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British Journal of Management, Vol. 13, 317–336 (2002)

‘Relationships Mean Everything’;

A Typology of Small-Business Relationship
Strategies in a Reflexive Context*
T. Fuller and J. Lewis†
Teesside Business School, University of Teesside, Borough Road, Middlesborough TS1 3BA
and †Video Networks Ltd, The ICON, Lytton Way, Stevenage SG1 1AL, UK
email: ted.fuller@tees.ac.uk [Fuller]; jennifer.lewis@videonetworks.com [Lewis]

This paper reports on empirical research that investigates the meaning of relationships
to owner-managers of small firms, and how differences in meaning are implicated in the
strategy of the firms. In-depth interviews with owner-managers yielded 36 usable
transcripts. These were coded using a grounded theory approach and the narrative was
analysed for differences in meaning. Five categories of orientation to relationships
were grounded in the narratives with each firm appearing to have a dominant orien-
tation both with customers and suppliers. A number of apparently common themes in
the discourse on relationships, for example, trust, talk, expectations and service, were
shown to be interpreted differently, consistent with the types of relationship strategy.
We adopted the term strategy because relationships were shown to have a long-term
and influential effect, mediated reflexively, on the trajectory of the business. The analysis
illustrates the significance of social constructionism and reflexivity as explanatory
theories, and therefore the centrality of the meaning of relationships to the strategic
management of the firm. Relationships are conceptualized as the mechanism that links
the firm to its environment and causal to the impact that change in the environment
has on the firm.

Introduction a relational context is a causal mechanism of the

subsequent actions of the firm.
The overall approach of this research is guided by The centrality of the business owner to the
a principle that the trajectory of a small business outcomes of a particular small business has been
is caused by the interrelationship between the extensively delineated (Carland, Hoy et al., 1984,
business and its external environment. This inter- p. 356; Hornaday, 1990), both empirically and
action is manifest in the firm’s actual everyday normatively. Explanations of differences in the
business relationships. Our proposition is that outcome of any particular small business include
understanding what these relationships mean to differences in owner-manager motivation (e.g.
the firm (and specifically the owner-manager as McClelland, 1987), personality (e.g. Chell, Haworth
the decision taker) explains subsequent behaviour. et al., 1991), capability (e.g. Penrose, 1959) and
In other words, an owner-manager’s reflexivity in intentionality (e.g. Bird, 1988). Some analyses
have produced typologies indicating differen-
tiating general patterns of owner manager char-
* This work was supported by the Economic and Social acteristics, backgrounds and dispositions (e.g.
Research Council under project reference R022250070.
We thank the anonymous referees and colleagues at Dunkelberg and Cooper, 1982; Miner 1997;
the University of Durham Business School for their Scase and Goffee, 1987; Smith 1967). The instru-
constructive comments and helpful suggestions. mental purpose of such work is anticipating and

© 2002 British Academy of Management

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318 T. Fuller and J. Lewis

differentiating entrepreneurial behaviour (inno- levels of predictability of outcome from given

vation, growth etc.) from less-dynamic small- circumstance – nor is the knowledge entirely
business management. cumulative as different normative concepts are
The relationships between the entrepreneur employed.
or owner-manager, the firm and the environ- What such structural approaches do not explain
ment are mainly articulated in structural form. is the nature of differences produced from volun-
Different approaches have identified slightly dif- taristic action (Astley and Van de Ven, 1983), that
ferent structures and given predominance to differ- is, the very nature of agency that entrepreneur-
ent factors within those structures. For example, ship produces. They are unable to account for
Gartner’s model (Gartner, 1985) includes the what emerges from the idiosyncrasies of particu-
individuals’ entrepreneurship characteristics; lar businesses and owner-managers, or from par-
the organization (internal structure), the environ- ticular circumstances. As Hall states (1999, p. 140)
ment (external structure) and the process by ‘the contribution of voluntary action to the prob-
which the venture is started (strategy). This is abilistic character of sociohistorical causality is
similar to Miller and Toulouse (1986) (personality, evidenced by the problems that confront any
structure, strategy) and to d’Amboise and attempt to formulate an absolutely deterministic
Muldowney (1988), who classify three structural causality’. Approaches to understanding volun-
domains: taristic action are, we suggest, more likely to be
found in constructionist methodologies (Berger
• the ‘task environment’, (Dill 1958), (external and Luckmann, 1967; Gergen, 1985), which seek
structure) to find explanations in how people meaningfully
• the interaction with the environment as a regard their actions. Constructionist method-
function of the owner-manager’s personality ologies in entrepreneurship and small business
• and (thirdly), the organisation itself (internal are used to account for differences in outcomes
structure, ownership, size etc.). by seeking to understand the ways that owner-
managers perceive the environment and how they
Storey (1994) suggests three sets of factors that chose to act from that perception (Fischer,
have a theoretical linkage to the growth of Reuber et al., 1997; Jenkins and Johnson, 1997;
enterprises, i.e. the entrepreneur (motivations Merz and Sauber, 1995; Naffziger, Hornsby et al.,
and experience), the firm (internal structure) and 1994; Shaver and Scott, 1991). These particular
the strategy of the firm (a mixture of external studies have not addressed the issue of relation-
structural positioning and resource management). ship behaviour.
Hodgetts and Kuratko (1992, p. 36) suggest that Sociological studies on the influence of
small-business success factors can be classified in voluntaristic behaviour in small businesses have
four areas, i.e. the existence of opportunity used reflexive (Garfinkel, 1967) accounts of
(external structural), adequate finance capital individual owner-managers to identify reasons for
(resources), modern business methods (internal behaviour that is different from what rational
structural) and management ability. Low and theory might predict. Some of these studies
Abrahamson’s (1997) discourse (on start-ups) address the issue of relationships. For example,
describes salient factors as networks (external Scase and Goffee (1987, p. 163) concluded that, ‘it
structure), formality of stakeholder relationships is important to view the small business as social as
(strategy), stakeholder motivations (market struc- well as financial units and to recognise that they
ture), structure (market structure) and strategy of are organised on the basis of particular patterns
innovation or imitation (external strategy). of personal relationships’. Curran and Blackburn
The above examples of structural approaches (1994, p. 81) state that there have been few
to small-business theory share the same attempts at empirical grounding and rigorous
methodology – a deterministic interpretation of investigation in research on small-business
causality. That is, certain combinations of factors relationships. They suggest the need to ‘unpack
produce determined outcomes, or at least the the nature of relationships between small firms
probability of certain outcomes (probabilistic and their customers to provide evidence on power
causality). These theories have not produced relationships between suppliers and customers’.
robust generalized accounts of causality – high They contribute a grounded spatial analysis of
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Small-Business Relationship Strategies in a Reflexive Context 319

