scholarly journals Are business relationships institutions?

Competitio ◽  
2020 ◽  
Vol 3 (1) ◽  
Author(s):  
Tibor Mandjak
Keyword(s):  
Value Creation ◽  
Communication Theory ◽  
Business Relationships ◽  
Business Relationship ◽  
External Resources ◽  
Institutional Economic ◽  
Value Sharing ◽  
Business Negotiations ◽  
Complex Phenomena ◽  
Theoretical Foundations

The question is simple; the answer could be quite complicated. Inter-organisational marketing researchers define business relationships as interactive exchanges between two organisations. Does this mean anything for institutional economists? A business relationship is created by weaving actor bonds, resource ties and activity links. Business relationships exist and change through time. The establishment, development, maintenance, as well as termination of a business relationship all require investments from the participating parties. A business relationship does not exist in an isolated manner, but other market and non-market actors can equally influence it. In reality, numerous other relationships and actors affect business relationships. As a result, these actors indirectly influence business relationships through the change in behaviour of one of the parties within the business relationship. These directly and indirectly affected relationships create a business network. For an organisation business relationships have different functions. External resources neededfor operation and value creation are fed by them. Value creation for the customer and value sharing with the customer take place in business relationships. They are forms of an organisation’s interdependence. A business relationship is a special form of governance of the partners’ mutual efforts. A business relationship has its own value for each organisation. Each organisation has several business relationships, each with different value. In business markets,where buyers are always organisations, the business relationship portfolio is the market itself. Inter-organisational marketing researchers use very different theoretical foundations to study business relationships. Modern contract law based research distinguishes about a dozen norms of behaviour in business relationships. Institutional economic-rooted studies argue that we should use the plural-forms approach (price, authority and trust must be employed together) to explain these very complex phenomena. Research using communication theory concluded that multiple periods of business negotiations were required to develop even primitive norms. The paper concludes with some elements of a possible answer to the title question.

Mutual Value in Business Relationships

2010 ◽  
pp. 971-981
Author(s):  
Rita de Cássia Pereira ◽  
Carlo Gabriel Porto Bellini ◽  
Fernando Bins Luce
Keyword(s):  
Relationship Marketing ◽  
Value Creation ◽  
Business Relationships ◽  
Business Relationship ◽  
Research Fronts ◽  
Starting Point ◽  
Working Together ◽  
Relationship Assessment ◽  
Made In

Relationship marketing evolves both in quantity and quality, as we can tell from the continuous incorporation of new constructs, models and technologies, the myriad of applications in different contexts, and the interaction with other marketing and management areas. Concepts and processes in relationship marketing continue to mature significantly with the help of developments made in other research fronts. In this sense, the concept of value as communicated by authors in the field (e.g., Hogan, 2001; Möller & Törrönen, 2003) brought light to the problem of relationship assessment, if we agree that value creation is critical for companies working together in a business relationship (Walter et al., 2001); thus, value creation must be the starting point for companies and customers to assess their relationships.

The knowledge interconnection process: evidence from contract manufacturing relationships

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Tibor Mandják ◽  
Zsuzsanna Szalkai ◽  
Erika Hlédik ◽  
Edit Neumann-Bódi ◽  
Mária Magyar ◽  
...  
Keyword(s):  
Empirical Research ◽  
Knowledge Creation ◽  
Business Relationships ◽  
Business Relationship ◽  
Contract Manufacturing ◽  
Content Type ◽  
Types Of Knowledge ◽  
Body Of Knowledge ◽  
New Knowledge ◽  
Different Types

