BOOK REVIEWS

Purpose: Companies engage in business relationships for a variety of reasons, including specialization, product development, and building competitive networks. Research has demonstrated that mergers and acquisitions (M&As) may challenge ongoing business relationships. The purpose of this article is to investigate whether and how competition authorities consider business relationships when evaluating M&As.

Methodology: The article uses the documentation from 450 M&As reported to the Swedish competition authority to capture the way in which an authority evaluates M&As. The Swedish competition authority evaluation corresponds to other national and international evaluation procedures.

Findings: The findings indicate that the competition authorities neglect an important aspect of business life, namely companies forming business relationships. The competition authorities evaluate M&As on the basis of risk for price increases, and consequently disregard such issues as heterogeneity in demand and offerings, and values built into existing business relationships.

Originality/Value/Contribution: The article contributes to research on business relationships through exploring how a public authority deals with such relationships. It also contributes to research on mergers and acquisitions through examining how these activities are evaluated by competition authorities. Furthermore, the article contributes to competition research by reflecting on competition law concerning M&A regulations in relation to business relationships.     

Electronic Marketplace: A Distinct Platform for Business-to-Business (B-to-B) Procurement

Purpose: The purpose of this study is to examine whether buyers perceive different electronic marketplaces (EMs) as distinct types of procurement platforms. More specifically, it empirically investigates to what extent professional buyers expect different benefits from different EM types and perceive different barriers associated with their usage.

Methodology: A Web-based survey of purchasing professionals in the United States was conducted with 359 responses received. A multivariate analysis of variance (MANOVA) was performed to determine if there are significant differences between EM types with respect to expected benefits (market aggregation and inter-firm collaboration) and perceived barriers (financial risks and trust barriers).

Findings: The results show buyers' expectations of benefits differ significantly between public EMs (i.e., third-party exchanges and industry-sponsored marketplaces) and private EMs (i.e., private trading networks), and between neutral EMs (i.e., third-party exchanges) and biased EMs (i.e., private trading networks and industry-sponsored marketplaces). Likewise, their perception of barriers differs significantly between public and private EMs.

Research limitations/implications: The research confirmed empirically that EMs are a distinct platform for business-to-business procurement. Nevertheless, by examining EMs from business buyers' perspective, this study necessarily limits itself to purchasing-related issues.

Practical implications: By providing insights into buyers' perceptions, our findings can help managers focus their promotional efforts aimed at potential firms that would like to use EM for procurement by emphasizing specific benefits or addressing specific perceived barriers based on the type of EM they manage.

Originality/value: This study fills a void in academic literature on EMs that currently contains few empirical studies with respect to EM types. Its main contribution is in establishing empirically that EMs do not constitute a single, homogeneous marketspace but are instead comprised of distinct types that offer users specific benefits and expose them to certain risks.     

Relationship and Market Conditions: Outcomes in Marketing Channels

Purpose: In today's highly competitive business environment, many organizations are tending to reduce the number of suppliers to focus on establishing stable and close relationships with a small number of them. The study here analyzes the influence of both market and relationship conditions on trust, commitment, and customer loyalty.

Methodology/Approach: Empirical research was conducted by collecting information from a sample of 304 retailers. A structural equations model is estimated.

Findings: Results support a positive influence of relationship value on trust and, in turn, on long-term orientation and commitment, with the latter as a strong antecedent of customer loyalty. In contrast, dependence on the main supplier does not seem to exert a significant effect on long-term orientation and commitment.

Originality/Value/Contribution: The evidence suggests that relationship conditions are important for creating value in B2B settings. Results shed additional light on the process of calculating, creating and claiming value.     

Considering Technological Impacts When Selecting Food Suppliers: Comparing Retailers' Buying Behavior in the United States and Europe

Purpose: The research investigates the impact of emergent technologies, specifically supply-chain technology and food-production technology (i.e., genetically modified organisms [GMO]), on global food retailers' supplier decisions.

Methodology/approach: Qualitative research is conducted to examine technology-related vendor selection criteria of food retailers in 5 European countries comparing to those in the US.

Findings: Our findings show that global food retailers view supply-chain technology as a competitive advantage and is integrated as an important selection criteria; however, selection criteria differ for food-production technology between the United States and the European countries. European food retailers explicitly oppose food-production technology (GMO), while U.S. food retailers implicitly accept food-production technology. Emerging from this opposing view, global food retailers establish similar criteria for organic food (non-GMO) supplier selection: reliability, distance, consistent quality, and relationships with suppliers.

