ISBM Pulse: Interfirm relationships

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Trust, Distrust and Confidence in B2B Relationships

Trust is central in B2B relationships. It increases the ‘ability to adapt to unforeseen problems in ways that are difficult to achieve through arm’s-length ties’ (Uzzi 1996, p. 678) and is the foundation for greater commitment and performance. Meta-analysis reveals that the ‘effect of trust on satisfaction and long-term orientation is even substantially larger than the direct effect of economic outcomes’ (Geyskens et al. 1998, p. 242). However, ‘while the effects of trust on attitudes and perceptions have been . . . fairly consistent and positive, its effects on behavior and performance’ have been weaker (Langfred 2004, p. 385). Although trust has been theorized to improve performance, its actual effect is questionable (Atuahene-Gima and Li 2002; Gundlach and Cannon 2010). Why does trust not consistently generate more favorable performance? Is this due to confusion about what trust is?

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Strategic Alliances in a Business-to-Business Environment

To acquire and utilize a diverse set of capabilities, firms develop alliance strategies that help integrate different disciplines and bodies of knowledge; provide access to technologies, markets and customers that might not be easily reached otherwise; enable the acquisition of R&D; and employ innovations that might otherwise be too costly to implement and might allow one technology or set of standards to dominate another. This chapter on strategic alliances begins by discussing the different conceptual frameworks used by scholars to develop the notion of alliances. Next, alliances are defined in the context of these prevailing conceptual frameworks. The stages of alliance development are discussed, beginning with strategic intent and partner selection. Then alliance governance is discussed. The chapter concludes with managerial and academic implications.

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Learning in Coopetitive Relationships

Current literature provides a deep understanding of firms’ vertical relationships, but knowledge of horizontal relationships among firms that occupy similar positions along a supply chain is rather limited. The main purpose of this chapter is to explicate issues related to cooperation among competitors, or ‘coopetition’. This chapter provides a broad overview of the major facets of coopetition. It seeks to increase awareness of this important strategic option among managers who plan to develop inter-firm collaborative relationships and to provoke further discussion and investigation of this phenomenon among marketing scholars.

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B2B Relationship Underpinnings of Outsourcing

Firms often enter into strategic alliances (also a B2B relationship) with firms in other industries operating in the same stages of the value chain. These firms, which historically have not been suppliers, customers or competitors of the focal firm, are called ‘collaborators’. This chapter specifically focuses on B2B relationships in the realm of outsourcing, a long-standing business practice that spans multiple organizational functions. The chapter covers selected theoretical perspectives on outsourcing, outsourcing relationships between a focal firm/business and its suppliers, customers, competitors, and collaborators, the role of outsourcing in achieving competitive cost advantage and differentiation advantage, and governance issues.

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Designing B2B Markets

Researchers and practitioners face unique challenges in understanding B2B online pricing mechanisms, as well as their design and execution, compared with B2C or consumer-to-consumer (C2C) markets. mplications for product assortment managements and the general design of B2B markets. This chapter examines three issues in depth. The first issue regards the product to be auctioned and the various options for which these products would be offered within an auction, whether in regard to sequential product offerings or online and offline offerings. We then turn to the second issue of bidder behavior and strategies in B2B auctions. Third, we close with a section on the mechanism design, including issues of price visibility, and consider the roles of guarantees and price premiums. Within each of these broad themes we discuss the significance of differentiated bidders and inter-organizational relationships in B2B markets and the implications for the firm. We conclude with a consideration of additional issues germane to future research.

Strategies for Making Partnerships Work (Sandy Jap)

If partnering holds the promise of all things good, why do partnerships and alliances fail so often? Sandy Jap will explore the dark side of partnering relationships:  why “friends” become “enemies” over time, with research insights and case studies from Samsung/Google, Nike/Footlocker and more. Most importantly, she will offer specific recommendations for avoiding problems, revitalizing weakening partnerships, and recognizing when a partnership can’t be saved.

Capturing Customer Loyalty (John Larson)

In work done across a broad series of different industries, including both business-to-business and business-to-consumer, it is found that creating strong levels of customer loyalty leads to greater sales and profit growth. We find that truly loyal customers give you a greater share of their business, are less price-sensitive, are cheaper to serve and are more willing to recommend your products and services to others. For one client we found that their truly loyal customers were over eight times more profitable than their average customer.

This webinar by John Larson will present these findings and then discuss how to handle three critical challenges that companies face when they try to increase customer loyalty.

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The Value of Collaboration – For All The Skeptics

Having trouble finding the right colleague for a collaborative partnership? Letting go of control is a stumbling block for even the best of us! This article explores what makes up a true collaboration and how to find an “honest broker” to guide you.