How functional, psychological, and social relationship benefits influence individual and firm commitment to the relationship

Jillian C. Sweeney and David A. Webb
UWA Business School, University of Western Australia, Crawley, Australia
Abstract Purpose – This paper aims to extend previous research investigating the effect of relationship benefits on firm outcomes by developing a model that includes the effect on individual employees in the buyer firm. The model also aims to address benefits beyond the functional in business-to business (B2B) settings by including psychological and social benefits. Design/methodology/approach – The study is based on a survey of 275 B2B buyers in Australian manufacturing firms. Findings – The findings reveal that functional benefits enhance firm-level commitment to the relationship, whereas psychological and social benefits affect individual commitment to the relationship directly and firm-level commitment indirectly, thereby emphasizing the importance of considering the individual as distinct from the firm. Given that the relationship is a process over time, and in recognition of the non-static nature of relationship benefits, the paper also explores the changes in benefits over relationship stages, including their impact on commitment. In contrast to expectations results show that while all three types of benefits increase, there is no change in the impact of all three benefit types on commitment across relationship stages. Practical implications – The study recognizes that the individual in the firm also benefits from B2B relationships and offers a measure of both firm and individual relationship benefits for use in future studies. The measure may also be used as a point of discussion about relationship management. Originality/value – The study is framed within social exchange theory and, is the first to simultaneously examine three types of relationship benefits and their interaction with both the individual and firm viewpoint. The study is also one of the first to empirically examine changes in relationships over the relationship stages. Keywords Buyer-seller relationship, Benefits, Social benefits Paper type Research paper

An executive summary for managers and executive readers can be found at the end of this article.

Conceptual background
The growing recognition of the importance of buyer-supplier relationships has focused research attention predominantly on the positive outcomes that can be accrued by both buyer and supplier firms (e.g., Crosby et al., 1990; Kalwani and Narayandas, 1995). Extant literature recognizes the firm as a social network in which individuals are the basis of the firm. However, the existence and importance of relationship outcomes accrued by those individuals in the buyer firm (e.g., satisfaction with or commitment to relationship, job or supplier) have been largely ignored in empirical research, despite Ojasalo (2001) emphasizing the conceptual distinction between firm and individual levels of benefits. This notable omission from the business-to-business (B2B) literature makes it worthy of research attention. Furthermore, previous studies have focused largely on the functional (e.g., economic and strategic) benefits of interfirm
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relationships, such as reduced costs, contract predictability, purchasing efficiency, and quality (e.g., Cannon and Homburg, 2001; Ghosh et al., 1997; Kalwani and Narayandas, 1995; Lyons et al., 1990). Although noneconomic aspects of a relationship, such as its social elements, are recognized as important for understanding relationship behavior (e.g., Anderson et al., 1993; Cunningham and Turnbull, 1982; Wilson and Mummalaneni, 1986), researchers have only recently sought to understand the impact of interpersonal relationships through empirical research (e.g., Bolton et al., 2003; Haytko, 2004; Nicholson et al., 2001) by highlighting the positive effect of social bonding in business relationships. However, few studies directly compare both social and functional aspects of the relationship (e.g., Bolton et al., 2003; Murry and Heide, 1998; Wathne et al., 2001). Given the importance of relationship marketing and because relationships pertain to individuals, we believe that further research is warranted to understand the social aspects of interfirm relationships. Moreover, consistent with Gwinner et al. (1998), our research identifies a distinct category of benefits, namely psychological benefits that, though similar to trust, is conceptually more inclusive and addresses perceptions of reliability, empathy, support, understanding between parties, and psychological assurance in a business relationship
The authors are grateful to the UWA Business School for a series of small grants to assist in data collection.

Journal of Business & Industrial Marketing 22/7 (2007) 474– 488 q Emerald Group Publishing Limited [ISSN 0885-8624] [DOI 10.1108/08858620710828854]

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that noneconomic goals are central human motivations and therefore inherent in economic transactions. binds important partners to the relationship. 1994).. Ojasalo. The paper is laid out as follows: using the conceptual model that we discuss following our overview of the relevant literature.g. and . we seek to identify relationship benefits that extend beyond the economic and non-economic descriptors that are too often adopted in the literature. In particular... in examining the effect of both social and economic resources offered by a large telecommunications company. and incentive premiums – on firm outcomes. to business customers. social resources primarily influence satisfaction with an individual provider in . Wilson and Jantrania (1995). this broader psychological concept is consistent with customer-perceived value components. Finally. 1998.and individual-level relationship commitment in a B2B context. who are the customers in a B2B relationship. 1987. to explore the effect of the duration of the relationship on the level of relationship benefits. they argue. Ford.Functional. switching costs. 1996. we conclude by identifying some limitations and suggestions for further research. social. Consistent with prior studies in both the B2B and business-to-consumer (B2C) domains. However. such as improved overall quality. positing that economic transactions transpire within interpersonal relationships. We view these benefits as broadly “functional” because they reflect a particular firm’s distinctive functional competencies (e. for example. emphasize that firms must build both social and structural bonds to develop and protect profitable customer relationships. Wilson and Jantrania. 1995. 1993). which seems to contradict the focus on interpersonal relationships in the conceptual relationship marketing literature and challenges the concept that a firm should enhance its social relationships rather than its economic or technical bonds. In addition. trust. To address these objectives. Lyons et al.g. Wathne et al. we add a time dimension to our study by examining relationship durational effects. 2001. Cunningham and ˚ Turnbull. We also extend research on benefits by assessing their effect on commitment to the relationship. as identified in a B2B context by Lapierre (2000). Both of these studies reveal that economic aspects are more critical to outcomes (Murry and Heide. and responsiveness. Haytko (2004) finds that the relationships that develop between managers and clients can become highly personal over time as a deeper understanding develops between them. most of which have been almost exclusively based in economics. status as the result of an accumulation of economic resources) but rather. Such research enhances our understanding of how commitment develops among buyers. and psychological relationship benefits on both firm.g.. Wilson and Jantrania. several researchers have argued that B2B relationships may be motivated by both non. (2001). Turnbull et al. such that economic goals are inseparable from 475 non-economic goals such as status and sociability (Granovetter. Namely. Price and Arnould (1999) report a similar finding in service providerclient relationships. operating efficiencies. Most recently. as relationship marketing researchers have become interested in the varying salience of attributes or dimensions over time (e.. Sharma and Fisher.and economic motives (Dwyer et al. (2001).. In contrast. Bolton et al. Such relationships facilitate operational and longer-term outcomes for both the individual and the firm. though with a clear distinction between business and truly personal relationships. we surveyed 275 employees involved in a business relationship with a supplier firm. Ghosh et al. Murry and Heide (1998). Although several studies have addressed interpersonal relationships in a B2B context. 1997. 1990). Sheth and Sharma. emphasizing that interaction is a social performance through which participants get the opportunity to develop social relationships which lead to trust. such as price incentives. Granovetter (1992) contends that people do not simply seek non-economic goals indirectly through economic goals (e. the economic sociology literature takes a somewhat unique stance toward benefits.g. Webb Journal of Business & Industrial Marketing Volume 22 · Number 7 · 2007 · 474 –488 context. Understanding that which is valued in the relationship is paramount for achieving this end. 2001). we argue for the need to recognize three distinct benefit categories: functional. 1997. Price and Arnould (1999). 1999. and social relationship benefits Jillian C. to examine the differential effects of functional. the objectives of our study are as follows: .g. such as solidarity. stronger competitive position (e.. Building such bonds with key customers and segments. Nicholson et al. In particular. we define functional benefits as the economic and strategic advantages derived through an interaction with another firm that enhance firm competitiveness and drive its financial position. reduced transaction costs (e. We present the study’s results and then turn our discussion to the main implications of our findings for business firms. social.. Relationship benefits (B2B) Many studies have identified the benefits of relationships in a B2B context. More specifically. Frenzen and Davis (1990) and likewise Gummesson (2002) maintain that relationships cannot be viewed in isolation from social relationships or from life itself. 1982. to investigate the relationship between benefits and commitment across the duration of the relationship. 1997)... psychological. Hakansson and Snehota. Weitz and Jap. 1995). Furthermore. (2005) that adopting a social exchange theory perspective leads to the identification of a wider range of benefits beyond the functional. commitment and relationship power (e. the Industrial Marketing and Purchasing (IMP) group has long recognized the existence and importance of the social content of interaction in business relationships. and business continuity (Han et al. Thus. only two that we know of have investigated the effect of both interpersonal relationships and the economic aspects of relationships – such as price. find that each affects buyer satisfaction outcomes differentially. Offering a similar view. 2000. Sweeney and David A. 1995). In taking this approach we demonstrate agreement with MacMillan et al. and also concurs with the concept of psychological contracts originally introduced by Rousseau (1990).g. Wathne et al. we formulate our hypotheses. . which creates not only a barrier to competition but also a strategic advantage in the marketplace.. In summary. through a series of in-depth interviews with account managers in advertising agencies. 1992). and Haytko (2004) all lend credence to the idea that interpersonal relationships in B2B settings are crucial. and psychological. 1997). Corroborating this stance. we examine how they influence the relationship commitment of an individual buyer involved in the relationship and of the buyer firm. reliability. Geyskens et al. Ring and Van de Ven. (2003)..

