Development of business-to-business relationships in turbulent environments

Abstract

This research examines business relationship structure, formation, development, and maintenance where the socio-political and economic environment for both exchange partners is highly turbulent. Based on multiple case-study data from 33 firms located in the Middle East, we find that turbulent environments create perceptions of uncertainty, dependence, vulnerability, urgency, and crises, leading to the formation of interimistic relationships different from those found within non-turbulent environments. These relationships are characterised by a constant search for new partners and the maintenance of a diverse portfolio of relationships. Relationships typically develop rapidly comprising three phases where a unique dynamic and structure is apparent. Dominant relationship characteristics include competence-based trust alongside control, high levels of instantaneous commitment, informal and rapid adaptation, frequent informal communication, and significant and ongoing efforts at strengthening social bonds with existing and potential partners.