The determinants of continuity in business relationships

Abstract

Stable and solid business relationships are a major issue for companies. The academic literature increasingly insists that the development of a sustainable competitive advantage relies, in large part, on the ability of firms to collaborate and form long-term relationships with their partners. The present work aims to deepen the understanding of the determinants of continuity in supply chain relationships. More specifically, this research proposes to examine the influence of relational variables and power asymmetry on the creation-appropriation of value and ultimately on relational satisfaction and continuity. Based on the theory of social exchange, the study seeks to explain how relational quality as well as the exercise of power can affect the performance and sustainability of business relationships.

Partial Least Squares (PLS) path modeling in SmartPLS 3 was used to empirically test the proposed hypotheses. The data were collected from 170 suppliers operating in various economic sectors in Morocco.

The results obtained show that the quality of the relationship favors a greater creation-appropriation of value as well as the sustainability of business relationships. As for power, its influence differs according to the way it is exercised within the relationship. On the other hand, the appropriation of value remains the main driver of partner satisfaction, a sine qua non-condition for the continuity of the relationship.

This study focuses only on the supplier's perspective to evaluate the business relationship while neglecting the customer's. Future studies should adopt a dyadic approach including the perspectives of both partners. Similarly, the dynamic nature of business relationships should also be taken into account.

JEL Classification: M31 Marketing.

Paper type: Empirical research.