Paper info

Managing relationships and the differences between manufacturing and service industries

Pete Naude , Peter Turnbull and Sheena Leek

The paper was published at the 18th IMP-conference in Perth, Australia in 2002.

Since the importance of managing relationships has been recognised there has been considerable conceptual development in relationship portfolio management. However, very little research has been performed on how practitioners apply this concept. Leek,Turnbull and Naudé's (2002) model found suppliers and buyers differed in their emphasis of the methods and information used for relationship management. This paper builds on the aforementioned model by investigating the similarities and differences of how auto/electrical manufacturing and financial services suppliers and buyers manage their relationships. Whilst the majority of financial services suppliers and buyers and auto/electrical manufacturing buyers combined three methods of relationship management, formal, documented system, personal judgement, meetings, auto/electrical manufacturing suppliers used only two. All of the sample thought commitment was an important variable for managing relationships. Suppliers from both sectors thoughtsales volume, profitability and relationship strength were important. Buyers from both sectors thought "willingness to adapt" and "investment in us" were important. However whilst financial services suppliers use cost to serve, auto/electrical manufacturing buyers suppliers use strategic importance and growth rate. Also, whilst financial services buyers use technological competence, innovativeness and capability were important, auto/electrical manufacturing buyers use purchasing volume andprofitability.