Cultural Dimensions of Switching Behavior in Importer-Exporter Relationships

Academy of Marketing Science Review,  2003  by N, Mahesh,  Ford, John B,  LaTour, Michael S

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The "relationship marketing" paradigm conceptualizes marketing as an exchange relationship marked by interaction between marketers and customers. According to this approach, marketing is not a discrete, transaction-oriented function, but a continuous, long-term oriented relationship-building process (Gronroos 1994). Marketing is often intrinsically based on repeat purchasing behavior rather than on discrete transactions (Dwyer, Schurr and Oh 1987). Relationship marketing stresses the importance inherent in the building of lasting trust-based relationships with the customer. Dwyer, Schurr and Oh (1987) distinguished between discrete transactions and long-term relationships by bringing in the analogy of a "one-night stand relationship" versus "a long lasting marriage."

The relationship-marketing paradigm is particularly relevant to industrial and services marketing (Gronroos 1994) where relationship factors have a particularly strong influence on buying behavior (Bonoma and Johnston 1978). A key strategic concern is to build dependable, on-going 'buyer-supplier' partnerships. Relationship building is an investment that will yield dividends in the long run. In the individualistic capitalist mode of thinking, cooperative behavior can be rationalized as the long-term synergistic maximization of mutual self-interest (Gerlach 1992), since both cooperating parties seek to strategically gain from their relationship vis-a-vis their competitors.

However somewhat antithetic to the relationship concept itself is the fact that institutional relationships can crumble due to a lack of inertia (Dwyer, Schurr and Oh 1987). Extending Dwyer et al.'s analogy, either partnering firms can go out of business (death), or they can switch to new partners (divorce and remarriage). Even as dissolution rates for cooperative inter-organizational relationships such as joint ventures are around 70% (Harrigan 1988) and increasing, most of the contemporary research in relationship marketing focuses on the relationship-building process without providing insights into the potential for the dissolution of such relationships. The literature emphasizes that if partners are carefully chosen on the basis of their capabilities and motivation (e.g. Ford 1984, Stump and Heide 1996), the costs of opportunistic behavior can be reduced, and lasting relationships can be built. However, these evaluations, or the context in which the evaluations were made in the first place, may change over time (Low 1996), thus establishing the potential for opportunistic behavior. Studying how and why relationships end will in turn help to maintain and enhance existing relationships.

This paper seeks to provide a contingency framework to analyze the dissolution of long-held buyer-supplier rela-tionships in an international context. In the arena of international relationship marketing, the terms buyers and suppliers can be used interchangeably with the terms importers and exporters respectively. The focus of the paper is on exploring the moderating effect of national culture on the decision of importers and exporters to end existing relationships. The primary motivation for termination of relationship itself can be due to endogenous (to the organizations involved) and/or exogenous (environmental) factors.

The paper is organized as follows. First, the stages of relationship building and international relationship marketing literature pertaining to the importer-exporter dyad are reviewed. Second, four streams of literature surrounding the dissolution of relationships are reviewed from which two major economic factors driving the termination of relationships are derived. Third, the moderating role of national culture in the termination of importer-exporter relationships is analyzed using Hofstede's (1980) dimensions and propositions are posited. Finally, the implications of the framework are discussed.

LITERATURE REVIEW

Stages of Relationship Building Dwyer, Schurr and Oh (1987) presented a four-stage process of relationship building between buyers and suppliers. The first is the exploration or evaluation stage when buyers evaluate the competencies and motivations of potential suppliers. Suppliers are evaluated not only on their technical and marketing capabilities (Wilson and Moller 1988), but also on their willingness or motivation as well as adaptability to the buyer's demands (Ford 1984, Stump and Heide 1996). By carefully assessing potential partners, buyers can reduce transaction costs such as the costs of uncertainty of potential partners' efficiency in the future and the costs of opportunistic behavior (Wilson and Moller 1988).

The second stage of relationship building is the expansion stage when a buyer, after evaluating potential suppliers, actually chooses one and presents a purchase order. This stage is the beginning of an interaction process that should result in long-term bonding. This interaction consists of the following components: exchange both formal and informal, adaptation to the buyer's needs and attitudes, and coordination to ensure smoother operations, to respond in an 'ad hoc' manner to environmental changes, and to handle conflict situations (Wilson and Moller 1988).