Purpose The main goal of the paper is to describe the knowledge interconnection process embedded in an interactive business relationship. The purpose of this study is to understand the knowledge interconnection inside the supplier-buyer relationship in the field of contract manufacturing. The knowledge interconnection process is defined by the authors as a process linked to business relationships, which contains different types of knowledge and various sub-processes related to them. Design/methodology/approach The Industrial Marketing and Purchasing Group (IMP) research framework has been applied and the contribution is a better understanding of the role of knowledge in the interactive business world. The empirical evidence is based on a case study of a Hungarian contract manufacturing company. This paper describes empirical, qualitative research about knowledge interconnection processes applying an abductive research design. Findings The knowledge interconnection process is linked to business relationships. It is a complex process, which contains three types of knowledge and five sub-processes. The knowledge evolution indicates the links between the different types of knowledge. The sub-processes relate to different types of knowledge and allow the flow of knowledge between the supplier and the buyer. In the business relationship, this flow of knowledge makes possible the new knowledge creation. A model of the knowledge interconnection process has been developed. Research limitations/implications Single case studies can create rich descriptions of complex phenomena, but the possibility for generalization is limited. Another limitation is that the knowledge interconnection process has been studied only from the supplier’s perspective. The present research extends IMP’s knowledge of embedded knowledge. In addition, empirical research contributes to the emerging field of IMP research that explores knowledge as a resource but lacks an empirical foundation. Practical implications The knowledge interconnection process is a decisive factor in the development and maintenance of long-term customer relations in the field of contract manufacturing. The evolution of knowledge types – from the body of knowledge to knowledge in use – demands the management of different sub-processes. Knowledge selection, knowledge recombination, knowledge mobilization and new knowledge creation processes are more strongly related to the supplier-customer dyad, while the knowledge relocation process has a network character. The knowledge interconnection process influences the company’s body of knowledge and its relationship management capability. Originality/value The originality of the study is, on the one hand, an empirical examination of the process of knowledge interconnection. On the other hand, the development of a model of the knowledge interconnection process. A further feature is that empirical research has been conducted in the field of contract manufacturing.

scholarly journals Understanding the Process of Transitioning to Customer Value Management

2006 ◽  
Vol 31 (2) ◽  
pp. 1-28 ◽  
Author(s):  
B Muthuraman ◽  
Anand Sen ◽  
Peeyush Gupta ◽  
D V R Seshadri ◽  
James A Narus
Keyword(s):  
Value Creation ◽  
Value Chain ◽  
Customer Value ◽  
Customer Relationships ◽  
Value Chains ◽  
Value Management ◽  
Business Markets ◽  
Value Sharing ◽  
Customer Value Management ◽  
The Way

Customer Value Management (CVM) has emerged as an important vehicle for customer retention in business markets. Supplier firms under increasing pressure from relentless competitive forces are seeking to retain and grow the share of business from profitable existing customers as a means of finding a way out of downward spiralling price pressures. While a lot has been written in academics about the importance of CVM, several gaps remain on understanding how a large company actually undertakes this journey. Crafting competitive value chains and focusing on streams of competition are also emerging as important agenda for supplier firms since, increasingly, the end customer is no longer willing to pay for inefficiencies in the value chains. In this context, the challenge for a supplier firm in business markets is no longer restricted to getting its own operations in order, but, additionally, it must ensure that multiple interfaces that exist across the entire value chain all the way until the end customer are streamlined so that the value chain is free of value drains and every meaningful opportunity to create value is exploited. In this paper, the authors present the experiences of the India-based Tata Steel in implementing CVM across 25 select customers. This has enabled it to successfully come out of the commodity trap that it found itself some four years ago. The paper begins with an overview of existing research in the area of CVM covering the important aspects of customer loyalty, customer relationships, trust as an antecedent for relationships, value as a cornerstone of business markets, and importance of the supplier firm focusing on the efficacy of the value chain of which it is a part. While one part of the challenge for a supplier firm is to find avenues to create and deliver unique value to its customer firms, an equally formidable challenge is to obtain equitable return for value delivered. This is where value sharing through integrative negotiations between the supplier and customer firms becomes central. The authors conclude that current understanding on value creation and value sharing is at a preliminary stage. This is the gap that the paper seeks to address based on the actual experience of the company in implementing CVM. This paper presents a framework for mapping the various ideas generated in the CVM implementation process and attempts to build a value sharing methodology based on the CVM journey of the company. It concludes with several challenges that the company has to grapple with for continued progress on its CVM journey. One of the important challenges is addressing value drains and discovering new value creation avenues along all the interfaces between the various firms constituting the value chain all the way until the end customer. The key learnings can be summarized as follows: Success of CVM has to start from the top management of both supplier and customer firms. The focal responsibility cannot be delegated. Firms planning to embark on the CVM journey must adapt the CVM process to their own specific situations while general lessons can be drawn from Tata Steel�s CVM implementation experience. Meaningful roles must be found for all key managers in both supplier and customer firms for success of CVM implementation. It is necessary to take stretch targets for the process to be attractive and worth the while for both the firms. At the same time, it is essential to manage the expectations of both firms: CVM is not a panacea or a magic bullet to solve all the problems of both the firms. The overall philosophy of both firms must be to seek to expand the ‘value pie,’ thus coming up with integrative decisions based on aligned data where both the firms ‘read off the same page’ of data.

