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Impact of digital technology on velocity of B2B

buyer-supplier relationship development


Ralph Kauffman and Lucille Pointer
College of Business, University of Houston Downtown, Houston, Texas, USA

Abstract
Purpose – This study aims to examine how the widespread adoption of digital technology (DT) in business-to-business (B2B) markets affects and, in
particular, increases the velocity of relationship development over time.
Design/methodology/approach – A literature search was conducted to develop propositions concerning DT’s effect on the various stages of
an existing B2B buyer-seller relationship development model. A group of 55 experienced practitioners was used to obtain reactions to the
propositions.
Findings – DT affects buyer-seller relationship development by reducing the time needed to initiate and advance through sequential relationship
stages. Agility in the decision-making process fosters stronger inter-firm relationships and influences other important attributes of B2B relationships,
such as organizational commitment, organizational embeddedness, trust and value creation.
Research limitations/implications – A broader, more diverse sample of commercial buyers and sellers is required to permit testing the
generalizability of the study’s findings.
Practical implications – DT affects the speed and agility of B2B relationship formation regardless of stage. As DT evolves in the age of Industry 4.0,
an understanding of the effects of DT will aid managers in assessing ways to leverage its potential and apply appropriate DT strategies throughout
the B2B relationship process to capitalize on current and future business opportunities. Firms need to explore the positive and negative effects of the
digital revolution on managers within their supply chain networks.
Originality/value – To the best of the authors’ knowledge, this is the first study that specifically addresses DT’s impact during the specific stages of
the relationship development process.
Keywords B2B buyer-seller relationships, Information technology, Digital technology, Trust, Commitment, Power balance, Information sharing,
Buyer-seller commitment
Paper type Conceptual paper

Introduction products and solutions. Considering that nearly everything


designed and developed today uses computers, it could be
The use of digital technology (DT) or information technology called an “umbrella term.” Because of the wide variety of
(IT) (these terms are used interchangeably in the paper) is methods and applications of DT in business, this study defines
ubiquitous in today’s commercial settings (Forrester Research, DT broadly in a manner similar to that proposed by Iansiti and
2019; Ramaswamy and Ozcan, 2020). DT is said to have Lakhani (2014) as “the digitization of previously analog
created the newest industrial revolution referred to as Industry machine and service operations, organizational tasks, and
4.0 (Gotz and Jankowska, 2020; Dobrescu et al., 2021). Several managerial processes.” Participants in the practitioner survey
scholars (Dobrescu et al., 2021; Hahn, 2020; Fatorachian and part of this study were instructed to define DT in a similar
Kazemi, 2021) characterize 4.0 as an ongoing process which manner when responding to survey questions.
automates the SC and manufacturing practices using new and This study is not a study of DT itself but a study of the
developing digital (smart) technology. Such technology impact of DT on the development of buyer-supplier
encompasses a myriad of e-business tools to expand networks relationships regardless of the type or form of DT used.
between manufacturers, resellers and end users, and maximizes Therefore, we do not discuss DT in detail but have included in
organizational performance and value (Bello et al., 2002). this section examples and references for DT technologies and
Among the many DT tools are social media, mobile concepts.
computing, robotics, analytics, automation, blockchain,
artificial intelligence (AI), enterprise resource planning, (ERP),
industrial internet of things, big data (Dobrescu et al., 2021;
Hahn, 2020). DT is a general term for computer-based
The authors wish to thank Thomas Crimi for his help in conducting the
practitioner survey
The current issue and full text archive of this journal is available on Emerald
Funding: The study was not funded by any institution or organization.
Insight at: https://www.emerald.com/insight/0885-8624.htm
Received 10 July 2020
Revised 17 October 2020
Journal of Business & Industrial Marketing
17 February 2021
37/7 (2022) 1515–1529 27 June 2021
© Emerald Publishing Limited [ISSN 0885-8624] 12 September 2021
[DOI 10.1108/JBIM-07-2020-0326] Accepted 21 September 2021

