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How functional, psychological, and socialrelationship benefits influence individual and
firm commitment to the relationship Jillian C. Sweeney and David A. Webb
UWA Business School, University of Western Australia, Crawley, Australia
AbstractPurpose – This paper aims to extend previous research investigating the effect of relationship benefits on firm outcomes by developing a model thatincludes the effect on individual employees in the buyer firm. The model also aims to address benefits beyond the functional in business-to business(B2B) settings by including psychological and social benefits.Design/methodology/approach – The study is based on a survey of 275 B2B buyers in Australian manufacturing firms.Findings – The findings reveal that functional benefits enhance firm-level commitment to the relationship, whereas psychological and social benefitsaffect individual commitment to the relationship directly and firm-level commitment indirectly, thereby emphasizing the importance of considering theindividual as distinct from the firm. Given that the relationship is a process over time, and in recognition of the non-static nature of relationship benefits,the paper also explores the changes in benefits over relationship stages, including their impact on commitment. In contrast to expectations results showthat while all three types of benefits increase, there is no change in the impact of all three benefit types on commitment across relationship stages.
Practical implications – The study recognizes that the individual in the firm also benefits from B2B relationships and offers a measure of both firmand individual relationship benefits for use in future studies. The measure may also be used as a point of discussion about relationship management.Originality/value – The study is framed within social exchange theory and, is the first to simultaneously examine three types of relationship benefitsand their interaction with both the individual and firm viewpoint. The study is also one of the first to empirically examine changes in relationships overthe relationship stages.
Keywords Buyer-seller relationship, Benefits, Social benefits
Paper type Research paper
An executive summary for managers and executive
readers can be found at the end of this article.
Conceptual background
The growing recognition of the importance of buyer-supplier
relationships has focused research attention predominantly on
the positive outcomes that can be accrued by both buyer and
supplier firms (e.g., Crosby et al., 1990; Kalwani and
Narayandas, 1995). Extant literature recognizes the firm as
a social network in which individuals are the basis of the firm.
However, the existence and importance of relationship
outcomes accrued by those individuals in the buyer firm
(e.g., satisfaction with or commitment to relationship, job or
supplier) have been largely ignored in empirical research,
despite Ojasalo (2001) emphasizing the conceptual
distinction between firm and individual levels of benefits.
This notable omission from the business-to-business (B2B)literature makes it worthy of research attention.
Furthermore, previous studies have focused largely on the
functional (e.g., economic and strategic) benefits of interfirm
relationships, such as reduced costs, contract predictability,
purchasing efficiency, and quality (e.g., Cannon and
Homburg, 2001; Ghosh et al ., 1 99 7; K alwani and
Narayandas, 1995; Lyons et al., 1 99 0) . A lthoughnoneconomic aspects of a relationship, such as its social
elements, are recognized as important for understanding
relationship behavior (e.g., Anderson et al., 1 99 3;
Cu nningham and Tur nb ull, 1982; Wilson and
Mummalaneni, 1986), researchers have only recently sought
to understand the impact of interpersonal relationships
through empirical research (e.g., Bolton e t a l., 2003;
Haytko, 2004; Nicholson et al., 2001) by highlighting the
positive effect of social bonding in business relationships.
However, few studies directly compare both social and
functional aspects of the relationship (e.g., Bolton et al., 2003;
Murry and Heide, 1998; Wathne et al., 2001). Given the
importance of relationship marketing and because
relationships pertain to individuals, we believe that furtherresearch is warranted to understand the social aspects of
interfirm relationships.
Moreover, consistent with Gwinner et al. (1998), our
research identifies a distinct category of benefits, namely
psychological benefits that, though similar to trust, is
conceptually more inclusive and addresses perceptions of
reliability, empathy, support, understanding between parties,
and psychological assurance in a business relationship
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/0885-8624.htm
Journal of Business & Industrial Marketing
22/7 (2007) 474–488
q Emerald Group Publishing Limited [ISSN 0885-8624]
[DOI 10.1108/08858620710828854]
The authors are grateful to the UWA Business School for a series of smallgrants to assist in data collection.
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context. In addition, this broader psychological concept is
consistent with customer-perceived value components, such
as solidarity, trust, reliability, and responsiveness, as identified
in a B2B context by Lapierre (2000), and also concurs with
the concept of psychological contracts originally introduced
by Rousseau (1990).
In summary, we seek to identify relationship benefits that
extend beyond the economic and non-economic descriptorsthat are too often adopted in the literature. In taking this
approach we demonstrate agreement with MacMillan et al.
(2005) that adopting a social exchange theory perspective
leads to the identification of a wider range of benefits beyond
the functional. Consistent with prior studies in both the B2B
and business-to-consumer (B2C) domains, we argue for the
need to recognize three distinct benefit categories: functional,
social, and psychological. We also extend research on benefits
by assessing their effect on commitment to the relationship. In
particular, we examine how they influence the relationship
commitment of an individual buyer involved in the
relationship and of the buyer firm. Such research enhances
our understanding of how commitment develops among
buyers, who are the customers in a B2B relationship.
Furthermore, as relationship marketing researchers have
become interested in the varying salience of attributes or
dimensions over time (e.g. Ring and Van de Ven, 1994), we
add a time dimension to our study by examining relationship
durational effects.
More specifically, the objectives of our study are as follows:. to examine the differential effects of functional, social, and
psychological relationship benefits on both firm- and
individual-level relationship commitment in a B2B
context;. to explore the effect of the duration of the relationship on
the level of relationship benefits; and. to investigate the relationship between benefits and
commitment across the duration of the relationship.
To address these objectives, we surveyed 275 employees
involved in a business relationship with a supplier firm. The
paper is laid out as follows: using the conceptual model that
we discuss following our overview of the relevant literature,
we formulate our hypotheses. We present the study’s results
and then turn our discussion to the main implications of our
findings for business firms. Finally, we conclude by identifying
some limitations and suggestions for further research.
Relationship benefits (B2B)
Many studies have identified the benefits of relationships in a
B2B context, most of which have been almost exclusively
based in economics, such as improved overall quality,
operating efficiencies, reduced transaction costs (e.g., Lyons
et al., 1990), stronger competitive position (e.g., Sheth and
Sharma, 1997), and business continuity (Han et al., 1993).
We view these benefits as broadly “functional” because they
reflect a particular firm’s distinctive functional competencies
(e.g., Sharma and Fisher, 1997). Thus, we define functional
benefits as the economic and strategic advantages derived
through an interaction with another firm that enhance firm
competitiveness and drive its financial position.
