90Journal of MarketingVol. 70 (July 2006), 90–103

© 2006, American Marketing AssociationISSN: 0022-2429 (print), 1547-7185 (electronic)

Jan B. Heide & Kenneth H. Wathne

Friends, Businesspeople, andRelationship Roles: A Conceptual

Framework and a Research AgendaThis article develops a conceptual framework of roles in marketing relationships. Drawing on emerging theory fromeconomic sociology and March’s (1994) notion of decision “logics,” the authors discuss two prototypical relation-ship roles, namely (1) a “friend,” who uses a “logic of appropriateness” and follows established rules, and (2) a“businessperson,” whose decisions are guided by utility-maximizing considerations under a “logic of conse-quences.” Next, they use extant theories of interfirm governance to suggest that firms’ relationship strategies canbe used both to create different relationship roles in the first place and to activate them over time. The authorsposit that activation can have several different outcomes, including reinforcement of an existing dominant role oractual switching to a new one. Theoretically, the conceptual framework allows for integration of different perspec-tives on interfirm relationships, some of which have provided seemingly inconsistent accounts of firm behavior.From a managerial perspective, the framework identifies specific matches between particular relationship roles onthe one hand and firms’ governance strategies on the other hand. In general, the framework suggests that an in-depth understanding of roles is a prerequisite for the deployment of relationship management initiatives towardresellers, customers, and suppliers.

Jan B. Heide is Irwin Maier Chair in Marketing, School of Business, Uni-versity of Wisconsin, Madison, and Professorial Fellow, Department ofManagement, University of Melbourne (e-mail: jheide@bus.wisc.edu).Kenneth H. Wathne is Assistant Professor of Marketing, School of Busi-ness, University of Wisconsin, Madison (e-mail: kwathne@bus.wisc.edu).Part of this article was completed while Heide was Montezemolo VisitingProfessor in the Judge Business School, University of Cambridge. Theauthors thank Aric Rindfleisch and Maria Papas Heide for their helpfulcomments. They also thank the anonymous JM reviewers for their con-structive suggestions. The authors are listed in alphabetical order. Eachauthor contributed equally to the article.

To read or contribute to reader and author dialogue on this article, visithttp://www.marketingpower.com/jmblog.

1We acknowledge that these particular labels carry surplusmeaning and can be misleading. Any given friend is unlikely to bedevoid of task orientation, and real-life businesspeople frequentlyshow exemplary service. Nevertheless, we rely on these particularterms for two reasons: First, they have been used in the literature(e.g., Montgomery 1998) as “ideal type” (in a Weberian sense)theoretical constructions. Second, field studies have shown thatthese specific labels are used in actual industry settings.

ior, they actually share a fundamental underlying assump-tion, namely, that exchange partners are “unitary actors”who play a single role over time and consistently makedecisions according to a fixed pattern (i.e., in a calculativeor heuristic manner). However, this assumption has beenchallenged. For example, Montgomery (1998) argues thatattributing global characteristics to exchange partners,either calculative or heuristic, is potentially misleading.Using a “prisoner’s dilemma” game as an illustration, hesuggests that the “players” are not individuals with fixedtraits or predispositions, as is often assumed, but rather col-lections of roles. In his analysis, Montgomery distinguishesbetween two role archetypes: (1) a “businessperson,” whosedecisions are guided by utility maximization considerationsand who will “defect” if such a move is individually prof-itable, and (2) a “friend,” who will cooperate as a matter ofprinciple.1

In this article, we build on this general view of relation-ship parties and interactions to develop a conceptual frame-work of roles in marketing relationships. Our frameworkexplicitly accounts for the possibility that different orienta-tions (calculative and heuristic) and the associated roles(businessperson and friend) can coexist and that switchingamong them is both possible and likely. Moreover, we argue

Aconsiderable body of literature exists on the generalorientations that exchange partners bring to bear ontheir relationships. In branches of the new institu-

tional economics literature, decision makers’ assumed prin-ciple of action is utility maximization, sometimes to thepoint of “self-interest seeking with guile” (e.g., Williamson1985, p. 47). This assumption has produced an extensivebody of research on so-called governance mechanisms (e.g.,monitoring and incentive devices), which have the pre-sumed ability to manage parties’ inherent “calculative” ori-entations (see, e.g., Rindfleisch and Heide 1997). In con-trast, other streams of literature, particularly in sociology,have been overtly critical of such an “undersocialized” viewof exchange, arguing that relationship behavior followsfrom rules or “heuristics,” which are applied regardless oftheir economic consequences (e.g., Granovetter 1985; Uzzi1997).

Notably, although these economic and sociological per-spectives provide different accounts of relationship behav-

Friends, Businesspeople, and Relationship Roles / 91

2Role theory has been used more extensively in research onintraorganizational phenomena (e.g., Behrman and Perreault 1984;Churchill et al. 1985; Singh 2000; Webster and Wind 1972).

that firms’ governance strategies (e.g., socialization andmonitoring) are capable of (1) creating relationship roles,(2) reinforcing existing roles over time, and (3) producingrole switching (e.g., from friend to businessperson).

From a theoretical standpoint, our framework provides anovel perspective on relationship management. As we dis-cuss subsequently, our perspective can explain empiricalresults that run counter to established governance theory;for example, certain governance mechanisms actually pro-mote rather than suppress opportunistic behavior (e.g., John1984).

The role concept also has important practical implica-tions. Ridgway (1957, p. 465) noted this early on, claimingthat “the establishment and maintenance of themanufacturer-dealer system itself—that is, the provision ofmutually satisfying roles in the relationship—is a majoradministrative responsibility.” Importantly, although indus-try observers have since made a case for the importance ofrelationship roles (e.g., Normann and Ramirez 1993), spe-cific guidelines for decision making are almost absent fromthe literature. Frazier (1999, p. 235) has argued that (1) “lit-tle is known about the specification of channel roles” and(2) “many manufacturers make role decisions very poorly.”

We organize the article as follows: We provide a briefsynthesis of existing theoretical perspectives and propose anew decision-theoretic conceptualization of relationshiproles. Then, we present our conceptual framework, discussthe implications, and suggest areas for further research.