1994. Garbarino and Johnson. including confidence. we examine such commitment at two levels.. Jap and Ganesan. psychological. no study in the B2B literature has examined psychological relationship benefits specifically. 1987. still need to be pursued... Smith and Barclay. friendship.g. p. p. A review of the literature shows that temporal aspects have become an increasing focus of relationship marketing researchers (e. Nonetheless. We suggest that not only are relationship benefits likely to vary in their impact on commitment. which has been central to the development of marketing knowledge for the past 30 years (e. An understanding of relationship benefits at different stages of the consumption process would assist in developing a dynamic model of relationship benefits and outcomes. we agree that relationship benefits will have a positive impact on both the individual and the firm. We acknowledge that progress has been made in previous research in terms of recognizing relationship benefits in B2B contexts. Relationship commitment Commitment is central to the foundation of relationships and successful relationship marketing (Berry and Parasuraman. 1994). the concept of exchange. Providing a working base for our study. Psychological aspects of the relationship have been noted in the relationship literature (e. Anderson and Narus. This ordering is supported by previous research that has investigated the impact of relationship benefits on commitment (e. Recognizing that the individual is the firm’s representative in a relationship (Zeithaml et al. Third. 36) was perhaps among the first to distinguish the “social” from “psychological” factors. We define psychological benefits as feelings of trust or confidence in the other party that result in greater peace of mind. in that the “focal points for facilitating and maintaining relationships are the psychological and social factors of the individual actors and their interacting.. 2003. we intend to explore 476 psychological as well as functional and social benefits.g. 1991. but also that the impact will vary across individual (employee) and firm commitment. several avenues. Lusch and Brown. 1975.. as we discuss further when we develop our hypotheses. Dwyer et al. 2001). 1972). the results of the few empirical studies tackling these issues have been mixed. Second.g. and special treatment benefits as well as economic benefits. and social relationship benefits Jillian C. we can deduce that action is socially embedded and thus cannot be explained by functional motives alone. non-economic satisfactions and engage in social exchange”. because it pertains to a behavioral intention to maintain the relationship (e. emerge as the most important benefits for customers. 1994). both the individual and the firm. we argue that understanding the non-economic benefits inherent in relationships. (2003) cite various studies (e. we examine both individual. Morgan and Hunt. Anderson and Narus. 1980) it is likely that the nature and role of relationship constructs will change over time. With regard to the relationship marketing literature specifically. little empirical research has addressed either the variation in the level of relationship constructs or the change in the impact of relational constructs on outcomes over time. Ojasalo. we aim to examine the relationship among various relationship benefits and commitment across time. whereas economic resources largely affect satisfaction with the supplier firm overall... Bolton. Doney and Cannon.g. and reduced anxiety aspects. several authors have discussed social exchange (e. Ford.. Furthermore. Hennig-Thurau et al. Bagozzi (1975. 2003). researchers such as Juttner and Wehrli (1995.” Thus we propose that psychological benefits. 1994). p... Kotler.g. Specifically. followed hierarchically by social and special treatment benefits. 1994) and has often been explored as a channel outcome (Geyskens et al. 2000.. corresponding with our objectives. Although benefits are an outcome of the relationship. Morgan and Hunt. 1977. Bolton et al. confidence.. 1990. 2004). First. Bagozzi. Morgan and Hunt.g. Webb Journal of Business & Industrial Marketing Volume 22 · Number 7 · 2007 · 474 –488 the supplier firm. Geyskens et al. 12). Dwyer et al. Dwyer et al.g. 1999). 1999. 1987. we argue that commitment is subsequent to benefits. 2003. 1996. A specific example is the concept of psychological contracts which concern an individual’s belief that there is a mutual obligation between the two parties (Kingshott. However. Verhoef.. offers support for these three levels of benefits. 1997.g. To the marketer. p. More recently. we are interested in understanding the role of such benefits in developing commitment within the buyer firm. 230) have identified psychosocial ¨ factors as the “grease” in a relationship. Confidence benefits. 1999). Arnett et al. 1987. the various stages that relationships pass through over time and the different needs of buyer and suppliers at each stage (e. Given the variety of benefits suggested by the literature. personal. However. and sharing with another party. (1987.Functional.and firmlevel commitment to the relationship with the supplier. feelings and meanings of the parties” that underlies the exchange. 1998. noting that it is “the social and psychological significance of the experience. (1998) in a consumer service context. 91). 2002. Morgan and Hunt. Sweeney and David A. 1990. Ojasalo (2001) argues that both the individual and the firm benefit from B2B relationships. Variation in benefits over time Given the developing nature of relationships. it is important that they acquire a better understanding of the factors that affect relationships that involve primarily social exchange” (Arnett et al. for example. The authors further assert that “because organizations often rely heavily on the promise of social benefits from their products. 2002. The work of Gwinner et al. posit that “relational exchange participants can be expected to derive complex. social. forms a third component of benefits in the B2B context. 1977.. Morgan and Hunt. Lusch and Brown.g. given current interest in the individual in social exchange processes (e. However. has long been differentiated along economic and social lines. Ferrell and Zay-Ferrell.. 1997) in their argument that social exchange theory is often used as a theoretical foundation for commitment and trust in relationship marketing. 2006). 1996. particularly those in the B2B context represents a strategically important yet under researched area of study. . which encompass trust. From the preceding. More recently. Dwyer et al. this conclusion may appear unsurprising. we define social benefits as perceptions of affinity.