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The terms “buyer-supplier” and “buyer-seller” are used related to the structure and behaviors of SCs should be studied.
interchangeably throughout the paper. Additionally, the term Although the use and efficacy of DT has been widely studied,
“supply chain” (SC) is used at times to indicate the overall there is less research on its impact on the relationship
buyer-seller network in the business relationship development development process.
process. This study is an attempt to conceptually identify and present
Many scholars have recognized the ability of DT to some of the significant ways in which DT affects the development
transform industries, alter relationships within and between of commercial buyer-seller relationships and how it can be
organizations and create value (Harrison and Hair, 2017; Salo beneficially used by B2B marketers. In particular, this study
and Wendelin, 2013; Zablah et al., 2005; Rohm et al., 2004; examines the role of DT regarding the velocity with which
Osmonbekov et al., 2002). Advances in IT can potentially commitment and trust develop in buyer-supplier relationships.
enable dynamic collaboration between members in an SC This paper is a conceptual theory development study with
(Fawcett et al., 2011). IT should be considered part of a firm’s research propositions developed from the literature and then
dynamic capabilities, which Chang (2019) defines as submitted to practitioners to obtain their ratings and comments
“mechanisms firms developed to assist with sense-making and for and on the concepts developed. It is not an empirical paper;
deploying resources from inside and between firms within its the practitioner sample was not large enough to enable
network.” Pagani and Pardo (2017) indicate that DT has had a statistical analysis.
profound impact on the relationships within SC networks The paper is organized as follows: first, a slightly modified
because it provides immediate information. Ramaswamy and version of an existing model of B2B buyer-seller relationship
Ozcan (2020) indicate that with newer DT platforms, business development is introduced as a framework. Next, in the context
interactions are quicker, multifaceted and more complex. of the model, prior literature is reviewed to develop
Although technology is being used, buyers and sellers are still propositions concerning the impact of DT on the B2B buyer-
present in the systems; however, the amount of personal seller relationship development process and its speed of
interaction may be reduced. Fenton (2019) states that people are progression. To assess the practicality of the propositions, a
at the heart of the SC management process and successful firms small sample of B2B buyers and sellers is surveyed. The survey
must integrate humans with automation to succeed. Michel results are tied back to the research propositions and study
(2019) posits that DTs like AI are useful but human actors are objectives. Finally, implications are discussed and conclusions
necessary to configure the key elements of the systems. Pagani are drawn. The paper is conceptual; therefore, a practitioner
and Pardo (2017) indicate that DT transforms the bonds survey is used to obtain ratings and comments to assess the
between actors in the SC by either strengthening current realism of the research propositions.
relationships or creating connections with new actors, to enable
knowledge sharing. They also indicate that DT can facilitate Research objectives and research contribution
collaboration, reduce time and improve efficiency. Actors in an
SC can be either individuals or groups but they hold Many existing studies on the impact of DT on buyer-supplier
multifunctional roles and are instrumental in co-creating value relationships focus on its effects on functional performance and
(Park and Lee, 2018). In this study, we focus on how DT value, in static ways (Lindh and Nordman, 2017; Ryssel et al.,
resources facilitate the relationship development process, rather 2004). However, the impact of DT on other aspects of the
than the actors’ contributions. Salo and Wendelin (2013) buyer-supplier relationship, in particular, the speed of the
recognized that DT efficiently integrates routine processes but formation of various stages of these relationships, has been
social interaction between managers is still needed. scarcely studied. The primary objective of this paper is not to
Considering that relationships evolve over time, it is analyze DT itself, but to show how DT contributes to increasing
important to investigate the effects of the diffusion of DT on the the speed of the buyer-seller relationship development process.
components of buyer-seller relationship processes. A recent The study is novel in that it specifically analyzes the impact of
study regarding digital marketing for business-to-business DT across various stages of relationship development. It shows
(B2B) organizations found that future research should include that DT affects the speed and agility of relationship formation
improved buyer-supplier relationships among areas to enhance regardless of the relationship stage. It also implies that this is a
business performance (Pandey et al., 2020). When fluid process where constructs interact and change as
investigating interpersonal trust development, Lewicki et al. information flow increases.
(2006) noted that trust, a major antecedent of relationship In particular, commitment velocity (the rate and direction of
development, evolves over time depending on the amount and change in commitment) has been shown to have a strong
level of experience between parties. impact on performance beyond the level of commitment. Its
An under-researched aspect of DT’s impact on B2B buyer- effect on sales performance is also greater than that of the level
supplier relationships is its effect on the velocity or speed of of commitment (Palmatier et al., 2013). In their study of the
relationship development. The need for more research on this dynamic perspectives of buyer-seller relationships, Hussain
aspect was identified by Palmatier et al. (2013). The researchers et al. (2020) identified the relationship velocity perspective.
acknowledged the need for commitment as the beginning of They found that the velocity perspective of buyer-seller
relationship development. Commitment speed increases when relationship development can empower marketing managers to
organizations detect positive business opportunities. The devise appropriate strategies to increase performance as
importance of velocity in relationship development was also relationships develop. Sahin et al. (2016) found that
noted by Hussain et al. (2020). Cagliano et al. (2021) stated commitment velocity has a significant influence on relationship
that as digital supply chain technologies evolve, other issues quality. In the context of research on inter-functional

