Relationship quality and relationship value as key drivers of relationship satisfaction and long-term orientation in buyer-seller relationships: the case of the UK electrical and electronics industries

This study focuses on two aspects of business-to-business relationships, relationshop quality and relationship value. Crosby et al. (1990) suggest that the quality of the relationship determines the probability of continued exchange between buyer and seller. Following Crosby et al.'s (1990) ground-breaking relationship quality study some important dimensional issue remain. The dominant conceptualisation of relationship quality defines it as a higher-order construct consisting of either outcome or process dimensions. The outcome dimensions of relationship qualoty have been examined extensively in the literature, whilst the process dimensions have received limited attention. The literature indentifies the need for a better understanding of how relationship quality is developed in business-to-business exchange. Therefore a vital first step for the current study is the development of a process conceptualisation of relationship quality. For the past three decades, the customer value literature has focused on the value a customer receives from the exchange of products and services. However, over the past decade researchers have begun to examine the value a customer derives from the exchange relationship itself. These studies of relationship value have focused on the tangible aspects of value such as the economic and functional benefits of a supplier relationship. The current study examines not only the tangible benefits of a supplier relationship but also the relationship's intangible benefits such as the social, emotional and knowledge benefits. Adopting a process approach to the quality of relationship between buyer and seller, the current study conceptualises Relationship Quality (RQ) as a higher-order structure consisting of a behavioural RQ and a cognitive RQ dimension. Relationship value is also conceptualised as a high-order construct consisting of a relationship benefit and a relationship sacrifice dimensions. From these conceptualisations a research and two competing models are developed and the interrelationship between constructs relationship quality, relationship value, relationship satisfaction and long-term orientation is tested. Data were collected by means of self-completion questionnaires among buyers in the UK electrical and electronic industries and analysis was conducted using the structural equation modelling techique PLS. The findings suggest that relationship quality is a determinate of relationship value and both have a direct and indirect effect on relationship satisfaction and long-term orientation. Through the improved conceptualisations of relationship quality and relationship value and the development and testing of theoretically grounded research and competing models, the current study provides and original contribution to scholarly literature. In addition, a contribution has been made to business practice, through the advancement of normative managerial guidelines to aid decision-making when managing long-term customer relationships