The Impact Of Power And Relationship Quality On Value Creation and Appropriation in Buyer–Supplier Relationships

2019 ◽  
Vol 17 (1) ◽  
pp. 47-80 ◽  
Author(s):  
Saâd Mdarhri Alaoui ◽  
Amine Noureddine
Keyword(s):  
Relationship Quality ◽  
Social Exchange ◽  
Value Creation ◽  
Business Relationships ◽  
Empirical Reality ◽  
Supplier Relationships ◽  
Main Driver ◽  
Partner Satisfaction ◽  
The Impact ◽  
The Relationship

Abstract Business relationships provide the means to create and appropriate superior value in business markets. However, despite the proliferation of research on the phenomenon, many questions remain unaddressed. Previous work focused almost exclusively on value after its creation and its sharing between the two exchange partners. Consequently, the appropriation of value as well as its interaction with value creation remains relatively unknown. Similarly, a few studies have examined the role of relational variables and power asymmetry in customer–supplier exchange relationships. To fill this gap, this study aims to examine the influence of relationship quality and power on value creation and appropriation and ultimately, on satisfaction and relationship continuity. Based on the theory of social exchange, this study proposes a conceptual model, which positions value creation and appropriation as central variables in the nomological network of business relationships. A quantitative study of 174 suppliers was carried out in order to compare the theoretical model with the empirical reality. The results obtained show that the relationship quality promotes greater value creation and appropriation in ongoing business relationships. As for power, its influence differs depending on how it is exercised within the relationship. Moreover, the appropriation of value remains the main driver of partner satisfaction, a sine qua non condition for the continuity of the relationship. This present research contributes to a better understanding of value creation-appropriation in ongoing business relationships. By strategically managing their customer–supplier relationships, managers can create and capture greater value and gain a competitive advantage.

scholarly journals Maintaining business relationships: resilience through institutional work

2019 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ilkka Tapani Ojansivu ◽  
Jan Hermes
Keyword(s):  
Relationship Maintenance ◽  
Historical Case Study ◽  
Business Relationships ◽  
Business Relationship ◽  
Historical Case ◽  
Content Type ◽  
Codes Of Practice ◽  
The Relationship ◽  
Over Time

