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Relational embeddedness, tertius iungens orientation and relationship quality in emerging markets Ramendra Singh Indian Institute of Management, Ahmedabad, India

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479 Received May 2007 Revised October 2007 Accepted November 2007

Abstract Purpose – The purpose of this paper is to investigate in an emerging market (India), the impact of relational embeddedness of dyadic business relationships on relationship quality (RQ) and the moderating impact of tertius iungens orientation (TIO) on this relationship. Design/methodology/approach – A sample of 75 business managers from various industries in India was surveyed, and analysis was done using moderated multiple regression analysis. Findings – The key finding of the study is that among the five different types of connection that a firm has (with competitors (C), value chain partners (V), internal (I), external (E) entities and auxiliary (A) connections), the A-connections like those with banks, MR agencies, advertising agencies and other service providers, have the most favorable impact on relationship quality with firms’ customers, when its boundary personnel exhibit high TIO (bonding) towards their customer. However, the direct impact of A-connection on RQ is negative, possibly due to the negative externalities such as sharing limited common resources. Other four connections were found to be insignificant. Research limitations/implications – A major limitation of this study is sample size (75). Hence, the findings of this study may not be generalisable. Practical implications – The findings of this study suggest that higher ability to bond disparate actors in network of business firm (TIO) have a strong and favorable impact on improving the RQ with its customers in embedded relationships. Originality/value – The major contribution of the study is to explain the moderating role of TIO in the network embedded dyadic business relationships. Keywords Networking, Channel relations, Strategic business units, India, Emerging markets Paper type Research paper

Introduction There has been a relatively recent realization of the inherent limitations in studying dyadic relationships from an atomistic perspective, which is now giving way to the evolution of the networks perspective to ‘‘more completely capture the complexity of inter-organizational relations’’ (Achrol et al., 1983), given the evolution of network forms of organizations in recent years (Snow, 1997; Achrol, 1997). From the network perspective, any network of actors is more than the sum of the dyadic interactions between them (Walker, 1997), as each such dyadic relationship gets affected by the ‘‘embedded context’’ in which it operates (Anderson et al., 1994) and the ‘‘connectedness’’, which is defined as the extent to which any exchange relationship is contingent (either positively or negatively) on the exchange in any other relationship (Cook and Emerson, 1978). Due to the structural properties of the network, traditional constructs commonly used to explain dyadic exchanges like power, trust, conflict and others would differ considerably in the network context. Taking a specific instance, we conjecture that the six social norms for relational governance proposed by McNeil (1981, 1983): solidarity, mutuality, flexibility, role integrity, harmonization of conflict and restraint of power, assume a different contextual meaning in the network