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coordination, Ruiz-Alba et al. (2020) found that an increase in Theoretical buyer-supplier relationship
agility afforded by DT improves firms’ ability to respond to development model
customer problems, which increases firms’ customer
orientation. They also state that this agility makes it easier to The model used in this research is the temporal model of
match a firm’s resources with changes in environmental factors, vertical relationships between buyers and sellers, which was
thereby positively impacting a firm’s dynamic capabilities (the originally proposed by Khoja et al. (2010) and empirically
ability of a firm to use its resources and coordinate tasks to tested and extended in Khoja et al. (2011) and Khoja et al.
(2015a, 2015b). The model is used only as a framework to
achieve results).
Palmatier et al. (2013), in referring to the meta-analysis in illustrate the steps and variables in the B2B relationship
Palmatier et al. (2006), note a research gap in studying the development process and how DT affects the process. The
importance of speed in the relationship development process: model indicates that buyer-supplier relationships develop in the
“extant research often fails to account for the information following three stages: pre-deal (t 1), deal (t) and post deal or
contained in a relationship’s trajectory. . .” (speed and continuation stage (t 1 1). The key variables in the model are
direction). In particular, they focus on the rate and direction of buyer and supplier power and relative power, commitment,
change in commitment. Additional support for examining the trust, relational embeddedness, intellectual capital and
impact of DT on the speed of relationship development is performance. The model used here adopts the three-stage
provided by psychological research, which indicates that people concept and the variables of the original model. It also includes
project trends and make decisions based on them (Johnson buyer engagement (Vivek et al., 2012) (see the Appendix for a
et al., 2005; Sahin et al., 2016; Hussain et al., 2020). description of the model variables). Figure 1 shows the main
While studies on the velocity in buyer-seller relationship variables and dynamics of the model. Table 1 shows the key
development exist, this paper expands the extant knowledge by variables and actions in the three stages of the model.
examining the impact of DT in each stage of the B2B
relationship development process. Model dynamics
B2B marketing theory has evolved from an economic Pre-deal stage (t21)
foundation to one built on behavioral science (Hadjikhani and In the pre-deal, or (t 1) stage, buyers and sellers explore
LaPlaca, 2013). Behavioral science necessarily involves alternative partners, become aware of each other and connect.
relationships. A recent study identified the B2B customer This is followed by interaction, negotiation – impacted by the
journey and relationship value as one area with potential for relative buyer and seller power – and, if expectations are met, trust
future expansion of B2B marketing theory (Cortez and and input commitment.
Johnston, 2017). The study concluded that “understanding the
Deal stage (t)
changes in organizational buying behavior will contribute to
At this stage, both parties expand their knowledge of each other,
closing the gap between B2B marketers’ challenges and
resulting in inter-organizational commitment and possibly internal
scientific research.” This study seeks to enhance B2B
relational embeddedness, as well as increased levels of buyer
marketing theory by adding to the understanding of how DT
commitment, seller trust and intellectual capital. Buyer satisfaction
affects and contributes to the development of relationships in
can be expected to lead to buyer retention and high-level buyer
organizational buying behavior.
engagement. If the relationship is for a one-time transaction, it
ends at this stage.
Methodology
Deal continuation stage (t 1 1)
This conceptual theory development study explores how DT At this stage, buyer and seller trust increases as does overall
impacts the buyer-supplier relationship formation process, commitment, interpersonal relationships, relational embeddedness
using an existing model of buyer-supplier relationship and buyer engagement. Firm-level commitment can also lead to
development (Khoja et al., 2010) as a framework. Literature high levels of internal relational embeddedness and buyer
from prior research is reviewed to formulate propositions that engagement. Performance at this stage results in satisfaction and
explain how each stage in the model is affected by DT. A group retention and can result in high levels of external relational
of 55 buyers and sellers averaging 15–23 years of experience in embeddedness and buyer engagement.
a major city in the southwest USA were surveyed to assess, rate
and comment on the practicality of the research propositions.
Literature review and development of research
They responded to a questionnaire that included one or two
questions that addressed each proposition. The respondents
propositions
were asked to rate the questions on a Likert scale from 1–5 and Based on the literature, this section develops research
also provide additional comments. The comments were propositions for some of the ways DT impacts the B2B
analyzed in a manner similar to the process used by Pandey relationship development process, with particular attention to
et al. (2020). From the data, five themes emerged that were its impact on the speed of relationship development. As
then related to the propositions, and to the stages in the buyer- mentioned in the Research Objectives and Research
seller relationship development model. The findings are Contributions section of the paper, the objective of the paper is
discussed and conclusions and management implications are the assessment of the impact of DT on the buyer-supplier
drawn. relationship development process and not to analyze DT itself.

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Pre-deal stage (t21) Digital technology impacts the relative power of buyers
and sellers at the pre-deal stage of a relationship
Digital technology impacts the speed of relationship DT has become the primary means for communication,
development at the pre-deal stage of a relationship initiation and completion of transactions between organizations
The beginning of deal negotiation activity is an indication of in the supply channel (Bharadwaj et al., 2013). It creates what
input commitment by both parties, signaling that they expect to Yadav and Pavlou (2014) refer to as a communication-
proceed to a deal. To arrive at this point, buyers and sellers rely mediated environment, where information is freely shared
on their mutual information. Digitization makes information within a network of members either from within the firm or
exchange easier and faster (Pagani and Pardo, 2017; Gezgin outside the firm. Members derive efficiencies, create value, gain
et al., 2017; Fawcett et al., 2011). competitive advantages and secure new business opportunities.
Research shows that information flow affects the speed at which Using equity theory, Osmonbekov and Gruen (2013) find that,
relationships are established. Digitized information facilitates depending on their position in the system, parties might be at a
quicker decision-making (Moharana et al., 2011). When SC strategic disadvantage because they must relinquish strategic
systems are integrated and information flows in real time, it is information. This may cause a power shift and perceived
visible sooner and the speed or agility of decision-making improves inequity or power imbalances. However, the use of DT
(Jadhav, 2015; Chi et al., 2008). Under these conditions, the produces massively connected environments that allow not
“sensemaking” capability, which is a part of a firm’s dynamic only for a higher level of information sharing but also increase
capability (Chang, 2019), will be faster at interpreting and information risk, which may affect the power balance
assimilating information (Ruiz-Alba et al., 2020). (Colicchia et al., 2019). Thus, information possessed by both
Key (2017) states that DT facilitates quick global buyers and sellers on each other and the market in which they
information sharing and is a powerful tool to leverage are operating can affect buyer and seller power, as noted by
engagement and commoditize information. Newer DT is Porter (1980). DT facilitates and expedites information
allowing for increased visibility and traceability of information acquisition. These examples illustrate the potential of DT to
in upstream and downstream SC operations (Dubey et al., impact the balance of power between buyers and sellers.
2020). Quinton and Wilson (2016) report that LinkedIn Therefore, as follows:
members can quickly assess the credentials of potential
partners. These studies support the role of DT in expediting the P2. DT offers the potential to increase buyers’ power through
initiation of the relationship and realizing input commitment. greater information accessibility and availability.
Therefore, as follows: P2a. DT can provide the potential for sellers to increase power
P1. Faster availability of information via DT decreases the time through greater knowledge of existing and potential
needed to reach input commitment by either or both parties. buyers’ operations.

