Skip to main content

Advertisement

SpringerLink
Log in

The role of economic value, social value, and perceptions of fairness in interorganizational relationship retention decisions

  • Published:
Journal of the Academy of Marketing Science Aims and scope Submit manuscript

Abstract

Although previous research provides a foundation for developing, maintaining, and exiting relationships, the extant literature has yet to consider the influence that patterns of economic and social forces have in guiding the future of deteriorating relationships. To understand better and respond to relationships in decline and to salvage relationships that are destined to fail needlessly, the authors use the political economic paradigm to identify symptoms of deteriorating relationships and provide a framework for combining relational forces that best guides relationship retention decisions. They propose a model based on the theoretical foundations of transactional cost analysis (TCA), social exchange, and distributive justice. Using relative dependence, interdependence, and mutual dependence to define the economic and social worth of the relationship, they incorporate dyadic patterns of behavior to illustrate similar and different interpretations and evaluations of fairness and the impact on relational out-comes. The article culminates with managerial implications and directions for future research.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  • Agins, Teri. 1994. “Gitano Put on Block as Company Loses Wal-Mart Business.”Wall Street Journal, January 25, p. A4.

  • Arndt, Johan. 1983. “The Political Economy Paradigm: Foundation for Theory Building in Marketing.”Journal of Marketing 47 (Fall): 44–54.

    Article  Google Scholar 

  • Bar-Tal, Daniel. 1976.Prosocial Behavior: Theory and Research. Washington, DC: Halsted and New York: Hemisphere.

    Google Scholar 

  • Beatty, Sally Goll. 1995. “Global Needs Challenge Midsize Agencies.”Wall Street Journal, December 14, p. B8.

  • Bell, Martin L. and C. William Emory. 1971. “The Faltering Marketing Concept.”Journal of Marketing 35 (October): 37–42.

    Article  Google Scholar 

  • Berscheid, Elen. 1985. “Compatibility, Interdependence, and Emotion.” InCompatible and Incompatible Relationships. Ed. William Ickes. New York: Springer-Verlag, 143–161.

    Google Scholar 

  • Berss, Marcia. 1995. “We Will Not Be in a National Chain.”Forbes, March 27, p. 50.

  • Blalock, Hubert M., Jr. and Paul H. Wilken. 1979.Intergroup Processes. New York: Free Press.

    Google Scholar 

  • Bleeke, Joel. 1995. “Is Your Strategic Alliance Really a Sale.”Harvard Business Review 73 (January–February):97–105.

    Google Scholar 

  • Bucklin, Louis P. 1973. “A Theory of Channel Control.”Journal of Marketing 37 (January):30–47,

    Google Scholar 

  • Clark, Margaret S. 1985. “Implications of Relationship Type for Understanding Compatibility.” InCompatible and Incompatible Relationships. Ed. William Ickes. New York: Springer-Verlag, 119–140.

    Google Scholar 

  • Cook, Karen S. and Karen A. Hegtvedt. 1983. “Distributive Justice, Equity and Equality.”Annual Review of Sociology 9:217–241.

    Article  Google Scholar 

  • Deighton, John and Kent Grayson. 1995. “Marketing and Seduction: Building Exchange Relationships by Managing Social Consensus.”Journal of Consumer Research 4 (March): 660–676.

    Article  Google Scholar 

  • Deutsch, M. 1975. “Equity, Equality and Need: What Determines Which Value Will Be Used as the Basis for Distribution Justice.”Journal of Social Issues 31 (3): 137–149.

    Article  Google Scholar 

  • Doeringer, Peter B., Philip I. Moss, and David G. Terkla. 1986. “Capitalism and Kinship: Do Institutions Matter in the Labor Market?”Industrial and Labor Relations Review 49 (October): 48–60.

    Article  Google Scholar 

  • Dore, Ronald. 1983. “Goodwill and the Spirit of Market Capitalism.”The British Journal of Sociology 34 (4): 459–482.