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perspective, vis-a`-vis the dyadic exchange perspective (Achrol, 1997). According to Gadde and Hakansson (1991), these dynamic aspects are captured through the mutual dependencies between ‘‘stability’’ and ‘‘change’’, one being a prerequisite for another. The impact of the environment external to the dyadic relationship has been studied in various contexts, and its importance in the dyadic relationship has been emphasized in several studies (Achrol, 1991). According to Achrol et al. (1983), a dyad faces a primary task environment (suppliers and customers), a secondary task environment (customers-to-customers, regulators, competitors) and a macro environment (social, economic, political and technological forces). They suggest that higher uncertainty in suppliers and customers may lead to higher level of conflict, and hence requires higher co-ordination within the dyad which results in increased co-operation. Since the nature of these three ‘‘categories’’ or ‘‘types’’ of a environment are still not fully and completely explained using the dyadic framework, a clearer picture is likely to emerge, if we take a network perspective. Thorelli (1986) states that early conceptualization lies in the realization that the salient part of a firm’s external environment consists of other firms. Similarly, Granovetter (1985) also suggests that the exchange relationships can be better understood if viewed as embedded in a network structure. Relationship quality (RQ) has been studied in the past to determine strength and quality of embedded relationships between actors in the network. Similarly, TIO has been scantily studied to evaluate the binding role of boundary personnel in maintaining network relationships. The purpose of this study is to extend the knowledge of business networks perspective, and evaluate how relationally embedded dyadic business relationships impact RQ and its three constituents-trusts, commitment and satisfaction, and the extent to which TIO moderates this relationship, in an emerging markets context, like India. The rest of the paper is laid out thus: First, I review the literature on network connectedness and RQ and its three constituents, and TIO. This is followed by proposed theoretical model and set of hypotheses, data collection and analysis and finally results, discussion, managerial implications and limitations of the study. Literature review Network connectedness From the network perspective, the social exchange theory views exchange networks as sets of two or more connected exchange relations (Emerson, 1981). Connections here, imply that exchange in any one dyadic relationship is contingent on exchange or lack of it in another. From business networks perspective, exchange relations can be studied if businesses are connected with each other in the sense that any one exchange relationship either supports or opposes exchange on another exchange relationship (Anderson et al., 1994). The outcome of such embeddedness of the dyadic relationship is also worth noting. Since in business networks, embeddedness makes a firm’s particular exchange relationship contingent on other exchange relationships, hence there is an underlying assumption that, ‘‘the commitment of a firm to a dyadic relationship to some extent is contingent on the firm’s involvement in relationships with other parties’’ (Holm and Johanson, 1995). More recently, there has been a clearer understanding in the literature, that dyadic exchange relationships which are more relational in nature have higher chances of leading to higher relational norms existing in the relationship like, increased trust and co-operation between dyad members and lesser conflict, leading to increased satisfaction of channel members. It is well

established in literature by now, that increased conflict reduces satisfaction derived from working relationships (Dwyer, 1980; Wilkinson, 1981; Anderson and Narus, 1984; Michie and Silbey, 1985; Frazier, 1999) due to the perception that the exchange partner is preventing the achievement of goals (Michie and Silbey, 1985) and the uncertainty of meeting expected economic and other goals in the relationship (Anderson and Narus, 1984). Relational exchanges are characterized by complexity, personal interactions, building of trust and other relational norms like solidarity and information exchange, taking a long-term view and even overlooking short-term disadvantages (Noordewier et al., 1990). McNeil (1983)’s social contract theory also stresses the importance of the presence of relational contract norms such as, role integrity, preservation of relation, harmonization of relational conflict, propriety of means and supracontract norms like justice, equality, liberty and dignity. More recently, researchers have suggested a more comprehensive construct called ‘‘relationship quality’’, to indicate the quality of the dyadic relationship. Another construct called tertius iungens orientation (TIO) commonly used in network literature captures the ability of actors to connect two un-connected actors. I use these constructs to study the effect of the network embeddedness on the RQ, and how the TIO moderates the strength of this relationship. Relationship quality RQ has been conceptualized as a higher order construct consisting of various distinct but related dimension. RQ does not have a widely accepted definition and measures and it may also include other dimensions like customer orientation and minimal opportunism (Berry and Parasuraman, 1991). But some of the overlapping dimensions are trust, satisfaction and commitment (Crosby et al., 1990; Dorsch et al., 1998; Hewett et al., 2002; Dywer et al., 1987; Kumar et al., 1995; Roberts et al., 2003). RQ also consists of evaluations of various aspects of relationship like attitudinal, process and future expectations ( Jap et al., 1999). Higher quality of relationships creates bond between the buyer–seller dyadic members so that both reap benefits beyond the mere exchange of goods (McNeil, 1980); It also fosters long-term more stable exchanges where both members mutually benefit (Ford, 1980). Trust. Trust is one of the most widely researched and accepted concept in relationship marketing (Dwyer et al., 1987; Ganesan, 1994) and includes dimensions like integrity, reliability, confidence on the other party (Gundlach and Murphy, 1993; Morgan and Hunt, 1994) and also risk dependence on the other party to obtain one’s goal (Deutsch, 1958) and hence has an important influence in the development of business relationship (Anderson and Weitz, 1989). Trust not only affects buyers’ attitudes and behaviors towards their suppliers (Schurr and Ozanne, 1985) but also provides a common ground to the buyer and vendor to solve their problems (Morgan and Hunt, 1994). Satisfaction. Satisfaction is the positive affective state, reflecting the extent to which, the expectation on financial, behavioral and other issues are met (Robicheaux and El-Ansary, 1975; Anderson and Narus, 1984). Berry and Parasuraman (1991) stress that a central tenet of relationship marketing is creating and retaining customers who feel they are receiving value and are valued. Literature suggests that members of highquality relationships are more satisfied with roles assumed and performed by each of the two parties in the exchange process (Crosby et al., 1990) and are more committed to the relationship (Dwyer et al., 1987).