network relationships and uncover aspects of advantage. The meaning of relationships is im-
what relationships mean to owner-managers. In plicitly defined by the paradigm. From this per-
particular they reiterate Scase and Goffee’s inter- spective, differences in firm strategic behaviour are
pretation of the significance of personal relation- interpreted in this literature through the presence
ships (Curran and Blackburn, 1994, p. 89). or absence of various networking activities.
An extreme example of dense external business Gibb (1993, 1997) suggests that everyday
relationships is the concept of the network relationships between the small business and its
organizational form whose governance is a hybrid internal and external stakeholders are much
(Powell, 1990) between market transactions and richer than transactional relationships. Using
hierarchies (Williamson, 1991). Such dense organ- social network theory (Boissevain and Mitchell,
izational forms are not the norm with regard to 1973) he proposes that personal social actions,
small businesses or entrepreneurial firms (Curran such as exchanging knowledge and problem
and Blackburn, 1994), but some of the govern- solving, convert intermittent relationships into
ance aspects are relevant to understanding ongoing relationships, build wider organization
behaviour. In particular, what Larson (1992) calls contacts and turn casual and natural relationships
exchange structures between firms, which are into a means for doing business (purposive
durable and relatively stable. Larson suggests that relationships).
a range of studies of entrepreneurial firms, Dyer and Singh (1998) develop a conceptual
(Jarillo, 1988; Johannisson, 1987; Lorenzoni and argument for a relational view of strategy that
Ornati, 1988) indicate reciprocity norms, personal takes into account four sources of competitive
relationships, reputation and trust as important advantage; relational specific assets, knowledge-
factors explaining the duration and stability of sharing routines, complementary resources/cap-
exchange structures. At the heart of Larson’s abilities and effective governance. This discourse
explanation, informed by Leifer and White (1986) conceives of exchange relationships as a meta-
and Janowitz (1976), is the notion of power phor for strategies of resource enrichment
through social control ‘a feedback process that is through collaboration. It is silent on the pro-
jointly determined by and diffused across multiple cesses that might occur and is not empirically
participants’ (Larson, 1992, p. 78). Analytically, grounded.
this power is relative to other powers in rela- In summary, the theoretical context for the
tionships, i.e. hierarchical or market power and study reported here is that relationships between
contractual power (Williamson, 1975, 1991). the owner of the business and the environment
Informed by Mark Granovetter’s work on are structurally significant, but the working of the
exchange processes (Granovetter, 1985), Larson structural mechanisms are unclear. Voluntaristic
suggested that the process by which significant rela- social actions of the owner, whether intentional or
tionships were built between entrepreneurial firms reflexive, are thought to contribute to the out-
was based on reciprocity, trust and mutual respect, come of the firm, and constructionist method-
and that the social context provides the environ- ologies may contribute insights into the reasons
ment in which economic exchange can be initi- and nature of such actions.
ated. However, her analysis did not penetrate the This study examines the nature of everyday
‘overwhelming majority of the entrepreneurial practices of business relationships from a social
firms’ inter-firm relations’, which were not ‘dense constructionist perspective, in which explanations
collaborative (dyadic) ties’ (1992, p. 84). are not found in individual psyche nor in social
The extensive literature on entrepreneur net- structures but in the interactive processes that
works, for example (Aldrich and Zimmer, 1986; take place routinely between people (Burr, 1995,
Birley, 1985; Human and Provan, 2000; Jarillo, 1988; p. 7), that is, the dynamics of social action. Our
Johannisson, 1987; Jones et al., 1997; Uzzi, 1997), view is that understanding these practices yields
as analogous to social networks (Mitchell, 1969), new insights. We suggest that relationships
conceives of organizational form as existing beyond between small firms and their stakeholders have
the boundaries of the individual firm, and that an ontological significance and that their descrip-
resource interdependency (including knowledge tions are explanatory narratives of voluntaristic
as a resource) and processes of governance (trust action. If one can understand the multi-
and reciprocity) are mechanisms of competitive dimensioned meanings of the action manifest in
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320 T. Fuller and J. Lewis