    Article  Google Scholar 

  • Dwyer, F. Robert, Paul H. Schurr, and Sejo Oh. 1987. “Developing Buyer-Seller Relationships.”Journal of Marketing 51 (April): 11–27.

    Article  Google Scholar 

  • Fiske, Alan Page. 1991.Structures of Social Life. New York: Free Press.

    Google Scholar 

  • Frazier, Gary L., James D. Gill, and Sudhir H. Kale. 1989. “Dealer Dependence Levels and Reciprocal Actions in a Channel of Distribution in a Developing Country.”Journal of Marketing 53 (January): 50–69.

    Article  Google Scholar 

  • Gassenheimer, Jule B., Roger J. Calantone, Judith M. Schmitz, and Robert A. Robicheaux. 1994. “Models of Channel Maintenance: What Is the Weaker Party to Do.”Journal of Business Research 30 (July): 225–236.

    Article  Google Scholar 

  • —, Jule B., Charlene J. Davis, and Robert Dalhstrom. 1998. “Is Dependent What We Want to Be? Effects of Incongruency.”Journal of Retailing 74 (Summer): 247–271.

    Article  Google Scholar 

  • Gibson, Richard. 1995. “McDonald’s U.S.—Franchisee Ventures Are on the Rise.”Wall Street Journal, June 26, p. B2.

  • Goldman, Kevin. 1995a. “Mars Deals Saatchi a Mighty Blow by Pulling $400 Million Account.”Wall Street Journal, February 22, p. B10.

    Google Scholar 

  • Goldman, Kevin. 1995b. “Kmart Gives Campbell Mithun Blue Light to Handle Account.”Wall Street Journal, April 18, p. B7.

    Google Scholar 

  • Greenberg, Jerald. 1987. “A Taxonomy of Organizational Justice Theories.”Academy of Management Review 12 (January): 9–22.

    Article  Google Scholar 

  • Gundlach, Gregory T. and Patrick E. Murphy. 1993. “Ethical and Legal Foundations of Relational Marketing Exchanges.”Journal of Marketing 57 (October): 35–46.

    Article  Google Scholar 

  • Hegtvedt, Karen A., Elaine A. Thompson, and Karen S. Cook. 1993. “Power and Equity: What Counts in Attributions for Exchange Outcomes.”Social Psychology Quarterly 56 (2): 100–119.

    Article  Google Scholar 

  • Heide, Jan B. and George John. 1988. “The Role of Dependence Balancing in Safeguarding Transaction-Specific Assets in Conventional Channels.”Journal of Marketing 52 (January): 20–35.

    Article  Google Scholar 

  • —and—. 1990. “Alliances in Industrial Purchasing: The Determinants of Joint Action in Buyer-Supplier Relationships.”Journal of Marketing Research 27 (February): 24–36.

    Article  Google Scholar 

  • —and—. 1992. “Do Norms Matter in Marketing Relationships.”Journal of Marketing 56 (April): 32–44.

    Article  Google Scholar 

  • Hirschman, Albert O. 1970.Exit, Voice, and Loyalty: Responses to Decline in Firms, Organizations, and States. Cambridge, MA: Harvard University Press.

    Google Scholar 

  • Hostetler, John A. 1964. “Persistence and Change Patterns in Amish Society.”Ethnology 3 (April): 185–198.

    Article  Google Scholar 

  • Houston, Franklin S. 1986. The Marketing Concept: What It Is and What It Is Not.”Journal of Marketing 50 (April): 81–87.

    Article  Google Scholar 

  • — and Jule B. Gassenheimer. 1987. “Marketing and Exchange.”Journal of Marketing 51 (October): 3–18.

    Article  Google Scholar 

  • Hwang, Kwang-Kuo. 1987. “Face and Favor: The Chinese Power Game.”American Journal of Sociology 94 (January): 944–974.

    Article  Google Scholar 

  • Hwang, Suein L. and Yumiko Ono. 1995. “Companies Crush Out Ties to Cigarettes.”Wall Street Journal, April 3, pp. B1, B3.

  • Jackson, Barbara Bund. 1985. “Build Customer Relationships That Last.”Harvard Business Review 63 (November–December): 120–128.