In contrast, the economic sociology literature takes a
somewhat unique stance toward benefits, positing that
economic transactions transpire within interpersonal
relationships, such that economic goals are inseparable from
non-economic goals such as status and sociability
(Granovetter, 1992). Granovetter (1992) contends that
people do not simply seek non-economic goals indirectly
through economic goals (e.g., status as the result of an
accumulation of economic resources) but rather, that non-
economic goals are central human motivations and therefore
inherent in economic transactions. Offering a similar view,
Frenzen and Davis (1990) and likewise Gummesson (2002)maintain that relationships cannot be viewed in isolation from
social relationships or from life itself. Corroborating this
stance, several researchers have argued that B2B relationships
may be motivated by both non- and economic motives
(Dwyer et al., 1987; Geyskens et al., 1999; Ghosh et al., 1997;
Ojasalo, 2001; Weitz and Jap, 1995; Wilson and Jantrania,
1995). In particular, the Industrial Marketing and Purchasing
(IMP) group has long recognized the existence and
importance of the social content of interaction in business
relationships, emphasizing that interaction is a social
performance through which participants get the opportunity
to develop social relationships which lead to trust,
commitment and relationship power (e.g., Cunningham and
Turnbull, 1982; Ford, 1997; Hakansson and Snehota, 2000;Turnbull et al., 1996; Wilson and Jantrania, 1995). Wilson
and Jantrania (1995), for example, emphasize that firms must
build both social and structural bonds to develop and protect
profitable customer relationships. Building such bonds with
key customers and segments, they argue, binds important
partners to the relationship, which creates not only a barrier
to competition but also a strategic advantage in the
marketplace. Understanding that which is valued in the
relationship is paramount for achieving this end.
Murry and Heide (1998), Price and Arnould (1999),
Nicholson et al. (2001), Wathne et al. (2001), and Haytko
(2004) all lend credence to the idea that interpersonal
relationships in B2B settings are crucial. Most recently,
through a series of in-depth interviews with account managers
in advertising agencies, Haytko (2004) finds that the
relationships that develop between managers and clients can
become highly personal over time as a deeper understanding
develops between them. Such relationships facilitate
operational and longer-term outcomes for both the
individual and the firm, though with a clear distinction
between business and truly personal relationships. Price and
Arnould (1999) report a similar finding in service provider-
client relationships.
Although several studies have addressed interpersonal
relationships in a B2B context, only two that we know of
have investigated the effect of both interpersonal relationships
and the economic aspects of relationships – such as price,
switching costs, and incentive premiums – on firm outcomes.
Both of these studies reveal that economic aspects are morecritical to outcomes (Murry and Heide, 1998; Wathne et al.,
2001), which seems to contradict the focus on interpersonal
relationships in the conceptual relationship marketing
literature and challenges the concept that a firm should
enhance its social relationships rather than its economic or
technical bonds, such as price incentives. However, Bolton
et al. (2003), in examining the effect of both social and
economic resources offered by a large telecommunications
company, to business customers, find that each affects buyer
satisfaction outcomes differentially. Namely, social resources
primarily influence satisfaction with an individual provider in
Functional, psychological, and social relationship benefits
Jillian C. Sweeney and David A. Webb
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the supplier firm, whereas economic resources largely affect
satisfaction with the supplier firm overall.
From the preceding, we can deduce that action is socially
embedded and thus cannot be explained by functional
motives alone. To the marketer, this conclusion may appear
unsurprising; the concept of exchange, which has been central
to the development of marketing knowledge for the past 30
years (e.g., Bagozzi, 1975, 1977; Ferrell and Zay-Ferrell,1977; Kotler, 1972), has long been differentiated along
economic and social lines.
With regard to the relationship marketing literature
specifically, several authors have discussed social exchange
(e.g., Anderson and Narus, 1990; Dwyer et al., 1987; Morgan
and Hunt, 1994). Dwyer et al. (1987, p. 12), for example,
posit that “relational exchange participants can be expected to
derive complex, personal, non-economic satisfactions and
engage in social exchange”. More recently, Arnett et al.
(2003) cite various studies (e.g., Anderson and Narus, 1990;
Dwyer et al., 1987; Lusch and Brown, 1996; Morgan and
Hunt, 1994; Smith and Barclay, 1997) in their argument that
social exchange theory is often used as a theoretical
foundation for commitment and trust in relationship
marketing. The authors further assert that “because
organizations often rely heavily on the promise of social
benefits from their products, it is important that they acquire
a better understanding of the factors that affect relationships
that involve primarily social exchange” (Arnett et al., 2003,
p. 91).
Bagozzi (1975, p. 36) was perhaps among the first to
distinguish the “social” from “psychological” factors, noting
that it is “the social and psychological significance of the
experience, feelings and meanings of the parties” that
underlies the exchange. More recently, researchers such as
Juttner and Wehrli (1995, p. 230) have identified psychosocial
factors as the “grease” in a relationship, in that the “focal
points for facilitating and maintaining relationships are the
psychological and social factors of the individual actors andtheir interacting.” Thus we propose that psychological
benefits, forms a third component of benefits in the B2B
context. Psychological aspects of the relationship have been
noted in the relationship literature (e.g. Geyskens et al.,
1999). A specific example is the concept of psychological
contracts which concern an individual’s belief that there is a
mutual obligation between the two parties (Kingshott, 2002,
2004). However, no study in the B2B literature has examined
psychological relationship benefits specifically.
The work of Gwinner et al. (1998) in a consumer service
context, offers support for these three levels of benefits,
including confidence, social, and special treatment benefits as
well as economic benefits. Confidence benefits, which
encompass trust, confidence, and reduced anxiety aspects,
emerge as the most important benefits for customers,
followed hierarchically by social and special treatment
benefits.
Providing a working base for our study, we define social
benefits as perceptions of affinity, friendship, and sharing with
another party. We define psychological benefits as feelings of
trust or confidence in the other party that result in greater
peace of mind.
We acknowledge that progress has been made in previous
research in terms of recognizing relationship benefits in B2B
contexts. However, several avenues, corresponding with our
objectives, still need to be pursued. First, we intend to explore
psychological as well as functional and social benefits.
Second, we are interested in understanding the role of such
benefits in developing commitment within the buyer firm.
Third, we examine such commitment at two levels, both the
individual and the firm. Specifically, we argue that
understanding the non-economic benefits inherent in
relationships, particularly those in the B2B context
represents a strategically important yet under researchedarea of study.
Relationship commitment
Commitment is central to the foundation of relationships and
successful relationship marketing (Berry and Parasuraman,
1991; Morgan and Hunt, 1994) and has often been explored
as a channel outcome (Geyskens et al., 1999). However, given
current interest in the individual in social exchange processes
(e.g., Ojasalo, 2001), we examine both individual- and firm-
level commitment to the relationship with the supplier.
Although benefits are an outcome of the relationship, we
argue that commitment is subsequent to benefits, because it
pertains to a behavioral intention to maintain the relationship
(e.g., Garbarino and Johnson, 1999; Morgan and Hunt,
1994). This ordering is supported by previous research that
has investigated the impact of relationship benefits on
commitment (e.g., Hennig-Thurau et al., 2002; Morgan and
Hunt, 1994).
Ojasalo (2001) argues that both the individual and the firm
benefit from B2B relationships. Recognizing that the
individual is the firm’s representative in a relationship
(Zeithaml et al. 2006), we agree that relationship benefits
will have a positive impact on both the individual and the
firm. We suggest that not only are relationship benefits likely
to vary in their impact on commitment, but also that the
impact will vary across individual (employee) and firmcommitment, as we discuss further when we develop our
hypotheses.
Variation in benefits over time
Given the developing nature of relationships, the various
stages that relationships pass through over time and the
different needs of buyer and suppliers at each stage (e.g.
