Win‐Win? The Paradox of Value and Interests in Business Relationships

Citation

Miles, M.P. and Hazeldine, M.F. (2007), "Win‐Win? The Paradox of Value and Interests in Business Relationships", European Journal of Marketing, Vol. 41 No. 5/6, pp. 703-704. https://doi.org/10.1108/03090560710737697

Introduction

Andrew Cox has written a thought‐provoking, exciting, and very practical new book Win‐Win? published by Earlsgate Press. Cox looks at the current marketing fad of win‐win commercial relationships and brings into the discussion years of practical marketing and supply chain management consulting experience supported by strong organizational economics theory to suggest that many business relationships cannot result in both parties benefiting to the same degree. The book should be positioned as a must read for managers involved in any form of inter‐organizational relationship development, from any of the mechanisms of corporate venturing, to lean production, to strategic alliances. In addition, this book will be valuable to marketing academics and students attempting to better understand the performance outcomes of transactional and relational exchanges. Win‐Win? is very well written, concise, and an excellence balance between a work that is both scholarly and practical. It contributes to our understanding of the forms and outcomes of both vertical and horizontal inter‐organizational interrelationships by illustrating applications with summary models and real world examples.

Cox offers a more complex perspective of the potential outcomes of a business relationship, than the overly simplistic win‐lose/win‐win framework. He suggests that both parties may have two types of goals for any relationship, commercial and operational. In addition, it is possible (and typical) that both parties will incur only partial wins (or losses) for each of their goals. He offers the case of Rover and Honda as an example of a relationship not working out as a win‐win for both parties. Honda established a very “collaborative relationship with Rover as a way to avoid the need to invest heavily in plant and infrastructure as they entered the UK marketplace” and Rover gained high quality small cars to sell in the European marketing and much of Honda's small car technology capabilities. When British Aerospace (BAE) sold its stake in Rover, it sold not to its strategic partner Honda, but to the “highest and quickest bidder” BMW. While the relationship for BAE was a strong win, and BMW greatly benefited from the technology transfer from Honda to Rover, Honda surely suffered a long‐term loss. It even could be assumed that the small car design and production knowledge and capabilities transferred from Honda to Rover during their partnership may have been of some value to BMW during the development of its Mini micro car.

The book is organized into seven chapters that can stand alone for readers needing specifics on:

1. 1.

   Relationship outcomes complexity.

2. 2.

   Types of business relationships.

3. 3.

   Horizontal business relationships.

4. 4.

   The win‐win paradox in supply chain relationships.

5. 5.

   Objectives of business relationships.

6. 6.

   Problems of defining interests.

7. 7.

   The use of power in business relationships.

This short book offers highly practical and valuable advise on how to employ power in an exchange relationship to create the desired outcomes.

Unique features

The most unique feature of Cox's book is that he is willing to swim up‐stream. He suggests that not all, in fact not most, business relationships are or can ever be win‐win. In fact relationships often have a range of less desirable outcomes, and that when entering into what is offered as a “win‐win,” no‐brainer exchange relationship, reasonable managers will consider both their commercial and operational objectives and those of their partners, the relative power of their firm compared to the exchange partner, and a range of potential outcomes from the relationship that may accrue to each firm.

Limitations and summary

This is a book written to be used by both executives, who create and manage relationships between firms; and academics and students attempting to better understand inter‐organizational business relationships and business exchanges. Reading the book will have immediate and practical value for both target markets. However, Cox presents 23 figures in the text that are very difficult to read given the small font size.

In addition, while this book is not designed to be a text for a term length course it could effectively be used with supplemental journal articles or cases in a graduate level marketing or logistics courses on: supply chain management, exchange theory, or as part of a post graduate marketing theory course. In sum, the author has written a very readable, useful, practical, and commercially valuable book that provides an alternative, theoretically grounded, perspective to the current “win‐win” conceptualization of business relationships that has become too accepted as a standard business practice.