Creating and appropriating value in collaborative relationships

a r t i c l e i n f o Business relationships provide means for creating and appropriating superior value in the marketplace. To date, research pertains almost exclusively to the value after relationship creation and sharing among exchange partners. Consequently, the interaction between value creation and value appropriation remains relatively unknown in collaborative relationships. Drawing on equity theory, this study proposes a conceptual model that positions value creation and value appropriation as focal variables within the nomological net of business relationships. Data collected from industrial customer–supplier projects reveal that value appropriation is the strongest driver of project satisfaction. Customer firms perceive value creation as positive only if they appropriate a larger slice of the bigger value pie. Information exchange moderates customer firms' evaluations of value creation and appropriation efforts. In contrast to the highly competitive nature at the project level, embedding the supplier project in an ongoing sourcing relationship reveals cooperative elements in the customer–supplier interaction. Greater relational satisfaction favors less aggressive value appropriation efforts. These insights help bridge the gap between managerial metrics that focus on successful value appropriation and academic models that attend to variables that capture the quality of ongoing relationships. Over the past two decades, relationship marketing became the dominant perspective in academic marketing literature (Palmatier, 2008). Scholars advance understanding of the drivers, mediators, and performance outcomes of business relationships on the basis of both conceptual and empirical perspectives. In particular, widespread research attention centers on relationship quality as a key mediating As a composite concept, relationship quality summarizes " the diverse interaction characteristics required to create a high-caliber relational bond " (Palmatier, 2008, p. 22) by encompassing variables such as satisfaction, trust, and commitment. As a mediating variable, relationship quality provides a means to an end. Companies do not build strong bonds with their customers and suppliers for their own sake. Rather, they adopt exchange designs that offer the best performance prospects (Carson et al., 1999). Companies prefer relational exchanges to arm's-length interactions when those exchanges help create and appropriate more business value in marketplaces (Ghosh and John, 1999). For example, North American car manufacturers historically relied on an arm's-length model of supplier management, characterized by minimal commitment or dependence and the exploitation of bargaining power. The focus was clearly on value appropriation, frequently at the expense of the suppliers. Competitive pressure from Japanese auto manufacturers forced U.S. firms to reconsider this practice …