More than friendship is required : an empirical test of cooperative firm strategies

Pesämaa, Ossi and Hair Jr, Joseph F (2006): More than friendship is required : an empirical test of cooperative firm strategies. Published in: Management Decision , Vol. 45, No. 3 (2007): pp. 602-615.

Abstract

Purpose - The purpose of this paper is to examine a proposed six-construct theoretical model of factors influencing successful cooperative relationships and strategy development. Design/methodology/approach - A theoretical model of strategy development and cooperative relationships was tested. Qualitative research among key experts identified 15 successful regional tourism networks. Two successful cooperative networks were selected based on annual revenues. A sample of 254 small and medium-sized members were surveyed from the two networks in Northern Minnesota, USA. Findings - Strong support was obtained for the proposed model. Hypothesized relationships were tested and the findings were consistent with previous research. Long-term orientation has a positive effect on friendship, loyalty, trust and commitment. Friendship is related to loyalty and commitment, and loyalty is related to trust. Ultimately, trust and commitment engender successful cooperation. The model can be used as a guide to strategy development at different levels in an organization. Research limitations/implications - Large firms select between higher and lower order functional strategies. Small and medium-sized firms sometimes address commitment and cooperative strategies through shared goals and decisions in order pursue higher order strategies. This paper research supports a greater emphasis on establishing relationships using loyalty, trust and commitment to develop successful higher order strategies. However, relationships based on friendship also can be an important consideration in strategy development. Practical implications - Strategic implications for developing relationships that can be used as a planning component of hierarchical strategies. Originality/value - The paper maintains that loyalty is more important than friendship in developing successful strategies based on cooperation.

• Item Type: MPRA Paper
• Language: English
• Keywords: Long term orientation; friendship; loyalty; trust; commitment; cooperation; tourism; experience stratos
• Subjects: C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C12 - Hypothesis Testing: General; ; A - General Economics and Teaching > A1 - General Economics > A14 - Sociology of Economics

References

Axelrod, R. (1984), The Evolution of Cooperation, Basic Books, New York, NY.

Baum, J.A.C. and Haveman, H.A. (1997), “Love thy neighbor? Agglomeration in the Manhattan hotel industry”, Administrative Science Quarterly, Vol. 42 No. 2, pp. 304-38.

Bignoux, S. (2006), “Short-term strategic alliances: a social exchange perspective”, Management Decisions, Vol. 44 No. 5, pp. 615-27.

Blau, P.M. (1964), Exchange and Power in Social Life, John Wiley, New York, NY.

Doz, Y.L. (1996), “The evolution of cooperation in strategic alliances: initial conditions or learning process”, Strategic Management Journal, Vol. 17 No. 5, pp. 5-83.

Dwyer, R.F., Schurr, P.H. and Oh, S. (1987), “Developing buyer-seller relationships”, Journal of Marketing, Vol. 51 No. 2, pp. 11-27.

Edquist, C. (1997), “Systems of innovation approaches – their emergence and characteristics”, in Edquist, C. (Ed.), System of Innovation, Technologies, Institutions and Organizations, Pinter, London.

Ekelund, C. (2002), “How to govern relationships and established commitments: a study of standardized products in mature industrial markets”, doctoral thesis no. 23, Copenhagen Business School, Copenhagen.

Garbarino, E. and Johnson, M.S. (1999), “The different roles of satisfaction, trust, and commitment in customer relationships”, Journal of Marketing, Vol. 63 No. 2, pp. 70-87.

Gounaris, S.P. (2005), “Trust and commitment influences on customer retention: insights from business-to-business services”, Journal of Business Research, Vol. 58 No. 2, pp. 126-40.

Granovetter, M. (1985), “Economic action and social structure: the problem of embeddedness”, American Journal of Sociology, Vol. 91 No. 3, pp. 481-510.

Gulati, R. (1995), “Does familiarity breed trust? The implications of repeated ties for contractual choice in alliances”, Academy of Management Journal, Vol. 38 No. 1, pp. 85-112.

Gulati, R. and Gargiulo, M. (1999), “Where do interorganizational networks come from?”, American Journal of Sociology, Vol. 104 No. 5, pp. 1439-93.

Gundlach, G.T., Achrol, R.S. and Mentzer, J.T. (1995), “The structure of commitment in exchange”, Journal of Marketing, Vol. 59 No. 1, pp. 78-103.

Holm-Blankenburg, D., Eriksson, K. and Johanson, J. (1996), “Business networks and cooperation in international business relationships”, Journal of International Business Studies, Vol. 27 No. 5, pp. 1033-53.

Ingram, P. and Roberts, P.W. (2000), “Friendship among competitors in the Sydney hotel industry”, American Journal of Sociology, Vol. 106 No. 2, pp. 387-423.

Johannisson, B. (1990), “Economies of overview: guiding the external growth of small firms”, International Small Business Journal, Vol. 9 No. 1, pp. 32-44.

Levinthal, D.A. and March, J.G. (1993), “The myopia of learning”, Strategic Management Journal, Vol. 14 No. 4, pp. 95-112.

