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The concept of Buyer and seller

relationship is not a new concept. But the
recent rise in its importance particularly
seems to be due to the fact that
cooperation became the instruments of
strategy.
since we expect relationship value to be
of crucial importance for the management
and, finally, the stability of cooperative
buyer-seller relationships value is measured
from both buyer and seller perspective and
measurement results are integrated in
DETERMINANTS OF THE
STABILITY OF COOPERATIVE
BUSINESS RELATIONSHIPS
Interaction process between
buyers and sellers in industrial markets
comprise not only economic exchange
but also social exchange in general.
social exchange theory by
Thibaut and Kelly suggest two
standards for the evaluation of
relationship outcome and, therefore,
value:
3. Comparison Level
1. Comparison level-
• It arises out of the sum of own
experiences in relationships and
knowledge concerning other
relationship which one has observed
or read about.
• Relationship outcome above CL are
relatively satisfying and those below
CL are perceived to be
2) Comparison level for alternatives-
• It is defined as best currently
available alternative to the present
relationship.
• The less the probable outcome in
current relationship exceeds CLalt,
the more the partners will be
tempted to leave the relationship.
Investment Model:
• This model was developed by Mr
Rusbult.
• It suggests that commitment to a
relationship is not only determined
by relationship satisfaction and
available alternatives but also by the
investments put into it.
Equity theory:
The theory states that an
equitable relationship exists if all
participants, in terms of inputs into
and outcomes from the exchange,
are receiving equal gains.
Hypotheses from the above theories:
2. The more present relationship value
exceeds the comparison level, the
higher will be the degree of
satisfaction.
3. The more the present relationship
value exceeds the comparison level for
alternatives, the higher will be the
commitment towards the relationship.
4. The higher the degree of relationship
satisfaction, the higher will be the
commitment towards the relationship.
• The higher the commitment towards
the relationship, the more stable
relationship will be.
• The more extrinsic
nonretreivableinvestments are tied
in a relationship, the higher will be
the commitment towards the
relationship.
• The more intrinsic nonretrievable
investments are tied in a
• The more equitable a relationship,
the higher will be the degree of
relationship satisfaction.
• The longer the duration of a
relationship, the higher will be the
commitment towards the
relationship.

Relationship
Equity
BUYER SELLER
RELATIONSHIP MODEL

Relationships
Present Relationship Value Satisfaction
Given CL

Present Relationship Value
Given CLalt

Commitment
Towards Relationship Relationship Stability
Extrinsic
NonretrievableInvestments

Intrinsic Nonretrievable Relationship Duration
Investment