Today's managers are organising and managing a portfolio of interorganizational relationships (IORs); hence, the governance of exchange relationships has gained strategic consequence. Prior interorganizational research by the authors has indicated that communication may be central to IOR governance. One test of communication's potential in this area would be to examine if communication could delineate differing IOR types. To study this, we decided to utilize a type of test–retest statistical application. We first classified manufacturer–retailer relationship structures by using Donaldson and O'Toole [J. Bus. Ind. Mark. 15 (2000) 491] original relationship strength framework (RSF) and discriminant analysis. Next, employing the same statistical technique, we classified the respondents after adding communication measures to the RSF. Results were limited. Only the inclusion of communication quality, one of the elements of communication behavior, in the RSF enhances its power to delineate relationship structures. However, we believe that it is in the ongoing management of relationships that the communication dynamic holds most promise.
It has been many years since Hunt (1983a) stated, “… the primary focus of marketing is the exchange relationship.” Then, this concept “flew in the face” of traditional economic thinking on exchange based on transaction cost economics (TCE) Coarse, 1937, Commons, 1950, Williamson, 1975 and Williamson, 1996 and agency theory Jensen & Meckling, 1976 and Ross, 1973. Today, the exchange relationship has become an integral component of marketing theory; current marketing theory integrates prior thinking and investigation of the sociality of interorganizational relationships (IORs) by Macaulay (1963) and Macneil (1980) with the traditional economic models.
The focus on the exchange relationship has produced a considerable body of work utilising a relationship marketing approach to the study of developing and maintaining close and profitable IORs. Yet, not all relationships become close (Macneil, 1980), nor is it even desirable or feasible for them to do so (Donaldson & O'Toole, 2002); companies, like individuals, find themselves in the position of managing differing IOR types. This indicates that relationship marketing is not applicable to the governance of many types of exchange relationships; hence, underlying our study's approach is the theory of relational exchange.
Many IOR researchers have identified and examined variables intrinsic to the success of developing and managing relational IORs. However, with only a few exceptions, communication has not been recognized as an intrinsic IOR variable. Macneil (1980) has argued that an exchange task, no matter how discrete, occurs within a social matrix; therefore, exchange involves human interaction, and focal to human interaction is communication. If communication is vital to human interaction, then, due to the very nature of exchange, communication should be recognized as a critical relationship variable. The development of trust, the signalling of commitment and flexibility, the copper fastening of cooperation, the synchronising of coordination cannot be done without communication. Yet, as already indicated, little theoretical thought or empirical studies on IOR communication exists.
Of specific interest to the authors is the governance of IORs, and similar to other academics and researchers who have linked communication and governance Krapfel et al., 1991, Mohr & Nevin, 1990 and Ring & Van de Ven, 1992, we perceive that communication is a key variable in IOR governance. The objective of this paper is to empirically explore the relationship between communication and IOR governance. We first discuss governance and communication. Next, we outline our methodology and results, followed by a discussion of the results and the study's limitations. We then present our conclusion and future research directions.
This study represents (1) a further examination of the RSF in a different context—the first usage of this framework involved respondents from the UK engineering, electronic, and telecommunication sectors, and (2) a first attempt to examine the contribution of communication facets and behavior to the discrimination of varying relationship structures. Few IOR researchers have investigated communication as a key IOR variable. This paper reported positively on the performance of the RSF to delineate alternative governance structures and on the contribution of a communication belief component to the discrimination of varying relationship types.