Dwyer et al., 1987; Ford, 1980) it is likely that the nature and
role of relationship constructs will change over time. A review
of the literature shows that temporal aspects have become an
increasing focus of relationship marketing researchers (e.g.,
Bolton, 1998; Bolton et al., 2003; Doney and Cannon, 1997;
Jap and Ganesan, 2000; Lusch and Brown, 1996; Verhoef,2003). An understanding of relationship benefits at different
stages of the consumption process would assist in developing
a dynamic model of relationship benefits and outcomes.
Nonetheless, little empirical research has addressed either
the variation in the level of relationship constructs or the
change in the impact of relational constructs on outcomes
over time. Furthermore, the results of the few empirical
studies tackling these issues have been mixed. Given the
variety of benefits suggested by the literature, we aim to
examine the relationship among various relationship benefits
and commitment across time.
Functional, psychological, and social relationship benefits
Jillian C. Sweeney and David A. Webb
Journal of Business & Industrial Marketing
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Hypotheses development
Relationship benefits
We posit individual and firm-level commitment to the
relationship to be distinct. Specifically, though the
individual remains within and represents the firm, the
individual also is able to distinguish between reporting his
or her firm-level perceptions and those perceptions held at the
personal level. This claim is consistent with role theory, which
posits that an individual represents a collection of social roles;
that a role or socially defined position has a key impact on
behaviors; and that actors can choose, to some extent, the role
they play depending on the context (Arnett et al., 2003;
Montgomery, 1998; Solomon et al., 1985). Thus, an
individual might view him- or herself as an individual
working in a firm or as the collective entity of the firm itself,
because that individual is part of the firm. This approach is
consistent with that of Homburg e t a l. (2002), who
distinguish between a service orientation held at the
individual employee level (i.e. an individual characteristic)
and one held at the firm level (i.e. representative of the firm
view, culture, or strategy). It is also consistent with
Cunningham and Turnbull’s (1982) discussion of howinteraction within relationships serves clear personal and
organizational objectives.
Ojasalo (2001, p. 207) in support asserts that “a person
representing his or her company can be assumed to have the
best interests of the company in mind and, at the same time,
he or she also, as an individual, has his/her own personal
interests at heart”. Holmlund (1996) further argues that the
firm view can be represented by the person holding the power
about the continuation of the relationship, which is the
sample element for the present study. We concur and hence
argue that while the individual (employee) view is different to
the firm view, that both can be satisfactorily represented by
the key individual in the relationship in the buyer firm.
From our discussion of embeddedness, the concept that
relationships emanate from individuals, and the idea that
individuals together represent the firm (Ojasalo, 2001;
Zeithaml et al., 2006), we propose that:
H1. T he greater the individual com mitm ent to the
relationship, the greater the firm commitment to the
relationship will be.
Previous research has indicated that relationship benefits have
a direct impact on the buyer firm’s commitment to the
relationship (Morgan and Hunt, 1994), as well as on
customer commitment to the relationship in the consumer
context (Hennig-Thurau et al., 2002). We evaluate the effect
of relationship benefits on both individual employee and firm
commitment.
Specifically, we argue that though a relationship, in
principle, may be between two firms, psychological and
social benefits are generated through individual, one-to-one
relationships and that the overall relationship is developed
through personal associations, such as between the
salesperson and the representative of the buyer firm (e.g.,
Dwyer et al., 1987; Wilson and Jantrania, 1995). As Dwyer
et al. (1987) suggest, the individual is the primary recipient of
psychological and social benefits, not the firm. This dyadic
view of relationship exchange is consistent with social
exchange theory and serves as the basis f or m any
relationship marketing studies (e.g., Anderson and Narus,
1984; Selnes and Sallis, 2003; Sweeney and Webb, 2002).
Such benefits are therefore most likely to generate individual
commitment to the relationship, as evidenced by B2C studies
(e.g., Hennig-Thurau et al., 2002; Reynolds and Beatty,
1999). These benefits derived by the individual are also
realized at the firm level because of the embedded nature of
economic actions within interpersonal relationships
(Granovetter, 1992). Therefore, we argue that psychological
and social benefits indirectly lead to firm commitment to therelationship, as the effect of such benefits is filtered through
an individual or series of individuals involved in the
relationship. Bolton e t a l. (2003) similarly posit that
enhancing social capital drives interpersonal rather than
firm-level evaluations of a supplier firm. Hence:
H2. The greater the social benefits, the greater the
individual commitment to the relationship will be.
H3. The greater the psychological benefits, the greater the
individual commitment to the relationship will be.
We expect that functional benefits affect firm commitment
rather than individual commitment to the relationship,
because ultimately relationships are driven by profit goals
(Hastings, 2003). Previous research has found that economic
investments primarily affect organizational- rather thanpersonal-level evaluations (Bolton et al., 2003). Finally,
substantial previous research supports the importance of
functional benefits, including the monetary and strategic
benefits achieved by the firm (e.g., Ghosh et al., 1997; Han
et al., 1993; Lyons et al., 1990; Sheth and Sharma, 1997).
Thus:
H4 . The greater the functional benefits, the greater the firm
commitment to the relationship will be.
Levels of benefits over relationship stages and time
To date, conventional relationship marketing has focused on
long-term, committed, and affect-laden partnerships that
evolve over a period of time (e.g., Dwyer et al., 1987).
However, research must consider the length of therelationship and/or stages of the relationship because
exchange partners must build a base of successful exchange
before they will commit to deep relationships. The
exploration phase, for example, involves search and trial,
during which the partners explore the obligations, benefits,
and costs of the relationship (Dwyer et al., 1987; Holmes,
1991). Psychological and social processes underlie these early
proceedings and negotiations.
The next stage, expansion, reflects an increase in the
interdependence and realization of benefits (Dwyer et al.,
1987; Jap and Ganesan, 2000). Socialization processes infuse
transactions and interactions with relationship norms and
values, which enhances the likelihood that the relationship
will continue. In turn, the relationship becomes increasingly
socially embedded. Trust and satisfaction become well
established at this stage as the partners deliver on the terms
of their written contracts, as well as on their psychological
contracts (Ring and Van de Ven, 1994).
Finally, in the commitment phase of the relationship,
partners have pledged to continue the relationship, and both
firms experience fully developed benefits that preclude
consideration of replacement partnerships (Dwyer et al.,
1987; Jap and Ganesan, 2000). Because of repeated
interactions over time, the relationship becomes socially
embedded through a continual socialization process
(McGrath, 1984; Ring and Van de Ven, 1994). The length
Functional, psychological, and social relationship benefits
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of the relationship, whether measured in years or stages,
represents the time invested in the relationship by both
parties, during which problems may have been addressed and
an increased understanding of the other party achieved
(Doney and Cannon, 1997; Naryandas and Rangan, 2004).
Similar propositions have been put forward in the consumer
context (Gwinner et al., 1998; Reynolds and Beatty, 1999).
