Relationship governance : structure and performance in industrial markets
The scope of research on interorganisational relationship structure has been limited by rigid adherence to specific governance paradigms and by lack of research into relational performance. The conceptual framework developed in this thesis responds to these issues by pursuing a multiparadigm, approach from which it develops a taxonomy of relationship structures that is linked to performance. The classification of a relationship into the taxonomy is based on the relationship strength construct. This construct discriminates between relational governance structures by measuring both behaviour process and economic content elements of a relationship. The result is a taxonomy of four relationship structures. They are bilateral, recurrent, dominant partner and discrete. Furthermore, the research links these relationship structures to a multifaceted definition of relational performance, which includes both behaviour and economic outcomes, to enable it to test which structure optimises performance. It proposes that bilateral relationships, developed from social exchange theory, are the optimal governance structures for managing interfirm. exchanges. Bilateral relationships have the highest level of relationship strength of all the structures. These structures involve partners who have high levels of trust in each other and who have made substantial commitment to the relationship. If these relationships are found to be the optimal structures in terms of performance, considerable support will have been found for social exchange theory. The research hypotheses are supported by empirical work which combines qualitative and quantitative methodologies. The qualitative study uses in-depth interviews with buyer and supplier organisations. The quantitative study consists of a mail survey of 500 UK industrial buyers who are interviewed about their main supply relationship. The industries included in the research are engineering, electronics and communications. The development of a taxonomy of relationship structures and its links to performance provides guidance to researchers and managers on how to assess and develop the potential of a relationship. The assumptions managers make about relationships have an impact on what is attainable from the relationship. The research also provides strong support for social exchange positions in managing interfirm relationships.