Industrial network approach literature on buyer-seller relationship initiation
| Authors/ Phases considered to be initiation | Description of the phases |
|---|---|
| Ford (1980) | This study conceptualises initiation in “the pre-relationship” and “the early” stages. In the first stage, customers assess potential suppliers; the evaluation starts with a specific episode in an existing relationship or due to referrals. In the “early stage”, primary negotiation activities occur. Due to social, cultural, technological, geographical and time distances between the parties, it is difficult for purchasers to assess a supplier's reliability. Therefore, the buyers’ judgement is based on the sellers’ reputation as a substitute for experience |
| Pre-relational stage | |
| Early stage | |
| Dwyer et al. (1987) | In the awareness phase, the parties are involved in unilateral activities to enhance their positioning and posturing to improve their attractiveness to the other parties. The exploration phase includes search and trial activities in relational exchange. This stage is composed of five subprocesses: attraction, communication and bargaining, power and justice, norm development and expectation development |
| Awareness phase | |
| Exploration phase | |
| Batonda and Perry (2003) | The model proposed by the authors describes the initiation through the “searching process” and the “starting process” phases. In the first phase, the parties focus on search and trial for potential exchange partners that they evaluate based on economic and social aspects. The “relationship starting process” tests the goal compatibility between the partners, along with the identification of interfirm and interpersonal dynamics of networks. These phases progress in an unpredictable way. They add a dormant phase (5) in their model to account for relationships established between actors that have been in contact before |
| Searching process | |
| Starting process | |
| Edvardsson et al. (2008) | In their model, the authors conceptualise initiation with status (12) (unrecognised, recognised and considered) and forces (converter (4) and inhibitor (7)) to symbolise in contrast to the notions of phases or stages that the initiation process may stop at any time. In the “unconsidered status”, the parties have no knowledge of each other; in the “recognised status”, one of the counterparts (or both) gains awareness of the other actor, and social relations are built. In the “considered status”, the counterparts discuss the objectives of the future business relationship, exchange information and exhibit trust (15) toward each other. The transition from one status to another depends on converters and inhibitors. Converters (timing of specific activities, trust, offering and competence) can speed up or slow down the process, whereas inhibitors, such as bond, risk and image, can hinder the process to proceed or reverse |
| Unrecognised status | |
| Recognised status | |
| Considered status | |
| Claycomb et al. (2010) | By focussing on a buyer’s perspective, the authors present four stages of relationship development. The initiation of the business relationship entails the awareness and exploration phases. In the awareness stage, buyers seek information on suppliers, and no transaction occurs. In the exploration stage, the first purchase takes place, and buyers are involved in estimating and testing goal compatibility, integrity and performance of suppliers. At this stage, buyers are still considering other potential suppliers |
| Awareness | |
| Exploration | |
| Ford et al. (2011) | In the pre-relationship stage, parties face high inertia as they evaluate the potential benefits of entering into a business relationship and quantify the efforts needed in terms of investments, adaptations and learning. In addition, parties seek to build trust with their counterparts. In the “exploratory stage,” time investment and distance (6) reduction between the parties occur. The model emphasises that relationships do not follow the order of stages in a predetermined way |
| Pre-relationship stage | |
| Exploratory stage | |
| Wagner (2011) | The author suggests adopting buyer–seller relationship development through life-cycle phase logic to study supplier development activities. The author recognises that business relationships evolve through stages (initiation, maturity and decline). In the initiation phase, the buyer and seller develop relationship-specific routines to better engage in supplier development activities |
| Initiation | |
| Abosag and Lee (2013) | Based on the life-cycle models (11), the authors describe the initiation with a primary phase labelled the pre-relationship stage, in which partners hear or gain knowledge of the counterpart. Then, there is the early interaction stage, in which the parties trial and test each other to reduce future relationship uncertainties |
| Pre-relationship | |
| Early integration | |
| Valtakoski (2015) | The study explores how the intangibility of the offer and the buyer’s trust in the seller affect the initiation phase. The seller’s efforts should aim to improve his trustworthiness. Therefore, the supplier must manage compensating strategies to improve the buyer’s cognitive (2) and affective trust (1). The study also emphasises that for the seller to initiate a relationship with the buyer, the buyer's trust in the seller must exceed a certain level |
| Initiation | |
| Mandják et al. (2015) | The model proposed by the authors entails a “starting situation” characterised by the simple co-existence of the actors in space and time. Potential partners are not conscious of the existence of each other. In the awareness stage, trigger issues (16) draw one partner’s attention to the existence of the other. At the individual level, the trigger issues are personal reputation, prior relations and referral; meanwhile, at an organisational level, the trigger issues are network position, attractiveness, goodwill, visibility and initiative. Trigger issues are fundamental to push the actors to start communicating because the decision to contact a potential partner is made in a situation of uncertainty. The next stage of the model, the interaction process, entails trust building from both individual and organisational levels through social and information exchange episodes. In the last stage, the relationship is established, and trust has been built at both individual and organisational levels |
