A conceptual model for managing long-term inter-organisational relationships

This paper will discuss the concept of relationship development. It will argue that whilst existing literature focuses on an economic power relationship this is incorrect. The focus should be based on a concentration on the trade off between the level of dependency that a firm is prepared to accept, compared to the level of certainty that they perceive to be realistic. The paper will explore the literature on relationship management and will take several established frameworks and argue that whilst they have substantial merit their focus is not helpful to relationship implementation and management. A conceptual model is presented which provides a different way of viewing relationships using the theoretical concept of 'game theory'. This paper suggests that relationships are processes and not entities. As such the unit of analysis should be at the product, service or commodity level and not at the firm level. The approach suggested whilst conceptual, has been developed from several years of research with a variety of firms across a range of industries; some case studies will be used to illustrate the applicability of the framework. © 2002 Elsevier Science Ltd. All rights reserved.