Jap and Ganesan. the greater the firm commitment to the relationship will be. he or she also. 1995). 1997.rather than personal-level evaluations (Bolton et al. Ojasalo (2001. Sweeney and Webb. during which the partners explore the obligations. psychological. 1994).. and affect-laden partnerships that evolve over a period of time (e.. such as between the salesperson and the representative of the buyer firm (e. Sweeney and David A. 1987..g. Hence: H2. The greater the individual commitment to the relationship. the individual also is able to distinguish between reporting his or her firm-level perceptions and those perceptions held at the personal level. 1994). 1992). Anderson and Narus. 2003. Webb Journal of Business & Industrial Marketing Volume 22 · Number 7 · 2007 · 474 –488 Hypotheses development Relationship benefits We posit individual and firm-level commitment to the relationship to be distinct. From our discussion of embeddedness. as well as on their psychological contracts (Ring and Van de Ven. and that actors can choose.Functional. Zeithaml et al. 1987). who distinguish between a service orientation held at the individual employee level (i. 2003.. 1997). partners have pledged to continue the relationship. involves search and trial. Because of repeated interactions over time. This claim is consistent with role theory. 1993. These benefits derived by the individual are also realized at the firm level because of the embedded nature of economic actions within interpersonal relationships (Granovetter. 2002. Bolton et al.. Holmlund (1996) further argues that the firm view can be represented by the person holding the power about the continuation of the relationship. and costs of the relationship (Dwyer et al. 2003). or strategy). 1987. However. This dyadic view of relationship exchange is consistent with social exchange theory and serves as the basis for many relationship marketing studies (e. we argue that though a relationship. as well as on customer commitment to the relationship in the consumer context (Hennig-Thurau et al. culture. In turn. It is also consistent with Cunningham and Turnbull’s (1982) discussion of how interaction within relationships serves clear personal and organizational objectives. Holmes. Finally. and social relationship benefits Jillian C. 2002). one-to-one relationships and that the overall relationship is developed through personal associations. Specifically. the relationship becomes socially embedded through a continual socialization process (McGrath. We expect that functional benefits affect firm commitment rather than individual commitment to the relationship. 2003).g. Ghosh et al. the concept that relationships emanate from individuals. 2000). Psychological and social processes underlie these early proceedings and negotiations. 1985). which posits that an individual represents a collection of social roles. substantial previous research supports the importance of functional benefits. though the individual remains within and represents the firm. Han et al. 2001. 1999). Therefore. Dwyer et al. as the effect of such benefits is filtered through an individual or series of individuals involved in the relationship. because ultimately relationships are driven by profit goals (Hastings.or herself as an individual working in a firm or as the collective entity of the firm itself.e. Trust and satisfaction become well established at this stage as the partners deliver on the terms of their written contracts.. that a role or socially defined position has a key impact on behaviors. and the idea that individuals together represent the firm (Ojasalo.. we argue that psychological and social benefits indirectly lead to firm commitment to the relationship. 1987. We concur and hence argue that while the individual (employee) view is different to the firm view. expansion.. (1987) suggest. 1998. the greater the individual commitment to the relationship will be.. 1987. (2002).g.g. and both firms experience fully developed benefits that preclude consideration of replacement partnerships (Dwyer et al. Socialization processes infuse transactions and interactions with relationship norms and values.... the relationship becomes increasingly socially embedded. Jap and Ganesan. 1984. may be between two firms.. 2000). conventional relationship marketing has focused on long-term. we propose that: H1. Dwyer et al. which enhances the likelihood that the relationship will continue. committed. 2002).. the individual is the primary recipient of psychological and social benefits. H3. This approach is consistent with that of Homburg et al. 1984. reflects an increase in the interdependence and realization of benefits (Dwyer et al. Previous research has indicated that relationship benefits have a direct impact on the buyer firm’s commitment to the relationship (Morgan and Hunt. in the commitment phase of the relationship.. as evidenced by B2C studies (e. research must consider the length of the relationship and/or stages of the relationship because exchange partners must build a base of successful exchange before they will commit to deep relationships. The greater the functional benefits. not the firm. Sheth and Sharma. p. because that individual is part of the firm. (2003) similarly posit that enhancing social capital drives interpersonal rather than firm-level evaluations of a supplier firm. for example. The exploration phase.e. at the same time. 1991). Levels of benefits over relationship stages and time To date. Ring and Van de Ven.g. psychological and social benefits are generated through individual. The next stage. as an individual.. Finally. Selnes and Sallis. 1994). Montgomery.. has his/her own personal interests at heart”.. including the monetary and strategic benefits achieved by the firm (e. the greater the firm commitment to the relationship will be. that both can be satisfactorily represented by the key individual in the relationship in the buyer firm. Thus. which is the sample element for the present study. Hennig-Thurau et al. an individual might view him. Reynolds and Beatty. As Dwyer et al. an individual characteristic) and one held at the firm level (i. The greater the psychological benefits. to some extent. the role they play depending on the context (Arnett et al. in principle. benefits. 1990.. 477 Such benefits are therefore most likely to generate individual commitment to the relationship. 207) in support asserts that “a person representing his or her company can be assumed to have the best interests of the company in mind and. Specifically. Wilson and Jantrania. Solomon et al. the greater the individual commitment to the relationship will be. The greater the social benefits. Lyons et al. representative of the firm view. Thus: H4. 2006). Previous research has found that economic investments primarily affect organizational. We evaluate the effect of relationship benefits on both individual employee and firm commitment. The length .