However, the results of studies examining the increase in
benefits over the relationship duration have been mixed;
Doney and Cannon (1997) find no support for trust
development over time, whereas Reynolds and Beatty
(1999) investigating social and functional benefits find
support for an increase in the former but not the latter over
time. We therefore seek to examine the change in the three
types of benefits addressed in this study. Based on the
preceding argument, we hypothesize that:
H5 . The later the stage of the relationship, the greater the
level of a) psychological benefits; b) social benefits; and
c) functional benefits.
Effects of benefits on commitment over time
While we expect that benefits and commitment increase over
the duration of the relationship, we also believe that the
effectiveness of the benefits on the development of
commitment varies over the length of the relationship.
Hence, although we indicated in H5 that psychological and
social benefits would be lowest in the early period of the
relationship, we also propose that they play a more critical role
in increasing commitment in earlier rather than later periods.
The repetitive exchanges inherent in an embedded
relationship involve social interactions that lead to the
development of norms and values that facilitate economic
exchange (Ring and Van de Ven, 1994). Thus, commitmentbecomes “institutionalized through repetitive executions of
acts by the successors of the parties who come to share that
these acts are simply ‘the way things are done’” (Ring and Van
de Ven, 1994, p. 106). Bolton et al. (2003) argue that
customers with longstanding relationships require fewer
supplier resources to maintain their relationship satisfaction.
In essence, time promotes continuity, such that relationship
commitment becomes established and less dependent on
perceptions of psychological and social benefits. Wilson and
Jantrania (1995) similarly posit that psychological and social
aspects of relationships, such as satisfaction, trust, and social
bonds, are salient early in the relationship but become latent
in later stages. As functional benefits are the key reason forentering a relationship (Hastings, 2003), we also expect that
the impact of economic benefits on commitment does not
increase or decrease over the duration of the relationship.
Thus we propose that:
H6. The effects of a) psychological benefits and b) social
benefits on the individual’s commitment to the
relationship decrease over the duration of the
relationship.
H7 . The effect of functional benefits on firm commitment
to the relationship remains constant over the duration
of the relationship.
Method
Data collection
The target population for this study was the individual
employee who had prime responsibility for a relationship with
a supplier firm, with at least six months experience in this
role. We drew a random sample of firms from a database of
Australian manufacturing industries, to include 152 four-digitstandard industrial classification codes. Many authors have
used similar methods to assess B2B relationships (e.g.,
Anderson and Narus, 1984; Heide and John, 1990), and even
given the exploratory nature of the study, the sample frame
represents a reasonably broad variety of buyer-seller
relationships. Because the database does not provide
information about persons within the firm, we conducted
our data collection in two stages, as recommended by
Anderson and Narus (1990). First, we sent a letter by mail to
the managing director, in which we asked him or her to
provide us with contact details for up to four people in the
firm who dealt with various suppliers, along with the name of
each supplier firm. We included a postage-paid reply envelope
with this pre-survey request, and the approach enabled us toidentify almost 1,000 buyer-supplier dyads. Second, we
selected a contact at random from each of the 548 firm-level
responses and asked those contacts to respond to the survey
with respect to their relationship with the named supplier.
Subsequently, we sent a personalized letter, questionnaire,
and postage-paid reply envelope to each of the contacts. In all,
we received 275 questionnaires, representing a response rate
of almost 50 percent among the named contacts.
We tested non-response using the extrapolation method of
Armstong and Overton (1977), which is based on the
assumption that late responders are comparable to non-
respondents. A series of randomly selected items across the
questionnaire reveal no significant differences beyond that
which might have occurred by chance (5 percent of cases). Wetherefore conclude that non-response bias is not an issue.
Measures
We developed a draft of the questionnaire and tested it on
several businesspeople who were buyers in a B2B relationship.
Using a verbal report-back protocol, we identified several
points of confusion in the question wording or response
format. We then used this information to revise the scales and
the questionnaire for the main data collection phase.
Following standard construct scale development procedures
(Churchill, 1979; DeVellis, 2003), we developed multiple-
item scales to tap the psychological, social, and functional
benefits on the basis of a series of 20 in-depth interviews with
buyers. This way, we achieved a set of 29 items to representthe three relationship benefit themes.
The measure of firm-level commitment to the relationship
included three items representing the attitudinal, temporal,
and instrumental components of commitment, taken from
Morgan and Hunt’s (1994) relationship commitment scale.
For comparability, we measured individual-level commitment
to the relationship using equivalent items, distinguished by
the use of phrases such as “Something I am . . ./the firm is very
committed to . . . ” We obtained the relationship stages and
corresponding descriptions from Dwyer et al. (1987); we
provide details of the measures in Tables I and II.
Functional, psychological, and social relationship benefits
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Results
Measurement model
The item set was reduced using an iterative process of
reliability analysis using item-to-total correlations (Churchill,
1979) together with exploratory factor analysis. Following this
stage, 14 items remained. Confirmatory factor analysis, using
structural equation modeling (LISREL 8.30 (Joreskog and
Sorbom, 1999)), strongly supports the three-factor structure
of relationship benefits (x 2 ¼ 401:96df ¼74, normed fit index
ðNFIÞ ¼ 0:95, confirmatory fit index ðCFIÞ ¼ 0:96, root
mean residual ðRMR Þ ¼ 0:06) (Table II). Although the
chi-square is significant, the other measures of goodness of fitare well above the recommended minimums (Bentler and
Bonett, 1980). The model is superior to a two-factor model,
in which we combined the psychological and social factors
(x 2 ¼ 677:81df ¼76, NFI ¼ 0:92, CFI ¼ 0:93, RMR ¼ 0:09),
and a one-factor model, in which we considered all benefits as
a single dimension (x 2 ¼ 884:61df ¼77, NFI ¼ 0:89,
CFI ¼ 0:90, RMR ¼ 0:09). The reliability of the three
dimensions and the commitment scales for the firm and the
individual are 0.86 or above in all cases (Table III).