| “Business relationship emerging flow” | |
| Ferreira et al. (2017) | Extending the dyadic business relationship initiation analysis to the triadic realms, the authors identified the beginning of the dyadic business relationship in the matching phase in which the actors are engaged in “practice matching” which aims to align buyer and supplier processes, resources and competencies |
| Matching | |
| Aaboen and Aarikka-Stenroos (2017) | These studies adopt the relationship initiation process described by Aarikka-Stenroos et al. (2018). The authors develop a model of initiation where the sequence of process elements can vary, interact and co-exist. The model entails a pre-initiation phase composed by two main process elements, the “need/opportunity”, which describes recognition activities of the actors in search of business opportunity, and the “match/attraction”, which entails the research of compatible partners. Then, the actual initiation phase contains four process elements: “accessing”, “defining exchange”, “building conditions” and “forming the future”. “Accessing” consists of all gate-opening events that push the parties to start a dialogue and mutual negotiations. In the “define exchange”, the parties define the requirements for the relationship to develop. “Building conditions” concerns the creation of the conditions to foster collaboration and trust among the parties; mutual understanding activities from both buyer–seller actors take part in this stage. Finally, in the “forming the future” stage, the knowledge of common goals and long-term potential benefits allows the parties to make strategic decisions for the relationship. The authors introduce the concept of “initiation contributors” (8), who drive the initiation process forward by triggering and advancing the focal dyadic initiation process |
| Aarikka-Stenroos et al. (2018) | |
| Fraboni (2023) | |
| - Pre-initiation | |
| - Actual initiation | |
| Sabatini et al. (2021) | This study provides a description of the network initiation process. In the “pre-engagement”, the firm acquires an understanding of the business network and how to engage in social contact with it. In the “initial engagement”, the firm interacts with the network's social context, but no business interaction occurs. In the “engagement” period, business interactions begin, and the firm focuses on adapting products and creating bonds and trust with the actors of the network |
| Pre-engagement | |
| Initial engagement | |
| Engagement | |
| Klimas et al. (2023) | The authors developed a multipath development framework for interorganisational relationships. In the initial phase, the authors asserted that parties experience first contact and perform mutual compatibility tests and a formal establishment of the relationship is carried out |
| Initiation and initial development | |
| Wadell and Bengston (2023) | In a turbulent business network, the authors suggest that a new business relationship could start from a resource combination previously controlled by one actor. Wadell and Bengston (2023) have found that business relationships could even start from a resource combination previously controlled by one actor. This stands in contrast to previous BSRI frameworks, which described resource combination as a step subsequent to BSRI as a consequence of increasing interdependencies (9) between the business actors' resources |
| Starting situation in turbulent business networks | |
| Zafari et al. (2023) | The authors have found that in turbulent environments, business relationships may not develop following the chronological stages described by existing literature. A turbulent (17) business environment increases potential business partners' perception of vulnerability (18), the urgency to act and uncertainty about future dependencies. These perceptions lead to the formation of interemistic relationships (10) characterised by a constant search for new partners and the maintenance of a diverse portfolio of relationships. The business relationship initiation phase in a turbulent business landscape is characterised by rapid development based on swift trust (14) due to the perception of urgency. This swift trust speeds up decision processes, favouring early resource exchange between the parties. Since primary interactions, both partners show high levels of commitment (3) demonstrated through regular communications and informal adaptations in order to leverage opportunities, mitigate threats and exert control activities. The intense interactions between the actors lead to the formation of trust based on fulfilled promises, which contribute to strengthening social bonds (13) between the parties |
| Business relationships in turbulent environments |
| Authors/ | Description of the phases |
|---|---|
| This study conceptualises initiation in “the pre-relationship” and “the early” stages. In the first stage, customers assess potential suppliers; the evaluation starts with a specific episode in an existing relationship or due to referrals. In the “early stage”, primary negotiation activities occur. Due to social, cultural, technological, geographical and time distances between the parties, it is difficult for purchasers to assess a supplier's reliability. Therefore, the buyers’ judgement is based on the sellers’ reputation as a substitute for experience | |
| Pre-relational stage | |
| Early stage | |
| In the awareness phase, the parties are involved in unilateral activities to enhance their positioning and posturing to improve their attractiveness to the other parties. The exploration phase includes search and trial activities in relational exchange. This stage is composed of five subprocesses: attraction, communication and bargaining, power and justice, norm development and expectation development | |
