Business relationships facing the end: why restore them?

Abstract

PurposeThis paper aims to discuss business relationships drawing to an end, and the reasons why company managers should attempt to restore the relationship instead of terminating it.Design/methodology/approachThe study applies a qualitative method and in‐depth interviews with companies in the North Sea oil industry.FindingsThe paper offers two contributions. First, it suggests an empirically grounded categorization of attenuating factors, i.e. the reasons to restore a relationship. Second, the categorization is extended to attenuating analysis, through which the value of the troubled relationship can be clarified. Thereafter, if the relationship is considered worth restoring, the managers may actively engage in restoring actions.Research limitations/implicationsBecause this study is limited to one business setting, future research applying the attenuating analysis to other industries by using action research is suggested.Practical implicationsThe study improves the awareness of inter‐organizational risk, enhances the manager's ability to assess the risk of losing a core relationship, and implements a method to reduce this risk. Troubled but valuable business relationships can be saved by applying the suggested attenuating analysis.Originality/valueTo one's knowledge, this is the first study that both systematically identifies the reasons for not leaving a business partner, and provides a practical framework for restoring a relationship based on the attenuating factors.

The relationship development aspect of production transfer

“…There are several reasons why an actor would want to restore a business relationship that has entered the termination state. Tähtinen and Vaaland (2006) identified a number of them in a literature review combined with interviews: lost relational investments, dissolution process costs, possible sanctions for future business, network limitations, and set-up costs. Moreover, Tähtinen et al (2007) suggest a process model that can be used for recovering relationships.…”

An Empirical Investigation of the Impact of Commitment and Trust on Internal Marketing

“…switching and opportunity costs, dissolution expenses) and non-financial (e.g. loss of reputation, unnecessary stress) in nature that have a significant impact on the level of commitment towards an on-going relationship (Liao, Wang, & Yeh, 2014;Sharma & Patterson, 2000;Tähtinen & Vaaland, 2006). Therefore, it is the expectation of total costs that influences commitment where higher costs involved are likely to generate a higher level of commitment.…”

Markets-as-Networks Theory: A Review

“…Biong, Wathne, and Parvatiyar (1997) offer two other reasons that can account for relationship dissolution: lack of relational orientation and mutual commitment by (or changed requirements of ) one or both of parties involved; and a nonpositive relationship value (i.e., relationship sacrifices more than offset, or simply equate benefits), for one if not both of parties. On the termination of business relationships, and its determinants and consequences, see Alajoutsijarvi, Moller, and Tahtinen (2000), Giller and Matear (2001), Gronhaug, Henjesand, & Koveland (1999), Halinen and Tahtinen (2002), Tahtinen and Halinen (2002), Tahtinen and Havila (2004), Tahtinen and Vaaland (2006), Tuusjarvi and Blois (2004), Vaaland (2004), and Vaaland, Haugland, and Purchase (2004.…”