    Google Scholar 

  • Jones, Thomas M. 1991. “Ethical Decision Making by Individuals in Organizations: An Issue-Contingent Model.”Academy of Management Review 16 (April): 366–395.

    Article  Google Scholar 

  • Keep, William W., Stanley C. Hollander, and Roger Dickinson. 1998. “Forces Impinging on Long-Term Business-to-Business Relationships in the United States: An Historical Perspective.”Journal of Marketing 62 (April): 31–45.

    Article  Google Scholar 

  • Kerber, Ross. 1997. “For Sale: Environmentally Correct Electricity.”Wall Street Journal, July 23, pp. B1–B2.

  • Kumar, Nirmalya. 1996. “The Power of Trust in Manufacturer-Retailer Relationships.”Harvard Business Review 74 (November–December): 92–106.

    Google Scholar 

  • —, Lisa K. Scheer, and Jan-Benedict E. M. Steenkamp. 1995a. “The Effects of Supplier Fairness on Vulnerable Resellers.”Journal of Marketing Research 32 (February): 54–65.

    Article  Google Scholar 

  • —,—,and—. 1995b. “The Effects of Perceived Interdependence on Dealer Attitudes.”Journal of Marketing Research 32 (August): 348–356.

    Article  Google Scholar 

  • Lee, Louise. 1995. “Hiring Outside Firms to Run Computers Isn’t Always a Bargain.”Wall Street Journal, May 18, pp. A1, A9.

  • Levinger, George. 1979. “A Social Exchange View on the Dissolution of Pair Relationships.” InSocial Exchange in Developing Relationships. Eds. Robert L. Burgess and Ted L. Huston. New York: Academic Press, 169–192.

    Google Scholar 

  • Macaulay, Stewart. 1963. “Non-Contractual Relations in Business: A Preliminary Study.”American Sociological Review 28:55–71.

    Article  Google Scholar 

  • Macneil, Ian R. 1980.The New Social Contract: An Inquiry Into Modern Contractual Relations. New Haven, CT: Yale University Press.

    Google Scholar 

  • Mallen, Bruce. 1963. “A Theory of Retailer-Supplier Conflict, Control, and Cooperation.”Journal of Retailing 39 (Summer): 24–33, 51.

    Google Scholar 

  • Molm, Linda D. 1984. “The Disruption and Recovery of Dyadic Social Interaction.” InAdvances in Group Processes, Vol. 1. Ed. Edward J. Lawler. Greenwich, CT: JAI, 183–227.

    Google Scholar 

  • Norton, Seth W. 1988. “Franchising Brand Name Capital, and the Entrepreneurial Capacity Problem.”Strategic Management Journal 9:105–114.

    Article  Google Scholar 

  • Oliver, Richard L. and John E. Swan. 1989. “Consumer Perceptions of Interpersonal Equity and Satisfaction in Transactions: A Field Survey Approach.”Journal of Marketing 53 (April): 21–35.

    Article  Google Scholar 

  • Ouchi, William G. 1980. “Markets, Bureaucracies, and Clans.”Administrative Science Quarterly 25 (March): 129–141.

    Article  Google Scholar 

  • Ping, Robert A. Jr. 1993. “The Effects of Satisfaction and Structural Constraints on Retailer Exiting, Voice, Loyalty, Opportunism, and Neglect.”Journal of Retailing 69 (Fall): 32–352.

    Google Scholar 

  • — 1997. “Voice in Business-to-Business Relationships: Cost of Exit and Demographic Antecedents.”Journal of Retailing 73 (2): 261–281.

    Article  Google Scholar 

  • Shirouzu, Norihiko and Michael Williams. 1995. “The Big Squeeze: Japan’s Small Businesses Struggle as Conglomerates Pressure Them to Lower Prices.”Wall Street Journal, July 25, pp. A1, A5.

  • Stern, Gabriella and Neal Templin. 1995. “Chrysler Ending Production Ties to Mitsubishi.”Wall Street Journal, October 16, p. A7.

