Paper info: The Effects of Previous Episodes in Business-to-Business Interaction
The Effects of Previous Episodes in Business-to-Business Interaction
Macquarie Graduate School of Management
University of Otago
Place of Publication
The paper was published at the 22nd IMP-conference in Milan, Italy in 2006.
The network approach to studying business-to-business interaction acknowledges that the acts of one relational party can produce effects not only in the dyadic partner but also amongst third parties within the network. Because acts are subject to meaningful interpretation by other parties, the effects are not always as the actor expects or desires. We use a single case study to explore this phenomenon. The focal company of our research decided to introduce a detailed contract called the Dealer Agreement. The Dealer Agreement was intended and expected to govern commercial exchange with their dealer network, to ensure positive effects on the dealer’s competitiveness and therefore success in the dealers’ served markets. Our informants in the focal company held the view that “if everything is written down, people perform better.”The evidence we collected from the dealer network shows that this single act - introducing a document to norm and control commercial exchange with dealers – resulted in a number of outcomes, positive and negative, expected and unexpected, and in one case jeopardized the continuity of a well-established and highly valued relationship.We find that these varied outcomes are a consequence of the contexts brought to bear on the dealers’ interpretations of the act of introducing the agreement. One dealer who responded positively had just begun in the role of dealer for our focal company, and used the newness of their relationship to contextualize the meaning of the agreement. For this party, the Dealer Agreement provided mutually understood grounds for business interaction, and was deemed as a demonstration of the focal company’s commitment to the relationship. Another group of dealers reacted negatively to the introduction of the agreement. They evaluated its introduction in the context of their well-established, long term relationships with the focal company. These informants regarded the Agreement as a betrayal of the trust they had created and maintained over many years of doing business together. These different, meaning-filled interpretations of the focal company’s act have clear consequences in the behaviours of the dyadic partner and the business network. Our research shows the importance of understanding contexts of interpretation.