We find support for distinction between all pairs of
constructs, including the three types of benefits and two
Table I Details of scales used to represent constructs
Scale
No. of
items Source of measure Sample items
Relationship benefits
Psychological 5 Developed for the study As per Table 2
Functional 5
Social 4
Individual/firm commitment to
the relationship
3 Morgan and Hunt (1994) Something that I am (the firm is) very committed to
Something I (the firm) intend(s) to maintain indefinitely
Something I (the firm) will expend every effort to maintain
Relationship stage 1 Measure based on Dwyer et al.’s
(1987) descriptions
Respondents asked to select from the following:
Exploration: potential exchange partners consider costs and benefits of the
relationship. Expectations of behavior and ground rules of future exchange
are developed
Expansion: benefits of the relationship become more apparent, and the firms
become increasingly interdependent. The relationship expands because of
the each party’s satisfaction with the other’s role performance and associated
benefits
Commitment: a pledge of continuity between exchange partners. A level of
satisfaction is reached, such that the buyer is not actively considering
replacing the exchange partner with an alternative that offers similar benefits
Dissolution: the relationship has been dissolved or terminated
Length of relationship Developed for the study How long have you personally (has your firm) been dealing with xyz? (up to
six months . . . more than ten years)
Table II Scale items used for the measures
Construct No. of items Measurement Items Loadinga
Psychological benefits 5 We have peace of mind in dealing with them 0.89
We trust them 0.90
We know what to expect of/from them 0.79
If they give us their word, we know that whatever it is, it will be done 0.87
There’s a real sense of understanding between us 0.79Functional benefits 5 Having a relationship with them enables us to compete in the market 0.82
We are able to capitalize on the value they offer 0.81
As a result of the relationship, we are able to maximize financial outcomes 0.85
We complement each other in terms of expertise 0.82
Our relationship sets up proactive opportunities 0.84
Social benefits 4 We have more than a formal business relationship with them 0.72
We have a real friendship with them 0.86
We work on things together 0.78
We share information 0.83
Note: a Loading based on confirmatory factor analysis results. Results for three-factor scale: x 2¼401:96, df ¼ 74, RMR ¼ 0:06, NFI ¼ 0:95, CFI ¼ 0:96
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types of commitment, using the discriminant validity tests
recommended by Anderson and Gerbing (1988) and Garver
and Mentzer (1999). First, the chi-square difference test
compares a model in which the correlation between a pair of
constructs is set to 1 with a model in which the correlation is
allowed to vary. This tests whether in fact the constructs are
the same (null hypothesis). The chi-square values in the upper
triangle in Table III demonstrate significant differences
between all pairs of constructs. Second, the correlation
confidence interval test uses the correlation plus or minus two
standard errors to identify whether the correlation between
the pairs is significantly different than 1 (again testing whether
the constructs are the same). The values of the correlations
and standard errors in the lower triangle in Table III also
support discriminant validity between all pairs of constructs.
Structural model
We derived the full structural model from our hypotheses and
present the model results in Table IV. In testing H6 and H7 ,we split the sample in two to represent shorter- and longer-
term relationships, which reduced the effective sample to just
over 200. At this stage, we turned to a partial disaggregation
approach to reduce the number of parameters to be tested,
based on the recommended ratio of observations to
parameters (Bagozzi and Heatherton, 1994; Kline, 1998), as
we discuss in the Appendix. Table IV and Figure 1 provide the
results of the hypothesized structural model, which represents
the interrelationships among the constructs.
The overall fit was good (x 2 ¼ 98:55df ¼28, NFI ¼ 0:98,
CFI ¼ 0:98, RMR ¼ 0:02). Specifically, our research model
differentiates between individual and firm commitment to the
relationship. The results that appear in Table IV support H1,
which proposes that firm commitment increases with
individual employee commitment to the relationship
(standardized loading b ¼ 0:41, t ¼ 6:59).
The proposed model results also show that the key driver of
individual commitment to the relationship is the social
interaction between the buyer and seller (b ¼ 0:68, t ¼ 7:68),
including a sense of sharing, working together, and friendship.
Psychological benefits derived from a sense of understanding,
peace of mind, trust, and confidence in the other partner also
play a significant, though lesser, role in developing individual
commitment to the relationship (b ¼ 0:19, t ¼ 2:37). Thus,
we find support for H2 and H3. H4 , which predicts that
increases in functional benefits lead to increases in firm
commitment, also is supported (b ¼ 0:50, t ¼ 7:85). The
perception of the economic and strategic advantages of
conducting business with the supplier, in terms of the value it
offers, the financial outcomes, and the ability to leverage the
relationship to derive strategic advantages, increases firm
commitment to the relationship.
Modification indices do not suggest allowing any further
paths be inserted to improve the model; for example,psychological and social benefits do not directly influence
firm commitment to the relationship in the model, nor do the
functional benefits realized by the firm enhance individual-
level commitment to the relationship. According to the total
effects of benefits on commitment, social benefits are clearly
the most influential overall on individual commitment,
whereas functional benefits are important in enhancing
firm-level commitment. However, social benefits also play a
clear role in developing firm-level commitment through the
fulfillment of individual commitment (Table V).
Alternative model
The need to investigate a plausible rival model to test the
robustness and validity of the proposed model has been well
Table III Measurement information, correlation matrix, and discriminant validity
Constructs Mean Standard deviation Reliability Average variance extracted 1 2 3 4 5
1 Psychological benefits 4.53 1.08 0.91 0.72 41.20 38.52 35.12 34.87
2 Social benefits 4.27 1.60 0.86 0.65 0.72 35.46 26.08 33.55
(0.03)
3 Functional benefits 4.62 1.44 0.90 0.67 0.73 0.83 33.02 19.35
(0.03) (0.03)4 Individual commitment 4.85 1.53 0.90 0.80 0.69 0.83 0.74 19.31
(0.04) (0.03) (0.03)
5 Firm commitment 5.20 1.56 0.94 0.87 0.68 0.72 0.82 0.81
(0.04) (0.03) (0.02) (0.02)
Notes: Correlations (and standards errors) are below the diagonal. The chi-square differences between constrained and unconstrained correlations betweenpairs of constructs (Anderson and Gerbing, 1988) are above the diagonal
Table IV Standardized path estimates for proposed models
Proposed model
Paths Loading t -value
H1: Individual commitment to the relationship ! firm commitment 0.41 6.59
H2 : Social benefits ! individual commitment 0.68 7.68
H3 : Psychological benefits ! individual commitment 0.19 2.37
H4 : Functional benefits ! firm commitment 0.50 7.85
Notes: Model fit: Chi square ¼ 98:55; df ¼ 28; RMR ¼ 0:02; NFI ¼ 0:98; CFI ¼ 0:98; goodness of fit index ðGFIÞ ¼ 0:94
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established (e.g., Kelloway, 1998). In our alternative model,
we consider functional benefits as central to the relationship
and hypothesize that both psychological and social benefits
enhance these central functional benefits. The rival model
provides a poorer fit in terms of the chi-square value
(203:54df ¼30) comp are d with the proposed model
(98:55df ¼28), and the RMR is higher (0.07 versus 0.02).
The other fit statistics are similarly less impressive for the rival
model. Overall, we conclude that on both measurement and
conceptual grounds, the proposed model is superior.
Difference in benefits over relationship stages
Our results support H5 ; that is, relationship benefits increase
over the stages of the relationship. The analysis revealssignificant variation in benefits according to the different
stages (Table VI). Whereas psychological benefits increase
over the stages of the relationship, social benefits are greatest
during the expansion stage, and functional benefits are great
during both the expansion and commitment stages of the
relationship.
Difference in effect of relationship benefits on
commitment over the relationship
To test the differences in the relationship between the three
types of benefits and relationship commitment across the
relationship duration (H6 and H7 ), we operationalized the
moderating role of time in three alternative ways: relationship
stages, the length of the relationship of the buyer firm with the
supplier firm in years, and the length of the relationship of the
individual respondent in the buyer firm with the supplier firm
in years. While we do not view the years of the relationship to
be the same as the stage, since some relationships develop
faster than others, identifying similar trends over time would
add validity to the findings. We used two groups in each case:
Figure 1 Proposed model results
Table V Total effects on endogenous constructs
Effect of !