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Commitment. Commitment is a key characteristic for development of successful exchange relationship (Gundlach et al., 1995) and characterizes highest level of relational bonding (Dwyer et al., 1987). Mutual and reciprocal commitment are indicators of high quality of relationship (Gundlach et al., 1995). Commitment has three components, instrumental, attitudinal and temporal commitments; but each of these with different conceptualizations (Gundlach et al., 1995). Tertius iungens orientation The Social Capital theory recognizes the recent debate about the contrasting benefits and shortcomings of sparse and dense networks. While sparse networks, rich in structural holes facilitate new innovative ideas and profit-making opportunities (Burt, 1992), dense networks increase co-ordinated actions for more effective implementation of those ideas (Obstfeld, 2005), as interests are ‘‘pre-aligned or normatively constrained’’ and trust is more readily available (Granovetter, 2005). From a network conceptualization perspective, there are sociological impacts behind economic actions. Somewhere between a dyad and network lie the three-party exchanges or triad, which was conceptualized by Simmel ([1902] 1950) and remains an under-developed concept in sociology and organization theory (Krackhardt, 1999). Simmel (1950) argued that a third party essentially changes the social dynamics of dyadic ties. TIO is a behavioral orientation towards connecting disconnected people or increasing co-ordination between already connected people in one’s social network (Obstfeld, 2005). The emphasis in TIO on joining or connecting people contrasts with strategic separation among parties, conceptualized by Simmel (1950) as Tertius Gaudens or ‘‘the third who enjoys’’, which refers to active separation of the two parties which are connected to the third party. TIO as an activity may involve co-ordination without adversarial tension and competition between the parties, although the latter may be indifferent to each others’ interests, or even share some common interest without being tied in any given particular activity and essentially consists of the following two strategies: (1) ‘‘Introduce or facilitate preexisting ties between parties such that the co-ordinative role of the TI subsequently, recedes in importance (brief iungens)’’. (2) ‘‘Introduce or facilitate interaction between parties while maintaining an essential coordinative role over time (sustained iungens)’’ (Obstfeld, 2005). Model and hypotheses The study tests the model depicted in Figure 1 that shows the network connections of the focal dyad (manufacturer-customer), and their connections to other parties like suppliers, other customers, customers’ customers, ancillaries and so on. The model proposes to empirically validate the impact of network embedded dyadic business relationships on relationship trust, relationship commitment and relationship satisfaction that are integral components of RQ. The model also tests the moderating effect of TIO of this causal relationship between network embeddedness and RQ. There is a void of empirical validation of this causal relationship in the extant literature. Anderson et al. (1994) distinguish the various primary and secondary functions. Primary functions connote the positive or negative effects of the interaction between the two partners in the focal dyadic relationship. Secondary functions or network functions connote the indirect positive or negative effects of the relationship which arise due to its connectedness with other relationships.

