Maintaining business relationships : resilience through institutional work

Purpose: Business relationships are considered long-term and stable. Furthermore, over time, business relationships are expected to become and remain “institutionalized”. The undertone is that this process is deterministic and inevitable. While the authors do not question the long-term nature of business relationships, they argue that the process of “institutionalization” requires more construct clarity. Consequently, they ask the following: What is the source of resilience in business relationships, and how are these relationships maintained over time? Design/methodology/approach: To unravel these questions, the authors conducted an historical case study of a business relationship between a government buyer and a software seller extending over two decades. Findings: The authors found that while the network around the business relationship is crumbling and all odds are in favor of relationship dissolution, the active maintenance work of key individuals in the relationship prevented detrimental effects and resulted in not only its continuation but also an increased degree of institutionalization. Research limitations/implications: The authors contribute to the Industrial Network approach (INA) by providing a non-deterministic approach to the typically taken-for-granted end phase of business relationships. Practical implications: The findings illustrate that the process of institutionalization is manageable but requires hard work, highlighting managers as the principle vehicle of relationship maintenance. Originality/value: The authors provide construct clarity around the process of “institutionalization”. In fact, they regard the process as reverse compared to the early interpretation in the INA literature in which a business relationship is assumed to start as a “clean slate” and then begins to represent the industry codes of practice over time. They found that “institutionalization” implies that a business relationship is no longer compared with nor is comparable to the institutional prescriptions; in contrast, the relationship has established its own rules and norms, which have been taken for granted by the buyer and seller organization.