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Paper info: A multi-level perspective on the dissolution of business relationships

Title


A multi-level perspective on the dissolution of business relationships

Authors


Inger Beate Pettersen

Place of Publication


The paper was published at the 17th IMP-conference in Oslo, Norway in 2001.

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Abstract


This paper presents a multi-level approach to the dissolution of business relationships. Anumber of factors are postulated to attenuate the likelihood of relationship dissolution.Structural aspects, such as contracts, are emphasized in Transaction Cost Theory, whereasRelational Contract Theory highlights relational aspects, such as boundary spannerinterpersonal bonds. In this study we argue that both macro level phenomena (such asstructural ties) and micro level phenomena (such as interpersonal ties) have a potential impactupon relationship dissolution. Moreover, since business relationships are seen as inherentlymulti-level phenomena, structural and relational aspects would constitute a multi-level issuein these relationships. Furthermore, we suggest that the potential impact of structural andinterpersonal ties upon the likelihood of relationship dissolution are moderated by propertiesconnected to the organizational and interorganizational context. Macro level properties, suchas size, formalization and centralization are thus seen to influence organizational membersbehavior. According to organization theory and research, individual's behavior, affectiveresponses, motives and attitude are affected by structure. Related to the phenomena ofbusiness relationships, organizational structure and context may favor or constrain thedevelopment of interpersonal ties across organizational boundaries. Drawing on theoreticalinsights from multi-level theory, organization theory and multi-level research on business-tobusinessrelationships, we suggest that a number of organizational and interorganizationaldimensions moderate the impact of structural and interpersonal ties upon the likelihood ofbusiness relationship dissolution.