Role Theory: Origins and EmergentViews

According to Biddle (1986, p. 68), role theory began as a“theatrical metaphor.” Over time, the general domain of roletheory has become the “study of behaviors that are charac-teristic of actors within contexts” (Biddle 1979, p. 56).Although several different approaches to role theory exist(e.g., Kahn et al. 1964; Mead 1932; Sherif 1936), the twobranches, known as functional (e.g., Bates and Harvey1975; Parsons 1937) and structural (e.g., Burt 1982; Win-ship and Mandel 1983) role theory, have historicallyenjoyed some prominence and have also received attentionin the marketing literature. For example, applications offunctional role theory in marketing are evident in the use ofterms such as “wholesaler” and “retailer” to describe par-ticular channel positions with associated functions andactivities (e.g., El-Ansary and Stern 1972). Structural roletheory has been used in marketing to describe the propertiesof distribution networks and their interaction patterns (e.g.,Anderson, Håkansson, and Johanson 1994; Iacobucci1996). In general, however, despite Stern’s (1969) earlycall, role theory has not been extensively used in researchon interfirm phenomena.2

Although conventional role theory has generated impor-tant insights, it has also been criticized (e.g., Powell and

Smith-Doerr 1994; Salancik 1995) for, among other rea-sons, not going far enough in terms of articulating the prop-erties of the relevant parties and their decision-making pat-terns. For example, Blau (1993) notes that a party’s actualbehavior in a relationship is not necessarily isomorphic withits position. This is consistent with Larson’s (1992) obser-vation that standard role designations, such as “principal”and “agent,” often provide little information about theactual properties of a set of parties and their relationship.

Emerging role theory has attempted to address theselimitations. In this article, we draw on recent role researchin economic sociology (e.g., Montgomery 1998) and definean organizational role as an organizational “identity” or a“collective mind” (Kohli and Jaworski 1990), which pro-vides the foundation for shared perceptions and coordinateddecision making (Albert and Whetten 1985; Messick 1999;Tajfel and Turner 1986). Our focus is on two particulararchetypes of roles or identities—friend and business-person—which differ systematically in their decision-making patterns.

Role of a Friend: The Logic of Appropriateness

Most versions of role theory presume that expectations,broadly defined, are major determinants of role behavior(Biddle 1986). The term “expectation” is commonly used ina prescriptive sense, referring to behaviors that “ought to”be performed (Turner 1974). In certain branches of roletheory (e.g., Montgomery 1998), the term “rule” is used todescribe how expectations guide organizational decisionmaking.

Montgomery’s (1998) role-theoretic arguments arederived from the work of March (1994), who argues thatdecision makers explicitly or implicitly ask three key basicquestions. These questions pertain to (1) recognition(“What kind of situation is this?”), (2) identity (“What kindof organization is this?”), and (3) rules (“What does anorganization such as this do in a situation such as this?”).Conceptually, the first two questions involve categorizationtasks (Turner et al. 1987)—for example, the categorizationof a firm’s exchange partner and the firm itself—and thethird question involves the matching of behaviors to cate-gories (Forgas 1982). For example, a distributor that agreesto carry additional inventory for a manufacturer may be cat-egorized as “cooperative” and, subsequently, may begranted “gold partner” status.

Research in contract law and marketing (e.g., Dwyer,Schurr, and Oh 1987; Heide and John 1992; Macaulay1963) describes how rules of behavior in interfirm relation-ships may manifest themselves as norms. For example, asupplier and a buyer may develop a norm of flexibility,which specifies how certain aspects of the relationship willbe modified under changing circumstances. March (1994)uses the term “logic of appropriateness” to describe such arule-driven decision-making mode.

Montgomery (1998) uses March’s (1994) logic ofappropriateness to coin a prototypical relationship role,namely, that of a friend. Using a game-theoretic analogy,Montgomery defines a friend role in terms of a tendency toplay a game based on fixed rules that prescribe cooperativemoves, even when such moves undermine a party’s individ-

92 / Journal of Marketing, July 2006

3Barney and Hansen (1994) make a distinction between “semi-strong” and “strong” or “hardcore” forms of trust. Semistrong trustcorresponds to Williamson’s (1993) and Uzzi’s (1997) notion ofcalculative trust and reflects a calculative decision logic in linewith the work of March (1994). Conversely, strong trust corre-sponds to Uzzi’s (1997) notion of heuristic trust and reflects arule-based decision logic in line with the work of March (1994).As Barney and Hansen note (p. 179), hardcore trustworthyexchange partners are trustworthy because “that is who they are.”

ual payoff. Uzzi’s (1997) study provides several “thickdescriptions” of such a role. For example, a productionmanager in an apparel company described how her firmwould forgo self-gain by contracting early for services tohelp a friend suffering from slow business. In the process,the company purposely sacrificed potential profits fromalternative contractor relationships.

Role of a Businessperson: The Logic ofConsequences

Although rules may serve as explanations for behavior, androles themselves (e.g., a friend) can be conceptualized onthe basis of rule-following behavior, some researchers sug-gest that roles are induced through the consequences ofbehavior (Biddle 1979). This principle is the cornerstone ofrational choice theory (e.g., Becker 1976; Hogarth andReder 1987), which tends to describe decision-making pro-cesses in utility maximization terms. March (1994, 1999)refers to such processes as involving a “logic ofconsequences.”

Many of the extant theories of interfirm relationships,including transaction cost, agency, and game theory, sharethe idea of anticipatory, consequential choice. For example,a common explanation for sustained cooperation betweenfirms is “calculative trust” (Williamson 1993).3 For exam-ple, a manufacturer may trust a distributor to fulfill its rolebecause the known short-term benefits to the distributorfrom opportunism are outweighed by the long-term benefitsfrom cooperation.

The prototypical relationship role that corresponds to alogic of consequences is that of a businessperson, who isnot bound by rules per se but whose primary motivation isutility maximization. In the terminology of game theory(Axelrod 1984), a businessperson plays the game by choos-ing the strategy (cooperation or defection) that maximizesindividual payoffs. A businessperson may even pursueopportunistic behaviors (e.g., quality shirking) at theexpense of a partner, if the gains from doing so are suffi-ciently large (Klein 1996).

Distinctions Between the Two Logics

Importantly, although rational choice theory does not denythe importance of rules, it tends to view them as beingderived from, or somehow supported by, underlying utilitymaximization considerations (Scott 2000). For example,although Gibbons (1999) recognizes the importance ofinformal rules within relational contracts, he also notes how

4Work within the rational choice paradigm has tried to reconcilethese perspectives by suggesting that decision makers possessmultiple utility functions for individual and social welfare, respec-tively (e.g., Harsanyi 1955; Margolis 1982). As such, utility mayexist at different levels. In the marketing literature, Rokkan, Heide,and Wathne (2003) describe how solidarity norms prescribebehaviors that maximize relationship utility. In addition, it hasbeen argued that utility exists in different forms, including that ofpsychological “warm glow” (Andreoni 1989, p. 1448). Still, theassumption that decision makers engage in calculations to maxi-mize utility (conceptually, a logic of consequences) is consistentacross all these models.

such rules must be explicitly enforced in a relationship(e.g., through a pattern of repeated interaction). As such,rule-following behavior (and, indeed, the very notion ofrelational contracting) is inherently tied to (economic)consequences.

