Does time impact relational norms in bilateral exchange? The small business case

Abstract

PurposeThe purpose of this paper is to assess empirically the presence of relational norms and the effect of time during the “transitory” and “established” phases of bilateral exchange for small business enterprises. Relationship development has recently become a central research focus in business management literature and is currently gaining more prominence when addressing the small firm sector. To‐date conceptual work has concentrated on the development of business‐to‐business relationships through sequential time dependent stages, including empirical work on the dimensions of relational norms. However, little attention has been given to role of time in this process of relationship building.Design/methodology/approachThe commercial setting is the UK brewing industry which is characterised by a few large suppliers (breweries) and many small retail buyers (public houses). The focal dyad for the study is the brewery‐public house relationship. Data was gathered through a telephone survey to: confirm the presence and structure of relational norms between trading partners; and assess whether time impacts the development of these norms.FindingsFor longer established bilateral exchange covariance based structural equation modelling confirmed the presence of relational norms as a higher order construct reflected by three dimensions: flexibility, information exchange and solidarity. Further, regression analysis supported a positive relationship between the length of the trading partnership and relational norms.Research limitations/implicationsThe implication of this study is that trading partners should nurture relationships through its early developmental stage to ensure enduring successful partnerships. The study needs to be replicated using a longitudinal design and alternative dyadic relationships, e.g. franchising and dealership arrangements.Originality/valueThe research provides empirical evidence supporting business‐to‐business relationship conceptualisations underpinned by social exchange theory.