Business Relationships for Competitive

This book provides the first summary and critical appraisal of the thinking that currently informs the management of business relationships, from the perspectives of both the buyer and supplier. The authors argue that these approaches are one-dimensional and instead recommend a more holistic approach based on power, interaction and portfolio perspectives. The book provides evidence of how relationships can be aligned and misaligned in practice, using eighteen examples drawn from a variety of business cases and circumstances.

Andrew Cox is CIPS Professor of Business Strategy and Procurement at Birmingham University Business School.

Chris Lonsdale is a Lecturer in Supply Chain Management at the University of Birmingham.

Joe Sanderson is a Lecturer in Supply Chain Management and Deputy Director of the CBSP.

Glyn Watson is a Lecturer in Supply Chain Management in the CBSP.

List of Figures

viii

Preface

x

Notes on the Contributors

xii

Part I Business Relationship Management in Theory and Practice

1 Current Approaches to the Analysis of Business Relationships

3

(29)

1.1 Current approaches to business relationship management

3

(20)

1.2 Business transactions and relationships in theory and practice

23

(3)

1.3 Conclusion

26

(6)

2 Power, Leverage and the Strategic Purposes of Business Relationships

32

(20)

2.1 Managing strategic ends in circumstances of buyer and supplier power

33

(7)

2.2 The power matrix: understanding the power circumstance between buyers and suppliers

40

(5)

2.3 Using leverage to improve power positions and commercial results

45

(5)

2.4 Conclusion

50

(2)

3 The Operational Means for Successful Business Relationship Management

52

(43)

3.1 The commercial and operational sourcing choices of the buyer

52

(10)

3.2 The commercial and operational customer/account management choices of the supplier

62

(13)

3.3 The ideal and the optimal: selecting appropriate relationship management styles

75

(17)

3.4 Conclusion

92

(3)

4 A Framework for the Alignment of Buyer and Supplier Relationships

95

(40)

4.1 Value appropriation outcomes in buyer and supplier exchange

95

(8)

4.2 Six ideal-typical frameworks for the successful alignment of buyer and supplier relationships

103

(24)

4.3 Conclusion: using ideal-typical frameworks to understand and correct relationship misalignments

127

(8)

Part II Alignment and Misalignment in Business Relationship Management

5 Cases in Aligned Buyer and Supplier Relationship Management

135

(28)

5.1 Aligned arm's-length buyer dominance: the closures case

135

(4)

5.2 Aligned arm's-length reciprocity: the consumables case

139

(6)

5.3 Aligned arm's-length supplier dominance: the decision-control case

145

(4)

5.4 Aligned buyer-dominant collaboration: the sub-assembly outsourcing case

149

(5)

5.5 Aligned reciprocal collaboration: the fan cowl doors case

154

(4)

5.6 Aligned supplier-dominant collaboration: the flow management case

158

(5)

6 Cases in Misaligned and Sub-Optimal Buyer and Supplier Relationship Management

163

(30)

6.1 Misaligned and sub-optimal arm's-length buyer dominance: the licensing case

163

(5)

6.2 Misaligned and sub-optimal arm's-length reciprocity: the air travel case

168

(4)

6.3 Misaligned and sub-optimal arm's-length supplier dominance: the pipeline case

172

(4)

6.4 Misaligned and sub-optimal buyer-dominant collaboration: the construction case

176

(5)

6.5 Misaligned and sub-optimal reciprocal collaboration: the IT outsourcing case

181

(6)

6.6 Misaligned and sub-optimal supplier-dominant collaboration: the bio-materials waste case

187

(6)

7 Cases in Dysfunctional Buyer and Supplier Relationship Management

193

(32)

7.1 Dysfunctional arm's-length buyer dominance: the telecommunications case

193

(5)

7.2 Dysfunctional arm's-length reciprocity: the reverse auction case

198

(5)

7.3 Dysfunctional arm's-length supplier dominance: the insourcing case

203

(4)

7.4 Dysfunctional buyer-dominant collaboration: the rings and prismatics case

207

(6)

7.5 Dysfunctional reciprocal collaboration: the engine controls case

213

(5)

7.6 Dysfunctional supplier-dominant collaboration: the logistics case

218

(7)

Part III Decision Support Tools for Improving Business Relationships

8 A Way Forward for Managers

225

(14)

8.1 Winning internal support for relationship management strategies

225

(4)

8.2 A decision-tree for aligning buyer-supplier relationships

229

(3)

8.3 The outcomes of relationship opportunism in different power scenarios

232

(4)

8.4 Conclusion

236

(3)

Index

239

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Business Relationships for Competitive Advantage Managing Alignment and Misalignment in Buyer and Supplier Transactions

Summary

Author Biography

Table of Contents

Supplemental Materials