Social
benefits Psychological benefits
Functional
benefits
on # n t value n t value n t value SMCa for structural equations
Individual commitment to the relationship 0.68 7.68 0.19 2.37 0.69
Firm commitment to the relationship 0.28 5.15 0.08 2.23 0.50 7.85 0.71
Note: a SMC ¼ squared multiple correlation
Table VI Means of level of perceived benefits received according tostage of relationship
Dimension
Exploration
(n 5 26)
Expansion
(n 5 59)
Commitment
(n 5 178)
Psychological benefits 4.17 5.44 5.66 *
Social benefits 2.92 4.63 4.42 *
Functional benefits 3.41 4.79 4.79 *
Notes: Results for multivariate test (all three benefits simultaneously):Test ¼ Wilks’ Lambda; Value ¼ 0:850; F value ¼ 7:282* significantdifferences were generally found between benefits at the exploration andexpansion stages, the exploration and commitment stages, and the
commitment and dissolution stages;*
p , 0:
01
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relationships in the exploration/expansion stages compared
with the commitment stage, relationships of up to five years in
duration com pared w ith m ore than ten years, and
relationships with the supplier experienced by the individual
respondent in the buyer firm of up to three years compared
with more than five years. We provide our rationale for the
sample split in the latter two cases in our discussion of the
partial disaggregation approach in the Appendix. To assessthe difference in parameters for the benefit-commitment
paths across the early and more established relationship
groups, we compared two models using multi-group
modeling. The first model constrained all parameters
(except error variances) to be equal across groups; in the
second, the benefit– commitment path was freed (Bollen,
1989). According to the results, the effect of social benefits on
individual commitment seems greater in the early exploration/
expansion stage of the relationship (0.71) than in the
commitment phase (0.68) (Table VII). We found similar
results for the lengths of the firm and individual relationships
with the supplier firm (Tables VIII and IX), although the chi-
square difference tests were non-significant in all three cases.
We obtained similar results for psychological commitment,which means H6a and H6b are not supported. However, as
we expected, the impact of functional benefits on firm
commitment did not significantly change across the
relationship, in support of H7 .
Finally, we further assessed the strength of our model by
evaluating the appropriateness of individual commitment to
the relationship as a mediator of the relationship between
psychological and social benefits and the firm-level
commitment. That is, we questioned whether individual
commitment accounts for the majority of the effect of the
psychological and social benefits on firm commitment. To this
end, we employed the test procedure recommended by Baron
and Kenny (1986). As the second and third columns of Table
X show, both psychological and social benefits influenced the
individual commitment mediator variable, as well as the
dependent variable, firm commitment. However, when we
take both benefits and individual commitment into account inmodeling the dependent variable, firm commitment, we find
that the effect of psychological and social benefits on firm
commitment reduces to insignificance, in support of the
mediating role of individual commitment. This supports the
validity of modeling commitment in the way we have (i.e. as
individual commitment increases, so does firm commitment).
Discussion
Theoretical implications
This research represents the first empirical examination of the
effect of relationship benefits on both firm and individual
commitment to the relationship. Furthermore, this study
empirically investigates the effect of three primary types of benefits – functional, psychological, and social – on
relationship outcomes in a business setting. In this way, our
research reinforces the claim that firms must consider
relationship benefits at distinct levels. Furthermore, the
importance of social and psychological benefits supports the
inclusion of social exchange mechanisms in marketing (e.g.,
Bagozzi, 1975). Although similar studies have been
conducted in a consumer setting (e.g., Gwinner et al., 1998;
Hennig-Thurau et al., 2002), to our knowledge, only the
Table VIII Tests of moderating effect of time on impact of relationship benefits to commitment – length of supplier relationship with firm
Parameters invariant Free SB to IC Free PB to IC Free FB to FCacross two groupsa #5yrs >10 yrs #5yrs >10 yrs #5yrs >10 yrs
PB to IC 0.33 0.44 0.28
SB to IC 0.59 0.63 0.56
FB to FC 0.39 0.33 0.41
IC to FC 0.37
x 2 147.76 147.28 146.08 146.71
df 73 72 72 72
Notes: PB ¼ psychological, SB ¼ social, FB ¼ functional benefits, IC ¼ individual, and FC ¼ firm commitment to the relationship. Nonstandardized valuesshown to ensure parameters same for fixed paths across models. a except for error variances of items, unique to each item and allowed to vary (Bollen, 1989)
Table VII Tests of moderating effect of time on impact of relationship benefits to commitment – relationship stages
Parameters invariant Free SB to IC Free PB to IC Free FB to FC
across two groups
a
Stages 1-2
b
Stage 3 Stages 1-2
a
Stage 3 Stages 1-2
a
Stage 3PB to IC 0.16 0.21 0.14
SB to IC 0.68 0.71 0.68
FB to FC 0.35 0.41 0.33
IC to FC 0.46
x 2 148.67 148.58 148.36 147.14
df 73 72 72 72
Notes: PB ¼ psychological, SB ¼ social, FB ¼ functional benefits, IC ¼ individual, and FC ¼ firm commitment to the relationship. Nonstandardized valuesshown to ensure parameters same for fixed paths across models; a except for error variances of items, unique to each item and allowed to vary (Bollen, 1989);b stages 1 and 2 refer to exploration and expansion and stage 3 to commitment stage, as suggested by Dwyer et al. (1987)
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effects of economic and social relationship aspects on
outcomes have been studied in the B2B context (e.g.,
Bolton et al., 2003; Murry and Heide, 1998; Wathne et al.,
2001).
The functional benefits we identified include economic
value and strategic advantages, such as competitive
positioning and operational factors, which are consistent
with a variety of previous research studies (Barringer, 1997;
Lyons et al., 1990; Sheth and Sharma, 1997). However, our
research broadens the meaning of social benefits identified in
previous research (e.g., Wathne et al., 2001) to include the
concepts of working together and sharing. This extended
meaning concurs with the findings of Haytko (2004) and
Ganesan (1994) who identify a partnership aspect of
relationships. Our research also identifies the distinct
category of psychological benefits that, though similar to
trust, is more inclusive and addresses perceptions of
reliability, empathy, support, understanding between parties,
and psychological assurance. The dimensions we use are
similar to those found in the consumer setting by Gwinner
et al. (1998) but are more specific to the B2B context. The
broader psychological component also is consistent with
certain customer-perceived value components identified in a
B2B context by Lapierre (2000).
Previous research by Murry and Heide (1998) and Wathne
e t al . (2001) demonstrates that B2B customers view
interpersonal relationships as of minimal importance
compared with incentive premiums, switching costs, and the
market variables of price and product assortment when they
consider customer outcomes such as participation in a
promotional campaign or switching. We similarly find that
economic/strategic benefits are most important in developing
firm commitment. Our findings, however, show that both
psychological and social benefits enhance individual
commitment. This result has some correspondence with
research by Bolton et al. (2003), who find that economic and
social resources provided by the supplier differentially affect
satisfaction with the supplier representative and the supplier
firm itself.
Our results highlight the importance of the role of the
individual employee in contributing to overall firm-level
commitment to the relationship, as well as the indirect role of
the “softer” psychological and social benefits for firm
outcomes. The significant though indirect effect of
psychological and social benefits on firm-level commitment
is consistent with the concept of embeddedness; namely,
economic action is embedded in social relationships
(Granovetter, 1992).