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Figure 1. The network embeddedness of the supplier-customer firms, its effect on RQ and the moderating role of TIO

The authors also emphasize that secondary relationships is at least as important as primary one, if not more. Primary functions of the focal relationship consist of the efficient interlinking of activities, leveraging of resources and mutuality among actors. Adaptation of activities in several relationships to each other results in increased complementarity of other interdependent activities across several firms. In a similar way, resource complementarity occurs by utilizing resources of one relationship in others. The critical point of departure between an atomized view of a dyadic relationship from a network view, is that in the latter, secondary functions, as mentioned above, form part of the networks. Business networks are both formed and caused by secondary functions. We now propose the following hypotheses based on the above hypothesized model as follows: H1. Higher network embeddedness of the focal dyad leads to higher relational trust in the dyad. H2. Higher network embeddedness of the focal dyad leads to higher relational commitment in the dyad. H3. Higher network embeddedness of the focal dyad leads to higher relational satisfaction in the dyad.

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H7. Lower TI Orientation in the focal dyad decreases relational commitment in the dyad. H8. Higher TI Orientation in the focal dyad increases relational satisfaction in the dyad. H9. Lower TI Orientation in the focal dyad decreases relational satisfaction in the dyad. Method The sample The sampling frame consisted of all business managers in any industry and directly handling business relationships with customers/clients for atleast six months in the same dyad. Since the data were collected from one informant of the dyad, namely from the seller organization, the problem of choosing the key informant does not arise and he/she was the only informant in the selling organization for the particular dyadic relationship. The survey instrument copy along with a participation cover letter was sent in two waves, to 300 business managers working in various industries including information technology (IT) consulting, banking, manufacturing, fast moving consumer goods (FMCG) and Chemicals. Most of the respondents were working in organizations that are leading names in their respective business segments. A total of 75 valid responses were received, for a response rate of 25 per cent. The low response rate is probably because no incentives were offered for participation apart from a customized copy of the study results. Moreover, respondents came from several organizations unlike any single organization, where the control over response rate is generally higher. The dyads represented in the study had the following sectoral breakup: .

IT and ITES: 9 (23 per cent);

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banking and financial services: 8 (27 per cent);

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manufacturing (chemicals, tyres, FMCG, fertilizers and pharma): 20 (45 per cent);

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retail: 1 (2.5 per cent); and

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consulting and research: 1 (2.5 per cent).

Ninety-six per cent of the respondents were male. The range of the relationship tenure across the 75 dyads was six months to eight years (Mean: 3.4 years). Mean age of the respondents was 33.6 years (Min 27 years; max 59 years) and they came from various levels of hierarchy in their organizations (from frontline sales managers to Vice Presidents). Instrument development and refinement My study used standard and validated scales for measuring all the constructs, namely RQ and TIO. Since 5-Connections (5-C) connection scale is a relatively recent one (item wise connection details are shown in the appendix), I have used that without any major

modification. All scales were pre-tested with a group of ten experienced managers who were undergoing Executive MBA program/Management development program at IIM Ahmedabad in India. The required changes in form of re-wording and minor rephrasing of items were carried out to enhance understanding of target respondents and reduce ambiguity where any.

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Description of variables I would now describe the variables used in the study. 5-C business connections I have used the scale proposed by Holm and Johanson (1995). The 19 item scale measure five distinct types of business connections of the two dyadic partners in the business network relational embeddedness context, in two distinct categories. One part measures connections from supplier’s perspective (nine items) while the other part measures it from buyer’s perspective (ten items). These are: C (competitor) connections (two items), V (Value Adding) connections (two items), E (external) connections (one item), I (internal supplementary) connections (four items) and A (Auxiliary) connections (ten items). The reliabilities of each of the five connections are reported in Table I. Taken together, the five connections as a single scale have  ¼ 0.85. These five connections are specified item wise in the scale items (Appendix). Moderator variable: TIO I use the standard six item Obstfeld (2005) scale ( ¼ 0.79). The scale did not require any adaptation for the study, since pretesting feedback was favorable and all items were clearly understood by the respondents. TIO measures the extent to which a business manager connects people with weak connections or no connections and hence we have hypothesized it to play a strong moderating role in the 5C-connectedness-RQ relationship context. However  improved slightly ( ¼ 0.81) if the first item was dropped. However, I chose not to drop the item, since it was a key measure from a strategic perspective. I guess that the improvement in  may probably be due to the different ways in which respondents may have interpreted the term ‘‘strategic work interest’’. Since no such feedback was received during pre-test, I chose to retain the item.

