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

Citation

Richardson, I. (2006), "Business Relationships for Competitive Advantage: Managing Alignment and Misalignment in Buyer and Supplier Transactions", Journal of Management Development, Vol. 25 No. 2, pp. 195-196. https://doi.org/10.1108/02621710610645162

The central argument of Business Relationships for Competitive Advantage is that buyer/supplier relationships cannot be made to work effectively unless there is recognition, on both sides, of the need to align commercial and operational goals. Despite many books on business‐to‐business relationship management, the authors contend that few attempts have been made to link theoretical insights in the field with empirical studies of real companies attempting to manage their external and internal relationships. Using case examples, derived from many years of academic and consulting activity, Cox et al. create a relationship alignment framework that seeks to enable practitioners to manage buyer/supplier relationships between organizations more effectively. They also identify a number of key conditions for successful alignment and suggest that misalignment normally occurs when one or more of these conditions are not met.

The book is divided into three sections. The first is a critical appraisal of business relationship management literature in which the authors consider the dominant approaches in procurement and supply, and sales and marketing, thinking. In both areas of competence, the authors argue that, instead of focusing holistically on the dyadic relationship within exchange transactions, the majority of current thinking is focused on how one or other side achieves its goals. This, among other things, has led to a tendency within the literature to stress operational rather than commercial objectives; unfortunately, as the book makes clear, the ultimate purpose of business relationships is about commercial rather than operational ends.

In seeking to address the shortcomings of the existing literature, the authors look to reconcile two of the more holistic approaches to relationship management decision making, International Marketing & Purchasing Group (IPM) and Relationship Portfolio Mapping (RPM), with the Power Perspective school. In so doing, they state that a more holistic, analytic, and predictive approach to the alignment of business relationships can be achieved. Drawing on previous work, the authors consider power and leverage and the operational means for successful business relationship management before presenting their framework for the alignment of buyer/supplier relationships. The framework consists of six ideal‐typical relationship management approaches which result in three basic outcomes when used to analyse relationships: aligned; misaligned and sub‐optimal; and misaligned with dysfunctional conflict.

The second section of the book considers the six ideal‐typical relationship approaches for aligned and misaligned relationships; and, in the case of the latter, strategies for improving failing relationships are suggested. The authors use 18 cases studies from a diverse range of industries and business types in support of their argument and, for anyone who has managed such relationships in the past, the scenarios will be all too recognizable. Not only are the cases very revealing and entertaining but, ultimately, they clearly demonstrate the theoretical contention of the authors. Moreover, the cases demonstrate that tension and conflict can exist in even the most aligned relationships; something that will come as a comfort to those managing such relationships in the commercial context. This section of the book is undoubtedly the most interesting for practitioners although, as the authors state, it is necessary to understand the theoretical underpinnings in order to fully appreciate the implications of the framework.

In section three of the book, the authors present a decision tree for aligning buyer/supplier relations and consider some additional factors when considering business relationship management. Not least of these, is that of internal relationships and the role played by managers and internal power structures in implementing successful external relationship strategies. They also recognize the role played by bounded rationality and opportunism in defining the nature of business relationships; something that will, no doubt, further enhance the practical relevance and appeal of the book to its practitioner audience.

Business Relationships for Competitive Advantage is a deceptively interesting and compelling book. It spans the academic and practitioner divide with a well‐constructed and commercially relevant argument that should contribute to knowledge in both areas. It is accessible and well structured although the illustrations do require some perseverance. The book should provide interesting reading for anyone considering the nature of their organization's relationships with suppliers and buyers.