Turning our attention to the duration of the relationship,
we find that relationship benefits generally increase over the
stages of the relationship, as previously conceptualized by
Dwyer et al. (1987). Increasing levels of benefits might be
Table IX Tests of moderating effect of time on impact of relationship benefits to commitment – length of supplier relationship with respondent inbuyer firm
Parameters invariant Free SB to IC Free PB to IC Free FB to FC
across two groupsa #3yrs >5 yrs #3yrs >5 yrs #3yrs >5 yrs
PB to IC 0.29 0.46 0.24
SB to IC 0.64 0.73 0.61
FB to FC 0.34 0.38 0.33IC to FC 0.47
x 2 156.56 153.94 154.18 156.28
df 73 72 72 72
Notes: PB ¼ psychological, SB ¼ social, FB ¼ functional benefits, IC ¼ individual, and FC ¼ firm commitment to the relationship. Nonstandardized valuesshown to ensure parameters same for fixed paths across models. a except for error variances of items, unique to each item and allowed to vary (Bollen, 1989)
Table X Mediation tests for individual commitment to relationship
Equation 1 Equation 2 Equation 3
Mediator: Individual
commitment5
f ðindependentÞ
Dependent: Firm
commitment5
f ðindependentÞ
Dependent: Firm commitment 5
f (independent and mediator)Coefficients for the
independent
variables
Coefficients for the
independent
variables
Coefficients for the
independent
variables
Coefficients for the
mediator variable
Independent variable n t value n t value n t value n t value
Psychological benefits 0.18 2.14 0.29 3.47 0.12 1.57 0.16 1.34
Social benefits 0.70 7.32 0.49 5.46 0.16 1.34 0.71 7.30
Individual commitment !
Firm commitment n/a n/a 0.55 5.30
SMC individual commitment 0.70 0.70
SMC firm commitment n/a 0.53 0.62
Note: SMC ¼ squared multiple correlation for structural equations
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explained through social exchange theory, in that the
developing relationship becomes more socially embedded,
and due to repeated interactions, benefits become increasingly
realized. However, the increase is not uniform, suggesting a
need for further investigation of why this may be the case.
While the effect of functional benefits on firm commitment to
the relationship remains constant over the duration of the
relationship, as hypothesized, the impact of social andpsychological benefits does not decrease, as we had
expected. Thus these benefits not only appear to increase,
but also continue to boost individual commitment to the
relationship over the relationship duration. Thus it would
seem that buyers are mindful of psychosocial aspects of the
relationship throughout and that the institutionalization of
activities and opinions, discussed by Ring and Van de Ven
(1994) does not apply in this case. Further research should
investigate this phenomenon in more detail.
Managerial implications
By understanding the variety of benefits involved in a
relationship, both buyers and suppliers can address with
greater holism the factors that are important in B2B
relationships. This is not to suggest that firms have
previously ignored these factors, rather, we merely point out
that a more open and integrated stance needs to be adopted in
terms of recognizing the full spectrum of benefits. In fact, we
suggest that there is place for “social” and “psychological”
factors on the strategic agenda as well as for “functional”. As a
broad starting point, managers of supplier firms might
consider for each of their “key” relationships how they are
faring against the content of each of the items included in our
survey battery (Table II). We suggest that suppliers are best
positioned to determine what more they could do to add extra
value to these “key” relationship dimensions. We also suggest
that managers might benefit from opening a dialog around
these issues with relationship partners. The scale can also be
used by suppliers as a measure of buyers’ relationship benefitsbased on buyer feedback, or even expected buyer feedback.
More specifically, because employees exist within the firm
and are together viewed as the firm (Zeithaml et al., 2006),
suppliers should focus their attention on enhancing buyers’
realization of social benefits in particular, as well as
psychological benefits and, of course, functional benefits in
order to cultivate buyer commitment. Developing social
benefits clearly takes time, as evidenced in the present study,
which means that perseverance, educating the buyer,
encouraging cooperation, sharing information, and gestures
of friendship are necessary to achieve such benefits.
Psychological benefits also have an indirect impact on the
firm through the individual, and the supplier firm might use
several strategies and tactics to increase them, such as setting
clear targets and expectations of what the supplier can do for
the buyer, promptly rectifying problems, and being reliable.
Finally, regular communication of expectations and goals, a
focus on distinct competencies, and the modification of
process and production to promote greater interfirm
compatibility enhance functional benefits. Both buyers and
suppliers in B2B relationships must focus on such functional
considerations, because these factors ultimately underlie
relationship development (Hastings, 2003). However, clearly
the relative importance of such benefits may vary from
customer to customer, and it is important that suppliers
identify the unique needs of each buyer firm.
Limitations and future research suggestions
We note some limitations of our research. First, our study is
cross-sectional, and therefore the inference of causality or the
directionality of the relationships is tenuous and highly
dependent on the correct specification of the model. The
validity of the model would be strengthened if it were tested
using longitudinal data. Nonetheless, our model is no
different than many other cross-sectional models tested(e.g., Garbarino and Johnson, 1999; Wathne et al., 2001)
and furthermore tests the proposed model against an alternate
model, which partially allays such concerns. Second, our
model, though parsimonious, is selective in the constructs
used. Relationship components such as service factors,
product and price factors, supplier firm and salesperson
characteristics are all known to be important factors in
relationship formation (Barringer, 1997; Doney and Cannon,
1997; Ghosh et al., 1997; Lyons et al., 1990; Wathne et al.,
2001) and are likely to act as antecedents to the relationship
benefits considered in the present study. Thus future research
may integrate these aspects, offering insights as to what
contributes specifically to each benefit type. Similarly,
relationship structure, such as the number of peopleinvolved in the relationship in supplier and buyer firms,
interdependence or power asymmetry and the norms
established in the relationship may also be usefully
examined in terms of their impact on relationship benefits
(Barringer, 1997; Geyskens et al., 1996; Robicheaux and
Coleman, 1994). Considering the outcomes, the effect of
benefits on other outcomes beyond commitment, such as job
satisfaction and firm performance is also a useful research
direction. T hird, our results represent buyers in
m anuf acturing firm s; even though w e included no
restriction on the type of industry the suppliers represented,
the generalizability of the findings may be limited. We
restricted our study to control extraneous sources of variation,
a common practice in many studies (e.g., Doney and Cannon,
1997; Morgan and Hunt, 1994), but further studies should be
conducted across different sectors. For example, given the
focus on internal and interactive marketing in service contexts
(Zeithaml et al., 2006), a useful extension to this study might
address whether psychological and social relationship
benefits, received by the service employee from interactions
with their own firm or interactions with their customers play a
significant role in developing employee commitment to
customer relationships and the service quality delivered.
Finally, given relationships are of course two-way, and only
one side of the dyad is evaluated in the present study, future
research can examine relationship benefits experienced by
both parties and the cross-implications of this.
We find that relationship benefits generally increase over the
different stages of the relationship but that these increases arenot uniform. We suggest further investigative research to
explore this finding more fully. We also suggest further
research into moderating factors other than time. For
example, a fruitful approach might examine the moderating
role of interimistic relationships (i.e. deliberately short-term,
as for a specific project, often both competitive and
collaborative) compared with enduring relationships (Lambe
et al., 2000). Such relationships have become increasingly
common (Wilson and Jantrania, 1995), and psychological and
social benefits may not play as significant a role in their
development.