relationships, one understands more clearly the as an addition to theory, the degree of hetero-
small firm. geneity of these. We chose to ground our research
in the perspectives of the owner-managers and
similar decision-makers. We use the term per-
Research aims and methodology spective as a metaphor ‘for revealing special
properties of an object or event’ (Denzin, 1970,
To consider the dynamic between the firm and its p. 65) that are ‘grounded’ (Glaser and Strauss,
environment as the activities inherent in its rela- 1968) in a strong empirical base. For our research,
tionships is to collapse the salient environment of the events were instances that could be reflexively
the small business into the notion of a set of recounted, told and retold by owner-managers
stakeholder relationships, some of which are and the special properties are the detailed
actualized, some of which are latent. This descriptions of these events, such as temporal
approach does not fully exhaust an exploration of sequence, nature of the relationship, the course of
contingent or latent powers or liabilities. For action or ‘patterns of stake’ (Potter, 1996, p. 131).
example, reasons why a business succeeds or fails In this way, the term perspective is used as an
could be outside any particular relationship it has, explanatory tool for understanding the empirical
though an event that changes the path of a world of small business – it is a ‘powerful strategy
business creates or changes relationships, whether of illumination’ (Denzin, 1970, p. 65) to gain
desired or not. insight into that world – it does not seek to give
Acting only on existing relationships enables us ‘perspectives’ an ontological status in the world.
to admit the ontology of the actors themselves. We set out to explore the viewpoints of owner-
We chose to ground the work in the everyday managers in order to ‘generate data which give
practice of doing business; an empirical and an authentic insight into people’s experiences’
phenomenological source that gives rise to a (Silverman, 1993, p. 91) – that is, through people’s
strong potential for ontological adequacy of willingness to tell stories about their experi-
theories thus grounded. Fundamentally, it enables ences, (and the researcher’s willingness to listen
the actors reasons for acting, and their sense of and learn ‘from those who experience and con-
the environment to be articulated, building theory sume the process that empirical research produces’
as to why and how actors behave in the way they (Hardy and Clegg, 1997)). As Miller and Glassner
do. Its interpretation can also enable dialectical (1997, p. 100) put it, ‘interview subjects construct
absences to be sensed in its interpretation; for not just narratives, but social worlds’. A primary
instance, actors may not perceive the same aim of this research therefore, was to maximize
external powers as observers. our understanding, through interpretative research
The interpretative approach in the social sciences practices, of the reflexive world of small business.
lies with traditional empirical programmes such
as phenomenology (Husserl, 1970; Schutz, 1967,
1970), ethnomethodology (Garfinkel, 1967; Pollner, Method
1987) and other social constructionist theory (cf.
Berger and Luckmann, 1967). From such a We initiated the research through a series of
‘complementarity’ of perspectives (Miller, 1997), qualitative interviews with key people from small
we have come to learn of the ‘intersubjectivity’ of firms, seeking to identify a range of possible
reality, of how our ongoing interaction with concepts of issues relating to relationships with
others constructs and communicates meaning, stakeholders, being guided by intermediate ana-
and of the essential role of language in enabling lysis and saturation. We then used qualitative
us to reflexively describe the social world around analysis techniques to build theory. In particular,
us, for instance, through telling stories about narrative analysis and grounded theory (Glaser
some aspect of it. and Strauss, 1968) to explore the significance,
Our study was the everyday practices and meaning and medium of exchange of/in relation-
orientations of owner-managers in the context of ships, from the perspective of the owner-manager.
their business relationships. The research exam- Undertaking this marked the focus of our research
ined the meaning of relationships to the owner- – the development of an empirical definition of
manager in terms of orientation and practice, and relationships.
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Small-Business Relationship Strategies in a Reflexive Context 321

We carried out 50 qualitative semi-structured the interviewees. In order to create meaningful

interviews with owner managers or similar patterns of these attributes, the transcripts were
decision-makers. Each interview lasted between revisited in an interpretative analysis of themes
45 and 90 minutes. Of these, 45 were transcribed and concepts inherent in the narrative. Respond-
and covered 38 different firms, of which 36 were ents had made clear in the interviews that, to
independently owned, located in the North East them, customers were the most significant stake-
of England and in a diversity of business sectors holders. Respondents were therefore asked what
(Appendix 1). The firms had all been established relationships meant to them, and in particular
for at least three years – start-ups are a different about their customer and supplier relationships.
case (Birley, 1985; Larson and Starr, 1993). The We recognize that the small firm is situated in a
research set out to follow a ‘theoretical sampling’ variety of internal and external stakeholders
design whereby interviewees were selected for (Curran et al., 1992; Dollinger, 1985; Gibb, 1997).
their perceived ‘theoretical relevance’ to the However our methodological approach guided us
study. Nineteen pilot interviews (Fielding, 1993, to use the owner-managers’ perspectives. A sep-
p. 137) were carried out to ‘ground’ empirically the arate two-month ethnographic study was under-
issues raised by the research’s primary questions taken in one responding business to understand
and to ascertain whether these questions were linkages between external and internal relation-
relevant to interviewees (i.e. they had face ships, but is not reported here. Apart from the dir-
validity). The process of interviewing then con- ection set by the owner-managers’ responses, our
tinued this until it was felt that ‘theoretical focus on external relations also relates to the wider
saturation’ had been reached, that is, that the research question, which is how environmental
research was not discovering anything new change can be understood to influence the small
(Glaser and Strauss, 1968, pp. 45–77). Given the business.
large amount of post-fieldwork analysis, this is a Through further analysis of these responses, we
judgemental decision partly based on available developed a sense of the almost ubiquitous
resource and partly on a preliminary analysis that presence of a long-term perspective on each
was carried out after each small batch of about relationship. Not that each relationship was long-
five interviews. Thirty-six substantial interviews term, but that each was something to be ‘built up’,
from 35 firms, chosen for their richness of to be ‘worked at’, ‘working together’, having a
response, formed the basis of further in-depth ‘philosophy of loyalty’. For example:
The interviews were concerned with two inter- ‘We try and cultivate a relationship with our
linked issues, the nature of their relationships customer, the nature of our business however is
with stakeholders and the nature of information that in terms of the products that we sell we’re not
and communications technology in that relation- unique and customers will move especially in the
[specified] market . . . Having said that we try and
ship. As this was explained at the start of the
offer something extra in terms of our customer
interviews, it set a context. However, our ques-
service and our rapid delivery . . . So we try to
tioning with regard to stakeholder relationships establish long standing relationships however it
was not restricted to technological issues, rather is a hard headed business and there are casualties.
on what relationships meant, how they varied We do find however that some of the customers
between suppliers and customers etc. and how the that we lose will come back to us, of course they
owner-managers built up and managed relation- want the same terms and conditions’ (Case 104 –
ships. Typical interview themes are shown in see Appendix 1).
Appendix 2. This paper concentrates on the issue
of relationships in this context, not the tech- Relationships were inherently a part of everyday
nological aspects. doing business, so each interaction was in a sense
tactical, but governed by, in their words, a
philosophy. This common theme of relationships
Analysis and interpretation having to be continuously worked at, led us to
take the view that approaches to relationships,
The transcripts were coded to produce a long list and any differences in these, were a strategic part
of attributes of the relationships, in the words of of the business. Thus differences in approaches to
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322 T. Fuller and J. Lewis