the results of studies examining the increase in benefits over the relationship duration have been mixed. The later the stage of the relationship. 2003). Reynolds and Beatty. are salient early in the relationship but become latent in later stages. 106). Similar propositions have been put forward in the consumer context (Gwinner et al. Because the database does not provide information about persons within the firm. 1997. which is based on the assumption that late responders are comparable to nonrespondents. such as satisfaction. 1984. 1994. 1990). p. representing a response rate of almost 50 percent among the named contacts. we conducted our data collection in two stages.g. and social bonds. . However. to include 152 four-digit standard industrial classification codes. questionnaire. First./the firm is very committed to . Many authors have used similar methods to assess B2B relationships (e. ” We obtained the relationship stages and corresponding descriptions from Dwyer et al. . . We drew a random sample of firms from a database of Australian manufacturing industries. In all. although we indicated in H5 that psychological and social benefits would be lowest in the early period of the relationship. and c) functional benefits..Functional. and functional benefits on the basis of a series of 20 in-depth interviews with buyers. taken from Morgan and Hunt’s (1994) relationship commitment scale. and postage-paid reply envelope to each of the contacts. whereas Reynolds and Beatty (1999) investigating social and functional benefits find support for an increase in the former but not the latter over time. Method Data collection The target population for this study was the individual employee who had prime responsibility for a relationship with a supplier firm. 2004).. The measure of firm-level commitment to the relationship included three items representing the attitudinal. we selected a contact at random from each of the 548 firm-level responses and asked those contacts to respond to the survey with respect to their relationship with the named supplier. 1994). The effects of a) psychological benefits and b) social benefits on the individual’s commitment to the relationship decrease over the duration of the relationship. represents the time invested in the relationship by both parties. A series of randomly selected items across the questionnaire reveal no significant differences beyond that which might have occurred by chance (5 percent of cases). For comparability. Hence. 1999). temporal. b) social benefits. H7. we received 275 questionnaires. We tested non-response using the extrapolation method of Armstong and Overton (1977). in which we asked him or her to provide us with contact details for up to four people in the firm who dealt with various suppliers. and instrumental components of commitment. . Wilson and Jantrania (1995) similarly posit that psychological and social aspects of relationships. Subsequently. Thus we propose that: H6. with at least six months experience in this role. Webb Journal of Business & Industrial Marketing Volume 22 · Number 7 · 2007 · 474 –488 of the relationship. psychological. We then used this information to revise the scales and the questionnaire for the main data collection phase. as recommended by Anderson and Narus (1990). In essence.000 buyer-supplier dyads. during which problems may have been addressed and an increased understanding of the other party achieved (Doney and Cannon. 2003). we sent a letter by mail to the managing director. whether measured in years or stages. The repetitive exchanges inherent in an embedded relationship involve social interactions that lead to the development of norms and values that facilitate economic exchange (Ring and Van de Ven. Doney and Cannon (1997) find no support for trust development over time. commitment becomes “institutionalized through repetitive executions of acts by the successors of the parties who come to share that these acts are simply ‘the way things are done’” (Ring and Van de Ven. 1979. (1987). Second. and social relationship benefits Jillian C. we identified several points of confusion in the question wording or response format. the greater the level of a) psychological benefits. Heide and John. along with the name of each supplier firm. Based on the preceding argument. we also propose that they play a more critical role in increasing commitment in earlier rather than later periods. we also believe that the effectiveness of the benefits on the development of commitment varies over the length of the relationship. such that relationship commitment becomes established and less dependent on perceptions of psychological and social benefits. DeVellis. and even given the exploratory nature of the study. time promotes continuity. Sweeney and David A. we provide details of the measures in Tables I and II. 478 Effects of benefits on commitment over time While we expect that benefits and commitment increase over the duration of the relationship. the sample frame represents a reasonably broad variety of buyer-seller relationships. we hypothesize that: H5. we sent a personalized letter. we measured individual-level commitment to the relationship using equivalent items. social. (2003) argue that customers with longstanding relationships require fewer supplier resources to maintain their relationship satisfaction. The effect of functional benefits on firm commitment to the relationship remains constant over the duration of the relationship. As functional benefits are the key reason for entering a relationship (Hastings. Naryandas and Rangan. Measures We developed a draft of the questionnaire and tested it on several businesspeople who were buyers in a B2B relationship. Bolton et al. we also expect that the impact of economic benefits on commitment does not increase or decrease over the duration of the relationship. We therefore conclude that non-response bias is not an issue. distinguished by the use of phrases such as “Something I am . we developed multipleitem scales to tap the psychological. we achieved a set of 29 items to represent the three relationship benefit themes. and the approach enabled us to identify almost 1. . This way. We therefore seek to examine the change in the three types of benefits addressed in this study. Anderson and Narus. 1998. Following standard construct scale development procedures (Churchill. Thus. Using a verbal report-back protocol. trust. We included a postage-paid reply envelope with this pre-survey request.

the other measures of goodness of fit are well above the recommended minimums (Bentler and Bonett.86 or above in all cases (Table III). in which we considered all benefits as a single dimension ( x2 ¼ 884:61df ¼77 .83 Functional benefits 5 Social benefits 4 Note: a Loading based on confirmatory factor analysis results. NFI ¼ 0:95. Results for three-factor scale: x2¼ 401:96. The reliability of the three dimensions and the commitment scales for the firm and the individual are 0. The relationship expands because of the each party’s satisfaction with the other’s role performance and associated benefits Commitment: a pledge of continuity between exchange partners. confirmatory fit index ðCFIÞ ¼ 0:96.87 0. Following this stage. df ¼ 74. Confirmatory factor analysis. We find support for distinction between all pairs of constructs. more than ten years) Table II Scale items used for the measures Construct Psychological benefits No. CFI ¼ 0:90. 14 items remained.79 0.90 0. and social relationship benefits Jillian C. The model is superior to a two-factor model. A level of satisfaction is reached. Expectations of behavior and ground rules of future exchange are developed Expansion: benefits of the relationship become more apparent. . CFI ¼ 0:93.89 0. such that the buyer is not actively considering replacing the exchange partner with an alternative that offers similar benefits Dissolution: the relationship has been dissolved or terminated How long have you personally (has your firm) been dealing with xyz? (up to six months . .72 0. and the firms become increasingly interdependent. of items Source of measure 5 5 4 3 Developed for the study Sample items As per Table 2 Morgan and Hunt (1994) 1 Measure based on Dwyer et al. CFI ¼ 0:96 Results Measurement model The item set was reduced using an iterative process of reliability analysis using item-to-total correlations (Churchill.81 0.82 0.85 0.78 0. strongly supports the three-factor structure of relationship benefits (x2 ¼ 401:96df ¼74 . 1980).84 0. normed fit index ðNFIÞ ¼ 0:95.82 0. Sweeney and David A. we know that whatever it is. and a one-factor model.86 0. Webb Journal of Business & Industrial Marketing Volume 22 · Number 7 · 2007 · 474 –488 Table I Details of scales used to represent constructs Scale Relationship benefits Psychological Functional Social Individual/firm commitment to the relationship Relationship stage No. we are able to maximize financial outcomes We complement each other in terms of expertise Our relationship sets up proactive opportunities We have more than a formal business relationship with them We have a real friendship with them We work on things together We share information Loadinga 0.Functional. RMR ¼ 0:06.30 (Joreskog and Sorbom. NFI ¼ 0:92.79 0. root mean residual ðRMRÞ ¼ 0:06) (Table II). in which we combined the psychological and social factors (x2 ¼ 677:81df ¼76 . psychological. 1999)). including the three types of benefits and two . using structural equation modeling (LISREL 8. 1979) together with exploratory factor analysis. of items 5 Measurement Items We have peace of mind in dealing with them We trust them We know what to expect of/from them If they give us their word. it will be done There’s a real sense of understanding between us Having a relationship with them enables us to compete in the market We are able to capitalize on the value they offer As a result of the relationship. RMR ¼ 0:09). NFI ¼ 0:89. Although the 479 chi-square is significant.’s (1987) descriptions Length of relationship Developed for the study Something that I am (the firm is) very committed to Something I (the firm) intend(s) to maintain indefinitely Something I (the firm) will expend every effort to maintain Respondents asked to select from the following: Exploration: potential exchange partners consider costs and benefits of the relationship. RMR ¼ 0:09).

