Relationship Quality and Innovation Capacity of Micro Enterprises: A Single Case Study in the Traditional Food Sector

Abstract

Purpose: This study aims to analyze the innovation capacity and relationship quality of micro-enterprises with its stakeholders.
 Design/Methodology/Approach: This is an exploratory and single-case study that uses an in-depth interview with the owner of one traditional food micro-enterprise (TFME) in Yogyakarta City (Daerah Istimewa Yogyakarta Province, Indonesia).
 Findings: The results determined that there are four types of relationships between a TFME and its stakeholders: supplier, internal, customer, and lateral partnerships. We further identify antecedents of relationship quality: opportunistic behavior, reputation, customer orientation, relationship orientation, conflicts, product quality, and knowledge and skills. The research further found that conflicts, relationship quality, product quality, knowledge and skills, and owner’s age can affect the innovation capacity of a TFME.
 Implications/Originality/Value: Theoretically, the findings provide support for the development of relationship marketing theory. Practically, this study is valuable for TFMEs to build relationship quality with stakeholders and innovation capacity.