relationships were, potentially, strategic, i.e. explana- strategy was embedded in everyday activity and
tory of a firm’s trajectory. exposed in the narrative of the speaker. However,
A further insight from the transcripts was the as researchers we began to use the idea of
significance of the interactivity between the firm different orientations to relationships in order to
and the stakeholders on the intentions and give the coded characteristics greater theoretical
understanding of the owner-manager. That is, we robustness. A pattern of meaning began to
read a continual reflexive shaping of the firm’s emerge by asking why these characteristics gave
activities through the owner’s interpretation of relationships particular purpose.
the interactions with stakeholders. For example: The differences in perspective or orientation of
the respondents were drawn from the way they
‘I can only see us having to get more and more described the meaning of relationships. We
adept at dealing with this sort of thing with our manually clustered the keywords used in these
customers because I think it will make a descriptions. Examples are given below. Given
difference ultimately.’ (Case 104) the long-term approach to relationships, i.e. the
strategy argument, we feel confident in reporting
‘I could have never have envisaged when I came
these differences as relationship strategies; the
here that people hired some of the things that they
do hire. I refer to it as absolutely crazy. But
manifest everyday approach reflecting the
invariably we find if we take something on and we meaning of relationships in a context of long-term
let people know that we’ve got it, there’s a market connections with stakeholders.
created for it.’ (Case 130) (emphasis added to A ‘relationship strategy’ is a concept that we
illustrate interpretative process) use to explain how the owner-manager plans and
attempts to put into practice a particular method
These are two fundamentals in our conception of of dealing with stakeholders. It may involve an
relationships. First, owner-managers construe most agreed plan of action; specified objectives such as
relationships with their stakeholders in a tem- to ‘develop each other’s business positively’ or it
poral context, and that this is normatively ‘ongoing’, may be a long-established or proven method of
built up ‘over time’. Second, that through inter- relational dealings.
actions with stakeholders, the owner (decision- Some owner-managers may discuss aspects of
maker) (re)constructs a mental model of their relational practices that cross over a number of
business vis-à-vis the environment and that this different strategies. For instance, owner-managers
reconstructing process (reflexivity) can lead to realign to another strategic orientation when the
changes in activities. These two conceptions narrative context of experience shifts from
establish relationship interactions as a strategic customer to supplier dealings. However, our
building block of the business and explanatory in findings also show that the majority of owner-
power. One respondent put it more succinctly: managers talk predominantly in the language of
one strategic approach to relationships.
‘Relationships mean everything.’ (Case 108) The resulting typology provides categories of
approaches to relationships, and these reveal five
Relationships can mean different things to different strategic meanings. Individual respond-
individual people in everyday life. This is also true ents usually displayed a consistent orientation to
of the owner-manager for whom the concept of one particular relationship strategy with stake-
relationships in business refers to something to be holders, whether customers or suppliers. There
built up, worked at, negotiated or maintained were few exceptions to this in our data. Import-
over time. That is to say, relationships are seen as a antly, further analysis of the narratives, and a
medium through which interests are served and subsequent ethnographic study revealed that
actions are accomplished in some practical way. these orientations could change over time.
This insight led us to think about the char-
acteristics of relationships as particular ways in
which a ‘strategy’ is manifest. Note that no owner- Relationship strategies
manager explicitly spoke of a ‘relationship strat-
egy’, nor referred to a particular analysis of their The categories that emerged are as follows and
orientation to relationships. This orientation or summarized in Table 1.
Small-Business Relationship Strategies in a Reflexive Context

9/12/02 1:28 pm
Table 1. Definitive differences in small-business owners’ orientation to relationships
Key orientation Attributes (coded in verbatim transcripts)

Network relationship To facilitate the formation of informal direct insight; gossip; information; know whom you are talking to; networking;
strategy (NRS) interconnected channels of communication personal interplay; respect; seek information out; talk; transferring information; trust.
through participation.
Contract relationship An expressed wish to work with people that share answering expectations; benefits; contractual; deal; demands; expertise; mutually

Page 323
strategy (CRS) the same vision of mutual trust and reciprocity, i.e. beneficial; needs; price; quality; service [people]; supply; tender; trust; working
transfer of goods or services for payment of the same. relationships.
Personal service relationship To form a significant relationship with people – ones advice; amicable agreement; business relationships; confidence; delivering; discuss
strategy (PSRS) that are indicative of the competitive nature of the [openly]; don’t mix business with pleasure; expect favours; face-to-face; fulfil
firm to provide an unparalleled service. expectations; good attitude; good relationships; helpful; immediate response;
interrelationship; knowledge; partnerships; people interact; perform; personal
contact/relationships; personal service/touch; professional approach; reliability; roles;
service; talk; trust.
Personalized relationship To consider the individuality of a person/organization accessibility; building rapport; chemistry between people; choice of whom to deal with;
strategy (PRS) and to build and adapt the relationship on the basis communication; compatible; confidentiality; continuous line between the personal and
of its distinctiveness. impersonal; dealing with somebody I like; dialogue(s); empathetic; expectations; face-to-
face; first-name terms; friendly; fulfil needs; golden values; higher degrees of
personalisation; honesty; human relationships; interactive; interpersonal; knowing each
other; loyalty; ongoing; open and genuine; personal contact/level; personal/personalized
relationship; personalities; problem solving; serious involvement; share ideas; someone
who you can rely on; symbolic; talk; true understandings; trust; trustworthy; understand
Strategic development To develop reciprocal relationships with stakeholders benefit one another mutually; common bond; communication; develop each other’s
relationship strategy (SDRS) who, through experience, share a common goal or business positively; discuss openly; establish rapport/relationships; expand our business;
interest in securing the future growth of their firm. expectations; higher degrees of sophistication; honesty; human relationships;
information; input; interchange of ideas; loyalty; making changes; mutual development;
mutually beneficial; needs; negotiate; nurture; partnerships; personal level; reciprocal
thing; relationships that extend beyond the individual; synopsis of each other’s business;
systems; trust; trustworthy; understanding the business/people; what their interests are;
what makes them tick; work together.

