Robert W. Palmatier

A Comparative Longitudinal Analysis of Theoretical Perspectives of Interorganizational Relationship Performance

Four theoretical perspectives currently dominate attempts to understand the drivers of successful interorganizational relationship performance: (1) commitment–trust, (2) dependence, (3) transaction cost economics, and (4) relational norms. Each perspective specifies a different set and distinct causal ordering of focal constructs as the most critical for understanding performance. Using four years of longitudinal data (N = 396), the authors compare the relative efficacy of these four perspectives for driving exchange performance and provide empirical insights into the causal ordering among key interorganizational constructs. The results demonstrate the parallel and equally important roles of commitment–trust and relationship-specific investments as immediate precursors to and key drivers of exchange performance. Building on the insights gleaned from tests of the four frameworks, the authors parsimoniously integrate these perspectives within a single model of interfirm relationship performance consistent with a resource-based view of an exchange. Managers may be able to increase performance by shifting resources from “relationship building” to specific investments targeted toward increasing the efficacy or effectiveness of the relationship itself to improve the relationships ability to create value. Moderation analysis indicates that managers may find it productive to allocate more relationship marketing efforts and investments to exchanges in markets with higher levels of uncertainty.

The Role of Customer Gratitude in Relationship Marketing

Most theories of relationship marketing emphasize the role of trust and commitment in affecting performance outcomes; however, a recent meta-analysis indicates that other mediating mechanisms are at work. Data from two studies—a laboratory experiment and a dyadic longitudinal field survey—demonstrate that gratitude also mediates the influence of a sellers relationship marketing investments on performance outcomes. Specifically, relationship marketing investments generate short-term feelings of gratitude that drive long-lasting performance benefits based on gratitude-related reciprocal behaviors. The authors identify a set of managerially relevant factors and test their power to alter customer perceptions of relationship marketing investments to increase customer gratitude, which can make relationship marketing programs more effective. Overall, the research empirically demonstrates that gratitude plays an important role in understanding how relationship marketing investments increase purchase intentions, sales growth, and share of wallet.

Customer Loyalty to Whom? Managing the Benefits and Risks of Salesperson-Owned Loyalty

In a study of 362 buyer–salesperson dyads using triadic data (from buyer, salesperson, and sales manager), the authors examine both a customers overall loyalty to the selling firm and the customers loyalty vested specifically in his or her salesperson. They find that only salesperson-owned loyalty, a newly identified construct, directly affects the more tangible seller financial outcomes of sales growth and selling effectiveness, whereas both salesperson-owned loyalty and loyalty to the selling firm increase the customers willingness to pay a price premium. A longitudinal study verifies that the positive effect of salesperson-owned loyalty on sales growth persists over time. However, because salesperson-owned loyalty simultaneously increases the sellers risk of losing business if the salesperson defects to a competitor, managers need to manage effectively the benefit–risk trade-off. Increasing relationship-enhancing activities and value received by the customer builds both salesperson-owned loyalty and loyalty to the selling firm. The loyalty-building impact of relationship-enhancing activities is moderated by selling-firm consistency and by the selling firms and salespersons loyalty-capturing strategies.

Poisoning Relationships: Perceived Unfairness in Channels of Distribution

Understanding how relationships are damaged is a critical component in building and preserving strong distribution channels. Using longitudinal data from a Fortune 500 firm and its channel members, this research shows that perceived unfairness truly acts as “relationship poison” by directly damaging relationships, aggravating the negative effects of both conflict and opportunism, and undermining the benefits of using contracts to manage channel relationships. Surprisingly, at low levels of perceived unfairness, conflict and opportunism have small or even insignificant effects on channel member outcomes, which implies that research investigating the negative impact of conflict and opportunism on exchange outcomes may need reevaluation because these effects are contingent and may vary depending on the levels of perceived unfairness. In addition, the findings support the premise that using contracts to manage channel relationships represents a double-edged sword that suppresses the negative effects of conflict and opportunism while aggravating the negative effect of unfairness.

Relationship Velocity: Toward a Theory of Relationship Dynamics

The dynamic components of relational constructs should play an important role in driving performance. To take an initial step toward a theory of relationship dynamics, the authors introduce the construct of commitment velocity—or the rate and direction of change in commitment—and articulate its important role in understanding relationships. In two studies, the authors demonstrate that commitment velocity has a strong impact on performance, beyond the impact of the level of commitment. In Study 1, modeling six years of longitudinal data in a latent growth curve analysis, the authors empirically demonstrate the significance of commitment velocity as a predictor of performance. In Study 2, the authors use matched multiple-source data to investigate the drivers of commitment velocity. Both customer trust and dynamic capabilities for creating value through exchange relationships (i.e., communication capabilities for exploring and investment capabilities for exploiting opportunities) affect commitment velocity. However, trust and communication capabilities become less impactful as a relationship ages, while investment capabilities grow more important. The authors offer three post hoc tenets that represent initial components of a theory of relationship dynamics that integrates two streams of relationship marketing research into a unified perspective.

