muslim customers.     

Disclosure requirements to consumers within contractual relationships in English law

This paper examines the question of what information has to be given under English law to the consumer by the supplier of goods or services. It begins with a historical approach showing that the general rule has been that no information has to be given to the consumer. Progress has, however, been made by the law in two ways. Firstly, by ensuring that where there are contractual terms, they are less one-sided than they would be if the supplier's term always prevailed. Exemption clauses have been banned or restricted by Acts of Parliament in 1973 and 1977. Secondly, by requiring suppliers (or persuading them through self-regulatory codes of practice) to give more information to consumers. The greatest progress has been made in instalment credit, especially under the Consumer Credit Act 1974.

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Informationspflichten gegenüber Endverbrauchern in vertraglichen Schuldverhältnissen im englischen Recht

Zusammenfassung Das englische Recht kennt keine allgemeine Informationspflicht des Unternehmens gegenüber Endverbrauchern in vertraglichen Schuldverhältnissen. Dieser Ausgangspunkt des Common Law ist jedoch in den letzten Jahrzehnten zunächst durch die Rechtsprechung und dann stärker durch gesetzgeberische Intervention und durch internationale Abkommen modifiziert worden. Der Beitrag unterscheidet fünf Entwicklungsetappen von Informationspflichten: durch Entwicklung stillschweigender Vertragsvereinbarungen (implied terms), durch Beschränkung von schriftlichen Freizeichnungsklauseln in der Rechtsprechung, durch gesetzgeberische Statuierung von Informationspflichten, insbesondere im Bereich des Verbraucherkredits, des Versicherungsrechtes, der Kennzeichnung und Werbung, sowie der Aufstellung von Mustergeschäftsbedingungen unter Mitwirkung des Office of Fair Trading. Die neue Gesetzgebung unterwirft Freizeichnungsklauseln weitgehender Beschränkung, auch wenn der Verbraucher darüber informiert worden ist. Schließlich bestehen Informationspflichten aufgrund internationaler Abkommen, insbesondere im Verkehrswesen. Der Beitrag befürwortet eine Weiterentwicklung und Verallgemeinerung von Informationspflichten im englischen Recht.

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Gordon Borrie (Professor of English Law, Birmingham) is Director General of Fair Trading, London EC₄A₁, Field House. This paper was first presented at the EEC/ERACA International Symposium on Consumer Information, Brussels, November 23–25, 1977.     

The link between customer satisfaction and loyalty: the moderating role of customer characteristics

This research examines whether trust and commitment mediate the extent to which satisfaction influences loyalty, and whether such mediation is conditional on certain demographic or situational customer characteristics. The findings suggest that assuming homogeneity supports the general notion that trust and commitment partially mediate the extent to which satisfaction influences loyalty. FIMIX-PLS and PLS-MGA analyses substantiate that this mediation differs between two distinct customer segments. The two segments reveal heterogeneity in how trust and commitment partially mediate the link between satisfaction and loyalty. That is, the effect of satisfaction on loyalty is fully mediated by trust and commitment in the segment of customers with high education, whereas satisfaction is partially mediated by trust, but not by commitment, in the other segment of customers with less education.     

Exploring the governance mechanisms of quasi-integration in buyer-supplier relationships

This article deals with quasi-integration governance mechanisms in the context of business-to-business buyer-seller relationships. Based on transaction cost analysis and resource dependence theory, the authors identify four key elements of quasi-integration: legal contract, joint problem solving, joint planning, and collaborative communication. From the perspective of resource dependence theory, the authors examine the effects of interdependence on these four elements. Empirical evidence derived from a study of 398 Chinese companies indicates that (1) the four governance mechanisms of quasi-integration are driven by inter-firm dependence; and that (2) legal contract serves as an important foundation of joint problem solving. In addition, the authors examine the distinct effects of the four elements on two critical exchange outcomes: supplier performance and buyer commitment. Their analysis shows that legal contract, joint planning, and collaborative communication positively affect supplier's performance, while joint problem solving and collaborative communication significantly enhance the buyer's commitment to the relationship.     