P1a. DT can contribute to the faster determination of when


it is not advantageous for one or both parties to continue Impact of digital technology on buyer engagement at the
developing a relationship, and therefore, terminate the pre-deal stage of a relationship
development process. Hakansson and Snehota (1995) report that DT helps in, and
reduces the time required for, coordination of activities. Gezgin
P1b. DT can contribute to the faster development of norms et al. (2017) state that “digital technology makes it possible to
and standards of conduct. transform SCs through analytics, artificial intelligence,

Figure 1 Simplified three-stage B2B relationship development

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robotics, internet and other advanced technologies.” As a P4. Availability of a large amount of information with quick
result, firms gain improvements in cost, agility, operational access may lead to faster communication, and hence,
excellence and decision-making. The widespread addition of faster negotiations between both parties.
mobile devices, such as phones and tablets to the DT mix
results in better connectivity between internal operations and
external partners. These results indicate that the adoption of Deal stage (t)
DT facilitates buyer engagement by increasing convenience,
reducing costs and generating higher efficiency and faster Impact of digital technology on buyer and seller
information processing time (Salo, 2012). commitment at the deal stage of a relationship
Therefore, as follows: Forrester Research (2015) argue that supply chain
management partners’ technology and ecosystems must align,
P3. DT offers the potential for earlier and stronger buyer
to ensure good customer engagement and ongoing
engagement at this stage through greater and faster access
relationships. Youssef et al. (2018) investigated customer
to information from seller websites, social media and
engagement in the B2B market and postulate that a positive
other digital resources.
relationship exists between customer trust, customer
engagement, customer involvement and customer engagement.
Kim et al. (2013) attest to the ability of DT alignment to
Impact of digital technology on buyer-seller positively impact relationship responsiveness and strategic
negotiations at the pre-deal stage of a relationship collaboration among SC members. DT alignment reduces
By providing immediate information, DT can decrease the time technological barriers and facilitates relationship-enabling
for decision-making (Orlikowski, 1992). Time reduction has responsiveness. Yu et al. (2017) conclude that DT has a
the potential to change the sequences and complexity of the significant effect on SC integration because it facilitates
components of a relationship (Baptista, 2013). collaboration and communication through information
Kovacs (2004) states that members of the SC use a specific sharing. Gotz and Jankowska (2020) posits that DT improves
communication process. This process expedites information SC operations because it modifies the intra- and inter-firm
flows. Information is the link between different stages and firms logistics and facilitates the development of digital ecosystems
in the SC (Jadhav, 2015). Using information logistics combining suppliers, manufactures and customers. “Digital
principles, he indicates that communication systems result in technology has improved the expediency of the contacts that
efficient information flows that reduce decision-making time. correspond between our internal teams and the prospective
Chi et al. (2008) state that IT networks provide enhanced suppliers” (Kim et al., 2013). These research results indicate
knowledge-processing ability, which helps firms’ inter- that DT can offer opportunities for greater and stronger ties
organizational systems act quicker because of the inherent between seller and buyer. When these ties create internal
embeddedness of firms. Diverse organizations form relational embeddedness, increased buyer commitment and
multifunctional, integrative centers to consolidate data from seller trust will develop and possibly lead to engagement.
firms within their networks to enable faster decision-making Therefore, as follows:
and coordination of negotiation strategy and response
(Bharadwaj et al., 2013). All these aspects of DT contribute to a P5. DT can contribute to faster attitudinal formation
faster pace of buyer-seller negotiations. regarding commitment and/or engagement or to facilitating
Therefore, as follows: a sense of unity or disunity between seller and buyer.


Table 1 Key variables and actions in the buyer-seller relationship development model
Pre-deal (t21) stage Deal (t) stage Deal continuation (t 1 1) stage
**
Exploration Attitudinal commitment Temporal commitment
**
Awareness Expansion 1Buyer and seller trust
**
Connection 1Interpersonal relationships 1Interpersonal relationships
Interaction 1Individual trust –Perceived risk
Input commitment Inter-organizational commitment 1Firm-level commitment
Negotiation Formal agreement 1Intellectual capital
Relative power Performance Performance
Trust 1Commitment Satisfaction/value

Concessions 1Trust Relational embeddedness

Agreement type 1Intellectual capital Buyer (customer) engagement
Satisfaction/value Retention

Relational embeddedness

Buyer (customer) engagement
Retention
Notes: “1” = Increased; “ ” = Decreased.  Khoja et al. (2010).  Relationship precursors.  Modified from the original model

