Relationship Management

Relationship Management - RELATIONSHIP MANAGEMENT...

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RELATIONSHIP MANAGEMENT Relationships are processes which can be managed, streamlined and focussed. They need to be thought of as output driven and there must be a focus on resources; can overlay Kraljic’s Matrix. Effective Relationships Efficient Relationships achieves the company’s goal/strategy achieve desired effect quickly Relationships with suppliers of Strategic items Relationships with suppliers of Non-Critical items Cousins et al (2008 ): 173, Core Text Inter-firm relationships are “…complex business processes that require resource allocation from the buyer and supplier to achieve a set of complex outputs. These outputs and inputs maybe asymmetrical depending on the buyers’ and suppliers’ desired outcomes. In addition, these relationships will be influenced by the respective external environments and constrained by the parties’ strategies, goals and power mechanisms.” Well managed relationships have been seen to lead to o Lower costs o Higher quality o Improved innovation o Reduced risk o Higher market value Demonstrated by success of Japanese car manufacturers in the 1980s; Japanese viewed relationship management as a fundamental function of procurement, whereas it was not prioritised in the Western economies, following which Western economies to develop their relationships, in order to become more competitive. As procurement, relationship management should be viewed as WHAT YOU DO, not an ADDITION to what you do. Relationship Theory : fashionably thought of in terms of partnerships Theory Base Key Focus Economic Based on Neo-Classic Economics: TCE, Agency theory, Contractual theories Behavioural Risk, Uncertainty, Trust, Socialisation, Social capital Strategic ERBV (extended RBV), Strategic Partnerships, RBV, Resource Dependency Marketing IMP, Channel Marketing, B2B, B2C, Consumer Behaviour TCE: - Williamson (1975) expands on Coase’s reasoning attempt to define the most appropriate, co- ordinating, governance mechanism. - Decision to internalise, or form a relationship to gain an additional capability, based on transaction costs = (physical, human, dedicated) asset and site specificity. - Mutual investment in asset specificity is required to avoid dependency. RBV: development of competitive advantage through resource utilisation: relationship management. Resources/capabilities describe tangible and intangible assets which are used to implement strategy.
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ERBV: recognises management of relationships, technology bundles and networks as a capability. Philosophical thinking must be conceptualised (by theories) in order for a firm to identify the most appropriate techniques for relationship management. Models of Inter-organisational Relationships o Relationships can be intra-organisational (within a firm) or inter-organisational (between firms) o Intra-organisational cooperation must be established, by introducing joint performance measures, before inter-organisational relationships can be effective o
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Relationship Management - RELATIONSHIP MANAGEMENT...

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