However, other scholars argue that the standard rationalchoice characterization of utility maximization is incom-plete. For example, Montgomery (1998, p. 100) argues,

Rational choice theorists have trouble explaining adher-ence to “social norms” not because these rules would bedifficult to derive from utility maximization, but becausethe associated maximization problems (entailing merely“psychic” costs and benefits) often seem vacuous. Theneed to construct nontrivial utility-maximization problemshave led rational choice theorists to emphasize externalsanctions (I follow a norm because others are watchingme) over internalization (I follow a norm because of whoI am). To the extent that a role has been internalized (i.e.,the individual’s self-assessed “degree of membership” ispositive), the cost of disobeying the norm is found notmerely in external sanctions (which are completely irrele-vant if the individual knows that she is not being moni-tored), but in the violation of self-consistency—individuals would no longer recognize themselves.

Montgomery’s account of an “appropriateness” mode ofdecision making is consistent with the “moral imperative”view that Durkheim (1915), Etzioni (1975), and Elster(1989) describe. For example, Etzioni argues (p. 24) that“utilitarian satisfaction should not be confused with thesense of affirmation that accompanies discharging one’smoral commitments, commitments that are often in them-selves taxing rather than pleasurable.”4 Moreover, Elsterwrites (p. 104), “When norms are internalized, they are fol-lowed even when violation would be unobserved and notexposed to sanctions. People have an internal gyroscopethat keeps them adhering steadily to norms, independentlyof current reactions of others.” On this note, and in contrastwith Gibbons’s (1999) view, Hackett (1994) provides evi-dence of “pure” relational contracts, in which the rulesthemselves are capable of guiding decision making, even inthe absence of explicit enforcement devices.

On the basis of the previous discussion, we suggest thattwo distinct decision logics exist and that they can be usedto delineate two prototypical relationship roles, namely,friend and businessperson. We summarize the precedingdiscussion in Table 1.

Friends, Businesspeople, and Relationship Roles / 93

The Coexistence of Logics: ADecision-Theoretic Perspective on

Relationship RolesNotably, although the bodies of theory that provide thebasis for the two prototypical relationship roles are quitedifferent, as Table 1 shows, they tend to converge on thesame general assumption, namely, that decision makerseither follow rules or maximize utility or, more generally,that they play a single role (friend or businessperson) overtime. In Gambetta’s (1996) terminology, a decision makereither (1) “is pushed from behind” (by preexisting rules) or(2) “jumps” (toward the alternative with the highest payoff).

We wish to challenge this assumption. Although weview the two roles as distinct, in the sense that one or theother may be applied to an individual decision, we believethat the two can also coexist within a given party in theform of latent predispositions (Friedberg 2000; Greenwaldand Pratkanis 1984). This is consistent with Powell andSmith-Doerr’s (1994, p. 371) argument that “identities areforged out of porous, multi-stranded relations in whichbusiness, reputation, and friendship are entangled.”

A largely unaddressed issue, however, pertains to thespecific manner in which roles coexist. Consider again theargument that an organizational role represents a form ofidentity or mental model of a relationship (Albert andWhetten 1985; Messick 1999). At a given time, based inpart on a relationship’s unique interaction history, a particu-lar identity will dominate a party’s approach to that rela-tionship (Oakes 1987). For example, a manufacturer mayview a certain supplier as a friend, and the manufacturer’sgeneral approach to the relationship may be reflected infriend types of actions, as in Uzzi’s (1997) example, whichwe described previously.

However, although the supplier in question may havefriend status, the manufacturer can simultaneously possessa mental model of businessperson suppliers based on actualexperiences in other relationships or on general industryobservation. Over time, depending on the focal supplier’sactions, the established relationship roles may be subject toreassessment.

Research in organization theory (e.g., Albert and Whet-ten 1985) describes how identities are formed by inter-organizational comparison processes that directly affectorganizational action. If a given comparison process pro-duces a sufficiently large “identity gap,” certaincongruence-enhancing responses are triggered, such as areassessment of a party’s own identity and/or the partner’s.For example, to the extent that a supplier pursues actionsnormally associated with a businessperson role, a complexprocess of role switching may be initiated. For example, theformer supplier friend may be assigned to a new category (abusinessperson), and the manufacturer’s own role mayreceive a similar designation.

Larson (1992, pp. 86–100) provides an example of howa role shift can also be triggered by external factors:

[T]he role shift occurred when “Support Products” (SP)was acquired by a much larger corporation. Before it wasacquired, the company had a reputation for developingclose supplier relationships, characterized by an ethos offriendship and mutual assistance. SP’s procurementmanager described the philosophy behind the firm’s keysupplier partnerships: “These people are extensions ofyour own organization—they are part of your family.”When SP was acquired, the new parent imposed internalsourcing requirements on its newly acquired division thatdramatically altered the terms and character of SP’s sup-plier alliances. The partnership philosophy was replacedby a short-term, cost-only focus. SP’s purchasing managerexplained that as a consequence, the relationships shifted,

Role

Key Characteristics Friend Businessperson

General theoretical origin of role Sociology Economics/rational choice theory

Subfields Economic sociology (embeddednessperspective)

Pure (self-sustaining) relational contracts

Transaction cost theoryAgency theoryGame theory

Externally enforced relational contracts

Representative literature Granovetter 1985; Etzioni 1975; Elster1989; Macaulay 1969

Williamson 1985, 1996; Jensen andMeckling 1976; Axelrod 1984; Gibbons

1999

Role’s underlying decision logica Appropriateness (heuristic) Consequences (calculative)

Role’s guide to decision makingb Rules Incentives

Actual role behavior Cooperation in principle Defection or cooperation = f (incentivestructure)

aSee March (1994).bSee Montgomery (1998).

TABLE 1Prototypical Relationship Roles

94 / Journal of Marketing, July 2006

and collaboration and special treatment became increas-ingly unlikely.