increases firm commitment to the relationship. However.31 0.Functional. role in developing individual commitment to the relationship (b ¼ 0:19. t ¼ 7:85).94 Average variance extracted 0.60 1.35 19. The proposed model results also show that the key driver of individual commitment to the relationship is the social interaction between the buyer and seller (b ¼ 0:68. including a sense of sharing.46 4 35.55 19. the chi-square difference test compares a model in which the correlation between a pair of constructs is set to 1 with a model in which the correlation is allowed to vary. 1998).62 4. Structural model We derived the full structural model from our hypotheses and present the model results in Table IV. Thus.85 H1: Individual commitment to the relationship ! firm commitment H2: Social benefits ! individual commitment H3: Psychological benefits ! individual commitment H4: Functional benefits ! firm commitment Notes: Model fit: Chi square ¼ 98:55.72 (0.85 5.68 2. which proposes that firm commitment increases with Table IV Standardized path estimates for proposed models individual employee commitment to the relationship (standardized loading b ¼ 0:41. The results that appear in Table IV support H1.73 (0. goodness of fit index ðGFIÞ ¼ 0:94 480 . NFI ¼ 0:98. The overall fit was good (x2 ¼ 98:55df ¼28 . Kline.53 4.72 0. and discriminant validity Constructs 1 Psychological benefits 2 Social benefits 3 Functional benefits 4 Individual commitment 5 Firm commitment Mean 4. though lesser.02) 0. for example.80 0. Psychological benefits derived from a sense of understanding.87 33. NFI ¼ 0:98.and longerterm relationships. psychological and social benefits do not directly influence firm commitment to the relationship in the model.03) 0.72 (0.90 0.59 7. Webb Journal of Business & Industrial Marketing Volume 22 · Number 7 · 2007 · 474 –488 Table III Measurement information. as we discuss in the Appendix.53 1. CFI ¼ 0:98. The chi-square differences between constrained and unconstrained correlations between pairs of constructs (Anderson and Gerbing.68 0. correlation matrix. t ¼ 7:68). psychological.20 3 38.02 0.37 7.90 0.03) 0.20 Standard deviation 1.91 0.67 0. According to the total effects of benefits on commitment.69 (0.12 26.27 4. The chi-square values in the upper triangle in Table III demonstrate significant differences between all pairs of constructs. and confidence in the other partner also play a significant. trust. also is supported (b ¼ 0:50. nor do the functional benefits realized by the firm enhance individuallevel commitment to the relationship.04) 0. 1988) are above the diagonal types of commitment. the financial outcomes.03) 0.41 0. Sweeney and David A.65 0.02) 5 34. CFI ¼ 0:98. The perception of the economic and strategic advantages of conducting business with the supplier.86 0. Table IV and Figure 1 provide the results of the hypothesized structural model. which reduced the effective sample to just over 200. in terms of the value it offers. t ¼ 2:37).87 1 0. we find support for H2 and H3. we turned to a partial disaggregation approach to reduce the number of parameters to be tested.52 35.03) Notes: Correlations (and standards errors) are below the diagonal. 1994. First. our research model differentiates between individual and firm commitment to the relationship. At this stage. social benefits are clearly the most influential overall on individual commitment.08 1. The values of the correlations and standard errors in the lower triangle in Table III also support discriminant validity between all pairs of constructs. we split the sample in two to represent shorter. RMR ¼ 0:02).08 33. This tests whether in fact the constructs are the same (null hypothesis).50 t-value 6.83 (0.68 (0.44 1. which predicts that increases in functional benefits lead to increases in firm commitment. Modification indices do not suggest allowing any further paths be inserted to improve the model.03) 0. working together. using the discriminant validity tests recommended by Anderson and Gerbing (1988) and Garver and Mentzer (1999). the correlation confidence interval test uses the correlation plus or minus two standard errors to identify whether the correlation between the pairs is significantly different than 1 (again testing whether the constructs are the same).19 0. based on the recommended ratio of observations to parameters (Bagozzi and Heatherton. Second. H4.04) 2 41. Alternative model The need to investigate a plausible rival model to test the robustness and validity of the proposed model has been well Proposed model Paths Loading 0. and social relationship benefits Jillian C. peace of mind. RMR ¼ 0:02.81 (0.83 (0.56 Reliability 0. df ¼ 28. which represents the interrelationships among the constructs. social benefits also play a clear role in developing firm-level commitment through the fulfillment of individual commitment (Table V).03) 0.74 (0. and friendship. t ¼ 6:59). Specifically. whereas functional benefits are important in enhancing firm-level commitment. In testing H6 and H7. and the ability to leverage the relationship to derive strategic advantages.82 (0.

71 established (e. the exploration and commitment stages.17 2.28 7. identifying similar trends over time would add validity to the findings. and the RMR is higher (0. and the length of the relationship of the individual respondent in the buyer firm with the supplier firm in years.. Sweeney and David A. Kelloway.69 0. relationship benefits increase over the stages of the relationship. and functional benefits are great during both the expansion and commitment stages of the relationship.68 5. The other fit statistics are similarly less impressive for the rival model.79 Commitment (n 5 178) 5.63 4.19 0. we consider functional benefits as central to the relationship and hypothesize that both psychological and social benefits enhance these central functional benefits. Webb Journal of Business & Industrial Marketing Volume 22 · Number 7 · 2007 · 474 –488 Figure 1 Proposed model results Table V Total effects on endogenous constructs Effect of ! on # Individual commitment to the relationship Firm commitment to the relationship Note: a SMC ¼ squared multiple correlation Social benefits n t value 0. that is. We used two groups in each case: .50 7. In our alternative model. F value ¼ 7:282* significant differences were generally found between benefits at the exploration and expansion stages. social benefits are greatest during the expansion stage. Overall.68 0.41 Expansion (n 5 59) 5.42 * 4. Difference in effect of relationship benefits on commitment over the relationship To test the differences in the relationship between the three types of benefits and relationship commitment across the 481 Table VI Means of level of perceived benefits received according to stage of relationship Dimension Psychological benefits Social benefits Functional benefits Exploration (n 5 26) 4. Whereas psychological benefits increase over the stages of the relationship. While we do not view the years of the relationship to be the same as the stage.85 t value 2.79 * Notes: Results for multivariate test (all three benefits simultaneously): Test ¼ Wilks’ Lambda.44 4. The rival model provides a poorer fit in terms of the chi-square value (203:54df ¼30 ) compared with the proposed model (98:55df ¼28 ). 0:01 relationship duration (H6 and H7). 1998).23 SMCa for structural equations 0. * p .92 3. Difference in benefits over relationship stages Our results support H5.Functional.08 Functional benefits n t value 0. psychological.37 2. The analysis reveals significant variation in benefits according to the different stages (Table VI). we conclude that on both measurement and conceptual grounds. and social relationship benefits Jillian C.g.66 * 4. Value ¼ 0:850.07 versus 0.02). we operationalized the moderating role of time in three alternative ways: relationship stages. and the commitment and dissolution stages. the proposed model is superior. since some relationships develop faster than others.15 Psychological benefits n 0. the length of the relationship of the buyer firm with the supplier firm in years.

