Managing strategic business relationships in retail operations: evidence from China

The purpose of this paper is to investigate how to manage business relationships in retail operations. In particular, this study examines the links between business relationships with principal stakeholders, operations strategy, and performance.

Drawing upon the stakeholder theory, this study employs a path analytic framework to understand the effects of business relationships on retail operations strategy and performance for a sample of retail companies in China.

The findings indicate that good relationships with customer and supplier could enable retailers to be more efficient in developing quality and flexible strategies, and that low cost and flexible strategies, in turn, influence business performance. However, the results suggest that the vital role that the Chinese government played in economic activities in the 1980s and 1990s has diminished gradually. It is appropriate to treat the good relationship with government bodies as a necessary, but not sufficient, condition for retail success in China.

This study seems to be the first in investigating the effects of business relationships on operations strategy and performance applying a stakeholder theory perspective.