In an exchange situation, there is a distinction between a relational and a transactional approach. The way researchers look on relationship between the organizations are divided in to two main approaches: transaction-based approach and relationship-based. Jackson (1985) argued that a successful business relationship encompasses doing a large number of things right, over time in a consistent matter. Further she states: “it takes coordination on the part of the seller of resources and tools to meet the customer’s future as well as its immediate needs”
(Jackson, 1985, s. 128). Day (2000) refers the marketing spectrum where the collaborative exchanges is at one end, and the other has the transactional exchange as illustrated in figure 3 below. In a pure transaction-based exchange, no further participation by either actor is
necessary nor desirable. The reasoning behind this is the fact that the transaction-based method is often utilized during the sale of standardized products, where the price is the main focus – not the relationship. Collaborative exchange, or relation-based exchanges, are more prevalent when the product or service is complex and customizable. In these cases, the exchange of information and knowledge is customary in order to form a closer relationship.
Figure 3 – Exchange categories (Day, 2000, s. 25)
3.4.1 Relationship-based factors
Grönroos (1990) defined the relationship between a buyer and a seller as a process where you identify, maintain, enhance, and by necessity also terminate relationships with stakeholders and customers, at a profit. This enables the objectives of all the involved partners, which is done by the mutual offering and fulfilment of promises. Grönroos (1990) definition is quite broad and argues that the relationships involve the relations to other stakeholder – not only the supplier – customer relations.
3.4.2 Relationship commitment in business-to-business relationships
Dwyer, Schurr and Oh (1987) found that commitment between the buyers and the sellers in business relationship is a crucial factor in the relationship development and continuity.
Relationship commitment benefits the actors in the relationship as it contributes to “reducing uncertainty, increasing exchange efficiency and satisfaction, and enhancing performance and profitability” (Ganesan, Brown, Mariadoss, & Ho, 2010, s. 361). Relationship marketing literature separates between affective and calculative forms of commitment. The affective form of commitment “reflect the social and psychological attachment to an exchange partner based on feelings of identification, loyalty, and affiliation” (Ganesan, Brown, Mariadoss, &
Ho, 2010, s. 362). The characteristics of this form of commitment includes sentiments of loyalty and dependability that signifies one actor’s positive feelings towards its exchange partner. Conversely, the calculative form of commitment based on a realization of the benefits of staying as well as the costs of leaving. This form of commitment is grounded in economic concerns and rationality, like e.g. switching costs. Affective commitment however has their roots the emotions and grows from social exchange (Ganesan, Brown, Mariadoss, & Ho, 2010).
Opportunism and unethical behavior pose threats to business relationships. These behaviors occur often and jeopardize long-term relationships. Opportunism is defined as a transgression of the norms of a specific business relationship through behaviors such as “evading
obligations, taking advantage of contractual loopholes, and extracting unfair concessions when market conditions allow” (Ganesan, Brown, Mariadoss, & Ho, 2010, s. 362). Unethical behavior, on the other hand, can be directed to the relationship itself or the exogenous issues, and are defined as violations of societal norms. Historically, the business press has included lot of opportunism, with examples of cutting out “middlemen”, and adding new distributors in protected areas. On the part of unethical behavior, examples include spreading false rumors, selling coercively, and selling substandard products.
Buyers make tangible or intangible investments that are specifically custom-made to the existing relationship and have difficulties to reorganize without a substantial loss in value when the calculative commitment is high (Ganesan, Brown, Mariadoss, & Ho, 2010). Within the concept of calculative commitment, the buyers are committed to a supply relationship through traits like switching costs. Such buyers are more likely to assimilate supplier behaviors that vary from the normative standard as they have few options to remain in the relationship, and thus, they will be motivated to maintain cognitive consistency (Ganesan, Brown, Mariadoss, & Ho, 2010). Because of this, at moderate levels of supplier misbehavior there is an expectation that it will cause assimilation effects of calculative commitment (Ganesan, Brown, Mariadoss, & Ho, 2010).
On the other side, we have the affective commitment that involves identification, affiliation, obligation and loyalty (Ganesan, Brown, Mariadoss, & Ho, 2010). It is regarded as a
“warmer” form of commitment than calculative commitment, which is more rational and
“cold”. Within affirmative commitment, the individuals representing the different entities develop personal relationships that strengthen and adds to their formal roles. Buyers that are affectively committed are more likely to interpret ambiguous supplier behaviors in a manner consistent with the positive tone of the relationship, thus creating assimilation effects when there is minor misbehavior on the seller’s part (Ganesan, Brown, Mariadoss, & Ho, 2010).
However, it is worth noting that affective commitment may lead to an attitude of
noncommitment as people in these relationships often are inclined to give other suppliers the benefit of the doubt when they suspect misbehavior. However, if the buyer perceive
opportunism, it is regarded as a rather large betrayal of the friendship as well as the business relationship, and thus will lead to negative sanctions (Ganesan, Brown, Mariadoss, & Ho, 2010). Additionally, damage of the flow of social reciprocity may be regarded as irreparable and lead to dissolution of the relationship.
Generally, the buyer commitment to create relationships works as a buffer against misbehavior such as opportunism and unethical behavior. However, if such misbehavior occurs, the buyers will most likely assimilate normative standards of behavior, thus creating buffering effects (Ganesan, Brown, Mariadoss, & Ho, 2010). When the misbehavior becomes severe, there are differences in ways to handle it between the calculative and affirmative forms of commitment. Within the calculative commitment form, it neither buffers nor amplifies effects of misbehavior. On the other hand, with the affirmative form of commitment, it amplifies buyers switching intention due to severe opportunism.