5-C Connections C-Connections V-Connections E-Connections I-Connections A-Connections TIO Relationship trust Relationship commitment Relationship satisfaction

Mean

SD

Reliabilities

2.65 3.55 3.03 3.15 2.68 2.28 5.44 4.77 5.44 4.93

12.41 2.24 2.06 1.16 3.23 8.50 5.52 7.58 9.21 7.46

0.853 0.467 0.378 NA 0.655 0.865 0.791 0.918 0.971 0.931

Table I. Mean, SD and reliabilities of measures used in the study

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Relationship quality I use the 16 item Roberts et al. (2003) scale, consisting of relationship trust, relational commitment and relationship satisfaction: .

Relationship trust: five item scale ( ¼ 0.92)

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Relationship commitment: six item scale ( ¼ 0.97)

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Relationship satisfaction: five item scale ( ¼ 0.93)

Results Table I reports the mean, SD and reliabilities, measured using Cronbach’s (1951) alpha. Except for H2, H6 and H7, other hypotheses have not been supported in my study. There may be several reasons for this. One probable reason for no support for most of the hypotheses is the small sample size, which is a major limitation of the study. Relationship trust, commitment and satisfaction and RQ as a higher order construct have been found out to be negatively related to A-connections, whereas other connections show non-significant relationships. However, the interaction term of TIO and A-connection has a positive significant relationship with each of the three components of RQ and with RQ as a separate construct. However, commitment shows the most strong relationship and trust the least (positive in interaction and negative in direct effect). relationship satisfaction also shows similarity in sign of relationship, although moderate in its strength. Discussion It can be seen from Table II that, except for A-connections, the other four connections (V, E, I and C connections) are non-significant. The reliabilities of these four connections (except for A-connection) are however low. We also observe that R2 values for all three components of RQ show reasonable fit (~30 per cent). Primarily, the most important finding is that A-connections across all four outcomes (satisfaction, trust, commitment and overall RQ) are negative in sign, contrary to our a priori expectations and theory. It can be understood from the perspective that, since A-connections denote auxiliary connections of an organization with regulatory and service providing Trust

Table II. Significant resultsa of main and interaction effects in moderated regression analysis – regression coefficients (SEs)

INTERCEPT C-Connections V-Connections E-Connections I-Connections A-Connections TIO C-Connections*TIO V-Connections*TIO E-Connections*TIO I-Connections*TIO A-Connections*TIO R2

Satisfaction

13.67**(6.52)

13.17*(6.6)

5.11**(2.39)

5.86**(2.43)

0.93**(0.43) 29.94%

1.00**(0.43) 29.58%

Commitment

RQ 12.41**(6.0)

6.2**(2.46)

1.135**(0.44) 30.93%

5.72**(2.21)

1.02**(0.39) 31.82%

Notes: *Significant at p < 0.1; **significant at p < 0.05; aonly significant results are shown