At a general level, role-switching processes have beendescribed as transitions between “primary and secondaryframeworks” (Goffman 1969) or between “quasi-stationaryequilibria” (Ashforth 2001). The actual transitions havesometimes been described in terms of “unfreezing” and“refreezing,” suggesting that role switching is subject toinertia pertaining to both (1) a partner’s new designationand (2) a party’s own role and associated behaviors.Regarding the former, a given event or situational cue (e.g.,a supplier that used to be viewed as a friend refuses to adaptto changing circumstances) may trigger doubts about theviability of the existing role. However, an actual recatego-rization of the supplier need not take place, at least notwithout additional confirmatory evidence. A chief executiveofficer who Uzzi (1997, pp. 44–45) interviewed providedthe following description: “Sometimes they ask for a favor(e.g., a low price) and we’ll do it. But if they always do that,they’re ripping me off.”

Similarly, the focal party (i.e., the manufacturer) maycontinue to play an existing role, even in the face of evi-dence about a partner’s new role, to the extent that the focalactions reaffirm the firm’s own identity and, in general,reduce uncertainty (Turner et al. 1987). In addition, anexisting role may be “sticky” (Bolton and Reed 2004) to theextent that it is shared by other parties or referents (Ash-forth 2001). For example, a manufacturer that has a globalreputation as a friend in a larger industrial network maycontinue to enact a friend role, even toward suppliers whoseactions belong to a standard businessperson repertoire.Decision makers may have a baseline tendency to pursuebehaviors that reaffirm existing roles.

Numerous accounts of firms’ struggles to change theirrelationship orientations provide evidence of role stickiness.For example, Lyons, Krachenberg, and Henke (1990, p. 33)report the following statement that a senior executive madeabout his firm’s attempted change in supplier strategy:“We’ve had to outplace or retire some of our most experi-enced, veteran buyers. It was just too much to expect themto change from playing poker with suppliers to cooperatingwith them. The old ways and the new game just didn’tmatch.”

Despite the possibility of role stickiness, the generalconclusion from the previous discussion is that parties maypossess multiple identities over time, even within the con-text of an individual relationship. As such, rather thanapplying fixed characterizations, such as calculative orheuristic, we view relationship parties as collections ofroles. Although the dual role conceptualization of friendand businessperson is admittedly somewhat simplistic, itnonetheless provides a useful starting point for building atheory of relationship roles.

Roles and Governance Decisions:A Conceptual Framework

In this section, we outline a framework that specifies howroles are (1) initially created in relationships and (2) subse-

quently activated. We also sketch out possible linkagesbetween roles and particular relationship outcomes. As wediscuss throughout the section, these outcomes pertain bothto the roles themselves (e.g., reinforcement of current rolesor switching) and to various economic dimensions. Forexample, the consequence of a firm’s decision to beginmonitoring a supplier “friend,” which, by definition, wouldnot require external surveillance, may be an economicopportunity cost.

In developing the framework, we integrate the notion ofa role with extant frameworks of interfirm governance (e.g.,Cannon and Perreault 1999; Heide 1994; Ouchi 1979;Wathne and Heide 2000). The governance literature pro-vides a useful building block because it identifies particularrelationship management mechanisms with different timedimensions, which can be expected to serve particular rolecreation and activation purposes. We first review a core setof governance mechanisms and their general properties.Then, we discuss their particular purposes in relation torelationship roles.

General Governance Mechanisms

Ouchi (1979) discusses two broad relationship managementstrategies available to firms: A firm can (1) identify partiesthat “fit its needs exactly” (p. 840) or (2) design a manage-rial system that specifically promotes desired behaviors. Inpractice, as suggested by extant governance typologies(e.g., Heide 1994; Wathne and Heide 2000), the formerapproach can be implemented through selection and sociali-zation efforts, whereas the latter tends to be based on incen-tives and monitoring. Although our primary focus is not onthese mechanisms per se, a brief review of each, includingexamples of actual industry practice, provides a usefulfoundation for the presentation of our role framework.

Selection. Relationship governance through selectioninvolves identifying exchange partners a priori that exhibit agood fit on particular criteria. The selection criteria mayinvolve both skills (e.g., product quality and humanresources) and values (e.g., cultural compatibility). Recentindustry accounts (Killian 2003) show how companies suchas Culver’s and Home Depot rely on both types of criteriato select their franchisees and suppliers, respectively. FordMotor Company has formalized its selection efforts throughspecialized supplier qualification programs, which serve asa trial period for prospective suppliers (Purchasing 1995).For some companies, such as the food retailers WholeFoods Market and Pret A Manger, selection is such an inte-gral part of the companies’ overall strategies that their elab-orate practices are explicitly communicated to their stake-holders. For example, Pret A Manger’s promotionalmaterials describe its selection practices as “treasurehunting.”

Socialization. Conceptually, socialization is the processby which new parties learn skills and internalize anotherparty’s values, goals, and rules (Chatman 1991). Socializa-tion can happen informally over the normal course of a rela-tionship, or processes can be explicitly designed to promotelearning and internalization. As an example of the latter,many corporations have established their own universities

Friends, Businesspeople, and Relationship Roles / 95

as a way to both develop particular skills and promote par-ticular values. These efforts range from McDonald’sattempt to get franchisees to “March to a single McDrum”(The Economist 1999), to Saturn’s investments in “Saturniz-ing” dealership employees (Meister 1998), to Motorola’straining of supplier and distributor “Black Belts” (Corpo-rate University Review 2000). Supplier qualification pro-grams, as we discussed previously, may also serve distinctsocialization purposes, in that a party is asked to take on afuture role in an “anticipatory” way (Biddle 1979; Dubin-sky et al. 1986).

Incentives. A cornerstone of agency theory (e.g., Jensenand Meckling 1976) is relationship management throughexplicit incentives. For example, manufacturers can managetheir reseller relationships through commissions (John andWeitz 1989), margins (Dutta, Bergen, and John 1994),bonuses (Gilliland 2003), or some combination thereof.Cisco recently launched a reseller program called “TakeStock in Cisco,” which provides “share points” in return forselling particular Cisco products (Schick 2001). In general,the rationale for the use of incentives is to structure a rela-tionship in such a way that particular actions are explicitlyrewarded or punished (Telser 1980).

Monitoring. The final governance strategy involvesexplicit measurement of partner performance relative tosome preexisting agreement or standard (Anderson andOliver 1987). In principle, a firm’s monitoring may includea partner’s output or behavior, and it can be implemented invarious ways. For example, industrial buyers may monitortheir component suppliers using incoming inspection,evaluation of statistical process control charts, or actualaudits of a supplier’s plant. Firms such as Sears have for-malized their monitoring process by developing “vendorreport cards” (Aron 1998). Franchisors such as McDonald’srely on “undercover” agents who evaluate franchisees onattributes such as food quality, speed, and store cleanliness(Tatge 2001). Recently, Arby’s and 7-Eleven have begun toexperiment with electronic surveillance systems (Shirouzuand Bigness 1997).

