Relationship development in a multinational utilities network

Abstract

Purpose

The purpose of this paper is to research the development of services business relationships between a global telecommunications provider (the supplier) and the divisions of a multinational utilities company (the buyer), which was undergoing a de‐merger into strategic business units.

Design/methodology/approach

The paper is a case study, supported by grounded theory.

Findings

The paper finds that the supplier used strategic relationship management, relationship specific investment and adaptation, and service quality, proved during exploratory exchanges, to establish its credibility with divisions of the buyer's network. Purchases were based on four criteria: cost, quality, relationship management and technological capability. Each division of the utility company (the buyers) tested the relationship and service quality credentials of the service provider. The buyers confirmed information from the network on the aptitude and commitment of the suppliers to its clients. Long‐term contracts followed.

Research limitations/implications

Research in other service sectors would be useful. Comparative case studies would be of value to provide influencing successful relationship development.

Practical implications

The practical implications of the paper are: the long‐term strategic relationship vision; total customer focus; relationship development efforts must be responsive to potential customer needs, purchase strategies and time scales, willingness to assume risk; the demand to establish relationship and service credibility prior to extensive exchange requires relationship specific investments by the supplier; and empowering relationship management staff.

Originality/value

There are few studies of relationship development in multinational services businesses in networks, and this research helps to fill this gap.

Citation

Tyler, K., Stanley, E. and Brady, A. (2006), "Relationship development in a multinational utilities network", Journal of Services Marketing, Vol. 20 No. 5, pp. 333-345. https://doi.org/10.1108/08876040610679945