    Google Scholar 

  • Stern, Louis W. and Torger Reve. 1980. “Distribution Channels as Political Economies: A Framework for Comparative Analysis.”Journal of Marketing 44 (Summer): 52–64.

    Article  Google Scholar 

  • Takahashi, Dean and Jon G. Auerbach. 1997. “Intel Countersudes DEC, Escalating Patent Fight.”Wall Street Journal, May 29, pp. A3, A12.

  • Tanzer, Andrew. 1994. “The Bamboo Network.”Forbes, July 18, pp. 138–149.

  • Thibaut, John W. and Harold H. Kelley. 1959.The Social Psychology of Groups. New York: John Wiley.

    Google Scholar 

  • Webster, Frederick E. Jr. 1992. “The Changing Role of Marketing in the Corporation.”Journal of Marketing 56 (October): 1–17.

    Article  Google Scholar 

  • Williamson, Oliver E. 1975.Markets and Hierarchies. New York: Free Press.

    Google Scholar 

  • — 1985.The Economic Institutions of Capitalism. New York: Free Press.

    Google Scholar 

  • — 1991. “Comparative Economic Organization: The Analysis of Discrete Structural Alternatives.”Administrative Science Quarterly 36:269–296.

    Article  Google Scholar 

  • — 1993. “Calculativeness, Trust, and Economic Organization.”Journal of Law and Economics 36 (April): 453–486.

    Article  Google Scholar 

  • Zajac, Edward J. and Cyrus P. Olsen. 1993. “From Transaction Cost to Transactional Value Analysis: Implications for the Study of Interorganizational Strategies.”Journal of Management Studies 30 (January): 131–145.

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. University of Kentucky, Kentucky, USA

    Jule B. Gassenheimer

  2. Rutgers University-Camden, Camden, USA

    Franklin S. Houston

  3. Trinity University, San Antonio, USA

    J. Charlene Davis

Authors
  1. Jule B. Gassenheimer
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Franklin S. Houston
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. J. Charlene Davis
    View author publications

    You can also search for this author in PubMed Google Scholar

Additional information

Jule B. Gassenheimer is an associate professor of marketing at the University of Kentucky. She received her Ph.D. from the University of Alabama. Her research interests include long-term buyer-seller relationships and channel strategy. Her previous work has appeared in a number of journals, which include theJournal of Marketing, theJournal of Retailing, theJournal of the Academy of Marketing Science, theJournal of Business Research, and theJournal of Personal Selling and Sales Management. She has also coauthored the bookMarketing Exchange Transactions and Relationships.

Franklin S. Houston is on faculty at Rutgers University in Camden, New Jersey. He received his Ph.D. from Purdue University’s Krannert School. His work has appeared in theJournal of the Academy of Marketing Science, theJournal of Marketing, theJournal of Marketing Research, Decision Sciences, theJournal of Advertising, theJournal of Business (Chicago), theJournal of Business Administration, theJournal of Retailing, theJournal of Macromarketing, and theJournal of Advertising Research. In addition, he has coauthored the bookMarketing Exchange Transactions and Relationships and edited the bookMarketing Exchange Relationships, Transactions, and Their Media.

J. Charlene Davis is on the faculty at Trinity University and is a doctoral candidate at the University of Kentucky. Her research interests include brand equity, services marketing, marketing theory, and buyer-seller relationships. Her previous work has appeared in theJournal of Retailing, theJournal of Marketing Theory and Practice, Advances in Consumer Research, theAssociation of Marketing Theory and Practice Conference Proceedings, and theAcademy of Marketing Science Multicultural Conference Proceedings.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Gassenheimer, J.B., Houston, F.S. & Davis, J.C. The role of economic value, social value, and perceptions of fairness in interorganizational relationship retention decisions. J. of the Acad. Mark. Sci. 26, 322–337 (1998). https://doi.org/10.1177/0092070398264005

Download citation

  • Issue Date:

  • DOI: https://doi.org/10.1177/0092070398264005

Keywords

Search

Navigation