Our conceptual framework (see Figure 1) is based onthe premise of inherent matches between particular gover-nance mechanisms on the one hand and different relation-ship roles on the other hand. Specifically, we propose thatrelationship strategies, which emphasize “clanlike” selec-tion and socialization, are inherently linked with the role ofa friend and rule-based decision making under a logic ofappropriateness. In contrast, the “harder” governancemechanisms of incentives and monitoring are linked to abusinessperson role and its logic of consequences. Ourframework suggests that a firm’s governance decisions canaffect both (1) the creation of relationship roles ex ante and(2) the activation of roles over time.

Ex Ante Role Creation

In principle, all the governance mechanisms we discussedpreviously are capable of creating relationship roles. How-ever, the specific manner in which the relevant roles are cre-ated may differ dramatically.

5For simplicity, in the previous discussion (and in Figure 1), weassociated direct governance efforts with selection and socializa-tion and a friend role, but firms may also rely on such efforts tocreate a businessperson. For example, Ryan and Deci (2000)describe how one party may internalize another’s economic goals.Conceptually, however, the ongoing behavior that follows fromthis form of internalization is guided by utility-maximizing con-siderations under a logic of consequences. Moreover, although wediscussed the possibility of (indirect) self-selection in the contextof monitoring and incentives and a businessperson role, self-selection can also be associated with other governance mecha-

Consider selection and socialization as a starting point.Such efforts are inherently associated with a logic of appro-priateness, in the sense that a firm attempts either (1) toidentify a friend that already possesses the relevant rules or(2) to develop one through social processes. Supplier quali-fication programs, which we discussed previously, may cre-ate friend roles in both of these manners. Note that the rolecreation process under a qualification program is direct, inthat one firm (e.g., a buyer) targets its governance effortstoward a particular party (e.g., an individual supplier).Theoretically, role creation in this manner involves creatingan “embedded” market through social processes (Granovet-ter 1985). We illustrate the relevant processes in Figure 1through the top-left vertical arrow.

Governance mechanisms may also establish roles in anindirect way by allowing parties to signal their predisposi-tions and self-select into the relationship. Consider the pre-viously discussed businessperson role and governanceefforts in the form of incentives and monitoring. As we dis-cuss in further detail subsequently, such strategies may beinherently incompatible with a friend role. However, to theextent that a given firm has a known reputation ex ante forrelying on monitoring and incentives, it allows other parties,which already possess dominant businessperson roles andfor which such mechanisms are consistent with theirdecision-making mode (i.e., a logic of consequences), toself-select into the relationship.

As Stryker (1968) describes, people have a tendency toseek out opportunities to enact a “salient identity.” Gam-betta (1996) provides an interesting account of how pub-licly known incentive systems serve as distinct self-selection devices into academic institutions. Similarly,franchisors attract franchisees to run their independentstores whose mind-sets are consistent with incentive sys-tems based on “residual claims” (Brickley and Dark 1987).The Swedish furniture company IKEA has a well-knownsystem of supplier competition, in which both incumbentand integrated suppliers must compete like independentcontractors with new suppliers on an ongoing basis (Mar-gonelli 2002). This system creates a particular form ofincentive structure, which allows “appropriate” suppliers(i.e., those that possess compatible orientations) to self-select into the manufacturer relationship. The (indirect)creation of a businessperson role in this manner involves theestablishment of a conventional “market” rather than an“embedded” relationship (Baker 1990; Williamson 1975).The top-right vertical arrow in Figure 1 depicts theseprocesses.5

96 / Journal of Marketing, July 2006

FIGURE 1Conceptual Framework

aUnlike the other three governance mechanisms, by definition, selection is used only ex ante.

Ex Post Role Activation

In addition to creating roles ex ante, as we discussed previ-ously, governance mechanisms also play important ex postfunctions in relation to relationship roles. As was the casepreviously, our framework is based on the assumption that

nisms (e.g., socialization). For example, Camerer and Vepsalainen(1988) discuss how companies that make their cultures visible cre-ate opportunities for self-selection.

certain linkages exist between (1) the decision “logics” thatunderlie particular roles and (2) the inherent nature of par-ticular governance mechanisms.

These linkages may manifest themselves in two differ-ent ways: First, the role that currently dominates a party’sapproach to a certain relationship may be reinforced by theother party’s governance choices. The reinforcement sce-narios, which involve “matches” between roles and gover-nance mechanisms, appear in Cells 1, 5, and 6 in Figure 1.Alternatively, to the extent that a particular governance

Friends, Businesspeople, and Relationship Roles / 97

6Technically, such determinations are made on the basis of styl-ized “if–then” statements (Hayek 1945). For example, if a buyermonitors, then he or she will be recognized as a businessperson.

mechanism is incompatible with the current role’s decisionlogic, a mismatch scenario is created, as we show in Cells 2,3 and 4. If the current role is sticky, as we previously dis-cussed, the immediate outcome of a mismatch scenario maybe maintenance or perhaps dilution of the current role.However, there is also the possibility that a mismatch willproduce actual role switching.

As we discuss subsequently, the upshot of our frame-work is that the different ex post scenarios produce immedi-ate outcomes with respect to the roles themselves (e.g.,reinforcement or switching). In addition, the different sce-narios have long-term consequences of both a behavioraland an economic nature. We first discuss the possible expost scenarios for an existing friend role, and then wesketch out the parallel scenarios for a businessperson role.

Existing friend role. Assume that a firm’s initial gover-nance efforts toward a particular exchange partner involvedselection or socialization and that these efforts succeeded inestablishing a friend role for the partner. Given these initialefforts, the relationship will end up in Cell 1, Cell 2, or Cell3, depending on the subsequent governance choices. If thefirm continues to rely on socialization (Cell 1), the partner’scurrent role will be reinforced. For example, a supplier thathas achieved friend status may sustain and possibly increasethe original level of rule-based cooperation. Given the evi-dence that initial socialization effects tend to decay overtime (Harrison and Caroll 1991), this form of role reinforce-ment may be an important relationship initiative. As a spe-cific example, Tupperware organizes regular “homecomingjubilees” for its top sellers, which include the singing of ananthem called “I’ve got that Tupper Feeling” (Brooks2004).