The role of channel quality in customer equity management

Maximization of customer equity is a core objective of customer–company relationship management. We present an extended model of customer equity for determining the optimal allocation of marketing resources across acquisition and retention activities. Focusing on the negative relationship between acquisition and retention, we motivate channel quality as a relevant decision variable, explicate its role in the model, and demonstrate the existence of an optimal value. In addition, rather than making concavity assumptions about acquisition and retention rate response curves, we use the flexible ADBUDG model (Little, JDC, Models and Managers: the Concept of a Decision Calculus. Manag Sci 1970; 16(8): 466–484.), which allows for both S-shaped and strictly-concave relationships, and parameterize it using decision calculus. We show how to estimate and apply the model and then provide sensitivity analyses with respect to changes in the true values of model parameters as well as inaccuracy in managerial inputs. We conclude by comparing our model with extant models and discussing the implications of our research.     

The antecedent role of customer-to-employee relationships in the development of customer-to-firm relationships

In this study, a customer-to-employee (C–E) relationship construct is employed to test the antecedent role of C–E relationships in the development of customer-to-firm relationships. The authors propose a conceptual model of the relationships that are hypothesized to exist among the constructs of ‘rapport’, ‘relational benefits’, ‘affective commitment’, and ‘dedicational behaviours’ of customers with respect to full-service restaurants. This study demonstrates that rapport has a positive influence on customers' perceptions of relational benefits and that rapport and enhanced perceptions of relational benefits induce customers to develop affective commitment and form intentions to engage in dedicational behaviours towards restaurants.     

Managing customer relationships. The challenge of deploying scarce managerial resources

In industrial markets many managers from marketing, technical service and production functions interact with customers. How should these managers be allocated to an evolving array of customers? This paper reports on the customer visits made by the managers of one packaging supplier. The visits of the marketing people seem related to the financial significance of the customer, whereas the technical visits are best understood by a ‘portfolio’ approach. At the same time many idiosyncratic and situational factors affect resource deployments.     

The role of lifetime activity cues in customer base analysis

This paper develops the notion of lifetime activity cues in customer base analysis. The authors first discuss the impact of lifetime indicators, such as customers' conceptual response to marketing activities, and then demonstrate how such lifetime cues can be embedded into the Pareto/NBD model. The authors theoretically analyze the implication of this additional behavioral indication on the model's predictions. In an illustrative example, they aim to establish an intuitive understanding of the effects of such information. Evidence from the cellular phone industry supports the relevance of this concept: The empirical study finds a substantial improvement in predictive accuracy in two independent holdout samples. The study concludes with a discussion of the managerial relevance of the proposed approach and opportunities for further research.     

How customer experience incongruence affects omnichannel customer retention: The moderating role of channel characteristics

Although a positive customer experience is known to be an important source of competitive advantage, it is unclear how customer experience can be effectively managed in an omnichannel setting. Drawing on goal theory, this study explores the effect of incongruity between online customer experience and offline customer experience on customer retention in an omnichannel context. It also examines the moderating effects of three channel characteristics: transparency, convenience, and seamlessness. Our hypotheses are tested with online survey data, and the results indicate that in an omnichannel context, customer experience incongruence has a negative effect on customer retention, but channel transparency, convenience, and seamlessness can effectively mitigate this negative effect. The findings have both theoretical implications for research related to omnichannel business and customer experience and practical implications for managers of omnichannel services.     

When service fails: The role of the salesperson and the customer

Service failures and consequent recoveries have been identified as a critical determinant of customer retention. Hence, effective service recovery programs warrant further exploration. In particular, with the current emphasis on relationship selling, salespeople should learn how to improvise to serve their customers effectively, including solving problems when service failure occurs. Therefore, alternatives to current common practices in industry should be investigated. The results of the present study suggest that by providing customers a choice of service recovery options, salespeople can augment customers' sense of control and ultimately their satisfaction with the service recovery and the overall service transaction. The investigation also proposed that customer satisfaction would be contingent upon the importance of the service. However, study findings revealed that this was not the case. Implications of the findings are also discussed. © 2006 Wiley Periodicals, Inc.     

How habits, social ties, and economic switching barriers affect customer loyalty in contractual service settings

While existing literature acknowledges positive effects of satisfaction and economic switching barriers for building customer loyalty, studies analyzing interactions of these antecedents reveal mixed findings. Prior research does not consider, as antecedents of switching barriers, either habits or social ties that result from shared service-usage within a family or community. This paper contributes to the literature, first, by replicating the effects of satisfaction, economic switching barriers, and their interaction with customer loyalty and word-of-mouth of subscribers to a contractual service. Second, the study empirically tests the role of social ties as a social switching barrier. Third, the study introduces and tests the effects of habits as a precursor of economic and social switching barriers. Results reveal significant positive effects of satisfaction, economic switching barriers, and social ties on customer loyalty and word-of-mouth. Additionally, economic switching barriers and social ties interact significantly with satisfaction and habits act as a precursor of economic switching barriers and social ties.     