the impact of functional benefits on firm commitment did not significantly change across the relationship. Furthermore. We provide our rationale for the sample split in the latter two cases in our discussion of the partial disaggregation approach in the Appendix. the benefit – commitment path was freed (Bollen.44 0. SB ¼ social. we questioned whether individual commitment accounts for the majority of the effect of the psychological and social benefits on firm commitment.41 148. 1989) 482 . as we expected. to our knowledge.63 0. the importance of social and psychological benefits supports the inclusion of social exchange mechanisms in marketing (e.33 147.28 Free FB to FC # 5yrs >10 yrs Notes: PB ¼ psychological.14 72 0. Nonstandardized values shown to ensure parameters same for fixed paths across models. Bagozzi.68 0. However.76 73 Free SB to IC #5yrs > 10 yrs 0. the effect of social benefits on individual commitment seems greater in the early exploration/ expansion stage of the relationship (0. in support of the mediating role of individual commitment. and FC ¼ firm commitment to the relationship.. firm commitment. According to the results.Functional. although the chisquare difference tests were non-significant in all three cases. and social relationship benefits Jillian C. a except for error variances of items. Nonstandardized values shown to ensure parameters same for fixed paths across models. 2002).59 0. As the second and third columns of Table X show. The first model constrained all parameters (except error variances) to be equal across groups. and relationships with the supplier experienced by the individual respondent in the buyer firm of up to three years compared with more than five years. Discussion Theoretical implications This research represents the first empirical examination of the effect of relationship benefits on both firm and individual commitment to the relationship.08 72 146.. To this end. In this way. 1989).46 148. Gwinner et al.71 0. as well as the dependent variable.56 0.16 0. in support of H7. only the Table VII Tests of moderating effect of time on impact of relationship benefits to commitment – relationship stages Parameters invariant across two groupsa PB to IC SB to IC FB to FC IC to FC x2 df 0. However.. IC ¼ individual. Although similar studies have been conducted in a consumer setting (e.g.. both psychological and social benefits influenced the individual commitment mediator variable.39 0. To assess the difference in parameters for the benefit-commitment paths across the early and more established relationship groups. as individual commitment increases. so does firm commitment).14 Free FB to FC Stages 1-2a Stage 3 Notes: PB ¼ psychological. relationships of up to five years in duration compared with more than ten years. IC ¼ individual. FB ¼ functional benefits. SB ¼ social. in the second. We found similar results for the lengths of the firm and individual relationships with the supplier firm (Tables VIII and IX). Webb Journal of Business & Industrial Marketing Volume 22 · Number 7 · 2007 · 474 –488 relationships in the exploration/expansion stages compared with the commitment stage. a except for error variances of items.33 Free PB to IC Stages 1-2a Stage 3 0.71 72 0.21 0. This supports the validity of modeling commitment in the way we have (i. we compared two models using multi-group modeling. Sweeney and David A. as suggested by Dwyer et al.36 72 147. unique to each item and allowed to vary (Bollen.71) than in the commitment phase (0. we find that the effect of psychological and social benefits on firm commitment reduces to insignificance. FB ¼ functional benefits. our research reinforces the claim that firms must consider relationship benefits at distinct levels.67 73 Free SB to IC Stages 1-2b Stage 3 0. Finally.41 Free PB to IC #5yrs > 10 yrs 0. That is. psychological.g. We obtained similar results for psychological commitment. firm commitment. Hennig-Thurau et al.37 147. which means H6a and H6b are not supported.28 72 146. we further assessed the strength of our model by evaluating the appropriateness of individual commitment to the relationship as a mediator of the relationship between psychological and social benefits and the firm-level commitment. 1975).35 0.e. unique to each item and allowed to vary (Bollen. when we take both benefits and individual commitment into account in modeling the dependent variable. 1998.68) (Table VII).58 72 148.68 0. psychological. and social – on relationship outcomes in a business setting. we employed the test procedure recommended by Baron and Kenny (1986). b stages 1 and 2 refer to exploration and expansion and stage 3 to commitment stage.33 0. Furthermore. and FC ¼ firm commitment to the relationship. (1987) Table VIII Tests of moderating effect of time on impact of relationship benefits to commitment – length of supplier relationship with firm Parameters invariant across two groupsa PB to IC SB to IC FB to FC IC to FC x2 df 0. 1989). this study empirically investigates the effect of three primary types of benefits – functional.

.73 0.46 Equation 3 Dependent: Firm commitment 5 f(independent and mediator) Coefficients for the independent Coefficients for the variables mediator variable n t value n t value 0.16 0. 2001) to include the concepts of working together and sharing.94 72 154. as previously conceptualized by Dwyer et al.33 Free PB to IC # 3yrs > 5 yrs 0. 2003.24 Free FB to FC #3yrs >5 yrs Notes: PB ¼ psychological. Wathne et al. who find that economic and social resources provided by the supplier differentially affect satisfaction with the supplier representative and the supplier firm itself.57 1. show that both psychological and social benefits enhance individual commitment.38 153. This result has some correspondence with research by Bolton et al. 1989) Table X Mediation tests for individual commitment to relationship Equation 1 Mediator: Individual commitment 5 fðindependentÞ Coefficients for the independent variables n t value 0.53 3. (2003). Wathne et al. and psychological assurance. switching costs. This extended meaning concurs with the findings of Haytko (2004) and Ganesan (1994) who identify a partnership aspect of relationships.32 Equation 2 Dependent: Firm commitment 5 fðindependentÞ Coefficients for the independent variables n t value 0.49 n/a 0. and the market variables of price and product assortment when they consider customer outcomes such as participation in a promotional campaign or switching.55 0. 2001).14 7.70 n/a 0.46 0. We similarly find that economic/strategic benefits are most important in developing firm commitment.. such as competitive positioning and operational factors. Bolton et al.. Murry and Heide. and social relationship benefits Jillian C.47 156..70 0. however.34 7. Turning our attention to the duration of the relationship.. (1987). IC ¼ individual. The dimensions we use are similar to those found in the consumer setting by Gwinner et al.12 0..29 0. FB ¼ functional benefits. Nonstandardized values shown to ensure parameters same for fixed paths across models. Sheth and Sharma.28 72 0. empathy. our research broadens the meaning of social benefits identified in previous research (e.29 0. Previous research by Murry and Heide (1998) and Wathne et al. Lyons et al.34 0.61 0. a except for error variances of items.64 0. The functional benefits we identified include economic value and strategic advantages. (1998) but are more specific to the B2B context.70 n/a 2. The significant though indirect effect of psychological and social benefits on firm-level commitment is consistent with the concept of embeddedness. unique to each item and allowed to vary (Bollen. is more inclusive and addresses perceptions of reliability. 1997. SB ¼ social.g.71 1. namely.34 5.18 0.30 0. which are consistent with a variety of previous research studies (Barringer. though similar to trust. Webb Journal of Business & Industrial Marketing Volume 22 · Number 7 · 2007 · 474 –488 Table IX Tests of moderating effect of time on impact of relationship benefits to commitment – length of supplier relationship with respondent in buyer firm Parameters invariant across two groupsa PB to IC SB to IC FB to FC IC to FC x2 df 0.Functional.18 72 156. and FC ¼ firm commitment to the relationship.62 1. 1998. Our results highlight the importance of the role of the individual employee in contributing to overall firm-level commitment to the relationship. support. Our findings. Our research also identifies the distinct category of psychological benefits that. The broader psychological component also is consistent with certain customer-perceived value components identified in a B2B context by Lapierre (2000).47 5. Increasing levels of benefits might be .30 Independent variable Psychological benefits Social benefits Individual commitment ! Firm commitment SMC individual commitment SMC firm commitment Note: SMC ¼ squared multiple correlation for structural equations effects of economic and social relationship aspects on outcomes have been studied in the B2B context (e. understanding between parties. Sweeney and David A. economic action is embedded in social relationships (Granovetter. (2001) demonstrates that B2B customers view 483 interpersonal relationships as of minimal importance compared with incentive premiums. we find that relationship benefits generally increase over the stages of the relationship. as well as the indirect role of the “softer” psychological and social benefits for firm outcomes. psychological. 1997).56 73 Free SB to IC #3yrs > 5 yrs 0. 1990. 1992). However.g.16 0.

