Building Good Business Relationships: More than Just Partnering or Strategic Alliances?

Abstract

Suggests that the concepts of partnerships and strategic alliances are increasingly emphasized in literature and “real life”, which might lead managers to believe that partnership‐style relationships, as opposed to arm′s length relationships, are necessary for a firm to compete successfully. Explores why, how, and when to establish a wide range of possible business‐to‐business relationships. The inter‐organizational relationship literature suggests six reasons for forming relationships: necessity, asymmetry, reciprocity, efficiency, stability, and legitimacy. Compares this framework with six partnership characteristics based on the partnership‐building literature: planning, sharing of benefits and burdens, extendedness, systematic operational information exchange, operating controls, and corporate culture bridge building. Suggests that firms should concentrate on how to develop “good business relationships”, which may have varying levels of partnership characteristics.