Purpose
The purpose of this paper is to consider the impact of effectuation when used by small suppliers within key account management (KAM) relationships.
Design/methodology/approach
An exploratory longitudinal case study approach was used to examine a single small supplier operating in the snack foods sector of the UK foods industry, as it entered into a new KAM relationship with a major retailer and undertook four new product development projects.
Findings
Findings suggest effectuation may positively moderate the ability of a small supplier to enter into a KAM relationship by enabling it to obtain resources and limit risk. However, once within the relationship, the use of effectuation may negatively impact success by increasing the potential for failure to co-create new product development, leading to sub-optimal products, impacting buyer confidence and trust. Furthermore, a failed KAM relationship may impact other customers through attempts to recover revenues by selling these products, which may promote short-term success but, in the long-term, lead to cascading sales failure.
Research limitations/implications
It cannot be claimed that the findings of just one case study represent all small suppliers or KAM relationships. Furthermore, the case presented specifically concerns buyer-supplier relationships within the food sector.
Practical implications
This study appears to suggest caution be exercised when applying effectuation to enter into a KAM relationship, as reliance on effectual means to garner required resources may lead to the production of sub-optimal products, which are rejected by the customer. Additionally, a large customer considering entering into a KAM relationship with a small supplier should take care to ensure their chosen partner has all resources needed to successfully deliver as required or be prepared to provide sufficient support to avoid the production of sub-optimal products.
Originality/value
Findings suggest the use of effectuation within a KAM relationship has the potential to develop a dark side within business-to-business buyer-supplier relationships through unintentional breaches of trust by the selling party.
The Effect of Market Orientation and Entrepreneurial Orientation on the New Product Development