Such relationships have become increasingly common (Wilson and Jantrania. encouraging cooperation. interdependence or power asymmetry and the norms established in the relationship may also be usefully examined in terms of their impact on relationship benefits (Barringer. a fruitful approach might examine the moderating role of interimistic relationships (i. the effect of benefits on other outcomes beyond commitment. often both competitive and collaborative) compared with enduring relationships (Lambe et al. and gestures of friendship are necessary to achieve such benefits. Finally. 2006). We also suggest further research into moderating factors other than time.. such as the number of people involved in the relationship in supplier and buyer firms. Third. Thus these benefits not only appear to increase. our results represent buyers in manufacturing firms..g. 1996. Finally.Functional. our model. such as job satisfaction and firm performance is also a useful research direction. Developing social benefits clearly takes time. Thus it would seem that buyers are mindful of psychosocial aspects of the relationship throughout and that the institutionalization of activities and opinions. which partially allays such concerns. supplier firm and salesperson characteristics are all known to be important factors in relationship formation (Barringer. and only one side of the dyad is evaluated in the present study. regular communication of expectations and goals. product and price factors. and the supplier firm might use several strategies and tactics to increase them. In fact. as for a specific project. 1995). 1997. Second. We restricted our study to control extraneous sources of variation. Garbarino and Johnson. However. Morgan and Hunt. Managerial implications By understanding the variety of benefits involved in a relationship. Relationship components such as service factors. psychological. our study is cross-sectional.. even though we included no restriction on the type of industry the suppliers represented. We suggest that suppliers are best positioned to determine what more they could do to add extra value to these “key” relationship dimensions. the generalizability of the findings may be limited. This is not to suggest that firms have previously ignored these factors. 1990. Both buyers and suppliers in B2B relationships must focus on such functional considerations.. the increase is not uniform. both buyers and suppliers can address with greater holism the factors that are important in B2B relationships. because employees exist within the firm and are together viewed as the firm (Zeithaml et al. Thus future research may integrate these aspects. Sweeney and David A.. of course. Wathne et al. Lyons et al.. because these factors ultimately underlie relationship development (Hastings. 2001) and furthermore tests the proposed model against an alternate model.. given relationships are of course two-way. managers of supplier firms might consider for each of their “key” relationships how they are faring against the content of each of the items included in our survey battery (Table II). 1997. but also continue to boost individual commitment to the relationship over the relationship duration. Robicheaux and Coleman. Geyskens et al. benefits become increasingly realized. and being reliable. The scale can also be used by suppliers as a measure of buyers’ relationship benefits based on buyer feedback. 1994). 2000). While the effect of functional benefits on firm commitment to the relationship remains constant over the duration of the relationship. We find that relationship benefits generally increase over the different stages of the relationship but that these increases are not uniform.e. functional benefits in order to cultivate buyer commitment. educating the buyer. in that the developing relationship becomes more socially embedded. For example. 2003). future research can examine relationship benefits experienced by both parties and the cross-implications of this. rather. 1997. our model is no different than many other cross-sectional models tested (e. Similarly. 1997. relationship structure. As a broad starting point. we merely point out that a more open and integrated stance needs to be adopted in terms of recognizing the full spectrum of benefits. For example. 484 Limitations and future research suggestions We note some limitations of our research. and social relationship benefits Jillian C. a useful extension to this study might address whether psychological and social relationship benefits. We also suggest that managers might benefit from opening a dialog around these issues with relationship partners. 2001) and are likely to act as antecedents to the relationship benefits considered in the present study. given the focus on internal and interactive marketing in service contexts (Zeithaml et al. Doney and Cannon. 1997. Doney and Cannon. Wathne et al. received by the service employee from interactions with their own firm or interactions with their customers play a significant role in developing employee commitment to customer relationships and the service quality delivered. 1999. we suggest that there is place for “social” and “psychological” factors on the strategic agenda as well as for “functional”. and therefore the inference of causality or the directionality of the relationships is tenuous and highly dependent on the correct specification of the model. discussed by Ring and Van de Ven (1994) does not apply in this case. The validity of the model would be strengthened if it were tested using longitudinal data. . Considering the outcomes. sharing information. More specifically. suppliers should focus their attention on enhancing buyers’ realization of social benefits in particular.. as well as psychological benefits and. and the modification of process and production to promote greater interfirm compatibility enhance functional benefits.. or even expected buyer feedback. though parsimonious. and psychological and social benefits may not play as significant a role in their development. but further studies should be conducted across different sectors. as hypothesized. clearly the relative importance of such benefits may vary from customer to customer. and due to repeated interactions. We suggest further investigative research to explore this finding more fully. and it is important that suppliers identify the unique needs of each buyer firm. offering insights as to what contributes specifically to each benefit type. Psychological benefits also have an indirect impact on the firm through the individual. Further research should investigate this phenomenon in more detail. suggesting a need for further investigation of why this may be the case.g. deliberately short-term. a focus on distinct competencies. as we had expected. the impact of social and psychological benefits does not decrease. promptly rectifying problems. such as setting clear targets and expectations of what the supplier can do for the buyer. Nonetheless.. Ghosh et al. 1994). However. 2006). a common practice in many studies (e. as evidenced in the present study. is selective in the constructs used. which means that perseverance. First. Webb Journal of Business & Industrial Marketing Volume 22 · Number 7 · 2007 · 474 –488 explained through social exchange theory.