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324 T. Fuller and J. Lewis

Network relationship strategy (NRS) A telecommunications equipment supplier get-

The main orientation of this strategy was to ting direct insights from talking, to create new
facilitate the formation of informal intercon- business:
nected channels of communication through
participation. The way these owners did business ‘[Direct] insight and information to help busi-
was to be at the centre of information flows, nesses and to help get more business [talking and
trading information, and then acting (proactively) “seeking information out”] opens more avenues
on emergent opportunities. Only three (of 35) to business.’ (Case 107)
respondent firms in the sample demonstrated this
orientation. The core skills and competencies Contract relationship strategy (CRS)
seemed to be to talk and interact on a personal
level. A suitable metaphor might be a busy The main orientation of this strategy is an
honeybee, continuously collecting and giving expressed wish to work with people that share the
resources. same vision of mutual trust and reciprocity, i.e.
The following are examples of the strategy transfer of goods or services for payment of the
described as daily practice by the respondents. same. This label is not intended to portray simply
An office equipment supplier talking about a rational notion of an objective economic (price)
how the firm situates itself in the information exchange, but the sense that relationships fun-
flows of the client, and how it looks to suppliers damentally mean an exchange, of equivalent
for information: value, however subjective that is in practice. It is
not strongly personal though, as with all rela-
‘[We] know which (customer’s) office has been tionships strategies identified, it does involve
upgraded or has what item and keep very very trusting people, and in this case on the basis of
good records, they now phone in and say, “Have what is done against expectations. The style of
we done this office”, so our records are actually business and the language used evokes a sense
better than theirs. So he now relies on us which in of specialization, of knowing what they are doing,
effect it has tied him to us, not only that, at the and then of communicating that task orientation
moment our prices are slightly higher than our to the customer through the contract and through
competitors.’ (Case 120) the way the work is done and delivered. The core
competencies appear to centre on identifying
‘[If] we can’t get a lot of sense let’s say on the end
needs and setting expectations, through discus-
of a telephone from a supplier, we tend to go off
them fairly rapidly.’ (Case 120)
sion and specification, and then fulfilling contrac-
tual obligations thus established. As with the
‘network’ approach, only three respondents in
A tool hire, sales and service business talking
our sample demonstrated this as a dominant
about interplay, about their role as information
approach to stakeholder relationships.
intermediary and, significantly that what they
The following are examples of the strategy
do is more important than their own brand
described as daily practice by the respondents.
The owner of a printing business talking about
‘I think to a degree, we are just relaying the customers that he has never met but where there
knowledge that we get from our suppliers is evidently clarity of expectations, unlike some
assuming its proven, that is, we’re relaying that to other customers (second quote), and how the tech-
our customers and we’re filtering it and we’re nologies used are creating new markets, as expect-
analysing it and we’re weighing one thing against ations for the standards and nature of output
another thing . . . [with] an overlay of our own increase.
experience in this sort of thing.’ (Case 130)
‘Two of our biggest customers I’ve never met
‘And whilst we may have [the name of the firm] on they’re just on the other end of the phone . . . if
display for passing traffic as well, I would still he wants some work he rings us up and he
have that term “Tool Hire” there [on display] in explains what he wants and where he wants it and
some prominence. As I say, I think it’s important we get it sorted out . . . All we have to do is get
people know what we do, they can find out who the electronics right and produce the stuff.’ (Case
we are later.’ (Case 130) 139)
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Small-Business Relationship Strategies in a Reflexive Context 325