agencies like governmental agencies, banks, MR firms, advertising firms, these connections are not perceived to strengthen the overall RQ as well as each of its three constituents-trust, commitment and satisfaction, but are perceived to negatively impact trust, satisfaction and commitment in the relationship, probably due to organizations’ sharing common resources e.g. personnel, to maintain these relationships that are not directly fruitful. However, when TIO is high, the interaction term of TIO with A-connection is positive and significant, due to the effect of ‘‘bonding’’ nature of TIO shown by the boundary person in the organization, although TIO itself is not significant; one probable reason may be the small sample size. Besides the moderated regression analysis, I also carried out a median split method of finding the possible moderating effect of TIO of the boundary personnel on the 5-C– RQ relationship. The sample was split at the median value of TIO (5.5) and a simple t-test was carried to determine the presence of significant differences of mean across both sub-samples (low TIO vs high TIO) of all predictor variables. Again I found that most of the effects were non-significant except for the effect on commitment ( p < 0.1), which was found to be significant. Thus, the findings indicate that when TIO is high, the likely impact of 5-C on commitment (unlike trust and satisfaction) of the relationship partners is likely to be high. I refrain however to generalize any of my findings. Managerial implications Despite its limitations in terms of low reliability of few constructs and counter-intuitive results, these findings have several important implications. First, it shows that out of the several connections that an organization may have, and contrary to popular belief that competitor connections have the most impact on RQ, it was not supported through this empirical study. Moreover, the findings also suggest that the other secondary functional connections like those with suppliers’ suppliers or customers’ customers are not important for impacting on RQ with customer firms. However, the supporting auxiliary connections like the linkages with government agencies, MR firms and advertising agencies do impact, albeit negatively on RQ with customers. The negative impact is probably due to the negative externalities associated with sharing the limited resources of the firm with non-customer firms like government, MR and ad agencies. Interestingly, however, it is also found that when the boundary personnel exhibit high TIO (when they are able to bring together weakly connected actors in their firms’ networks), the impact of these A-connections on RQ is positive and strong. They impact satisfaction, commitment and trust powerfully and also RQ as a whole. The impact on commitment is however slightly higher than that in trust and satisfaction. Although it is possible that these findings may be partly due to the nature of the sample (respondents are drawn from a mix of industries), yet these are interesting findings with important implications for managers of these firms. It shows that probably commitment is the most important element of RQ that trust and satisfaction, and hence gaining commitment should be accorded more resources from the organization, which finds support from the trust-commitment theory of relationship marketing (Morgan and Hunt, 1994). Hence, businesses in emerging markets should manage relationships with government agencies, MR agencies and advertising agencies in such a way that their other connecting partners like those connected to suppliers and customers do not perceive them as draining huge organizational resources like manpower, manhours and financial resources, at the cost of relationships with them. However, with sales people who have strong TIO and can bring together

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unconnected persons would help in mitigating this problem to a large extent. This finding has key implication for sales managers that they should be careful not only in hiring their sales people to screen them for high TIO (ability to bring people together across various relationships) but also make sure that the sales training provided to sales and service personnel who are dealing with customers and suppliers directly, to also inculcate building soft skills in managing strong relationships with disparate people in different roles and contexts, and the display the key ability and willingness to ‘‘knit them together’’ in relationships. Limitations and directions for future research The study has several limitations. First, the results of the study cannot be generalized due to the small sample size used. However, being an exploratory study, the purpose was to determine how TIO of boundary personnel impacts the relationship between embeddedness of dyadic business relationships and RQ. I could have also analyzed for each specific industry, instead of clubbing them together, had the sample size been larger. Future research can look at the model from a particular industry perspective with a large sample in order to determine significant relationships. Second, limitation of my study is that the respondents are from various hierarchical levels of their respective organizations, and so their perspective would differ from the position they hold in the organization. However, since they were the most informed person to respond on the specific dyadic relationship between their organization and their network partners. However, collecting data on primary and secondary network partners of an organization should have been carried out using multiple respondents, instead of a single respondent. Another limitation of my study is that the three elements of RQ–trust, commitment and satisfaction are themselves causally interrelated, though my study does not delve into these interlinkages. Lastly, this study uses TIO, which is an interpersonal construct[1] in triadic relationships, together with other constructs that are organizational constructs. However, doing so may result in confounding results as interpersonal constructs may have different impact than interorganizational ones, and hence, the results should accordingly be viewed with certain degree of caution. Future work should also look at incorporating these causal linkages and incorporate other relevant variables in the model to make the findings more generalisable in nature Note 1. I thank an anonymous reviewer for bringing this to my notice, and flagging it as a limitation of this study. References Achrol, R.S. (1991), ‘‘Evolution of the marketing organization: new forms for turbulent environments’’, Journal of Marketing, Vol. 55, October, pp. 77-93. Achrol, R.S. (1997), ‘‘Changes in the theory of interorganizational relations in marketing: toward a network paradigm’’, Journal of the Academy of Marketing Science, Vol. 25 No. 1, Winter, pp. 56-71. Achrol, R.S., Reve, T. and Stern, L.W. (1983), ‘‘The environment of marketing channel dyads: a framework for comparative analysis’’, Journal of Marketing Science, Vol. 47, pp. 55-67.

