Abstract
1. Introduction
2. Theoretical background
3. Hypothesis development
4. Method
5. Analysis
6. Discussion
7. Conclusions
Appendix A. Survey items
References
Abstract
Prior research advocates a positive, linear association between relationship investments and relationship performance. Our study challenges this conventional wisdom and advances the extant literature by investigating the potential curvilinear effects of suppliers' different relationship marketing programs (i.e., social, financial, and structural) on dyadic perceptions of relationship value. From an analysis of 113 buyer-supplier dyads, we found that social programs enhance relationship value synergy, but their effect on relationship value asymmetry between suppliers and buyers follows a U-shaped curve. On the other hand, we observe a positive and increasing returns-to-scale effect of financial programs on relationship value synergy and its inverted U-shaped association with supplier's relationship value asymmetry. Interestingly, structural programs increase relationship value synergy and have a stronger effect on increasing relationship value for the supplier than for the buyer. In addition, we find that structural programs are more effective in creating value in long-term relationships than in short-term relationships; therefore, as the relationship with a buying firm ages, managers should consider investing more in structural programs to develop their relationship. However, in long-term relationships, managers should avoid investing too much in financial programs because financial programs are less effective in increasing creation of relationship value as a relationship ages.
Introduction
The business-to-business marketing literature has long recognized that relationship investments enhance relationship performance (Palmatier, Dant, Grewal, & Evans, 2006, Palmatier, Gopalakrishna, & Houston, 2006, Palmatier, Scheer, Houston, Evans, & Gopalakrishna, 2007). Practitioners, however, are less certain about whether they gain much value from their investments in building close inter-organizational relationships with customers, as they increasingly realize that “close relationships are not always synonymous with good relationships” (Anderson & Jap, 2005, p.75). The high failure rate (30%–50%) of close relationships, such as joint ventures or alliances, between firms and either their suppliers or customers has led managers to reconsider the linear view of their relationship building efforts (Anderson & Jap, 2005). Moreover, the rising opportunistic behavior in today's complex supply chains has created the risk that one party in a dyadic buyersupplier relationship can gain greater value at the expense of the other (Vandenbosch & Sapp, 2010). Such opportunism puts pressure on supplying firms to consider not only how much new value their investments can create for the relationships, but also how much value they can receive compared to their partners. Given the high costs of investing in business relationships, it is critical for managers to effectively tackle these two challenges; however, prior research reveals a gap to the extent that it has not completely explained this important phenomenon.