However, if the firm in question deploys explicit incen-tives (Cell 2) or monitoring (Cell 3), there is a distinct pos-sibility of a mismatch between (1) the decision logic inher-ent in the established role (i.e., a friend’s logic ofappropriateness) and (2) the use of governance mechanismsthat are inherently tied to a logic of consequences. From apurely descriptive perspective, the available evidence sug-gests that such mismatches are not unlikely. For example,Gardiner (2003, p. 18) argues that firms “are not good atjudging motivations” and, consequently, are prone to“heavy and misplaced” reliance on incentive-basedstrategies.

What are the potential outcomes of a mismatch? It ispossible that the existing role will continue to be enacted bythe partner, though in a weakened or diluted state. Specifi-cally, a new governance regime may create an “identitygap,” as we previously discussed, and trigger doubts aboutthe viability of the existing relationship roles. For example,a supplier that historically has categorized a given buyer asa friend but subsequently becomes subjected to a stringentmonitoring system may reclassify the buyer as a business-person.6 It is conceivable that the supplier itself, as a resultof role stickiness, will continue to enact the friend role.However, going forward, the supplier’s behaviors are likely

to be in the form of perfunctory compliance with thebuyer’s strategy (Moschandreas 1997). For example, thesupplier may continue to deliver components according to afixed delivery schedule but refuse to accommodate specialrequests during unusual demand conditions (Wathne andHeide 2000). In this scenario, the buyer’s governanceefforts are actually dysfunctional and associated withopportunity costs because costly initiatives are deployedtoward a party that has already internalized a friend role.

Perhaps more seriously, it is also possible that thebuyer’s use of market-based governance mechanisms insuch situations produces actual role switching. The identitygap may lead to a recategorization for the supplier, resultingin a matching businessperson role with an entirely newbehavioral repertoire. As a specific example of role switch-ing, consider 7-Eleven’s decision to impose an electronicmonitoring system on its franchisees. As various sources(e.g., Coughlan et al. 2001; Lal and Han 2005) describe,7-Eleven franchisees are frequently attracted to the systemin the first place because of perceived compatibilitybetween the company’s operating philosophy and their ownmind-sets. However, the implementation of a “draconian”electronic surveillance system was viewed as such a funda-mental shift in management philosophy that it causedsevere reactions among the franchisees, some of whichwere subsequently described as “militant radicals” (Shi-rouzu and Bigness 1997).

In addition to the direct effects on roles themselves, themismatch scenarios may produce various long-term out-comes. For example, the new behavioral repertoire that fol-lows from a role switch may include retaliatory actions,which are “characteristically opportunistic” in nature (John1984, p. 280). Over time, this may have economic conse-quences in the form of high direct transaction costs in theongoing relationship.

Importantly, both the general possibility and conse-quences of role switching are well documented. Kreps(1997, p. 363) notes that a firm that historically has notmonitored closely in a given relationship and that has notrelied on strong extrinsic incentives may create “muddi-ness” and a shift in relationship orientation. Tenbrunsel andMessick (1999) show empirically that surveillance andsanctioning systems can change both (1) a party’s orienta-tion toward a partner and (2) the actual choice rule used.Specifically, they show that the use of such hard relation-ship features increased the likelihood that a business type offrame was evoked, which in turn induced a calculative deci-sion rule. Notably, Tenbrunsel and Messick also show thatafter a business frame was evoked, a weak surveillance andsanctioning system that was intended to increase coopera-tion actually decreased the likelihood of cooperativebehaviors.

The preceding discussion implies that a perceived roleswitch by an exchange partner may affect a party’s owndecision logic and that the shift may have nonintuitive (andnegative) consequences. In Nagin and colleagues’ (2002)terminology, these consequences follow from applying a“rational cheater” model and its underlying assumption(i.e., logic of consequences) to situations in which decisionmakers are currently working under a “conscience model”

98 / Journal of Marketing, July 2006

or under a logic of appropriateness. Notably, and somewhatdisturbingly, Anderson and Jap (2005) cite fieldwork andpsychological research that document that close interfirmrelationships are particularly vulnerable to showing a “darkside.”

Existing businessperson role. We now consider a situa-tion in which a party already makes decisions as part of abusinessperson role and in which the focal behavioral reper-toire is based on a logic of consequences. In Figure 1, thepossible scenarios appear in Cells 4, 5, and 6. The matchesare represented by Cells 5 and 6, in which incentives andmonitoring are deployed toward a party whose current roleis consistent with the use of such mechanisms. We expectthat the outcome of these scenarios is reinforcement of thecurrent role. Notably, there is evidence that suggests thatsuch matches have distinct performance implications. Forexample, Tenbrunsel and Messick (1999) show that when abusiness type of decision frame was evoked in a relation-ship, strong sanctions indeed increased cooperation.

The mismatch scenario for an existing businesspersonrole appears in Cell 4. A party whose current mental modelis based on a logic of consequences is subsequently sub-jected to socialization. Although this scenario involves amismatch, we do not necessarily predict a role switch.Instead, relying on socialization in such a situation maysimply cause a resource waste, to the extent that the relevantefforts fail to convert the businessperson to a friend. Themagnitude of the socialization efforts needed to induce sucha switch is likely to be substantial, as evidenced by Mit-subishi Motor Corporation’s efforts to reverse its adversar-ial supplier relationships (Smitka 2001). To regain its sup-pliers’ support, Mitsubishi Motor Corporation went so faras to establish a formal supplier association and a technicalsupport center staffed with 70 full-time engineers.

Notably, to the extent that a firm’s relationship effortsinvolve dedicated investments, as in the preceding example,a failure to bring about a role switch in a businesspersonmay produce a mismatch scenario with substantial eco-nomic implications. To illustrate, consider Jackson’s (1985)analysis of the risks associated with using “relationshipmarketing” initiatives toward customers that operate undera “transaction” orientation. For example, a supplier thatdevelops a dedicated product and delivery system for abuyer that is looking for only a temporary source of capac-ity may not only fail to reap the returns from the invest-ments but also subsequently face a significant lock-in con-dition (Klein, Crawford, and Alchian 1978). This suggeststhat explicit attention to roles can be an important prerequi-site for relationship investment decisions.

