Business-to-business marketing: organizational buying behaviour, relationships and networks 161
based on the interaction approach. Hakansson
(1989) also demonstrates the robustness of the
approach in applying it to innovation and
technology transfer.
Relationship management and
networks
To fully understand the importance of relation-
ships as an input to, and an outcome of,
organizational buying and selling, we need to
examine the investments and bonding pro-
cesses of the relationship partners and other
players in the network. Relationships between
companies don’t just happen, they are the
consequences of efforts made by those com-
panies – without such investments the relation-
ships will not develop and will decline. These
investments may be relatively trivial, such as a
special delivery schedule, or they may be major
changes in product design, for example. Both
sellers and buyers make such investments, or
adaptations, and these define the nature of the
relationships – how the companies ‘live
together’. Relationship management is the
process of planning and controlling these
efforts in both companies (Turnbull et al., 1996;
Ford, 1998).
It is important to note that all companies
have relationships with their customers and
their suppliers. It is the nature of the relation-
ships which varies – from close, trusting and
productive to arms length, conflicting and
marginal. The company will have to manage
many relationships simultaneously and thus
are interconnected. Thus, marketing manage-
ment is very much to do with the managing of
an interconnected portfolio of customer
relationships.
Whilst the interaction approach has been
acknowledged as an important development in
the process of understanding business markets,
it has limitations; the approach was originally
based on the analysis of bilateral relationships
between pairs of organizations. In reality, of
course, no relationship exists in isolation but
forms part of a connected and interdependent
set of relationships. Thus, the way the parties of
a relationship will behave will be affected by
their connections to other organizations and the
interaction occurring. The study of these sets of
relationships has come to be termed the network
approachand can be seen as a logical develop-
ment of the earlier research on interaction.
It is important to be aware that any one
company has a ‘network’ of different kinds of
interconnected relationships. Spencer and Valla
(1989) define a network as:... a set of interconnected relations involving
people and organizations called actors, and
forming a structured sub-system within a larger
system of actors... They are involved in a
finalized process, with the ultimate purpose of
allowing and facilitating the exchange of goods
or services between a supplier and a customer,
or a set of them.
In a network of relationships it is necessary
not only to examine the investments and
bonding processes of direct relationship part-
ners, but also other players in the network, the
indirect relationships, as they affect buying
behaviour. The interconnectedness of direct
and indirect business relationships is simply
demonstrated in Figure 7.4. It can be observed
that the focal company not only has relation-
ships with Customers 1 and 3, but also has a
relationship with customer 2, an intermediary,
and relationships with Suppliers 1, 2 and 3; it
is also necessary to be aware of indirect
relationships which may have an impact on
the direct relationships. Two of the focal com-
pany’s customers have relationships with
competing suppliers. Customer 2 is also sup-
plied by Competitor 1 and Customer 3 is also
supplied by Competitor 2. The focal com-
pany’s Supplier 2 has relationships with two
suppliers. Within a network, the behaviour of
organizations in one relationship will influ-
ence the companies’ behaviour in other rela-
tionships. For example, the focal company
may provide Customer 2 with a certain level
of delivery reliability which Customer 2 may
subsequently begin to insist on from its other