Incorporating the emotional climate into inter-firm relationship health

Abstract

A recent study reported the potential loss of one million B2B salesmen in the United States between now and 2020 to self-service e-commerce. In light of these alarming claims this paper examines a new approach to the measurement of the health of inter-firm business relationships comprising problem solving/interactive skills, organisation and structure and the emotional climate which is something not often discussed in inter-firm relationships. Using US survey panel data of 500 inter-firm business relationships we build on previous research by exploring the relationship between a new measure of inter-firm relationship health (BRHI) and analyse its relationship with espirit de corp, relationship satisfaction, relationship trust, relationship commitment and inter-firm relationship performance. The results of the model confirm a strong direct positive relationship between healthy inter-firm relationships and explain 60 % of relationship performance. The BRHI contributes three times as much to relationship performance than does relationship satisfaction thus indicating its potential usefulness as a relationship monitor. What is also clear is that the emotional climate in a B2B interfirm relationship also has a significant part to play in the overall health of an inter-firm relationship and whilst not as important as the problem solving/interaction skills is deemed to be as nearly as important as the organisational aspects of the inter-firm relationship. Both buyers and suppliers can now easily measure at either a point in time or over time, the health of their B2B relationship using the BRHI. The BRHI can assist relationship managers to prioritise investments in the B2B landscape based on the nature of their relationship and the extent to which that relationship constitutes the most important part of their target market