Maslyn, J.M. and Uhl-Bien, M. (2001), “Leader-member exchange and its dimensions: effects of self-effort and others’ effort on relationship quality”, Journal of Applied Psychology, Vol. 86 No. 4, pp. 697-708.

Mavondo, F.T. and Rodrigo, E.M. (2001), “The effect of relationship dimensions on interpersonal and interorganizational commitment in organizations conducting business between Australia and China”, Journal of Business Research, Vol. 52 No. 2, pp. 111-21.

Mayer, R.C., Davis, J.H. and Schoorman, D.F. (1995), “An integrative model of organizational trust”, Academy of Management Review, Vol. 20 No. 3, pp. 709-34.

Morgan, R.M. and Hunt, S.D. (1994), “The commitment-trust theory of relationship marketing”, Journal of Marketing, Vol. 58 No. 3, pp. 20-38.

Mukherjee, A. and Nath, P. (2003), “A model of trust in online relationship banking”, International Journal of Bank Marketing, Vol. 21 No. 1, pp. 5-15.

Nicholson, C.Y., Compeau, L.D. and Sethi, R. (2001), “The role of interpersonal liking in building trust in long-term channel relationships”, Journal of the Academy of Marketing Science, Vol. 29 No. 1, pp. 3-15.

Nohria, N. and Eccles, R.G. (1992), Networks and Organizations: Structure, Form and Action, Harvard Business School Press, Boston, MA.

Oliver, A.L. and Ebers, M. (1998), “Networking network studies: an analysis of conceptual configurations in the study of inter-organizational relationships”, Organizational Studies, Vol. 19 No. 4, pp. 549-83.

Park, S.H. and Russo, M.V. (1996), “When competition eclipses cooperation: an event history analysis of joint ventures”, Management Science, Vol. 42 No. 6, pp. 875-90.

Porter, M.E. (1980), Competitive Strategy, Free Press, New York, NY.

Powell, W.W. (1990), “Neither market nor hierarchy: networks forms of organization”, Organizational Behavior, Vol. 12, pp. 295-336.

Rodriguez, C.M. and Wilson, D. (2002), “Relationship bonding and trust as a foundation for commitment in US-mexican strategic alliances: a structural equation modelling approach”, Journal of International Marketing, Vol. 10 No. 4, pp. 53-76.

Rousseau, D.M., Sitkin, S.B., Burt, R.S. and Camerer, C. (1998), “Introduction to special topic forum: not so different after all: a cross-discipline view of trust”, Academy of Management Review, Vol. 23 No. 3, pp. 393-404.

Rumelt, R.P., Schendel, D. and Teece, D.J. (1991), “Strategic management and economics”, Strategic Management Journal, Vol. 12, special issue: Fundamental research issues in strategy and economics, pp. 5-29.

Teece, D.J., Pisano, G. and Shuen, A. (1997), “Dynamic capabilities and strategic management”, Strategic Management Journal, Vol. 18 No. 7, pp. 509-33.

Tjosvold, D. and Sun, H.F. (2002), “Understanding conflict avoidance: relationship, motivations, actions and consequences”, International Journal of Conflict Management, Vol. 13 No. 2, pp. 142-64.

Uzzi, B. (1997), “Social structure and competition in interfirm networks: the paradox of embeddedness”, Administrative Science Quarterly, Vol. 42 No. 1, pp. 35-67.

Varamaeki, E. (2001), “Essays on multilateral cooperation between SMEs: the prerequisites for successful development and different models of interfirm cooperation”, doctoral thesis no. 92, Universitas Wasaensis, Waasa.

Wetzels, M., Ruyter, K. and Birgelen, M. (1998), “Marketing service relationships: the role of commitment”, Journal of Business & Industrial Marketing, Vol. 13 Nos 4/5, pp. 406-23.

Wildeman, L. (1998), “Alliances and networks: the next generation”, International Journal of Technology Management, Vol. 15 Nos 1/2, pp. 96-108.

Williamson, O.E. (1981), “The economics of organization: the transaction cost approach”, The American Journal of Sociology, Vol. 87 No. 3, pp. 548-77.

Wong, A. and Sohal, A. (2002), “An examination of the relationship between trust, commitment and relationship quality”, International Journal of Retail & Distribution Management, Vol. 30 No. 1, pp. 34-50.

Ylimaz, C. and Hunt, S.D. (2001), “Salesperson cooperation: the influence of relational, task, organizational, and personal factors”, Journal of the Marketing Science, Vol. 29 No. 4, pp. 335-57.

Zaheer, A., McEvily, B. and Perrone, V. (1998), “Does trust matter? Exploring the effects of interorganizational and interpersonal trust on performance”, Organization Science, Vol. 9 No. 2, pp. 141-59.

Zajac, E.J. (1990), “CEO selection, succession, compensation and firm performance: a theoretical integration and empirical analysis”, Strategic Management Journal, Vol. 11 No. 3, pp. 217-30.