1. Long Term Inter firm Relationships
Lecturer – Shahed Rahman

2. Exchange Relationships: Bridging Transactions
Why are exchange relationships so complex?
First, all people are different
Second, human interactions provide the only means through which exchange relationships can develop

3. Exchange Relationships: Bridging Transactions
Three basic types of human interactions can arise in business domains
Calculative Exchange Relationships
Ideational Exchange Relationships
Genuine Relationships

4. Calculative Exchange Relationships
Entirely based on the economic returns derived from a transaction
Does not last long
In calculative exchange relationships behaviors must conform to precise transactions terms

5. Ideational Exchange Relationships
Each exchange partner is viewed by the other as a conveyor of ideas, ideals and opinions
Development of norms
In the future it can improve performance

6. Genuine Relationships
Genuine relationships are highly evolved interactions in which partners are willingly to share personal information
Decision and behaviors in genuine relationships are no longer based on purely rational transaction criteria
Share behavioral norms as well as personal affinity (likeness) for one another

7. Exchange Episodes
Exchange episode is a separate and distinct transaction, such as Ford acquiring parts from Mazda
When the channel participants have little allegiance (Commitment )
In marketing channels, exchange episodes are completed based on pre-specified terms of exchange

8. Four elements must be associated with any marketing exchange episode
Products and services
Information exchange
Financial exchange
Social exchange

9. Products and services
Products or services are usually the primary object of interest in any marketing exchange episode

10. Information Exchange
Information exchange is technical, institutional, market intelligence conveyed from one channel member to another through personal or impersonal means

11. Ultimate economic measure of exchange Mutual assignment of value
Financial Exchange
Ultimate economic measure of exchange
Mutual assignment of value

12. Social Exchange Two things are necessary for social exchange
Must be purposeful and adaptive (Each participants believes that objectives can be reached through taking part in the exchange)
Willingness among the partners to adapt their behaviors or expectations to achieve outcomes sought through exchange.

13. The Discrete Relational Exchange Continuum
Discrete exchange is a transaction that has little social or no information exchange and no significant past or likelihood of a future relationship with the other participant
There are little interpersonal involvement between the exchange parties.
Communication is functional and used only to complete the transaction

14. Stages of Channel Relationship
Most relationships pass through four stages of development
Awareness
Exploration
Expansion
Commitment

15. The four stages of Channel Relationship
You are the one
Commitment
Increasing Trust and Commitment; Decreasing technological or cultural distance between organizations
Expansion
Engage in trial transactions; closing time and technological distance between organizations
Exploration
Closing Social and or spatial distance between organizations
Awareness

16. Exchange Governance Norms
All behavioral contracts are governed by norms
Five key governance norms are
Reciprocity
Relational communication
Solidarity
Role integrity
Mutuality

17. Reciprocity

18. Exchange Governance Norms
Solidarity (Team Spirit)
Glue that binds exchange partners together
Role integrity (Honesty)
The degree to which each party to an exchange fulfill it promises and satisfies its partners
Mutuality (Support)
Each partners creates outcomes. Benefits must be distributed between them