Purpose Business relationships are considered long-term and stable. Furthermore, over time, business relationships are expected to become and remain “institutionalized”. The undertone is that this process is deterministic and inevitable. While the authors do not question the long-term nature of business relationships, they argue that the process of “institutionalization” requires more construct clarity. Consequently, they ask the following: What is the source of resilience in business relationships, and how are these relationships maintained over time? Design/methodology/approach To unravel these questions, the authors conducted an historical case study of a business relationship between a government buyer and a software seller extending over two decades. Findings The authors found that while the network around the business relationship is crumbling and all odds are in favor of relationship dissolution, the active maintenance work of key individuals in the relationship prevented detrimental effects and resulted in not only its continuation but also an increased degree of institutionalization. Research limitations/implications The authors contribute to the Industrial Network approach (INA) by providing a non-deterministic approach to the typically taken-for-granted end phase of business relationships. Practical implications The findings illustrate that the process of institutionalization is manageable but requires hard work, highlighting managers as the principle vehicle of relationship maintenance. Originality/value The authors provide construct clarity around the process of “institutionalization”. In fact, they regard the process as reverse compared to the early interpretation in the INA literature in which a business relationship is assumed to start as a “clean slate” and then begins to represent the industry codes of practice over time. They found that “institutionalization” implies that a business relationship is no longer compared with nor is comparable to the institutional prescriptions; in contrast, the relationship has established its own rules and norms, which have been taken for granted by the buyer and seller organization.

scholarly journals Switching Cost to Customer Loyalty: Operation and Business Relationship

2016 ◽  
Vol 5 (1) ◽  
pp. 35
Author(s):  
Puji Setyawan E. Putranto
Keyword(s):  
Customer Loyalty ◽  
Value Creation ◽  
Switching Costs ◽  
Perceived Value ◽  
Business Relationship ◽  
Moderating Effects ◽  
Binding Factor ◽  
Business Customers ◽  
Business To Business ◽  
Seller Relationship

Many business customers to day consolidate their supply basis and implementing preferred supplier programs. Consequently suppliers forced to gain a key supplier status from their customers where as a collaborative buyer-seller relationship represents a source of competitive advance. The vendors sometimes in flict switching costs on their customers, to prevent them from defecting to new suppliers. In a competitive setting where competition dominated by a price war, the potential switching costs might be an exit barrier and a binding factor of customer loyalty. ln efforts to address that issue this research examines the moderating effects of switching costs on customer loyalty through both satisfaction and perceived-value measures. The research investigates opporlunities for differentiation through value creation in business to business (B2B) relationship.

scholarly journals Investigating the Effects of Islamic Business Ethics and Etiquette on Business Relationships and Customers’ Adoption of Internet Banking

2021 ◽  
Author(s):  
Omar Thaher Hasan Megdadi
Keyword(s):  
Business Ethics ◽  
Relationship Quality ◽  
Relationship Marketing ◽  
Internet Banking ◽  
Business Relationships ◽  
Significant Positive Effect ◽  
Business Relationship ◽  
Islamic Business Ethics ◽  
Positive Effect ◽  
The Way

<p><b>AbstractThanks to technological advancement and growth, banks across the world offer Internet banking (IB) services to their customers. Internet banking services can be considered as a substitute distribution channel for banks, as they lower costs and make it easier for customers to manage their bank accounts remotely 24/7. Despite the obvious benefits of internet banking, large numbers of customers are reluctant to adopt IB services. One reason for their reluctance is because adopting IB services is a form of change, and people have a natural resistance to change. Hence, numerous researchers have studied the factors that influence customers’ adoption of IB services. </b></p> <p>Business relationships are considered one of the most valuable keys to business success. ‘Relationship Marketing’ has emerged as a concept that emphasizes establishing, strengthening, and maintaining a buyer-seller relationship. In today’s business environment, businesses focus more on their relationship networks than on the product itself. These relationships are affected by religious and cultural values. Thus, the way people perceive certain behaviours will depend upon their culture and religion. For example, the Islamic culture and ethical values affects the way Muslims behave and perceive behaviours, as Islam covers all aspects of life.</p> <p>This research is designed to investigate the role of business ethics and etiquette in building high-quality business relationships during the inception stage of the relationship. It also examines the effect of a business relationship on customers’ willingness to adopt IB services. The research was conducted from the customers’ perspective by using a quantitative method; a survey was distributed to a sample from the Jordanian Islamic banking market. Findings of this research indicated a significant positive effect of Islamic business ethics and etiquette on business relationship quality at all of the proposed variables except Ihsan, it also indicated a significant positive effect of business relationship quality on the adoption of internet banking. Results also showed a significant mediating effect of business relationship quality between business ethics and etiquette and internet banking adoption. </p> <p>This research contributes to the existing body of research in the fields of business ethics and etiquette, relationship marketing, and internet banking adoption. It gives in depth insight on the nature of the relationships of the variables within the research model. This research examined some variables that have not been studied before and provides evidence for future research; it also provides business practitioners with a better understanding of the nature of the factors affecting internet banking adoption and ways to enhance their relationships with their customers. </p> <p> Keywords: Relationship Marketing, Business Relationships, Business Ethics, Business Etiquette, Islamic Business Ethics and Etiquette, Internet Banking Adoption.</p>