The impact of new technologies on customer satisfaction and business to business customer relationships: Evidence from the soft drinks industry

Sales technology has been touted as a primary tool for enhancing customer relationship management (CRM) and thus improving overall customer satisfaction. The marketing, IT, and practitioner literatures make numerous references to the impact of CRM on business orientation and performance. However, according to Richard et al. (2007), not many studies have investigated customer relationship technology adopted by a firm and the impact on relationship development. The aim of this paper is to examine the relative impact of new technologies on improving customer relations and overall customer satisfaction within the sales industry. New technologies have revolutionised the workplace and have become an integral part of organisations throughout the world (Forster, 2000). Driving this revolution are two powerful new forces, cyberspace and computing power. This article defines three key terms which include CRM, customer satisfaction and new technologies and evaluates the impact of these emerging technological developments on relationships and customer satisfaction in a sales force/customer context. Primary research was conducted using two focus groups consisting of nine participants from Britvic. The analysis reveals that technology is both beneficial and essential within the sales force industry for both the sales representative and their customers and provides an insight into the impact of technology on the sales force/customer relationship. The paper concludes with reference to new technologies and the future.     

Rethinking corporate governance in the digital economy: The role of stewardship

Digital technologies are increasingly changing the nature of competition and generating externalities that impact society. On the one hand, digitalization allows organizations to create substantial economic value in shorter periods of time through improved economies of scale, scope, and learning, resulting is increasing returns on capital and competitive concentration. On the other hand, ensuing societal concerns with inequities, regulatory lapses, and lack of transparency and truthfulness represent significant challenges for effective corporate governance. This article addresses the consequences to stakeholders that emerge from the digital economy, discussing how traditional governance mechanisms are ill-equipped to subvert negative externalities. We offer a stewardship-based model of corporate governance as a solution to the pressing problems plaguing consumers, employees, and other salient stakeholders of digital business excesses, with an emphasis on truthful disclosures, enhanced transparency, improvements in equitable allocation of organizational resources, and heightened trust relationships. The focus is on the positive role that organizational leaders can play as exemplars of virtuous stewardship in a highly networked society. The article redefines a modern view of stewardship in a digital economy and applies its principles to the four Ts of virtuous stewardship, a practical corporate governance model that encompasses truthfulness, transparency, trust, and technological equity.     

The role of customer gratitude in making relationship marketing investments successful

This paper recognises that customer loyalty is important for many competitive organisations, and that retail firms make investments to build and maintain loyal relationships with their existing and potential customers (e.g. loyalty programs). However, there has been little focus on the mechanisms by which these relationship investments operate to achieve customer loyalty. This paper examines one mechanism, namely customer gratitude, which works to make a firm’s relationship marketing investment a success or a failure. Using data from 1600 undergraduate students, this study empirically confirms the mediating role of customer gratitude between the customers’ perceptions a firm’s relationship marketing investments and customers’ perceptions of the value of the relationship with the firm. Further, a significant moderating effect of perceived benevolence on the relationship between customers’ perceptions a firm’s relationship marketing investments and customer gratitude was identified. For theorists, this customer gratitude model offers a better psychological explanation of how relationship marketing investments operate to improve the value that customers place on their relationships with retailers. Our research suggests that managers should invest resources to stimulate customer gratitude in order to build strong customer–seller relationships.     

Role of gratitude and obligation in long term customer relationships

This paper examines the role of gratitude and obligation in customer relationships. We surveyed 398 customers exiting grocery and clothing stores in Ahmedabad and Jaipur cities in India, after they had finished shopping. We analysed their responses using structural equation modelling (SEM). We found that social and structural investments by sellers created gratitude among customers, resulting in short-term purchase intensions and increased customer loyalty.In contrast, financial investments made by sellers created obligation among customers, and reduced customer loyalty. The paper also discusses theoretical and managerial implications of these findings.     

The role of customer operant resources in health care value creation

Service Business - Service-dominant logic advocates that customers co-create value with a firm by contributing operant resources. However, do their operant resources contribute to improving the...