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Holm, D.B. and Johanson, J. (1995), ‘‘Business network connections and the atmosphere of dyadic business relationships’’, working paper, Uppsala University. Jap, S.D., Manolis, C. and Weitz, B. (1999), ‘‘Relationship quality and buyer-seller interactions in channels of distribution,’’ Journal of Business Research, Vol. 46, pp. 303-13. Kumar, N., Scheer, L.K. and Steenkamp, J.-B.E.M. (1995), ‘‘The effects of supplier fairness on vulnerable resellers’’, Journal of Marketing Research, Vol. 32, pp. 54-65. Krackhardt, D. (1999), ‘‘The ties that torture: simmelian tie analysis in organizations’’, Research in the Sociology of Organizations, Vol. 16, pp. 183-210. Noordewier, T.G., John, G. and Nevin, J.R. (1990), ‘‘Performance outcomes of purchasing arrangements in industrial buyer-vendor relationships’’, Journal of Marketing, Vol. 54 No. 4, pp. 80-93. Macneil, I.R. (1980), The New Social Contract: An Enquiry into Modern Contractual Relations, Yale University Press, New Haven, CT. Macneil, I.R. (1981), ‘‘Economic analysis of contractual relations: its shortfalls and the need for a rich classificatory apparatus’’, Northwestern University Law Review, Vol. 75 No. 6, pp. 1018-63. Macneil, I.R. (1983), ‘‘Values in contract: internal and external’’, Northwestern University Law Review, Vol. 78, pp. 340-418. Michie, D.A. and Silbey, S.D. (1985), ‘‘Channel member satisfaction: controversy resolved’’, Journal of the Academy of Marketing Science, Vol. 13 No. 2, pp. 188-205. Morgan, R.M. and Hunt, S.D. (1994), ‘‘The commitment-trust theory of relationship marketing’’, Journal of Marketing, Vol. 58, pp. 20-38. Obstfeld, D. (2005), ‘‘Social networks, the tertius iungens orientation, and involvement in innovation’’, Administrative Science Quarterly, Vol. 50, pp. 100-30. Roberts, K., Varki, S. and Brodie, R. (2003), ‘‘Measuring the quality of relationships in consumer services: an empirical study’’, European Journal of Marketing, Vol. 37 No. 1, pp. 169-96. Robicheaux, R.A. and El-Ansary, A.I. (1975), ‘‘A general model of understanding channel member behavior’’, Journal of Retailing, Vol. 52, Winter, pp. 13-30. Schurr, P.H. and Ozanne, J.L. (1985), ‘‘Influences on exchange processes: buyers’ preconceptions of a seller’s trustworthiness and bargaining toughness’’, Journal of Consumer Research, Vol. 11, pp. 939-53. Simmel, G. (1902), The Sociology of Georg Simmel, 1950 ed (translated by Wolff, K.), Free Press, Toronto. Snow, C.C. (1997), ‘‘Twenty-first-century organizations: implications for a new marketing paradigm’’, Journal of the Academy of Marketing Science, Vol. 25 No. 1, Winter, pp. 72-4 Thorelli, H.B. (1986), ‘‘Networks: between markets and hierarchies’’, Strategic Management Journal, Vol. 7, pp. 37-51. Walker, O.C. Jr (1997), ‘‘The adaptability of network organizations: some unexplored questions’’, Journal of the Academy of Marketing Science, Vol. 25, No. 1, Winter, pp. 75-82. Wilkinson, I.F. (1981), ‘‘Power, conflict, and satisfaction in distribution channels: an empirical study’’, International Journal of Physical Distribution and Logistics Management, Vol. 11, pp. 20-30. Further reading Ulaga, W. and Eggert, A. (2002), ‘‘Relationship value and relationship quality: broadening the nomological network of business-to-business relationships’’, European Journal of Marketing, Vol. 40 No. 3/4, pp. 311-27.