| Awareness phase | |
| Exploration phase | |
| The model proposed by the authors describes the initiation through the “searching process” and the “starting process” phases. In the first phase, the parties focus on search and trial for potential exchange partners that they evaluate based on economic and social aspects. The “relationship starting process” tests the goal compatibility between the partners, along with the identification of interfirm and interpersonal dynamics of networks. These phases progress in an unpredictable way. They add a dormant phase (5) in their model to account for relationships established between actors that have been in contact before | |
| Searching process | |
| Starting process | |
| In their model, the authors conceptualise initiation with status (12) (unrecognised, recognised and considered) and forces (converter (4) and inhibitor (7)) to symbolise in contrast to the notions of phases or stages that the initiation process may stop at any time. In the “unconsidered status”, the parties have no knowledge of each other; in the “recognised status”, one of the counterparts (or both) gains awareness of the other actor, and social relations are built. In the “considered status”, the counterparts discuss the objectives of the future business relationship, exchange information and exhibit trust (15) toward each other. The transition from one status to another depends on converters and inhibitors. Converters (timing of specific activities, trust, offering and competence) can speed up or slow down the process, whereas inhibitors, such as bond, risk and image, can hinder the process to proceed or reverse | |
| Unrecognised status | |
| Recognised status | |
| Considered status | |
| By focussing on a buyer’s perspective, the authors present four stages of relationship development. The initiation of the business relationship entails the awareness and exploration phases. In the awareness stage, buyers seek information on suppliers, and no transaction occurs. In the exploration stage, the first purchase takes place, and buyers are involved in estimating and testing goal compatibility, integrity and performance of suppliers. At this stage, buyers are still considering other potential suppliers | |
| Awareness | |
| Exploration | |
| In the pre-relationship stage, parties face high inertia as they evaluate the potential benefits of entering into a business relationship and quantify the efforts needed in terms of investments, adaptations and learning. In addition, parties seek to build trust with their counterparts. In the “exploratory stage,” time investment and distance (6) reduction between the parties occur. The model emphasises that relationships do not follow the order of stages in a predetermined way | |
| Pre-relationship stage | |
| Exploratory stage | |
| The author suggests adopting buyer–seller relationship development through life-cycle phase logic to study supplier development activities. The author recognises that business relationships evolve through stages (initiation, maturity and decline). In the initiation phase, the buyer and seller develop relationship-specific routines to better engage in supplier development activities | |
| Initiation | |
| Based on the life-cycle models (11), the authors describe the initiation with a primary phase labelled the pre-relationship stage, in which partners hear or gain knowledge of the counterpart. Then, there is the early interaction stage, in which the parties trial and test each other to reduce future relationship uncertainties | |
| Pre-relationship | |
| Early integration | |
| The study explores how the intangibility of the offer and the buyer’s trust in the seller affect the initiation phase. The seller’s efforts should aim to improve his trustworthiness. Therefore, the supplier must manage compensating strategies to improve the buyer’s cognitive (2) and affective trust (1). The study also emphasises that for the seller to initiate a relationship with the buyer, the buyer's trust in the seller must exceed a certain level | |
| Initiation | |
| The model proposed by the authors entails a “starting situation” characterised by the simple co-existence of the actors in space and time. Potential partners are not conscious of the existence of each other. In the awareness stage, trigger issues (16) draw one partner’s attention to the existence of the other. At the individual level, the trigger issues are personal reputation, prior relations and referral; meanwhile, at an organisational level, the trigger issues are network position, attractiveness, goodwill, visibility and initiative. Trigger issues are fundamental to push the actors to start communicating because the decision to contact a potential partner is made in a situation of uncertainty. The next stage of the model, the interaction process, entails trust building from both individual and organisational levels through social and information exchange episodes. In the last stage, the relationship is established, and trust has been built at both individual and organisational levels | |
| “Business relationship emerging flow” | |
| Extending the dyadic business relationship initiation analysis to the triadic realms, the authors identified the beginning of the dyadic business relationship in the matching phase in which the actors are engaged in “practice matching” which aims to align buyer and supplier processes, resources and competencies | |
| Matching | |
| These studies adopt the relationship initiation process described by | |
| - Pre-initiation | |
| - Actual initiation | |
| This study provides a description of the network initiation process. In the “pre-engagement”, the firm acquires an understanding of the business network and how to engage in social contact with it. In the “initial engagement”, the firm interacts with the network's social context, but no business interaction occurs. In the “engagement” period, business interactions begin, and the firm focuses on adapting products and creating bonds and trust with the actors of the network | |