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P5a. The potential to reach inter-organizational attitudinal of the information, resulting in better information processes and
commitment, buyer engagement and formal agreement can stronger inter-organization connectivity and collaboration (Yu
be enhanced by better collaboration resulting from DT. et al., 2017). Efficiencies of DT allow for the rapid diffusion of
Thus, these states of commitment and engagement will be information across functional areas within firms and facilitates
achieved more quickly. inter-organization communication and information flow (Gezgin
et al., 2017). Jadhav (2015) indicates that DT provides a zero-
latency messaging environment with real-time visibility, which
Digital technology impacts buyer and seller relational enables easier performance monitoring. Through the continual
embeddedness, trust, value and intellectual capital at exchange of information, parties in a network can evaluate the
the deal stage of a relationship information content for relevancy and accuracy, which builds
Iansiti and Lakhani (2014) state that DT allows for more trust (Quinton and Wilson, 2016). Trust is based on the
connectivity because discrete activities are integrated and expectation and confidence that one’s exchange partner will
connected for continuous processing within systems. With DT, perform as expected (Morgan and Hunt, 1994; Sabel, 1993;
information asymmetry decreases, information becomes Shanka and Buvik, 2019). As firms interact, the strength of their
transparent and parties in an exchange relationship are equally relationships is affected depending on whether expectations are
knowledgeable of the situation (Varadarajan and Yadav, 2002). met. This performance assessment will determine whether there
This provides opportunities for stronger ties and low-level will be future interactions or transactions. The DT-enabled
internal relational embeddedness between the seller and buyer. increased sharing of information allows both parties to assess
Salo and Wendelin (2013) introduced the concept of digital more quickly if the other party is living up to expectations.
bonding, which represents the integration of buyer-seller Therefore, as follows:
information systems to form an inter-organizational system.
This encourages future transactions and greater information P7. Performance metering: DT allows buyers and sellers to
flows and promotes more social interaction between managers. assess whether expectations are being met.
Firms may expand their value-creation process to transactions
with other customers and suppliers. Kim et al. (2013) indicate
that when relationships are enhanced through DT assignment, Impact of digital technology on contacts and
customer value creation is improved. Successful performance communication at the deal stage of a relationship
of the agreement by both parties will lead to more commitment, Speier et al. (2008) theorize that in supply channel systems,
increased performance and increased value in the form of dyadic relationships expand to multi-partner relationships as
intellectual capital (Daskou and Mangina, 2003). De Olivera information integration expands the collaborative efforts of
et al. (2011) found that the intensity of internet utilization in these firms to others through sequential linkages. Chi et al.
supplier and customer-oriented processes affects collaborative (2008) imply that the application of DT can lead to inter-
practices involving suppliers and customers. Keillor et al. organizational exploitation of shared complementary digital
(1997) state that technology enhances the development of trust assets, co-specialized processes and expertise, and increased
and shortens the time taken to build trust between buyers and identification of external opportunities, which infers a level of
sellers by allowing salespeople to demonstrate the key attributes expanded relational embeddedness among partners in the
extended supply channel. These processes may increase the
necessary to build it, such as honesty, dependability and
likelihood of the development of external relational
competency. A firm’s willingness to share more sensitive and
embeddedness at this stage (Yu et al., 2017).
strategic information and create stronger structural
Pagani and Pardo (2017) state, “Digital technologies blur
mechanisms for sharing information through DT leads to
boundaries between suppliers and customer companies, and
better performance, which builds innovative SC relationships
promote alliances between upstream and downstream actors in
(Fawcett et al., 2011). These results of DT can all contribute to
channels where networks create places for growth and
increased trust, commitment, embeddedness, value and
innovation.” Digital resources provide additional opportunities
intellectual capital for both firms.
for external contact and communication outside a developing
Therefore, as follows:
or existing buyer-seller relationship (Hallikaninen et al., 2019).
P6. DT, by enhancing collaboration and cooperation Hallikaninen et al. (2019) also theorize that there is an
between buyers and sellers, offers opportunities for increased likelihood of the development of external relational
stronger ties and low-level internal relational embeddedness embeddedness at this stage and DT and resources provide a
between seller and buyer. means for expressing it. Evaluating the features of a
professional social networking system, Quinton and Wilson
P6a. DT can contribute to increased buyer commitment and (2016) state that the connectivity of such a system affords
faster development of seller trust, supporting the members a platform for collaboration, information sharing and
increased value and intellectual capital. value creation on a level that cannot be duplicated offline.
These results contribute to increased relational embeddedness
involving multiple partners and can result in increased benefits
Impact of digital technology on buyers’ and sellers’ from contacts with non-partner entities.
assessment of each other at the deal stage of a Therefore, as follows:
relationship
Research shows that IT interactions can occur among many P8. DT can provide additional opportunities for external
members of a SC at one time and that IT improves the accuracy contact and communication outside of a formal or

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existing buyer-seller relationship, thereby increasing the interconnected system. It becomes an enabler of cooperative
likelihood that external relational embeddedness will develop relationships between exchange partners by facilitating effective
at this stage. The resources of DT can provide means for and efficient access to and sharing of information (Fawcett
organizations to communicate more information that et al., 2011). Salo and Wendelin (2013) found that IT can
may not be shared in a formal manner. integrate routine processes but social interaction may be robust
and this facilitates the creation of new knowledge that can lead
to new opportunities. Constant feedback and monitoring in the
Deal continuation stage (t 1 1) system allow participants to forge close partnerships, which can
lead to trust (Johnson et al., 2004). Applying the partnership
Digital technology impacts buyer and seller trust and relationship management (PRM) paradigm. Ba and Pavlou
commitment at the deal continuation stage of a (2002) demonstrate that buyers form trust based on feedback
relationship and interactions in the digital environment. Trust figures
Trust is a central antecedent for the beginning and prominently in buyer–seller relationships, but the perceptions
continuation of interactions between SC partners (Quinton may differ depending on whether it is a vendor or buyer.
and Wilson, 2016; Johnson et al., 2004). Trust is built over time According to Ekici (2013), suppliers feel more socially
and, with repeated interactions and personal experiences, connected when involved in long-term relationships with
increases between parties (Narandas and Rangan, 2004). repeated interactions. They are more susceptible to emotional
Vogelgesang et al. (2020) posits that trust velocity defined as damage compared to buyers whose trust level varies little
the rate and direction of changes in trust over time, based on between long-term and short relationships. Fawcett et al.
information flows, is important to assessing the behavioral (2011) report that DT promotes an information-sharing
integrity of leaders. Researchers continue to document a culture, which is described as a valued capability that plays a
positive relationship between trust and information sharing role in competitive differentiation strategies.
(Newell et al., 2019). Shared information is used to assess In their research on the use of PRM DT, Zablah et al. (2005)
decisions and drive more interactions, and trust becomes a state that DT gives dyadic partners in a channel an opportunity
natural byproduct of the relationship. While investigating the for high levels of coordination and efficiency. Michel (2019)
trust-information sharing linkage, Newell et al. (2019) reports not only on the importance of trust in relationship
conceptualize trust as either goodwill or competence trust.
development but also shows how the use of DT, such as block
They show that both goodwill and competence trust are
chain (distributed ledger technology) which can build trust by
important antecedents to information sharing, but that
influencing social responsibility and radical transparency in SC
competence-based trust can lead to information sharing even
processes. Block chain’s main value is its ability to increase
with low levels of goodwill trust.
sharing of certified information, increase visibility and traceability
Narandas and Rangan (2004) conclude that interpersonal
among SC members and improve coordination and integration
trust enhances inter-organizational commitment over time. Ekici
(Cagliano et al., 2021). When reviewing the impact of Industry
(2013) indicate that trust is an important antecedent of
4.0, Fatorachian and Kazemi (2021) indicate that DT is the
relationship commitment. Daskou and Mangina (2003) posit
foundation for the creation of a fully integrated SC with a high
that partners’ dependence and trust are tied to communications
level of connectivity, transparency, autonomy and collaboration
that are fostered by DT. While investigating the role of
and flexibility. These research results support increased buyer
technology in creating and maintaining relationships among
trust and can result in a high degree of inter-organizational
direct sellers within direct selling companies, Harrison and Hair
dependency, engagement and/or embeddedness.
(2017) conceive trust and customer satisfaction as components
Therefore, as follows:
of customer relationship quality. They report technology as an
enabler of communication, and that trust and satisfaction are P.10. DT can foster/increase the development of high-level and
important factors in managing relationships among independent external relational embeddedness by making information
contractors. The application of DT enhances interaction and and communication more available and more valued.
communication between the buyer and seller, which suggests
increased trust, commitment and engagement. P.10a. Additional shared information resulting from the use of
Therefore, as follows: DT may cause the buyer to feel more connected to the
supplier and as a result, increase the buyer’s trust in the
P9. Continued positive digital support and communications seller (also applies at the Deal Stage [t]).
on both sides of the relationship should increase buyer
and seller trust and commitment and support the continued
development of interpersonal relationships between Practitioner survey
buyers and sellers. These relationships foster
development/continuation of firm-level commitment and To elicit practitioner managers’ evaluation of the research
continued buyer engagement. propositions, a small survey was conducted with a group of
managers (buyers and sellers) in 2019. A total of 55
respondents participated: 30 buyers and 25 sellers. All
Digital technology impacts relational embeddedness respondents were working in either procurement or marketing/
and trust at the deal continuation stage of a relationship sales functions at managerial or other level with decision-
DT is advocated as a mechanism to foster relationship making responsibilities. Refer to Table 2 for the distribution of
capability, where information is efficiently shared in an respondents across various industries. The questionnaire