Research implications: Applying the supplier choice criteria framework (Lehmann and O'Shaughnessy 1982 Lehmann, D. R. and 'Shaughnessy, J. O. 1982. Decision criteria used in buying different categories of products. Journal of Purchasing and Materials Management, 18: 9–14.  [Google Scholar]) to further analyze organic food suppliers, we find that reliability (adaptive criterion), distance (integrative criterion), consistent quality (performance criterion), and relationships with suppliers (economic criterion) are essential, but price is not.

Practical implications: This study suggests that to sustain competitiveness in the global food market, food suppliers not only need to ensure technological compatibility in supply-chain, but also adapt to the local food-production restriction (GMO) and organic food selection criteria preferences.

Originality/value/contribution: Supply-chain technology is strategically important and is adopted by global food retailers for competitive advantage; yet, there are dramatic differences regarding the acceptance of food production technology. This research contributes to the better understanding of how technologies exert significant and strategic weight in the food supplier selection process.     

Effects of Network Embeddedness on the Relationship Between Environmental Volatility and Interfirm Contracts

Purpose: This study examines the effects of an embedded network on the contractual relationship between exchange parties under conditions reflecting varying levels of environmental volatility and investigates the role of an important network factor—the embedded network—in the contractual relationship between manufacturers and their suppliers.

Methodology: The empirical test was conducted with manufacturing companies in the context of manufacturer–supplier relationships. Construct measures were based on existing measures and previous research. Measurement reliability and validity were established using exploratory and confirmatory factor analysis and an overall measurement model was assessed with structural equation modeling using LISREL.

Findings: The results of a survey of manufacturers indicate that firms in an embedded network preferred “soft” contracts even when they face volatile environments, whereas those facing volatile environments in a less embedded network preferred “hard” contracts with explicitly specified written requirements. Network partners carefully evaluated embedded networks (a critical factor that has not received enough attention) before forming contractual relationships in a network perceiving interfirm relationships differently.

Originality: The study introduces network embeddedness to explain governance mechanisms in volatile environments and shows that the explicit recognition of embedded network may facilitate the development of contracts with specific provisions as the contractual relationship evolves.     

Customer Participation and Project Performance: The Mediating Role of Knowledge Sharing in the Chinese Telecommunication Service Industry

Purpose: Extant literature has devoted more attention to customer value co-creation and knowledge sharing, not only in business-to-customer (B2C) markets, but also in business-to-business (B2B) markets. This study explores and examines the antecedents and consequences of customer knowledge sharing in the context of B2B markets by applying the motivation-opportunity-ability (MOA) framework.

Methodology/Approach: This empirical study involves two structured surveys of project managers from both suppliers (n = 213) and customers (n = 312), which were conducted in the context of the Chinese telecommunication service industry. The conceptual model of this study was subsequently tested by developing Partial Least Squares (PLS) based structural equation models.

Findings: It was found that customer knowledge sharing is facilitated by four MOA factors: customer orientation, customer perceived benefits, customer socialization, and customer technological capability. It was determined that knowledge sharing has a direct and significant effect on project performance. Furthermore, the study revealed that such relationships vary across suppliers and customers.

Research Implications: This study extends the existing research stream of interfirm knowledge sharing by examining the antecedents and consequences of customer knowledge sharing from dual perspectives of customers and suppliers, and sheds light on the benefits of customer knowledge sharing. The dyadic perspective embodied in this design facilitates our understanding and management of knowledge sharing between organizations.

Originality/Value/Contribution: This article provides an important contribution to the existing literature of customer knowledge sharing by revealing how to effectively facilitate interorganizational knowledge sharing, particularly knowledge from customers to suppliers, and discovers conditions under which customers are more likely to exchange information, and share knowledge with their suppliers from the dyadic perspective.     

Using Signals to Initiate Importer-Exporter Relationships: Evidence from Vietnamese Importers

ABSTRACT

Purpose: Realizing the existence of information asymmetry in export markets and the use of signals to distinguish high-qualified sellers from low-qualified sellers, this study investigates the effects of signal consistency and signal clarity on exporter credibility, and subsequently, importer relationship intention.

Methodology: Using a survey data set collected from a systematic sample of 418 Vietnamese importers, the authors tested a model hypothesizing the impact of signal consistency and signal clarity on exporter credibility, and subsequently, on importer relationship intention.

Findings: The authors found that signal consistency and clarity have a positive impact on exporter credibility. Signal consistency also enhances the level of signal clarity. They also found that exporter credibility underlies importer relationship intension.

Research Implications: Under the condition of information asymmetry, importers face difficulties in identifying and evaluating the best supplier among available suppliers in order to make the most appropriate selection decision. The findings confirm that signal clarity and consistency can help exporters to overcome such problems. Exporters should ensure that all signals sent to importers are clear and consistent over time to encourage importers to build long-term business relationships with them.

Contributions: The findings of this study add to the literature on signaling in exporter–importer relationships and can serve as an initiation for further research in the area in transitioning economies.     