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3. pp. Appendix The partial disaggregation approach involves combining variables into subgroups. 128-42. and Fisher. 3. J.A. Vol. Asia-Australia Marketing Journal. 1. 41 No. pp. pp. 61. 191-203. Solomon. 286-96. (2001).T. Vol. and Gutman. In our case. J. we needed to reduce the number of parameters to be estimated. Those with a particular interest in the topic covered may then read the article in . We compared specific hypothesized paths across two groups that represented more recently and longer established relationships. Verhoef. pp. Services Marketing: Integrating Customer Focus across the Firm. 199-216. D. V. and Barclay.G. 90-118. Vol. D. L. 77-92. Vol.Functional. K. (1985). “The hunt-vitell general theory of marketing ethics: can it enhance our understanding of principal-agent relationships in channels of distribution?”.). Webb Journal of Business & Industrial Marketing Volume 22 · Number 7 · 2007 · 474 –488 Ojasalo. 305-20. D.R.J.W.T.. and Webb. 229 for the length of the individualsupplier relationship. Journal of Retailing. pp.A. (1997). 32. Turnbull. 38-56. 11. Vol.. J. “Understanding the effect of customer relationship management efforts on customer retention and customer share development”. Journal of Marketing. D. F. Academy of Management Review. Zeithaml. 214-26. J. 31 No. Sheth. (1995). Dryden. our number of observations was at least five times the number of parameters to be estimated (Kline. 63. A. Vermillon. 1 No.. Understanding Business Markets: Interaction.. J. Wilson. pp. the procedure that we adopted (see Tables VII-IX). (2003). 4.N. pp. Journal of Business & Industrial Marketing. October. 1 No. Vol. J. Because the total sample size across the two groups was 201 for length of the firmsupplier relationship.D. 1.H. “The effects of supplier fairness on vulnerable resellers”. P. L. Vol. C. 3-21. 4th ed. so we excluded relationships of five to ten years’ duration. J. Bitner. ´ Hallen. B. 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January. using the partial disaggregation approach... Lassar. Further reading Dorsch. Journal of Business Ethics.A. 19 No.E. “The structure of marketing channel relationships”.W. Relationships and Networks. 16 No. and 243 for the exploration/expansion versus commitment stages. which we developed so that they were maximally different by excluding a middle value in the scales. pp. Wathne. Vol.E. (1998). pp. and Sallis. Industrial Marketing Management. pp. 26. “Commercial friendships: service provider-client relationships in context”. “The principle of the conservation of business relationship energy: or many kinds of new beginnings”. 4.. “Relationship benefits: an exploration of buyer-supplier dyads”. 11 Nos 3/4.au Executive summary and implications for managers and executives This summary has been provided to allow managers and executives a rapid appreciation of the content of the article.C.M. M. Vol.E. S.D. 3.. M. pp. 389-400. Corresponding author Jillian C. K. Sweeney and David A. “Promoting relationship learning”. 99-111. (Ed. Journal of Marketing. Reynolds. Sharma. Journal of Marketing Research. 22 No. L.J. 67 No. E. Robicheaux. N. L. Journal of the Academy of Marketing Science. Vol. Vol. R.B. D. 4. pp. and Van de Ven. pp. and Kelley.uwa. (1999). Journal of Marketing. “Customer benefits and company consequences of customer-salesperson relationships in retailing”. the approach ensures that when we assess the moderating power of the length and stage of the relationship. Havila. and Beatty. “Key account management at company and individual levels in business-to-business relationships”. pp. 2. S. pp. (1995). Vol. B. pp. 2. Spring. and Jap. Vol. 11-32. Journal of Marketing. and Heide. Vol. For example. (2002). “The role of relationship quality in the stratification of vendors as perceived by customers”. “A role theory perspective on dyadic interactions: the service encounter”. Vol. “Interaction. A. D. (1996). 3. Scheer. D. “Supplier relationships: emerging issues and challenges”. and social relationship benefits Jillian C. 3. Winter. Ford.-B. Journal of Business & Industrial Marketing. Sweeney. and Sharma. 44-62. 4 No. Journal of Marketing. M. and Wilkinson. This structure represents the case in which one structural parameter is freed at a time. 38-51. Journal of Relationship Marketing.T. “Understanding the value of a relationship”. “Functional strategies and competitiveness: An empirical analysis using data from Australian manufacturing”. R. 80-95. pp.S. 1994). London. 55-66. 2 No. Czepiel. Price. which is consistent with Kline’s (1998) recommendation. W. in Ford. 1. Sweeney can be contacted at: jsweeney@ biz.edu. J.K. 67 No. “Bonding and commitment in buyer-seller relationships: a preliminary conceptualisation”. and Mummalaneni. and Cunningham. (1997).H. We also considered the need to balance sub-sample sizes. pp.B. pp. (1986). psychological. P. (2001). the length of the supplier relationships with the firm was either five years or less (n ¼ 79) or more than ten years (n ¼ 122). D. April. P. Ring. and Arnould. to 38.M. 44-59.C. S. S. Weitz. Smith. (2003). Vol. 26 No. Swanson. February.W. pp. H. M. 23 No.L. Biong. Kumar. V. (1999). and Coleman. Vol. thereby reducing the number of parameters to be estimated (Bagozzi and Heatherton. Industrial Marketing Management. Vol. (1997). pp. “Choice of supplier in embedded markets: relationship and marketing program effects”. New York. I. 75 No. 30-45.

We have a real friendship with them. The scale can also be used by suppliers as a measure of buyers’ relationship benefits based on buyer feedback. of course. does not mean to say they would not benefit from a clearer understanding of how the functional aspects of doing business fits in with social and psychological factors. we merely point out that a more open and integrated stance needs to be adopted in terms of recognizing the full spectrum of benefits. We trust them. Supplied by Marketing Consultants for Emerald. could marketing academics. There’s a real sense of understanding between us. and psychological benefits as feelings of trust or confidence in the other party that result in greater peace of mind. has long been differentiated along economic and social lines. and get on with your work” might be one employer’s reaction. Our relationship sets up proactive opportunities. The greater the psychological benefits. Stopping the social interaction in the expectation that employees could use their time doing some “real work” might prove to be false economy. as well as psychological benefits and. functional benefits in order to cultivate buyer commitment. and sharing with another party. . The greater the individual commitment to the relationship. However. and social relationship benefits Jillian C. the fact that many enlightened companies now accept that it is people. and social relationship benefits influence individual and firm commitment to the relationship Picture the scene. and social relationship benefits influence individual and firm commitment to the relationship”. Social benefits.Functional. This is not to suggest that firms have previously ignored these factors. Individual employees are far better and developing trust and confidence in an organization that the organization as an entity. However. both buyers and suppliers can address with greater holism the factors that are important in B2B relationships. If they give us their word. In a study of employees of buyer firms. Suppliers should focus attention on enhancing buyers’ realization of social benefits in particular. .” Functional benefits are the economic and strategic advantages derived through an interaction with another firm that enhance firm competitiveness and drive its financial position. As a result of the relationship. The authors propose that psychological benefits forms a third component of benefits in the B2B context. which were: . We know what to expect of/ from them. A group of employees spending rather more time than an employer might think they should. . Sweeney and David A. the greater the firm commitment to the relationship will be. What the boss probably did not realize was that it was through these informal conversations at relatively slack parts of the day that some of the company’s most important work was being done – employees sharing work experiences and together figuring out how best to get the job done and satisfy the customer. How functional. it will be done. too. which get things done and that people are the organization. we know that whatever it is. defining social benefits as perceptions of affinity. We work on things together. psychological. hanging round the coffee machine and chatting. The greater the functional benefits. Webb Journal of Business & Industrial Marketing Volume 22 · Number 7 · 2007 · 474 –488 toto to take advantage of the more comprehensive description of the research undertaken and its results to get the full benefit of the material present. Webb say: “By understanding the variety of benefits involved in a relationship. ´ (A precis of the article “How functional. the greater the individual commitment to the relationship will be.com Or visit our web site for further details: www. the later the stage of the relationship. Having a relationship with them enables us to compete in the market. We complement each other in terms of expertise. We have peace of mind in dealing with them. But it is not just social interaction with colleagues which has benefits for companies. the greater the individual commitment to the relationship will be. They were also supported in their view that. Sweeney and David A. who had prime responsibility for a relationship with a supplier firm. psychological. supplier and buyer organizations. We have more than a formal business relationship with them. the greater the firm commitment to the relationship will be. action is socially embedded and cannot be explained by functional motives alone.emeraldinsight. rather. It is the bonds and friendships which flourish within the marketplace between. the greater the level of all three benefit types. for instance. we are able to maximize financial outcomes. psychological.com/reprints 488 . Sweeney and Webb suggest that suppliers are best positioned to determine what more they could do to add extra value to these “key” relationship dimensions and also suggest that managers might benefit from opening a dialog around these issues with relationship partners. or even expected buyer feedback. which has been central to the development of marketing knowledge for the past 30 years. The greater the social benefits. “Stop hanging about.) To purchase reprints of this article please e-mail: reprints@emeraldinsight. In fact. not organizations. . . friendship. The authors suggest that managers of supplier firms might consider for each of their key relationships how they are faring against the content of each of the items included in their survey of buyers. Anthropologists could fill a library with books on the subject. Psychological benefits. So. We are able to capitalize on the value they offer. We share information. The concept of exchange. Jillian C. they found support for their hypotheses that: . Functional benefits. we suggest that there is place for ‘social’ and ‘psychological’ factors on the strategic agenda as well as for ‘functional’.

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