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consisted of 18 questions related to the 16 research  Theme 2. Activities/states can be performed/reached


propositions developed from the literature review. Responses faster with DT rather than without.
were reported using a 5-part Likert scale ranging from (1)  Theme 3. New internal and external connections
“completely agree” to (5) “completely disagree.” The between the parties involved are facilitated.
questionnaire was organized into three sections,  Theme 4. DTs potentially contribute to increased
corresponding to the three stages of buyer-supplier relationship value for the parties involved, particularly the benefits
development: pre-deal, deal and deal continuation. of embeddedness.
Respondents were encouraged to comment on the questions 3 Deal continuation stage (t11):
and their responses.  Theme 1. DT can contribute to better coordination
As Table 3 shows, the overall responses to all questions had a
and collaboration between the parties involved.
mean Likert value of 1.88 for buyers, 2.11 for sellers and 1.96
 Theme 3. New internal and external connections
overall. This indicated overall support for the propositions in
between the parties involved are facilitated.
the area of “completely agree” (1) and “mostly agree” (2).
 Theme 4. DTs potentially contribute to increased value
Mean Likert scores for the 18 individual questions from all
for the parties involved, particularly the benefits of
respondents ranged from a minimum of 1.48 to a maximum of
embeddedness.
2.39. Again, this indicates relatively strong support for the
research propositions.
Review of respondents’ comments resulted in five themes Findings from research propositions and
that support the research propositions and indicate the impact practitioner survey
of DT on the model variables at the three stages of relationship The themes’ relationships with the propositions and effects are
development. The themes are as follows: summarized in Table 4. The effect of DT on the buyer-supplier
Themes by model relationship stage: relationship development process is indicated in the column
1 Pre-deal stage (t 1): “Proposition effect,” which shows that DT affects the
 Theme 1. DT can contribute to better coordination
commercial buyer-seller relationship development process as
and collaboration between the parties involved.
follows:
 Theme 2. Activities/states can be performed/reached
1 Providing information to both parties faster.
faster with DT rather than without.
2 Providing more information to both parties.
 Theme 5. Impact of greater availability and
3 Making information more accessible.
accessibility of information on relative buyer-seller
power. These results are evident throughout the three stages of buyer-
2 Deal stage (t): supplier relationship development and in all five themes that
 Theme 1. DT can contribute to better coordination and emerged from the practitioner survey.
collaboration between the parties involved. Additional indications from the propositions and survey are:

Table 2 Industries representeda and experience of survey respondentsb


Buyers Sellers
Number of respondents 35 Number of respondents 20
Average years in the role 23.2 Average years in the role 15.3
Industries represented 16 Industries represented 14
Buyer industries and respondents Seller industries and respondents
Industry Number of respondents Industry Number of respondents
Process automation 1 Industrial distribution 2
Nuclear energy 1 Industrial sales 3
Energy development 3 Industrial products 1
Building components 1 Construction materials 1
Petrochemicals 2 Industrial supplies 2
Health care 3 Oilfield equipment 1
Professional consulting 3 Industrial maintenance, repair, and operating supplies 1
Energy production 3 Financial services 2
Chemical manufacturing 2 Meeting and convention services 1
Process equipment manufacturing 3 Professional consulting 1
Oil and gas production 4 Professional services 1
Public utilities 1 Capital project management 1
Oil and gas drilling 2 Chemicals 2
Food wholesale 1 Pharmaceuticals 1
Oil and gas operations 3
Equipment wholesale 2
a
Notes: Industries as reported on survey questionnaires. bRespondents were all in managerial or other decision-making positions

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1 DT enables better coordination and collaboration The impacts of these effects are shown in the column “Impact
between buyer and seller. of proposition effect.” The five themes were identified in the
2 There are increased opportunities for contact and preceding section.
communication, and recognition of value-creation Overall, these results support the achievement of the research
opportunities between buyer and seller. objectives of this study: identify the effects of DT on variables
These last two indications are evident at the deal and deal- and relationship progression in the development of commercial
continuation stages of relationship development and are present buyer-seller relationships. In particular, we assess the impact of
in all but one of the five themes from the practitioner survey. DT on the speed of relationship development.