DiscussionTheoretical Implications and Relationships withPrior ResearchMuch of the extant research on interfirm relationships hasfocused, explicitly or implicitly, on the orientations that par-ties bring to bear on their interaction. In some of this litera-ture, a sharp distinction has been drawn between differenttypes of orientations. For example, one particular body of

research emphasizes calculative orientations, which corre-spond to March’s (1994) logic of consequences. Many ofthe theoretical frameworks used to study interfirm relation-ships (e.g., Axelrod 1984; Eisenhardt 1989; Williamson1985) belong to this category. At the same time, there aretheoretical accounts and empirical evidence, primarily fromsociology and contract law (e.g., Macaulay 1963; Uzzi1997) of heuristic orientations, which are consistent with alogic of appropriateness. Overall, however, the extant litera-ture tends to take an “either–or” type of approach, implic-itly assuming that relationships can be described in terms ofa single orientation.

Our central argument is that such categorical distinc-tions may be too simplistic. On the one hand, we subscribeto the general distinction between the logics of conse-quences and appropriateness, as they pertain to individualrelationship episodes. As such, our framework is consistentwith prior work that describes relationships in terms oflocations on particular continuums, such as the degree oftrust, commitment, and long-term orientation. Specifically,a high “score” on such a dimension in a given situationwould most likely reflect the strength of a prevailing friendrole. On the other hand, the upshot of our framework is thatdescriptions along single dimensions may not fully capturethe true nature of relationship interactions. We posit thatexchange relationships may simultaneously involve differ-ent types of orientations. Importantly, this goes beyondacknowledging that relationships are multidimensional, inthe sense of joint descriptions on intercorrelated attributes(e.g., different relational norms). Although we endorse thisview as it applies to individual transactions, our frameworkis based on the assumption that actual shifts among funda-mentally different relationship orientations are both possi-ble and likely.

Theoretically, our framework begins to provide an inter-active perspective on relationship formation and manage-ment. For example, a firm may rely simultaneously on(direct) selection processes and on (indirect) opportunitiesfor self-selection through various incentive and monitoringdevices. The notion of self-selection suggests that though aparticular governance process can be initiated by one party,its ultimate success depends on the other party’s tendencyto seek out a salient role. As such, our framework suggeststhat certain governance mechanisms, which have often beendescribed primarily from the perspective of a single firm(i.e., the principal), actually involve and, in a broader sense,are available to both relationship parties. Moreover, interac-tivity follows from the notion that firms judge a partner’srole on the basis of the particular governance choices made,and these judgments ultimately influence the focal firm’sown role and relationship decisions. Our framework con-ceptualizes relationship roles as the products of complexprocesses that involve multiple parties, governance reper-toires, and judgments.

In a recent article, Stout and Blair (2001) criticize cer-tain branches of extant social science research for treatingdecision making as a “black box” and for being limited toobserving particular antecedents and outcomes withoutaccounting for the underlying process. Similar critiqueshave been voiced by others, who have asked for greater

Friends, Businesspeople, and Relationship Roles / 99

attention to what lies behind choices (Hodgson 1997) andfor “mechanism-based explanations” (Hedström and Swed-berg 1998, p. 9). In a broad sense, our framework is anattempt to shed some light on this issue. We propose thatthe concept of a role may yield some insight into the blackbox and that it may help integrate discrepant theoreticalperspectives on relationships and interactions.

Finally, we believe that our role framework has thepotential to generate new insights into the unit-of-analysisissue in relationship research. Consider the literature ontransaction costs as an example. In this literature, the indi-vidual transaction has been suggested as the key unit ofanalysis (Williamson 1996). Rindfleisch and Heide (1997)note how this assumption has manifested itself in empiricalwork in the form of a focus on dyadic relationships.Recently, however, this particular focus has been describedas being too restrictive, insofar as it ignores the effects ofrelated relationship dyads. As a consequence, researchershave begun to adopt larger units of analysis, such as multi-ple dyads and networks (e.g., Wathne and Heide 2004).

For all practical purposes, adopting a network perspec-tive means broadening the unit of analysis and taking amacro perspective on relationship research. Although weacknowledge the importance of such a perspective, ourframework represents a call for disaggregation, that is, for amicro-level account of relationships and parties. Specifi-cally, our role framework suggests that relationships cannotbe properly understood without explicit recognition of both(1) the set of roles with which firms approach relationshipsin the first place and (2) the ability of relationship manage-ment strategies to reinforce or dilute those roles or to causeactual switching. In certain respects, our framework recog-nizes the “decision premise” as an important unit of analy-sis, consistent with Simon’s (1947) early recommendation.

Importantly, this does not diminish the need to studylarger marketing networks. However, accounting for rolessuggests that certain phenomena are more complex than fre-quently assumed. For example, it is possible that the use ofparticular strategies in one relationship influences not onlythe pattern of roles in that particular relationship but alsothe possibility of role switching in related ones. Heide(2003) recently showed that market relationships that coex-ist with an integrated operation within a so-called pluralsystem exhibit more hierarchical characteristics than singu-lar ones, as a result of spillover effects across connectedrelationships. In general, we believe that a role-theoreticmodel of relationship governance may be useful in docu-menting processes at both a micro and a macro level andboth within and across parties and relationships.

Managerial Implications

A considerable body of literature has emerged in marketingon the general topic of governance and relationship man-agement strategies. Both academic research and industryobservation suggest that firms’ governance decisions areimportant parts of their overall marketing strategies (Ghoshand John 1999). Moreover, firms’ governance choices havebeen shown to have distinct performance implications (e.g.,Buvik and John 2000).

However, the focus in prior research has often beenstrictly on the governance mechanisms themselves. Forexample, Baker and Faulkner (1991) develop a set of gen-eral recommendations for relationship management, whichinclude the explicit use of incentives (“link pay with perfor-mance”), monitoring (“increase accountability”), andrelated initiatives. Although we do not dispute the possibleusefulness of such efforts, we suggest a caveat about thegeneric use of any governance program. Our conceptualframework accounts for the notion that inherent linkagesexist between roles and governance mechanisms and thatfirms’ governance decisions must be made in a context-sensitive manner and with explicit attention to the ability ofgovernance mechanisms both to create roles initially and toactivate them over time. In general, understanding relation-ship roles is an important prerequisite for governancedeployment.

In managing relationships, firms must also carefullyconsider both roles and functions. Consistent with recentrole theory, we draw an explicit distinction between thetwo. For example, in a supply chain context, there is a cru-cial difference between functions such as inventory mainte-nance and forecasting and the specific manner in whichthey are carried out (i.e., as a friend or businessperson). AsKahn (2003) notes, the implementation of efficient-consumer-response and quick-response types of initiativesrequires fundamental changes in relationships between sup-ply chain partners with respect to both the allocation offunctions and overall relationship orientation.

