Value Co-Creation in Industrial Buyer-Seller Partnerships ... - Doria

A situation of dependence exists when there are only one or a few available actors on themarket who can provide the needed resource. Dependence implies that one party is in aweaker position in relation to another party who is in a more powerful position (Emerson1962).Business relationships are usually long-term; interaction goes on for long periods oftime and adaptations are made on both sides of the dyad. As a consequence of interactionover time the relationship and the offering become increasingly complex and customized.Gradually this leads to a situation where there simply are not many other alternatives on themarket that could offer the same type of resource exchange, due to the specific adaptationsmade in the focal relationships and to the degree of tailor-madeness that the adaptationsimply. Consequently this creates a situation of a certain degree of dependence, associatedwith limited alternatives and high switching costs.In industrial relations the process of exchange is often a complex system that involvesa fair share of know-how and expertise. The offering is often a result, a product of manyyears of cooperation and mutual adjustments. Both parties have taken a risk by gettinginvolved with the other party to the extent that adaptations such as design modifications andorganizational arrangements have been made to support the relationship.Dyer and Singh (1998) express a word of caution about specializing. They argue thatthere is always a risk involved in specializing. Specializing means that the resource becomesless valuable to alternative uses and should be identified as a potential risk from theperspective of a single company. This is obviously something that companies need toconsider in the assessment of the benefits and sacrifices of involvement in, and theadaptations made for, a particular business relationship. According to the senior vicepresident for marine operations at the Seller the issue of dependence is one of the key issueswhen discussing high-involvement relationships with customers (Interview: Seller 7). Thereis always a risk in getting heavily involved with one partner. How can you be sure that youdo not miss out on something else that is happening in the market? How do you preserve thebalance of not seeming to be favoring a certain customer in the eyes of other customers?Obviously there is no straightforward or easy answer to this question; the assessments of thebenefits and sacrifices that are involved in getting “ involved” and making adaptations haveto be made with care for each specific case.4.4.1 A distinction between dependence and interdependenceIt is important to make a distinction between the concepts dependence and interdependence.They are interrelated, but not synonymous. Interdependence is here used as Pfeffer andSalancik (1978) defined the concept in theory of resource dependence. Interdependence is70