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Based on Granovetter’s (1992) suggestion that attachments
to others may modify economic action and therefore that
social aspects may enhance positive or reduce negative aspects
of economic exchanges, psychological and social benefits may
act as moderators of the effect of functional benefits on firm
outcomes. Bolton et al. (2003) investigated the augmenting
role of social bonds on the effect of economic resources on
relationship evaluation, but found no direct support for such arelationship. Given the meager support for this concept in
previous research, we suggest that it represents a fruitful
future research direction.
The consistency in the benefits that each party seeks, as it
pertains to the principle-agent relationship, might provide an
interesting avenue for further research. For example, our
study has revealed that social benefits have the greatest effect
on the individual, whereas functional benefits have the
greatest effect on the firm. If the motivation with respect to
the benefits sought is inconsistent, the potential for principal-
agent problems may be greater. Building on work by
Vermillon et al. (2003), we suggest that research should
focus principal-agent relationships not solely at a teleological
level but at the deontological level as well. This expansion
would extend the work on principal-agent relationships,which makes it a topic worthy of investigation.
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Appendix
The partial disaggregation approach involves combining
variables into subgroups, thereby reducing the number of
parametersto be estimated (Bagozzi and Heatherton, 1994). In
our case, the approach ensures that when we assess the
moderating power of the length and stage of the relationship,
our number of observations wasat least fivetimesthe numberof
parameters to be estimated (Kline, 1998). We compared
specific hypothesized paths across two groups that represented
more recently and longer established relationships, which we
developed so that they were maximally different by excluding amiddle value in the scales. For example, the length of the
supplier relationships with the firm was either five years or less
(n ¼ 79) or more than ten years (n ¼ 122), so we excluded
relationships of five to ten years’ duration. We also considered
the need to balance sub-sample sizes. Because the total sample
size across the two groups was 201 for length of the firm-
supplier relationship, 229 for the length of the individual-
supplier relationship, and 243 for the exploration/expansion
versus commitment stages, we needed to reduce the number of
parameters to be estimated, using the partial disaggregation
approach, to 38, which is consistent with Kline’s (1998)
recommendation. This structure represents the case in which
one structural parameter is freed at a time, the procedure that
we adopted (see Tables VII-IX).
Corresponding author
Jillian C. Sweeney can be contacted at: jsweeney@
biz.uwa.edu.au
Executive summary and implications formanagers and executives
This summary has been provided to allow managers and executives
a rapid appreciation of the content of the article. Those with a
particular interest in the topic covered may then read the article in
Functional, psychological, and social relationship benefits
Jillian C. Sweeney and David A. Webb
Journal of Business & Industrial Marketing
Volume 22 · Number 7 · 2007 · 474–488
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toto to take advantage of the more comprehensive description of the
research undertaken and its results to get the full benefit of the
material present.
How functional, psychological, and social relationship
benefits influence individual and firm commitment to
the relationshipPicture the scene. A group of employees spending rather more
time than an employer might think they should, hanging
round the coffee machine and chatting. “Stop hanging about,
and get on with your work” might be one employer’s reaction.
What the boss probably did not realize was that it was through
these informal conversations at relatively slack parts of the day
that some of the company’s most important work was being
done – employees sharing work experiences and together
figuring out how best to get the job done and satisfy the
customer.
Stopping the social interaction in the expectation that
employees could use their time doing some “real work” might
prove to be false economy. But it is not just social interaction
with colleagues which has benefits for companies. It is the
bonds and friendships which flourish within the marketplacebetween, for instance, supplier and buyer organizations.
Individual employees are far better and developing trust and
confidence in an organization that the organization as an
entity.
Anthropologists could fill a library with books on the
subject. So, too, could marketing academics. However, the
fact that many enlightened companies now accept that it is
people, not organizations, which get things done and that
people are the organization, does not mean to say they would
not benefit from a clearer understanding of how the
functional aspects of doing business fits in with social and
psychological factors.
J il lian C. S weeney and David A . Webb say: “By
understanding the variety of benefits involved in arelationship, both buyers and suppliers can address with
greater holism the factors that are important in B2B
relationships. This is not to suggest that firms have
previously ignored these factors, rather, we merely point out
that a more open and integrated stance needs to be adopted in
terms of recognizing the full spectrum of benefits. In fact, we
suggest that there is place for ‘social’ and ‘psychological’
factors on the strategic agenda as well as for ‘functional’.”
Functional benefits are the economic and strategic
advantages derived through an interaction with another firm
that enhance firm competitiveness and drive its financial
position. However, action is socially embedded and cannot be
explained by functional motives alone. The concept of
exchange, which has been central to the development of
marketing knowledge for the past 30 years, has long beendifferentiated along economic and social lines. The authors
propose that psychological benefits forms a third component
of benefits in the B2B context, defining social benefits as
perceptions of affinity, friendship, and sharing with another
party, and psychological benefits as feelings of trust or
confidence in the other party that result in greater peace of
mind.
In a study of employees of buyer firms, who had prime
responsibility for a relationship with a supplier firm, they
found support for their hypotheses that:.
T he greater the individual com mitm ent to therelationship, the greater the firm commitment to the
relationship will be.. The greater the social benefits, the greater the individual
commitment to the relationship will be.. The greater the psychological benefits, the greater the
individual commitment to the relationship will be.. The greater the functional benefits, the greater the firm
commitment to the relationship will be.
They were also supported in their view that, the later the stage
of the relationship, the greater the level of all three benefit
types.
The authors suggest that managers of supplier firms might
consider for each of their key relationships how they are faring
against the content of each of the items included in theirsurvey of buyers, which were:. Psychological benefits. We have peace of mind in dealing
with them. We trust them. We know what to expect of/
from them. If they give us their word, we know that
whatever it is, it will be done. There’s a real sense of
understanding between us.. Functional benefits. Having a relationship with them
enables us to compete in the market. We are able to
capitalize on the value they offer. As a result of the
relationship, we are able to maximize financial outcomes.
We complement each other in terms of expertise. Our
relationship sets up proactive opportunities.. Social benefits. We have more than a formal business
relationship with them. We have a real friendship withthem. We work on things together. We share information.
Sweeney and Webb suggest that suppliers are best positioned
to determine what more they could do to add extra value to
these “key” relationship dimensions and also suggest that
managers might benefit from opening a dialog around these
issues with relationship partners. The scale can also be used
by suppliers as a measure of buyers’ relationship benefits
based on buyer feedback, or even expected buyer feedback.
Suppliers should focus attention on enhancing buyers’
realization of social benefits in particular, as well as
psychological benefits and, of course, functional benefits in
order to cultivate buyer commitment.
(A precis of the article “How functional, psychological, and social relationship benefits influence individual and firm commitment to
the relationship”. Supplied by Marketing Consultants for
Emerald.)
Functional, psychological, and social relationship benefits
Jillian C. Sweeney and David A. Webb
Journal of Business & Industrial Marketing
Volume 22 · Number 7 · 2007 · 474–488
488
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