To some extent, the focus of our conceptual frameworkis on mismatches between governance decisions and rolesand on their potential outcomes. For example, we suggestthat incentives and monitoring, which have been recom-mended as generic relationship management initiatives(e.g., Baker and Faulkner 1991), are intrinsically linkedwith only one type of role, namely, that of a businessperson.Crucially, deploying such strategies in other contexts (i.e.,toward friends) not only may be ineffective or causeresource waste but also may cause role switching and sub-sequent activation of behavioral repertoires that mayinclude opportunism.

Notably, although the concept of relationship roles hasreceived little systematic attention in extant research, it isfrequently suggested as a key explanation of relationshipproblems. For example, Solomon and colleagues (1985, p.105) note how a “failure to read from a common script” is atypical cause of difficulties in relationships between clientsand service providers. Similarly, Uzzi (1999, p. 502) con-cludes that it is inherently difficult to form ties between par-ties that “use alternate scripts.” Although more fine-grainedguidelines for managerial decision making require a bodyof empirical evidence, our general conclusion is that firms’governance decisions are inherently more complex than isfrequently assumed and that such decisions may hinge cru-cially on detailed assessments of relationship roles.

Issues for Further Research

Our conceptual framework in Figure 1 involves a series ofresearch issues and hypotheses that can be tested empiri-cally. In general, the underlying philosophy of the frame-

100 / Journal of Marketing, July 2006

work is that linkages exist among (1) ex ante roles or “ini-tial conditions” (Cowen 1998), (2) governance strategies,and (3) outcomes. Clarification of the specific nature ofthese linkages requires empirical testing, including effortsto measure directly and account for relationship roles. Weecho Kreps’s (1997, p. 364) sentiments that such empiricalefforts are “likely to be messy.” Nonetheless, increasing theunderstanding of roles and their interplay with establishedrelationship constructs seems to be an important researchpriority.

In addition to the general research agenda inherent inour conceptual framework, there are additional, more spe-cific research issues that should be systematically exam-ined. We discuss some of them next.

Relationship investments and resource allocation deci-sions. Important issues pertain to the linkage between rolesand profitability. Most likely, the two particular roles wediscuss herein differ substantially in terms of their cash-flow patterns. For example, creating a friend role mayrequire significant up-front investments, for example, in theform of selection and socialization efforts. At the sametime, after a friend is established, it may be cheaper tomaintain than a businessperson. However, note that certaintypes of exchange partners that may fit a friend profile canbecome demanding and costly to serve (Reinartz andKumar 2003).

It is also important to document how strongly roles areheld and how easily they can be switched or “unfrozen.” Forexample, if certain customers have undesirable cost impli-cations, as suggested in Reinartz and Kumar’s (2003)research, and if established roles are indeed sticky, it sug-gests that a firm’s role creation decisions must beapproached in a deliberate and forward-looking manner.

At the same time, although existing sticky roles mayhave nontrivial cost implications, they may also representsources of competitive advantage. For example, consider anindustrial supplier that enjoys sticky friend relationshipswith its buyers. From the standpoint of a competing sup-plier, this raises important questions about both (1) the spe-cific sources of role stickiness and (2) the particular “cor-rective procedures” (Bolton and Reed 2004) that mayundermine the incumbent supplier’s relationships.

Finally, a related profitability issue pertains to resourceallocation decisions across relationship types within anoverall portfolio (Johnson, Sohi, and Grewal 2004; Johnsonand Selnes 2004). At a given time, a firm may possess a mixof roles in its portfolio, and decisions must be made abouthow to allocate scarce resources among them. Dickson andcolleagues (2004) note how firms may need to make funda-mental allocation choices between (1) using scarceresources to reinforce prior behavior (e.g., in a currentfriend relationship) and (2) using them to solve problems inothers (e.g., trying to convert a businessperson). Thesetypes of issues require firms to consider both initiation andmaintenance costs carefully, at the relationship and the port-folio levels.

Relationship perceptions. As we noted previously,deploying governance mechanisms without a careful con-

sideration of existing relationship roles may haveunintended consequences, such as resource waste and roleswitching. Given the well-documented finding that firmshave divergent perceptions about their interaction (e.g.,Wathne, Biong, and Heide 2001), such scenarios are notunlikely. Indeed, on the basis of previous research, it mightbe expected that the potential for mismatches between gov-ernance deployment and prevailing roles is high and thatthis may be a possible explanation of relationship failure.Research could be directed usefully toward documenting(1) the manner in which role perceptions are establishedand (2) whether particular roles are uniquely held by anindividual party or are shared in some way. A related ques-tion is whether a party may misrepresent a given role. InThe Republic, Plato discusses how Socrates defines a friendas “one who both seems and is an honest man.”7 It is clearthat distinct opportunities exist, at least in the short run, for“seeming” and for the misrepresentation of roles. Thisraises important relationship management challenges in itsown right.

In general, role theory suggests that a distinction can bemade between perceptions that pertain to (1) a specificexchange partner, as per our framework, and (2) certainpositions or organizational forms (Biddle 1979; Forman andWhetten 2002), as per conventional role theory. For exam-ple, a manufacturer may have a perception of retailers ingeneral, which will influence its approach to a particularpartner. As a specific example, a manufacturer whose priorinteraction has primarily involved smaller retail clients mayperceive retailers in general as friends and thereforeapproach new retail relationships with this particular orien-tation. Our framework highlights the risks associated withsuch mental shortcuts, insofar as they produce costly mis-matched governance initiatives.

Issues such as those we present in the preceding discus-sion illustrate how roles can be conceptualized at multiplelevels of analysis. With increasing demand for cross-levelconstructs and theories (e.g., Klein and Kozlowski 2000;Rousseau 1985), role theory represents a promising avenuefor further research. Our discussion also reinforces theimportance of continuing to direct relationship researchtoward improving the understanding of human behavior.Notably, Williamson (1996, p. 266), who is frequently criti-cized for the particular behavioral assumptions that underlietransaction cost economics, explicitly suggests that “moremicroanalytic attention to the processes through which trad-ing relationships evolve is indeed a rewarding researchenterprise.” Similarly, Tenbrunsel and Messick (1999, p.706) emphasize the “need to explore assumptions” aboutdecision makers and their reactions to the mechanisms thatare deployed in exchange relationships. Although continuedtheoretical integration and empirical research may turn outto be messy, the resultant insights could be considerable.

7See Plato (2000), The Republic, trans. Tom Griffith. Cam-bridge, UK: Cambridge University Press.

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