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Understanding the interplay between business relationships and business strategy using configuration theory
[Thesis]. Manchester, UK: The University of Manchester; 2011.
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Abstract
This study applies a configuration theoretic approach to understand the interplay between business strategy and relationship strategy. It is hypothesised that business relationships make their greatest contributions to both relationship performance and firm performance when the structure of a relationship is accurately aligned with the business strategy (i.e. coniguration model 1) and the relationship strategy (i.e. coniguration model 2) of a focal irm. The hypotheses are tested using four seemingly complementary approaches to fit consisting of profile deviation, moderation, mediation, and covariation.This study adopts both qualitative interviews and a quantitative survey to address the research questions. First, a total of 30 interviews with CEOs and other senior marketing managers in the UK and the USA were conducted to develop a new typology for relationship strategies (termed resource acquisition strategies). The five resource acquisition strategies consist of Money Bonds, New Market Bonds, Utilisation Bonds, Intellectual Bonds, and Credibility Bonds. A further quantitative pretest, with 311 full time MBA and international executive MBA students at Manchester Business School, supported the validity and reliability of this typology. To examine the two coniguration models, a sample of 658 usable responses from the US service industries was collected through a web-based survey.In the first configuration model, the results of a profile deviation analysis confirmed the existence of an ideal relational configuration for each business strategy so that the degree of adherence to this ideal profile is significantly and positively related to performance variables. Several robustness tests gave further confidence to these findings. In addition, while the two neo-classical approaches to fit, profile deviation and covariation, were strongly supported, the results only loosely supported the operationalisation of fit from the two classical approaches, fit as moderation and mediation. In the second configuration model, the results of the profile deviation analyses indicated that strategic coalignment between the business relationship characteristics and the relationship strategy is a desirable property for performance enhancement. Several robustness tests supported this finding. Moreover, the results of examining the interplay between business strategy and relationship strategy, and linking it to performance, rejected the association between the two strategy types, implying that there are several alternative, equally effective, routes to success in building relationships.This study adds to the body of knowledge via providing sufficient evidence for the appropriateness of using configuration theory in the study of relationship marketing based phenomena, thus widening the scope of this theory. It also sheds new light on our understanding of relationship strategies which is further development of the resource-based view and Industrial Marketing and Purchasing approach. It contributes to the extant literature by investigating the degree and patterns of coalignment between relationship structure and both business strategy and relationship strategy. Moreover, juxtaposing alternative forms of fit added new insight into the fit methodology literature.From a managerial perspective, this study provides specific guidelines to help managers design their relationships in ways that are aligned with their strategic intent. It also suggests that marketing managers can usefully draw on configuration theory and profile deviation approach to optimise their benchmarking decisions.