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Business Relationship Framework in Emerging Market: A Preliminary Study in Indonesia

Anton A Setyawan, Basu Swastha Dharmmesta, Purwanto B.m and Sahid Susilo Nugroho

International Journal of Economics & Business Administration (IJEBA), 2014, vol. II, issue 1, 59-72

Abstract: This paper explores business relationship framework between two companies. In this research, we use relationship marketing and transaction cost as frameworks to analyze business relationship of two different kinds of companies in Indonesia, oil company and hypermarket. Gronroos (1994) defines relationship marketing is establishing, maintaining, and enhancing relationships with customers and other partners, at a profit, so that the objectives of the parties involved are met. This is achieved by a mutual exchange and fulfilment of promises. This definition is a key to analyze the relationship of retailer and their supplier. In the other side, Williamson (1980) argued that relationship in business organization based on their economic interest. This approach known as transaction cost approach. In this kind of relationship, business organizations consider cost and benefit of business relationship. We use qualitative method in this research. The design of the research is case study with multiple cases proposed by Yin (1994). In this case study, we use basic content analysis as tool to analyze the phenomenon. Unit analysis of this research is company. We use two cases in the different companies, Oil Company and hypermarket. In order to gain validity, we use multiple key person or informant to gain validity. The result shows, that in the oil company, relationship between company and their supplier tied on a strict contract. In fact, the relationship of supplier and a company is based on transaction cost theory. In the hypermarket company, the relationship of supplier and retailer is based on trust, commitment and satisfaction. Those three construct are the foundation of relationship marketing.

Keywords: Relationship Marketing; Resource Dependence; Transaction Cost Theory; Multiple Case Studies (search for similar items in EconPapers)
JEL-codes: M14 M31 O31 (search for similar items in EconPapers)
Date: 2014
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Handle: RePEc:ers:ijebaa:v:ii:y:2014:i:1:p:59-72