Firm and relationship performance: Unlocking the management models of business relationships

Abstract

The research on business relationships has focused on socio-psychological constructs, such as trust and commitment, to explain either satisfaction with the relationship, or strategic/economic performance of the firm. However, there has been little critical discussion of the reasons for choice of a dependent variable, nor the cause-effect associations between these constructs. Evidently, managers must assess economic outcome at the level of the firm and at the level of the relationship, and in very complex cases even at the level of the value chain in contrast to other competing chains. This paper examines the theory and operationalization of the relationship performance concept. Relationship performance is a construct for examining business relationships and management models, which in turn are composed of the phenomena of cooperation and competition. It also suggests directions for further research in this area.