Value appropriation in business exchange: literature review and future research opportunities

Purpose – Value appropriation is a central, yet neglected aspect in business exchange research. The purpose of the paper is to generate an overview of research on active value appropriation in business exchange and provide the foundation for further research into value appropriation, as well as some initial guidance for managers. Design/methodology/approach – Literatures investigating value appropriation were identified by the means of a systematic review of the overall management literature. Findings – The authors provide an overview and comparison of the literatures and find that they apply diverse understandings of the value appropriation process and emphasize different mechanisms and outcomes of value appropriation. Research limitations/implications – Based on the literature comparison and discussion, in combination with inspiration from alternative business exchange literature, the authors propose four areas with high potential for future research into value appropriation: network position effects, appropriation acts and behaviors, buyer-seller relationship effects, and appropriation over time. Practical implications – Boundary spanning managers acting in industrial markets must master the difficult balance between value creation and appropriation. This review has provided an overview of the many managerial options for value appropriation and created knowledge on the effects of the various appropriation mechanisms enabling managers to secure company rents while not jeopardizing value creation. Originality/value – To the authors’ knowledge, this paper represents the first attempt at reviewing the management literature on value appropriation in business exchange. The authors provide overview, details, comparisons, and frame a research agenda as a first step towards establishing value appropriation as a key phenomenon in business exchange research.Chris Ellegaard, Christopher J. Medlin, Jens Geersbr

A dyadic segmentation approach to business partnerships

In business science, the studied objects are often groups of partners rather than independent firms. Extending classical segmentation to these polyads raises conceptual problems, principally: defining what should be considered as common or specific at the partners' and at the segment levels. The general approaches consist either in merging partners characteristics and performances into a single macro-object, thus loosing their specific contributions to each partner's performance, or in modelling partners' performance as if their models were independent. As a step to understanding, how partnership influences firms' performance, the dyadic (i.e. two partners') case is studied. First, some theoretical issues concerning the degrees of individual and contributive interest in a dyadic population are discussed. Next, partnership's conceptualisation is based upon two models for each firm: a "self-model" that reflects how the firm's characteristics explain its own performance, and a "contributive-model" model that reflects how these characteristics influence the partner's performance. This allows definition of three relationship modes: merging, teaming and sharing. Subsequently, dyad segmentation strategies are discussed according to their capacity to reflect the modes of partnership and a dyadic clusterwise regression method, based on a genetic algorithm, is presented. Finally, the method is illustrated empirically using actual data of business partners in the software market.Jacques-Marie Aurifeille and Christopher John Medli

Dimensions of space in business network research

Available online 23 June 2016Abstract not availableJan-Åke Törnroos, Aino Halinen, Christopher J. Medli

Modelling distributor firm and manufacturer firm working relationships

Past research has characterized business relationships using perceptual and sentiment constructs. This research has relied on an underlying assumption that ‘structure’, in the form of channel role, is more likely to explain firm behaviour in relationships than ‘strategy’ or any other formulation. A re-examination of the literature throws doubt on this assumption. An empirical study is used to explore an alternate hypothesis, with differentiated local models of distributor and manufacturing firms’ working relationships being found using a clusterwise regression technique. The results suggest that inter-firm cooperation is more effective than a self-centred approach to achieving relationship performance. In addition the results suggest that relationship ‘strategy’ is more important than ‘structure’ in modelling working relationships. Finally, directions for further research and management implications are considered.http://pandora.nla.gov.au/pan/25410/20060410-0000/smib.vuw.ac.nz_8081/WWW/ANZMAC2005/index.htm

A collaborative interest model of relational coordination: Examining relational norms as actor bonds

An important aspect of business-to-business marketing involves the development over time of privileged bonds between firms. Research has identified the complexity of such bonds and emphasised the need for closer scrutiny of the different mechanisms at work in successful and mutually beneficial business relationships. Actor intention and actor bonds are structured as a complex amalgam of self and collective interest. Firms cooperate for self-interest and in that process generate relational norms whose structure can be represented as actor bonds. In this study, a longitudinal input-process-output model of relationships is proposed. Input by firms motivated to create relationships is driven by the need to access customers or resources. This desire to operate in a relationship leads firms to coordinate themselves through a process whereby relational norms are developed and finally, output is achieved at a relationship level. That output is conceptualised at a relationship level recognises the emergent results of interaction, an essential reason for joining any relationship. The model was empirically tested in the computer software industry with a survey of firms acting as principals and distributors in a number of existing distribution relationships. Our findings, based on regression analysis, suggest that self and collective interest result in an intriguing blend of relational norms. The proposition that self-interest is not linked to trust and commitment is supported, suggesting that relational coordination is primarily based on collective interest. However, the proposition that flexibility is linked to both self and collective interest is also supported. This suggests that the degree of flexibility found in relationships may reflect the continuing need of balancing self and collective interests. The final section of the paper proposes directions for future research on the intertwining of self and collective interest in relationships, along with their associations to actor bond structure that is configured as relational norms

Ending-competence in business closure

Business closure and ending-competence are highly relevant concepts in a globalizing world economy where structural change is common. However, ending-competence in business closure situations is a rarely studied phenomenon, and prior theoretical development is modest. In this paper a conceptual model of ending-competence in business closure is developed. A case study examination of a business closure, involving a car manufacturing plant owned by Mitsubishi Motors Australia Ltd., allows further development of the model. The model consists of four elements: (1) earlier experiences of ending; (2) an understanding of different types of commitment; (3) the interdependence between parties; and (4) coordinating and timing the ending. The model illustrates the different roles played by upper and operational management during a closure process. An understanding of ending-competence is important to managers of large firms and to educators of future managers. © 2011.Virpi Havila and Christopher J. Medli

Dimensions of inter-firm trust: benevolence and credibility

Past research on inter-firm trust has noted two dimensions, benevolence and credibility. The credibility dimension of trust has been operationalized variously as a combination of honesty, reliability and expectancy; while benevolence has rarely been examined as a unique dimension. We examine the two trust dimensions with empirical data of inter-firm relationships in the software industry and find that benevolence is strongly associated with relationship performance. No association is found between credibility and relationship performance, when discriminant validity is imposed. This result has important implications, as almost all of the inter-firm empirical research on trust has been based on the credibility dimension or a global measure combining the two dimensions. The research in this chapter suggests that benevolence, where managers perceive the other firm willing to look after their firm’s interests and so the collective interests of both firms moving forward, is the key to business relationship performance