The Role of Culture in International Relationship Marketing

International relationships are increasingly critical to business performance. Yet despite a recent surge in international research on relationship marketing (RM), it is unclear whether or how RM should be adapted across cultures. The authors adopt Hofstedes dimensions of culture to conduct a comprehensive, multivariate, metaregression analysis of 47,864 relationships across 170 studies, 36 countries, and six continents. To guide theory, they propose four tenets that parsimoniously capture the essence of cultures effects on RM. Study 1 affirms these tenets and emphasizes the importance of taking a fine-grained perspective to understand the role of culture in RM because of the high degree of heterogeneity across different cultural dimensions and RM linkages. For example, the magnitude of individualisms effect is 71% greater on RM than other cultural dimensions, whereas masculinity has almost no effect; however, accounting only for individualism ignores significant moderating effects of power distance and uncertainty avoidance dimensions. To guide managers, Study 2 adopts a country-level approach and reveals that RM is much more effective outside the United States such that relationships are 55% more effective, on average, for increasing business performance in Brazil, Russia, India, and China.

Goal-Setting Paradoxes? Trade-Offs Between Working Hard and Working Smart: The United States Versus China

This article proposes a model of the impact of goal difficulty and goal specificity on selling behaviors (selling effort, adaptive selling, and sales planning) and hence sales and behavior performance. The model suggests that goal-setting factors may have opposing effects on different sales behaviors. The empirical findings suggest that goal difficulty positively influences selling effort while negatively influencing adaptive selling behaviors. The results show that goal difficulty and goal specificity both have opposite effects on the two dimensions of working smart: adaptive selling and sales planning. The findings support the need for sales managers to account for the cultural context of the salesperson when determining optimal goal-setting strategies. With data collected from salespeople in the United States and China, the cross-cultural differences regarding the effects of goal-setting factors are also proposed and empirically supported.

Effects of Customer and Innovation Asset Configuration Strategies on Firm Performance

Both customer and innovation assets are important to firm performance. Prior research has mostly examined these assets at the firm level and has not distinguished between the effects of asset depth relative to competitors and asset breadth across different segments. Using configuration theory and the resource-based view of the firm, the authors propose that how these assets interact to influence performance depends on both depth and breadth because these features reflect whether the assets are likely to create and/or appropriate value when deployed. Empirical results from two studies—one using secondary data and another using primary data from a survey of senior managers—indicate that performance is highest when firms employ configurations using deep customer and broad innovation assets or deep innovation and broad customer assets. In contrast, firm performance variability decreases in the presence of deep–deep and broad–broad asset configurations. The effect of configuration strategies on firm performance also is typically greater in dynamic than in stable environments.

Dynamic Relationship Marketing

Firms routinely engage in relationship marketing (RM) efforts to improve their relationships with business partners, and extant research has documented the effectiveness of various RM strategies. According to the perspective proposed in this article, as customers migrate through different relationship states over time, not all RM strategies are equally effective, so it is possible to identify the most effective RM strategies given customers’ states. The authors apply a multivariate hidden Markov model to a six-year longitudinal data set of 552 business-to-business relationships maintained by a Fortune 500 firm. The analysis identifies four latent buyer–seller relationship states, according to each customers level of commitment, trust, dependence, and relational norms, and it parsimoniously captures customers’ migration across relationship states through three positive (exploration, endowment, recovery) and two negative (neglect, betrayal) migration mechanisms. The most effective RM strategies across migration paths can help firms promote customer migration to higher performance states and prevent deterioration to poorer ones. A counterfactual elasticity analysis compares the relative importance of different migration strategies at various relationship stages. This research thus moves beyond extant RM literature by focusing on the differential effectiveness of RM strategies across relationship states, and it provides managerial guidance regarding efficient, dynamic resource allocations.

Transformational Relationship Events

Exchange events are fundamental building blocks of business relationships and essential to relationship development. However, some events contribute to incremental relationship development, as predicted by life cycle theories, whereas others spark “turning points” with dramatic impacts on the relationship. Such transformational relationship events are encounters between exchange partners that significantly disconfirm relational expectations (positively or negatively); they result in dramatic, discontinuous change to the relationships trajectory and often reformulate the relationship itself. With a three-study, multimethod design, the authors (1) establish a foundation for differentiating dramatic and incremental exchange events on the basis of relational versus product expectations and disconfirmations, thus revealing that strong relationships benefit product disconfirmations but harm relational disconfirmations, and (2) conceptualize, define, and differentiate transformational relationship events from other types of disconfirming events and then link them to exchange performance.