The personal touch of business relationship: A study of the determinants and impact of business friendship

Abstract

Business friendship refers to the integration of “business” dealings and personal “friendship” that permeates many markets. As relationship marketing and customer relationship management become increasingly prevalent practices, business friendship as a fundamental element embedded in business relationships needs to be better understood. This paper studies how business friendship is formed and its impact on key marketing outcomes. We propose that business friendship is driven by three factors spanning business and personal domains—congeniality, rule adherence and business reputation. Our empirical analysis is based on survey and actual sales data from 263 client firms of a leading provider of business intelligence and strategic planning services. The results show the three factors contribute significantly to business friendship. We find that business friendship between the client and the supplier significantly impacts the sales to the client, and this impact is further moderated by how the two parties share responsibilities in achieving common goals. In addition, we show that business friendship induces one party to accommodate and cooperate with the other (i.e., compliance), and to engage in positive word-of-mouth. The framework and findings shed lights on how companies may influence (and be influenced by) business friendship as they increasingly emphasize long-term business relationships.

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Fig. 1

Notes

  1. 1.

    Sometimes researchers refer to business friendship as commercial friendship (e.g., Price & Arnould, 1999).

  2. 2.

    In our context and business friendship embedded in interorganizational relationship in general, voluntary social interaction, communal orientation, and intrinsic orientation are important. However, intimate self-disclosure (i.e., friends have a greater level of self-disclosure and intimacy than non-friends) may not be highly relevant since disclosing personal information can be at odd with the business contexts. As Price and Arnould (1999) showed, intimate self-disclosure is more relevant in personal service settings, such as hair-styling, counselling, bar tenders, dating services, etc. Our own testing also shows that intimate self-disclosure does not load sufficiently to the business friendship construct in our surveys. This is also consistent with Grayson’s (2007) suggestion that all the items do not have to co-exist in a particular context.

  3. 3.

    The details of the control variables are provided in Table 2.

  4. 4.

    QQ, WeChat, and Weibo are all social media services popular in China.

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Acknowledgments

The authors acknowledge the support from the National Natural Science Foundation of China (71572099, 71328202, 71102064) and Shanghai Pujiang Program Foundation (15PJC042). The authors are listed alphabetically and contributed equally to the paper.

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Correspondence to Liping Qian.

Appendices

Appendix 1. Survey quality procedures and tests

In this appendix, we report the handling of key informant knowledgeability, common method bias, and nonresponse bias. We implemented two procedures to ensure the knowledgeability of the key informants (purchasing managers): (1) through prescreening telephone interviews in which informants were asked about their knowledgeability about survey issues, and (2) by asking them to report on their level of knowledgeability in the final survey, which showed high levels of knowledge. To reduce concerns about common method variance (CMV) and response biases, we used several of the procedural remedies by Podsakoff, MacKenzie, Lee, and Podsakoff (2003: 887–88). First, to minimize social desirability biases, the survey’s first page emphasized that each survey would be submitted anonymously and that no identifying information would be collected in the survey. Second, each section included text that reassured respondents that no particular answer was encouraged or discouraged. All the items met Podsakoff et al.’s (2003) criteria for minimizing ambiguity. Third, the data were collected form two sources. The sales were objective actual data while others were gathered from respondents. Forth, we conducted Harman’s one factor-test following Podsakoff et al. (2003). The result indicated that common method variance was not a serious problem. Taken together, we can conclude that common method bias is not a serious problem in this study. Finally, a comparison of participating and nonparticipating buyers indicated no significant differences in key firm characteristics, such as age, size, and sales. Similarly, early and late respondents were compared with regard to the substantive constructs in the model, and showed no statistically significant differences. Thus, nonresponse bias is not a concern in this study.

Appendix 2

Table 5 Measurement and items

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Gao, W., Liu, Y. & Qian, L. The personal touch of business relationship: A study of the determinants and impact of business friendship. Asia Pac J Manag 33, 469–498 (2016). https://doi.org/10.1007/s10490-016-9464-1

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Keywords

  • Business friendship
  • Congeniality
  • Customer relationship management
  • Interorganizational relations
  • Relationship marketing
  • Reputation
  • Rule adherence
  • Word-of-mouth