scholarly journals Champagne: the challenge of value co-creation through regional brands

2019 ◽  
Vol 31 (2) ◽  
pp. 203-220 ◽  
Author(s):  
Martin Kunc ◽  
David Menival ◽  
Steve Charters
Keyword(s):  
Value Creation ◽  
Shared Resources ◽  
Market Positioning ◽  
Content Type ◽  
External Resources ◽  
Strategic Resources ◽  
Special Cases ◽  
Wine Region ◽  
The Impact

PurposeThe traditional view of the process of value creation suggests that it occurs inside the firm through its activities or resources. However, there are special cases where firms create value using external shared resources, e.g. a territorial brand. The purpose of this study is to demonstrate how the combination of both internal and external resources co-create value in wine regions.Design/methodology/approachAn in-depth case study of nine firms covering different co-creation processes in Champagne, France. The selection of interviews was designed to cover the diversity of firms within the area with different market positioning. Most firms in the region have been selling champagne for more than 50 years, so they have established long-standing relationships with their markets.FindingsWhile there is only one value, Champagne, firms create many different values based on owners’ perceptions with diverse effects on the process of value co-creation in the territorial brand. Some firms have strategies which could deteriorate the value of shared resource. This threat needs institutional changes with unknown consequences on the territorial brand.Research limitations/implicationsThe research only involved one case study with a highly developed territorial brand system. There are multiple wine regions that have considered managing either implicitly or explicitly their shared strategic resources (e.g. a territorial brand). Consequently, the findings may not be applicable to all wine regions but it can provide a “gold standard” for regions and wineries that do not realize the impact that their value creation actions can have on the wine region.Practical implicationsCollective management of shared strategic resources, such as a territorial brand, can be a powerful action to sustain competitive advantage rather than individual actions to develop individual brands. However, it can work only with an institutional organization managing the collective process.Originality/valueThe paper offers lessons from a comprehensive and well-known case study where resource bundles co-create value with a territorial brand.

The impact of information technology deployment on trust, commitment and value creation in business relationships

2004 ◽  
Vol 19 (3) ◽  
pp. 197-207 ◽  
Author(s):  
Ricky Ryssel ◽  
Thomas Ritter ◽  
Hans Georg Gemünden
Keyword(s):  
Information Technology ◽  
Value Creation ◽  
Business Environment ◽  
Future Research ◽  
Business Relationships ◽  
Organizational Relationships ◽  
Supplier Relationships ◽  
Technology Deployment ◽  
Managerial Implications ◽  
The Impact

To strengthen their position in today's highly‐competitive and fast‐paced business environment, supplier firms often engage in relationships with their customers. Recent advances in information technology offer new ways of managing inter‐organizational relationships. In this paper, a model conceptualizing the impact of information technology deployment on inter‐organizational buyer‐seller relationships is developed. Using an empirical study of 61 German firms engaged in customer‐supplier relationships, this paper also gives some empirical evidence for the developed framework. With regard to relationship management, intra‐ and inter‐organizational information technology deployment has different effects on relationship atmosphere and on the relationship's value creation. The findings give new insight into the role of information technology in value‐creation in business‐to‐business relationships. Managerial implications and future research questions in this area are also discussed.

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