Deterrence or Conflict Spiral Effect? Exercise of Coercive Power in Marketing Channels: Evidence from China

Purpose: The article aims to test the appropriateness of deterrence and conflict spiral models in marketing channels. Both models have been alternatively used as bases to explain firms’ power-related behaviors in marketing channels. However, the issue of the appropriateness of such an application in various contexts has not yet been addressed.

Methodology/approach: The authors develop the hypotheses based on deterrence theory and their alternatives based on conflict spiral theory. They gather data from 204 sales representatives of suppliers in China and use linear regression analysis to test their hypotheses versus alternatives.

Empirical findings: The data analysis offers supportive evidence for the deterrence logic but with unexpected results. By elaborating on the empirical results, the original assumption of deterrence theory, and the nature of interfirm relationship in marketing channels, the authors modify the deterrence model for research on power related-behaviors in the given context. The analysis implies a possible explanation for inconsistent findings in the literature regarding exercises of coercive power.

Originality/value/contribution: This article proposes a revised deterrence model that can interpret the empirical results with a consistent logic and better predict power-related behaviors in marketing channels.

Research limitations/implications: The research results may lack generalizability with respect to channel type and culture. It does not directly test the cognitive mechanisms that mediate the impact of power on its exercise. Researchers are encouraged to directly test the mediating constructs in other channels or countries.

Practical implications: The article includes some insights and implications for managers in understanding power structure and implementing influence strategies in business-to-business marketing.     

Conceptualization and Integration of Marketing Intelligence: The Case of an Industrial Manufacturer

Purpose: The primary goal of this article was to conceptualize a systematic marketing intelligence process for industrial manufacturers because, up until now, such concepts have only been focused on consumer goods settings. Hence, this article investigates how marketing intelligence activities are developed and managed effectively in industrial markets.

Methodology/approach: The authors conducted a case study of Maschinenfabrik Reinhausen, a German based manufacturer of regulation technology for power transformers.

Findings: We found that a systematic marketing intelligence process should be based on the resource- and market-based view of strategy as well as on the market orientation construct. When implementing marketing intelligence, the integration of the sales force within the whole process is the crucial lever for an industrial company. The formalization of the process is necessary to ensure its continuity and acceptance; however, the varying intensity allows the necessary flexibility of the process.

Research implications: The constraints of the decisive process steps of marketing intelligence have to be further enhanced for industrial markets. It is important to find out how the integration of the sales force can best be designed to incorporate reward systems and motivation structures, and how to establish a corporate marketing-minded culture throughout the organization.

Practical implications: The important steps for a well implemented marketing intelligence process are a preparation phase, followed by the gathering, analysis, and dissemination of information. This article highlights the success factors for each process step. Above all, managerial and organizational commitment is necessary for the implementation of the whole process.

Originality/value/contribution: By focusing on the industrial manufacturing business, this study provides deep insights into a neglected area of research. Light needs to be shed on marketing intelligence in industrial markets, where the lack of traditional market research has to be compensated.     

Customer Involvement in Product Development: An Industrial Network Perspective

Purpose: In business markets, working with customers and users has become increasingly important to get knowledge about customer needs and to develop new products. The purpose of this article is twofold: (1) to develop a framework for analyzing customer involvement in product development in a business market context, and (2) to apply this framework to a particular company to describe and analyze how it practices customer involvement.

Methodology/approach: The article takes its main theoretical starting point in the industrial network approach, but also uses other literature from the innovation and product development field. The empirical study applies a qualitative case study approach and focuses on one company in the truck business.

Findings: The suggested framework deals with four key aspects of customer involvement: Why, when, how, and who. The observed pattern of the truck manufacturer shows how dealers, hauliers, and truck drivers are all part of the overall understanding of the customer. These actors are involved for different, typically very clear, purposes at different points in time through surveys, product clinics, and field testing. The pattern, referred to as mixed facilitative, is not one of close collaboration with individual customers, but one of broad involvement of several customers through business intelligence and direct involvement.

Research implications: First, the article provides researchers with a framework and method for studying customer involvement in product development. Second, the case study provides an illustrative example of the customer involvement pattern pursued by a leading company in a major industry. This enhances the understanding of the focal phenomenon, leads to managerial implications, and gives ideas for future research.

Practical implications: There are several managerial implications related to the why, when, how, and who questions. For example, it is pointed out that managers should consider involving customers more extensively than what seems to be common today—for example, by using customers as codevelopers, working with them throughout the entire development process (i.e., not only early and late), and including different types of users (with different requirements and wishes).

Originality/value/contribution of the article: The contribution lies in the development of a framework centered on the four key questions of customer involvement in

product development and using this framework for observing a pattern, and finding explanations and relating this pattern to how other firms are doing.