Abstract:
This research concerns rebuilding/repairing those buyer-seller relationships that were once strong, but have been damaged. A framework of relationship repair is proposed and empirically tested using fairness theory as foundation. Qualitative research and the literature were used to identify the most common causes of relationship damage. The most common relationship repairing/rebuilding efforts of suppliers are also identified. Specifically, the impact of three causes of relationship damage - seller firm's opportunistic behavior, service failures, and availability of better alternative suppliers - were explored. Additionally, the impact of five repair efforts - providing compensation, making relationship specific investments, showing accountability, giving assurance, and making organizational changes - on justice perceptions and subsequently on change in relationship quality was examined. A fractional factorial, mixed-design experiment was conducted to test the main effects and the second order interaction effects of the repair efforts. Scenarios were used to operationalize the causes of relationship damage as well as the repair efforts. The results show that supplier's opportunistic behaviors have the most damaging effect on relationship quality, followed by service failures and availability of better alternatives, in that order. Moreover, as proposed, the repair efforts have differential positive effects on distributive and procedural justice perceptions, which in turn are positively related to the change in relationship quality. Overall, the proposed model is well supported by the data. The study contributes to research in the domains of fairness theory, service failure and recovery, trust repair, and business-to-business relationship marketing. Theoretical and managerial implications, limitations, and directions for future research are discussed.