| Pre-engagement | |
| Initial engagement | |
| Engagement | |
| The authors developed a multipath development framework for interorganisational relationships. In the initial phase, the authors asserted that parties experience first contact and perform mutual compatibility tests and a formal establishment of the relationship is carried out | |
| Initiation and initial development | |
| In a turbulent business network, the authors suggest that a new business relationship could start from a resource combination previously controlled by one actor. | |
| Starting situation in turbulent business networks | |
| The authors have found that in turbulent environments, business relationships may not develop following the chronological stages described by existing literature. A turbulent (17) business environment increases potential business partners' perception of vulnerability (18), the urgency to act and uncertainty about future dependencies. These perceptions lead to the formation of interemistic relationships (10) characterised by a constant search for new partners and the maintenance of a diverse portfolio of relationships. The business relationship initiation phase in a turbulent business landscape is characterised by rapid development based on swift trust (14) due to the perception of urgency. This swift trust speeds up decision processes, favouring early resource exchange between the parties. Since primary interactions, both partners show high levels of commitment (3) demonstrated through regular communications and informal adaptations in order to leverage opportunities, mitigate threats and exert control activities. The intense interactions between the actors lead to the formation of trust based on fulfilled promises, which contribute to strengthening social bonds (13) between the parties | |
| Business relationships in turbulent environments |
| Glossary, concepts and related definitions based on the business relationship domain |
| (1) Affective trust: It is the perceived willingness of one actor to engage in actions that show special affective consideration toward the counterpart (Valtakoski et al., 2015) |
| (2) Cognitive trust: It is based on the rational evaluation of information about the counterpart’s product/service performance and behaviour (Valtakoski et al., 2015) |
| (3) Commitment: It refers to the extent level of effort and input that one actor intends to put into maintaining a close and enduring business relationship (Dwyer et al., 1987; Lasrado et al., 2023) |
| (4) Converter forces: Forces that speed up or slow down the business relationship initiation process (Edvardsson et al., 2008) |
| (5) Dormant phase: Inactive stage of the business relationship initiation process (Batonda and Perry, 2003) |
| (6) Distance between potential partners: Distance indicates the level of closeness between the counterparts in the business relationship. Distance encompasses various forms: social, cultural, technological, time and geographical distance (Ford, 1980) |
| (7) Inhibitor forces: Forces that hinder the business relationship process to proceed and reverse (Edvardsson et al., 2008) |
| (8) Initiation contributors: Entities that contribute to business relationship initiation (Aarikka-Stenroos et al., 2018) |
| (9) Interdependence: It refers to the mutual understanding by business partners that participation in their business relationship provides greater value than non-participation in it or participation in an alternative business relationship (Zafari et al., 2023) |
| (10) Interemistic relationship: A business relationship characterised by a short lifespan and by the emergence of high interdependence and coordination efforts between the actors from the beginning due to the need to complete tasks under time pressure. The perceived lack of time forces interestimic relationships to use proxies for trusts, such as the counterpart’s reputation and third-party assurance (Zafari et al., 2023) |
| (11) Life-cycle models: It refers to a conceptualisation of the development of business relationships that sees the progression of the business relationship based on life cycle stages: beginning, growth, maturation and decline (Hussain et al., 2020) |
| (12) Status: Distinct and rather stable positions in the business relationship initiation process which differ in terms of closeness to a business agreement. In contrast to the notion of stage, the status does not presume that the business relationship initiation process progresses following a certain order: the process may stop, reverse and proceed at any time (Edvardsson et al., 2008) |
| (13) Social bonds: Emotional ties that keep business partners together (Zafari et al., 2023) |
| (14) Swift-trust: Trust formed quickly due to the lack of time to test the counterpart’s competencies (Zafari et al., 2023) |
| (15) Trust: It could be defined as the willingness to take risks that one actor demonstrates in order to start a business relationship with the counterpart (Valtakoski et al., 2015). Trust could also be defined as the belief and confidence in the potential business partner’s reliability and integrity (Zafari et al., 2023) |
| (16) Trigger issues: Entities, aspects or factors that prompt (trigger) mutual interaction process between business actors at both individual and organisational levels during the business relationship initiation. “Trigger issues transform what is potential into what is real. Their role is very similar to the role of catalysts in chemical processes” (Mandják et al., 2015) |
| (17) Turbulence: It is defined as an external environmental condition characterised by continuous, abrupt, sudden and unpredictable external changes of a magnitude that threaten the core function and survival of the firms (Wadell and Bengston, 2023; Zafari et al., 2023) |
| (18) Vulnerability: A firm's feeling of being under threats to such an extent that it may fail to operate (Zafari et al., 2023) |
| Glossary, concepts and related definitions based on the business relationship domain |
Source(s): Authors’ elaboration