‘[Some customers] also think they can do it better The following are examples of the strategy
than we can which is a bit unfortunate because described as daily practice by the respondents.
usually they can’t.’ (Case 139) The proprietor of an office services bureau
captures the essence of this approach; personal
‘But [technology has] also opened up . . . a lot of
explanations and strong sense of service:
new markets for us as far as we’re concerned and
it answers people’s changing expectations.’ (Case
139) ‘[But] I’ll explain [to the client, that] provided we
can find the necessary document we can return it
to the customer on a fax and as quickly as they
A director of a quarry and stonemasonry business
could access it themselves really.’ (Case 113)
talking about the ‘basics’ of their business
The son of the founder of a small architectural
‘So they put their trust in me that I can do the job, glassware manufacturer talks about the intensity
all being I sign a contract, and I’d get skinned if I of the personal service:
didn’t [deliver] and I trust that they’re going to
pay me, or if they don’t I’ll take them to court. So ‘[The sales rep] would talk to the designer to see if
it’s qualified isn’t it? Its pretty basic stuff.’ (Case it could be done, how it would be done, how long
117) it would take etc. But he would . . . see that
through all the way . . . to the last nail being ham-
The manager of a manufacturer of domestic and mered in . . . and if anything went wrong he would
industrial appliances talking about systems for be the man who would be in the front line to deal
being able to respond to customer expectations with any.’ (Case 137)
and contractual obligations:
The production manager at an electronic
‘[a] customer has the opportunity to buy a five- equipment manufacturing and distribution
year extended warranty and if he does that his business talks about the importance of personal
details are put into the system and when the actual service in the relationship:
machine comes back for a repair the system will
spot from the serial number that this customer is ‘Because we [are] a one-stop shop, therefore it
covered under an extended warranty and must be personal service, when you’re dealing
therefore we won’t bill him etc.’ (Case 121) with new people in the business or with engineers
they want to talk to technical people, they want to
talk to sales about deliveries, they don’t want to be
Personal service relationship strategy (PSRS)
sort of pressing buttons and getting answer
The orientation of this strategy is to form a machines, they want personal service, that is what
significant relationship with people – ones that I believe we will continue to provide.’ (Case 112)
are indicative of the competitive nature of the
firm to provide an unparalleled service. This The managing director of a stationery printing
approach is personal in the sense that the trans- firm talks about the trust element in knowing
actions are closely connected with the stake- people, but also draws limits on the personal
holders’ everyday task needs and that these can aspect of relationships:
be learnt and articulated through ‘talk’. Also,
there is a strong sense that knowing people helps ‘I don’t mix business with pleasure. Mainly
with the construction of trust in the relationships. because sometimes I think you can become too
The strategic purpose behind this approach seems involved in leisure pursuits with suppliers but
to be the desire to construct a shared interper- it becomes very hard to make decisions that
aren’t influenced by familiarity. Whilst I appreciate
sonal dialogue, within which the value of the
that you know having the personal contact with
firm’s activities can be demonstrated and enhanced.
people etc., interrelationship is important, when I
Thus, the core competency of this approach is the finish at night I don’t have any contact with sup-
ability to relate to the particularity of situations pliers or customers even, apart from 1 or 2 personal
and the individual needs of an organization. Ten friends who are customers as well. So I try to keep
firms (of 35) demonstrated this approach to most relationships on a very professional basis.’
relationships. (Case 126)
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326 T. Fuller and J. Lewis

Personalized relationship strategy (PRS) clear and had a very clear method on how it would
work and everybody understood it . . . and the
The main orientation of this strategy is to con- other comment that came over was I was talking
sider the individuality of a person/organization their language.’ (Case 134)
and to build and adapt the relationship on the
basis of its distinctiveness. Here the focus seems A director of a design company and a managing
to be more on the individual personalities than on director from a publishing company also give very
the tasks. In some extreme cases, the respondents good insights into the importance of personal
imply that business progresses on the basis of relationships, for instance the idea of ‘golden
liking the stakeholder personally, and applies to values’:
customers and suppliers alike. Thus, the tasks
involved in doing business appear as a medium ‘[We’re] looking for integrity, that’s very high
for the personal relationship, rather than the on our list of golden values, so we expect it to
relationship being a medium for the task. The be reciprocated, integrity and honesty.’ (Case
respondents go to great lengths to establish and 106)
maintain relationships at a personal level and
take their cues from the interpersonal chemistry
Strategic development relationship strategy
they experience. This provides a true understand-
ing necessary for trust and for articulating and
meeting expectations. The core competency implied The main orientation of this strategy is to develop
was interpersonal skills, particularly verbal com- reciprocal relationships with stakeholders whom,
munication. Of the 35 firms, 12 demonstrated this through experience, share a common goal or inter-
approach to relationships. est in securing the future growth of their firm.
The following are examples of the strategy This ‘meaning of relationships’, came through
described as daily practice by the respondents. strongly in seven of the firms interviewed. The
A director of a bio-processing business talks approach still involved the fundamental concepts
about the approach of developing personal of trust, honesty, personalities and individualities,
relationships to create empathy so that a bond but extended beyond these with an intention of
develops: working together for the benefit of both busi-
nesses. Such relationships are open and communi-
‘[Customers] will say yes your product is very cative at a personal level, at an inter-organizational
interesting but what we’d actually like you do is task level and at an inter-organizational strategic
just change it slightly for our purposes. So under level. The purview of the respondents was wider,
those circumstances I think there’s probably a sensing the whole market system they were
very close relationship and very often we’ll send
involved in. The core skills and competencies
our technical people out to visit a customer’s
technical people to discuss what they want.’ (Case
implied are identifying and anticipating the need
110) for change, communicating understanding.
The following are examples of the strategy
The director of an audio speaker maker amplifies described as daily practice by the respondents.
the centrality of liking the stakeholder: The managing director of a sealant manufac-
turer talks about his ideas of mutual benefit,
‘[If] I’m working with [a supplier] somebody that mutual development and working together:
I particularly get on with and like, then that would
naturally progress to a more friendly relationship ‘Yes I have no desire or wish to keep either our
as it would with anybody else.’ (Case 135) customers or suppliers at arms length. I’d rather
confide in them where I can and see what we do to
The proprietor of a marketing firm illustrates her benefit one another mutually. Relationships in
orientation to people through her perception of business to me is one of partnerships it’s about
building personal relationships over time and trust, it’s about support and it’s about mutual
value of using the right language: development.’ (Case 104)

‘[The customer’s management team] all said that The managing director of a surface-coatings engin-
they liked [the proposal] because it was direct and eering firm talks about building relationships with
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Small-Business Relationship Strategies in a Reflexive Context 327

the stakeholders business, beyond individuals, about by respondents. These differences add
though nurturing personal relationships: weight to the case for prominent differences in
strategies and the key competences demanded by
‘And so having the right kind of relationship that such strategies.
extends, if you like, beyond the individual is The ways in which the meaning of these
probably very important . . . the relationships in common themes differs in each strategy is
that sense are potentially transitory, but you need summarized in Table 2. This table illustrates
to nurture [them].’ (Case 129)
correspondence between core competences and
respondent’s interpretation of key themes. There
The owner of a distribution company demon-
are seven themes – the first four relate mainly to
strates how he sees the interrelationships of the
the context of customer relationships, the second
supply chain and how the development of one
three mainly to the context of suppliers.
part helps the development of another:

