Organizational Culture and Relationship Skills

Abstract

While both the strategic management and the network literature recognize the importance of inter-firm relationships for explaining competitive advantage, the question why firms differ in their ability to benefit from these relationships is rarely addressed. This paper aims to begin to fill this gap in the literature. We argue that organizational culture is an important factor influencing the relationship skills of a firm, defined as a firm's ability to manage its ties with other firms, whether these are customers, suppliers, or service providers. We assume relationship skills to be especially relevant for the formation and maintenance of close and durable transaction ties. We test our model on a dataset of 127 Dutch inter-firm relations and find general support. Specifically, we find that firms with organizational cultures characterized by an orientation towards stability and predictability, a positive orientation towards innovation, and not characterized by a strong focus on immediate results, score high on relationship skills. Relationship skills, in turn, are found to have a positive influence on the outcomes of inter-firm relationships in terms of learning, achieving innovations and gaining new contacts, but not in terms of immediate (financial) results.