Appendix. Sample measures TIO (six items scale) (Obstfeld, 2005); scale of 1 (Not at all) to 7 (Very Much) (1) I introduce the client to other partners who might have a strategic work interest.

Relationship quality

(2) I will try to describe an issue in a way that will appeal to a diverse set of interests. (3) I see opportunities for collaboration between the client and other people. (4) I point out the common ground shared by the client and other people who have different perspectives on an issue. (5) I introduce the client to people when I think they might benefit from becoming acquainted. (6) I forge connections between the client and other people dealing with a particular issue. Relationship quality (16 items scale) (Roberts et al., 2003); scale of 1 (Not at all) to 7 (Very Much) (1) Our firm regrets the decision to do business with this specific customer. (2) Our firm is very satisfied with this specific customer. (3) Our firm is very pleased with what this specific customer does for us. (4) Our firm is not completely happy with this specific customer. (5) Our firm would still choose to use this specific customer if we had to do it all over again. (6) This specific customer keeps promises it makes to our firm. (7) This specific customer is genuinely concerned that our business succeeds. (8) This specific customer considers our welfare as well as its own when making important decisions. (9) Our firm trusts that this specific customer keeps our best interests in mind. (10)

This specific customer is trustworthy.

(11)

The relationship with this specific customer is something to which we are very committed.

(12)

The relationship with this specific customer is very important to our business.

(13)

The relationship with this specific customer is something our business intends to maintain indefinitely.

(14)

The relationship with this specific customer is very much like being family.

(15)

The relationship with this specific customer is something our business really cares about.

(16)

The relationship with this specific customer deserves our business’ maximum effort to maintain.

Dyadic relationship embeddedness in the network (five connections from supplier’s perspective and five connections from customer’s perspective; Holm and Johanson, 1995); scale of one (not at all) to five (very much) To what extent is your business with this specific customer affected by your own relationship with any of the following parties? .

any of your own other customers. (C-Connection);

.

any of your own suppliers. (V-Connection);

.

any other unit of the customer’s firm. (I-Connection);

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.

any other unit of the supplier’s firm. (I-Connection);

.

any bank or other financial organization. (A-Connection);

.

any law firm or other legal organization. (A-Connection);

.

any consultant or research organization. (A-Connection);

.

any trade union or other social body. (A-Connection); and

.

any government or regulatory body affecting you. (A-Connection).

To what extent is your business with this specific customer affected by his own relationships with any of the following parties? .

any other supplier of products competing with you, for the same product. (C-Connection);

.

any of its own customers. (V-Connection);

.

any supplier of products supplementary to your product. (E-Connection);

.

any other unit of the customer’s firm. (I-Connection);

.

any other unit of the supplier’s firm. (I-Connection);

.

any bank or other financial organization. (A-Connection);

.

any law firm or other legal organization. (A-Connection);

.

any consultant or research organization. (A-Connection);

.

any trade union or other social body. (A-Connection); and

.

any government or regulatory body affecting your customer. (A-connection).

Corresponding author Ramendra Singh can be contacted at: [email protected]

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