‘[W]e don’t have any problem in letting [cus- Theme 1: ‘Supply’

tomers] know that we expect to make a profit but
that we’re quite willing in exchange for that to go The notion that the small businesses provided a
out on a limb if necessary to give them the ‘supply’ or were ‘supplying’ customers through
benefits that they’re looking for. [But] with our their relationships was present in firms in all five
suppliers we try to establish a relationship where of the relationship strategies.
they can look forward, or we let them know what The NRS respondents talked in overall terms;
benefits we’re expecting from their products and e.g. ‘we try to supply to as many people as
what trading terms we require in order for us to possible’. In CRS the focus was on what was
satisfy our customers in turn as part of a chain.’ supplied, e.g. ‘mainly the home market’, or ‘[We]
(Case 128) supply the [product name] to the [customer]’. The
PSRS respondents talked about a process of
The managing director and founder of a printing supplying needs, for example ‘supplying
firm talks about how integrity in interbusiness occupational health needs’. In PRS ‘supply’ was
planning and support from stakeholders is at the used in a dialectical sense, such as ‘we’re not
core of his stakeholder relationships: supplying a standard product’. Respondents in
SDRS put the term ‘supply’ in an interactive
‘[The customer has] told me what their plans are
context, for example ‘customers that supply us
for the future, so therefore I can go back to [the
supplier] and say right, this is what we want to call
with big volumes of work’, or ‘just in time
up from you, now what about it. And with that supplying [is] how we’ve been successful’.
information [the customer] gets good prices and
good service.’ (Case 136) Theme 2: ‘Talk’
These five different strategies; Network (NRS), As is clear from the preceding analysis, ‘talk’ is a
Contract (CRS), Personal Service (PSRS), fundamental aspect of relationships, again in
Personalized (PRS) and Strategic development every one of the five relationship strategies. The
(SDRS), distinguish one firm from another with transcripts are full of phrases such as ‘we have to
regard to what relationships mean to the talk people through’ and ‘we’re talking to them
respondent (and by implication to the culture and about problems’.
behaviour of the firm). In the NRS category, talk was interactive and
information sharing, as in ‘we have to talk people
through what they should really be considering’.
Common relationship themes with In CRS, talk was for setting expectations, as in ‘we
different interpretations can talk them through how to do it properly’. For
PSRS respondents talk was a way of maintaining
A number of common relationship themes trust, as in ‘when we . . . initially talk to [a lot of
emerged from the interviews, as discussed below. clients they] are concerned’ and being ‘on the
There were distinctive differences in the way that telephone nearly every week talking to them’. Those
these common themes were interpreted and talked in the PRS category brought to the surface the
Table 2. Different interpretations of common relationship ‘themes’ by owner-manager respondents analysed by relationship strategy type
Relationship strategy
Network Contract Personal service Personalized Strategic development

9/12/02 1:28 pm
Competence To be able to talk and Identifying needs and setting Ability to relate to the Interpersonal skills, Identifying and anticipating
interact on a personal level. expectations, through particularity of task situations particularly verbal the need for change,
discussion and specification, and the individual needs of an communication. communicating
fulfilling contractual organisation. understanding.


Page 328
Supply Overall perspective; e.g. Focus on what was Process of supplying needs, Dialectical; ‘we’re not Interactive context, for
‘we try to supply to as supplied, e.g. ‘products’ for example ‘supplying supplying a standard example ‘just in time
many people as possible’. ‘mainly the home market’. occupational health needs’. product’. supplying [is] how we’ve
been successful’.
Talk Interactive and information Talk used for setting A way of maintaining trust: Concern for processes: An explicit business
sharing: ‘we have to talk expectations: ‘we can talk ‘when we sort of initially ‘So we can talk quite resource; ‘we talk
people through what they them through how to do talk to [a lot of clients they] freely and openly’. [internally] about these
should really be considering’. it properly’. are concerned’. relationships . . . [about]
the terms that we use’.
Trust Quite objective: e.g. trust in the For a relationship to develop Relationships based on The task is secondary Objectified as a resource:
judgements provided ‘about there has to be ‘trust on both ‘trusting somebody’ to do a to the person: ‘deal with ‘only be obtained . . . from
the equipment’ or tasks. sides’. task, or of having ‘trust in us’. people you trust’. getting to know your customer’
and ‘has to be reciprocal thing’.
Expectations Unspecific, or task oriented – Reciprocity of expectations Expectations about tasks set Expectations implicit and Expectations highly
‘what we do, not who we are’. made as explicit as possible. through ongoing interpersonal centred around personal explicit, open and longer
dialogue. values and forms of term, e.g. ‘we let them
behaviour. know what benefits we
are expecting’.
Build Sense of control: relationships Relationship has objective Investment cost of building up Synonymous with Explicit nature of what
built with suppliers, ‘to play status – can be built up. instrumental relationship building rapport about is built, e.g. credibility,
one off against the other’. (e.g. increased volume). business issues. confidence.
Personal A sense of interaction, e.g. ‘Personal’ used as a qualitative People are who you do Being personal is
‘personal interplay’. description to actions ‘personal business with, e.g. ‘some instrumental, e.g. If you

