Forgiveness in Buyer–Seller Relationships Gone Bad

Stuebiger, Nina, Baumann, Jasmin, Haas, Alexander and Le Meunier-FitzHugh, Kenneth (2016) Forgiveness in Buyer–Seller Relationships Gone Bad. In: Rediscovering the Essentiality of Marketing. Developments in Marketing Science: Proceedings of the Academy of Marketing Science . Springer, pp. 743-744.

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Abstract

Getting out of a buyer–seller relationship gone bad can be even worse than an ugly divorce, with a multitude of examples for transgressions in business‐to‐business (B2B) relationships making headlines every year. But what happens to the relationship after a transgression has occurred? For example, Karachi Electric Supply Corporation (KESC) threatened to terminate its collaboration with Siemens after accusing the latter of causing substantial losses to the power utility and sabotaging the SAP software used in managerial operations. In the end, however, the two firms decided to put the past behind them and KESC agreed to withdraw all court claims and instead continue the cooperation, thereby reestablishing an atmosphere of understanding and trust between the partners (Dawn 2007; Tribune 2013). Here, the customer decided to forgive the supplier after the transgression and to restore the relationship to its original state. Transgressions are violations of the relationship between at least two partners, e.g., customers and manufacturers or service providers (Tsarenko and Tojib 2011; Beverland et al. 2009), which can lead to dissatisfaction on both sides, and reactions such as negative word of mouth and relationship termination (Bendapudi and Berry 1997). While past research has especially focused on service failure and recovery (e.g., Maxham and Netemeyer 2002) and reinvigorations after transgressions in customer–brand relationships (e.g., Aaker et al. 2004), the impact of forgiveness as a complex social behavioral pattern in interorganizational buyer–seller relationships has not yet been empirically examined. We address this gap by investigating how forgiveness affects the performance and management of a buyer–seller relationship after a transgression. To this end, this qualitative study is first in advancing theory construction for the concept of forgiveness in interorganizational buyer–seller relationships. In doing so, it offers a number of theoretical and managerial contributions. From a theoretical perspective, our study (1) examines the potential effect of forgiveness as a moderator on the management and performance of the buyer–seller relationship, and thereby on the organizational success of both partner firms. Further, conclusions are drawn as to how full forgiveness (i.e., comprising both the cognitive and affective dimension) can be achieved in interorganizational contexts involving different groups of actors, in order to avoid the presumably negative effects of partial forgiveness on relationship quality and performance. (2) The construct is examined from an investment‐expectancy perspective, thus allowing for the development of explicit indicators of when it is appropriate for firms to either restore or terminate the business relationship. (3) Finally, it integrates prior findings from diverse disciplines such as psychology and management and thereby introduces the forgiveness construct into the relationship marketing research stream. From a managerial perspective, this research provides (1) key insights which allow examination of the conditions under which it is either appropriate to successfully restore or otherwise end the collaboration between buyer and seller, thereby facilitating effective relationship performance management. To this end, our study (2) enhances managers understanding of the transformation of the buyer–seller relationship after a transgression occurred, which may affect the satisfaction, trust, loyalty, and closeness of involved actors. (3) It identifies decisive influencing factors, which advise firms on what way to forgive is most effective in order to avoid long‐lasting discontent between partner firms (e.g., whether to display and/or communicate forgiveness openly, apologize, or compensate the victim). Our study is unique in its examination of the effect of forgiveness on buyer and supplier performance leading to a new way of thinking about transgressions in buyer–supplier relationships and highlighting the importance of appropriate reactions. In line with these first insights, this research provides a conceptual basis for future—qualitative and quantitative—examination of the implementation of forgiveness by both organizational actors (buyer and seller) and identifies forgiveness as a driver for future firm profits.

Item Type: Book Section
Faculty \ School: Faculty of Social Sciences > Norwich Business School
Related URLs:
Depositing User: Pure Connector
Date Deposited: 24 Sep 2016 01:01
Last Modified: 11 Aug 2020 00:02
URI: https://ueaeprints.uea.ac.uk/id/eprint/60349
DOI: 10.1007/978-3-319-29877-1_139

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