Product importance and complexity as determinants of adaptation processes in business relationships

Abstract

Purpose – The aim of this paper is to characterize adaptation processes in business relationships. The nature of adaptive behavior is described by outlining activities and events in these relationships. The role of perceived product importance and complexity in the character of the adaptations processes is sought. Design/methodology/approach – A case study approach is adopted and two long-term relationships between buyers and sellers of capital equipment in the mining industry are investigated. Perspectives from both sides of the dyad (buyer and seller) were attained through in-depth interviews. Findings – Findings show that supplier-based adaptations occur more frequently than customer-based adaptations. The market antecedents of concentration and resource dependency are identified as drivers of adaptive behavior. Furthermore, product importance and complexity are key drivers to adaptation processes and the development of long-term relationships. Supplier's brand name and the choice of a direct channel strategy are identified as indicators of long-term commitment to the market. Moreover, two-task related factors were extremely relevant as selection criteria for capital equipment: the functional suitability and the degree of standardization/customization of the equipment. Research limitations/implications – The findings are specific to the market environment and recommendations are given for the realm of the mining industry. Multi-case studies in multi-contexts should be conducted to enable generalization and potential theory-building. Practical implications – A number of important managerial implications for buyers and sellers of capital equipment in the mining industry are given. Originality/value – This paper contributes to knowledge by providing rich descriptions of adaptation processes. This real life evidence enables the identification of major drivers of adaptive behavior and, consequently, the development of long-term successful relationships.