Table 3 Buyer and seller ratings of conceptual propositions


Buyers’ mean Suppliers’ mean Total
Questions and associated proposition(s) response response mean

1. DT makes information available faster and decreases time to reach input commitment (Prop. P1) 1.48 2.00 1.67
2. DT enables faster determination of advantages for parties to continue the development of a
relationship or terminate the development process (Prop. P1a) 1.88 2.22 2.00
3. DT enables faster development of norms and standards (Prop. P1b, P6) 2.09 2.17 2.12
4. Greater information accessibility and availability through DT potentially increases buyer’s power
(Prop. P2) 1.61 1.83 1.69
5. Greater knowledge of existing and potential buyers’ operations through DT potentially increases
seller’s power (Prop. P2a) 2.03 2.28 2.12
6. More and faster access to information from seller websites and social media through DT and
availability of other digital resources enables earlier and stronger low-level buyer engagement at this
stage (Prop. P3) 1.88 2.22 2.00
7. Larger amount of and quicker access to information, through faster communication capabilities of DT
shorten the time to reach negotiated agreements (Prop. P4) 2.00 2.39 2.14
8. More information and faster access through DT results in faster formation of attitudinal commitment
and/or facilitates a sense of unity or disunity (Prop. P5) 2.21 2.39 2.27
9. More information and faster access through DT improves the likelihood of achievement of inter-
organizational commitment, buyer engagement and formal agreement and reduce the time to reach
these states (Prop. P5a) 2.12 2.33 2.20
10. Use of DT for communication/coordination allows stronger ties and improve the potential for low-
and high-level internal relational embeddedness (Prop. P6) 2.15 2.28 2.20
11. Use of DT for communication/coordination enables increased buyer commitment and faster
development of seller trust, increased development of intellectual capital and low-and high-level
internal relational embeddedness (Prop. P6a) 2.21 2.33 2.25
12. Use of DT enables performance metering, facilitates faster buyer and seller assessment of
expectations being met and contributes to the development of low- and high-level internal relational
embeddedness (Prop. P7) 1.79 2.11 1.90
13. DT enables organizations to informally communicate more information outside of a formal or
existing business relationship. – increases the likelihood of low-level external relational embeddedness
quickly (Prop. P8) 1.73 2.00 1.82
14. DT can foster/increase the development of low- and high-level internal and external relational
embeddedness by making information and communications more available and efficient (Prop. P10) 1.88 2.00 1.92
15. Additional shared information as a result of relational embeddedness may reduce the buyer’s
perceived risk (would also apply at the Deal Stage (t) (Prop. P10a) 1.82 2.00 1.88
16. Temporal (continuing) commitment must exist in seller and buyer to get to this stage. Continued
positive digital support and communications on both sides of the relationship should increase buyer
and seller trust and commitment, and support the continued development of interpersonal
relationships between buyer and seller. These relationships foster development/continuation of firm-
level commitment and continued buyer engagement (Prop. P9) 1.76 2.00 1.84
17. Relational embeddedness, buyer engagement and buyer and seller commitment, all contribute to
the development of value, intellectual capital, improved performance in buyer-seller relationships
(Prop. P9) 1.48 1.50 1.49
18. DT can enhance and shorten the processes necessary to achieve/create relational embeddedness,
buyer engagement and buyer and seller commitment (Prop. P10) 1.73 1.89 1.78
Total N 30 25 55
Notes: Values from five-part Likert scale: 1 = completely agree and 5 = completely disagree

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Table 4 Effects of DT on buyer-supplier relationship development


Summary of conceptual propositions and practitioner survey theme indications
Theme Relation-
from ship

Proposition Proposition effect Impact of proposition effect survey stage
1 More and faster information accessibility Reduced time to reach commitment 2 PD
1a More and faster information accessibility Reduced time to reach go/no go decision 2 PD
1b Faster information exchange Faster development of norms/standards 2 PD
2 More and faster information accessibility May increase buyer’s relative power 5 PD
2a More and faster information accessibility May increase seller’s relative power 5 PD
3 More and faster information accessibility Earlier/stronger buyer engagement 1 PD
4 More and faster information accessibility Faster pace of negotiations 2 PD
5 More and faster information accessibility Faster achievement of commitment 2 D
5a Better coordination/collaboration Faster achievement of commitment/engagement/agreement 1 D
6 Better coordination/collaboration Stronger ties and relational embeddedness 3 D
6a Better coordination/collaboration Increased and faster achievement of commitment, trust and 2, 4 D
mutual development of intellectual capital
7 More and faster information accessibility Easier/faster ability to assess if performance expectations are 4 D
being met
8 Increased opportunities for contacts and Expanded opportunities for external relational embeddedness 3 D
communication
9 Digital support for communication/coordination/ Increased buyer and seller trust, commitment, engagement 3 DC
collaboration
10 More and faster information accessibility Expanded opportunities and mechanisms for relational 3 DC
embeddedness
10a More and faster information accessibility Reduced buyer’s perceived risk and increased buyer trust 1, 4 DC

Notes: PD = pre-deal stage; D = deal stage; DC = deal continuation stage

Discussion and conclusions not change the effect of DT on increasing the velocity of buyer-
supplier relationship development but may have contributed to
The development and continuation of many relationships between
an overall increase of these effects in the general marketplace.
buyers and sellers is affected by DT. DT has enabled SCs to be
That is, the constrictions on in-person contact during the
managed as complete systems that foster the development of
pandemic likely had at least three effects as follows:
stronger inter-firm relationships, through faster availability and 1 More firms used DT to develop and maintain buyer-seller
accessibility of more reliable information. The availability and relationships.
accessibility of information has also allowed firms to find new ways 2 Among all firms DT was used much more intensely for
to create value and improve competitive advantages in the process relationship building and maintenance.
of developing relationships. Managers have reported that 3 New and innovative uses of DT for relationship
interactions are faster, more accurate, complete and useful. The development and maintenance were devised and applied.
accessibility and availability of information improves the speed of
decision-making because it enables a higher level of trust and
commitment to be established earlier in relationships. The Management implications
application of DT helps expand networks by facilitating the The results indicate that the velocity of relationship development
addition of new members to networks, to increase value and is of particular importance in buyer-seller relationship
opportunities. The availability and accessibility of information development. Managers can use the findings to leverage DT
affects how such relationships develop and are maintained. This throughout their B2B relationships to increase the velocity of
study clarifies some of the ways in which DT affects the relationship development and maximize organizational efficiency
development and maintenance of these relationships. The five and performance.
themes that emerged from the practitioner survey indicate As discussed earlier, the velocity of relationship commitment
particular impacts of DT on the development and maintenance of development is a leading indicator of future sales growth
buyer-supplier relationships. In conclusion, DT has improved SC (Palmatier et al., 2013) and can empower managers to devise
management agility because it has increased the velocity of trust appropriate strategies to capture value from current and future
formation, commitment and relationship development. In relationships (Hussain et al., 2020). Furthermore, commitment
particular, DT enables the more rapid formation of various stages velocity has a significant influence on relationship quality, as it
and states in the buyer-seller relationship. acts as a mediator between perceived relationship investment and
Although the practitioner survey was conducted before the relationship quality (Sahin et al., 2016). In addition to integrating
COVID-19 pandemic, the impact of the pandemic likely did routine processes, DT can also improve social interactions

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engagement”, Sirius Decisions July 2019 Newsletter, 31
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No. 4, pp. 757-783.
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Three types of commitment:
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1 Input or behavioral: Action taken by partners to justify a
pp. 296-312.
self-interest stake in the relationship.
Vivek, S., Beatty, S. and Morgan, R. (2012), “Customer
engagement: exploring customer relationships beyond 2 Attitudinal or affective: Indicates a sense of unity among
purchase”, Journal of Marketing Theory and Practice, Vol. 20 partners through goal congruence and operational
No. 2. linkages.
Vogelgesang, G.R., Crossley, C., Simons, T. and Avolio, B. 3 Temporal or continuance: Indicates an enduring long-term
(2020), “Behavioral integrity: examining the effects of trust relationship, for example, investment in assets specific to
velocity and psychological contract breach”, Journal of the transaction.
Business Ethics, Vol. 172 No. 1, available at: https://doi.org/ (Anderson and Weitz, 1992; Morgan and Hunt, 1994;
10.1007/s10551-020-04497-2 Skarmeas et al., 2002; Gundlach et al., 1995).

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Trust (Brass et al., 2004; McEvily and Zaheer, 1999; Rowley et al.,
One’s confidence in another that the other behaves in a 2000; Kraatz, 1998; Siebert et al., 2002; Nicolaou and Birley,
predictable and mutually acceptable manner (Morgan and 2003).
Hunt, 1994; Sabel, 1993).
Three dimensions of trust:
1 Contractual trust: Partners’ expectation that contracts will Intellectual capital
be fulfilled; The creative, technical and collaborative knowledge and
2 Competence trust: Partners’ expectation that contracts will “knowing capabilities” of a firm (McGaughey, 2002;
be professionally fulfilled; and Nahapiet and Ghoshal, 1998).
3 Goodwill trust: Partners’ confidence in each other to
continue a long-term relationship (Miyamoto and Rexha,
Performance
2004).
The result of a buyer-supplier exchange manifested in the
A somewhat parallel three-phase model of trust impact of the exchange on the financial or operational results
development was proposed by Mandjak et al. (2019), of the buyer or supplier organization.
consisting of perceived trust, perceived trust transforming into
experienced trust and perceived trust and experienced trust together.
McKnight and Chervany (2001) and McKnight et al. Buyer engagement (high or low level depending on
(2002) develop a detailed typology and trust-building model extent of engagement)
in business to consumer internet settings. Although trust Two types:
development in B2B settings may follow similar details, B2B 1 Internal.
partners are likely to proceed with some form of the three
2 External.
dimensions in the preceding two references.
Buyer engagement can be defined as: “Creating deep
connections with customers that drive purchase decisions,
Embeddedness (high or low level depending on the interaction, and participation over time” (Sashi, 2012,
degree of tie strength and/or knowledge shared) attributed to Forrester Consulting, 2008; van Doorn et al.,
“Direct cohesive ties as a mechanism for gaining fine-grained 2010). It also includes the degree to which buyers (individuals
information” (Gulati, 1998). and groups) detectably and deliberately interact with a brand
Two types: (Sirius Decisions, 2019).
1 Internal: relationship between exchange partners.
2 External: exchange involving entities in addition to Corresponding author
exchange partners. Ralph Kauffman can be contacted at: kauffmanr@uhd.edu

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