T. Fuller and J. Lewis

contact’ and ‘personal touch’ people you are [more] have a (good) relationship
and ‘personal service’. formal with [than] others’. suppliers will ‘make an
extra effort’.
Service Reliable service enables Part of what is supplied, Objective item that is both Service is a result of what Service used as a verb; ‘to
promises to be kept. part of the overall value ‘demanded’ and ‘provided’. is done, e.g. ‘level of service’, and as a noun;
assessment. service’. ‘range of services’ ‘poor
service/good service’.
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Small-Business Relationship Strategies in a Reflexive Context 329

processes they were concerned with, e.g. ‘So clear about the expectations their customers had
we can talk quite freely and openly’, and ‘we’ve of them and how this whole system operated.
got people who know you talking to other people
as well’. Respondents in SDRS used talk as an
Theme 5: ‘Build’
explicit internal and external business resource,
for instance, ‘I’m talking to fairly sophisticated Respondents in all five categories expressed the
MDs who are not silly’, and ‘it’s important that intention of ‘building’ relationships with suppliers
our employees understand about relationships (and with customers in some cases). The use of
and we talk about these relationships quite often, the word implies that the respondents had a sense
it’s actually the terms that we do use in trying to of control over these relationships with suppliers,
make sure that we maintain the balance’. that they had some choice in whether to build the
relationship or not, perhaps more choice than
with customers. The building of relationships was
Theme 3: ‘Trust’
not measured in terms of transactions, though
The word ‘trust’ appears frequently in the growth in transactions was implied. A respondent
transcripts and is present in examples of all five in the NRS category said ‘I do want to build up
relationship strategies. There are differences in relationships, good trading relationships, because
emphasis however between the categories. In what I find is they offer us price support’. The
NRS customers would trust that what the firm CRS respondents talked more about the relation-
said about equipment or tasks being done would ship being built up, rather than the activity of
actually happen. In CRS, for relationships to building relationships: ‘The relationship is built
develop, there had to be ‘trust on both sides’. In up because we can . . . talk them through [how to
PSRS there was talk of ‘trusting somebody’ to do do it].’ This contrasts with PSRS respondents, for
a task, or of having ‘trust in us’. In PRS, the task whom building up a relationship was instrumen-
was secondary to the person. Phrases such as tal, for example: ‘we’ve built up such a relation-
‘open [and] trusting’ and ‘deal with people you ship with the organisation that all we need to do
trust’ were used. In SDRS trust was objectified as is give them a call’. The ‘time and effort that’s
a resource, and could ‘only be obtained . . . from been put into building up the relationship in the
getting to know your customer’ and ‘trust it has to first place’ was also made explicit by PSRS.
be a reciprocal thing’. Building relationships for those in the PRS
category was said to be akin to building a rapport,
though with business issues at stake. Some SDRS
Theme 4: ‘Expectations’
respondents were more explicit as to what was
The theme of ‘expectations’ is present in all five being built, for example ‘build up credibility’, and
categories, often linked closely with the word ‘build confidence’.
‘trust’. Respondents did not always use the word
‘expectations’, but often alluded to the actual
Theme 6: ‘Personal’
expectations and how these were managed. The
actual phrase ‘customer expectations’ was typic- Respondents used the term ‘personal’ in four of
ally synonymous with changes in expectations. the five categories. No transcripts in the CRS
The management of these was most clear in two category allude to the notion of ‘personal’. This
of the categories, CRS and SDRS. In the other term was used mainly with respect to supplier
categories, there was a sense that expectations relationships. The NRS types had ‘personal
were implicitly wrapped in the overall dialogue interplay’, PSRS had ‘personal contact’ and
between the firm and its stakeholders. In both personal ‘touch’ and of course personal ‘service’.
classifications, reciprocity was fundamental to the PRS types talked about who they had contact
relationship, and expectations were explicit to with, and referred to suppliers as ‘people’, e.g.
reciprocity. For example, one respondent in the ‘tend to stop with one person’, and the processes
CRS category had made significant changes to as interpersonal, e.g. ‘some people you are clearly
‘answer people’s changing expectations’. SDRS very formal with and others . . . you’re probably
respondents’ approach to relationships made not very formal with at all’. The SDRS
clear their expectations to suppliers, and were perspective demonstrated an instrumental view
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330 T. Fuller and J. Lewis

of personal relationships. For example, ‘they’ll qualitatively different strategies are used, which
make an extra effort, [but] if you haven’t got that are mutable. We have found sufficient evidence
relationship with them then they won’t’. among 36 small businesses to suggest that it is
possible to categorize differences in relationship
strategies as types.
Theme 7: ‘Service’
Common relationship themes in the narratives
This theme was most prominent in the context of of owner-managers are; supply, talk, trust,
relationships with suppliers, but was also used in expectations, build, personal and service. These
the context of customers. It was used as a themes are evidence of the strong presence of
counterpoint to ‘price’, implying additional value, attempted governance through social control
such as response times or problem solving. The mechanisms (Janowitz, 1976; Leifer and White,
respondents talked about ‘good service’, ‘24 hour 1986). Despite being everyday in action, the strat-
service’, ‘knowledge and service’, ‘quality of ser- egies are demonstrably long-term in conception.
vice’, being ‘service driven’. A NRS respondent They are not conceived by the owner-managers as
talked about ‘reliable service’, which enabled structural, for example as might be configurations
them to meet their promises to customers. A CRS of products and services, or segmentation of
respondent explicitly described the trade-off customers relative to competitors (d’Amboise
between price and service, as in ‘sometimes it’s and Muldowney, 1988; Gartner, 1985; Miller and
counterproductive to beat [supplier prices] down Toulouse, 1986; Storey, 1994). Nor do these strat-
too far because you don’t actually get the quality egies conform with the notion of entrepreneurial
of service that you want’. For PSRS, service was posturing, i.e. the extent to which the owner-
an objective phenomenon which ‘people want’ or manager favours change and innovation (Covin,
‘demand’ and which the firm ‘tries to provide’, Prescott et al., 1990). Instead, the strategies are
because ‘if you give them that service they tend more concerned with the maintenance of
to, to stay with you’. Respondents with a PRS everyday social flow between the firm and its
approach to relationships treated service as stakeholders and by implication the reduction in
analogous to products, i.e. an outcome of activity, the risk of being let down, for example by non-
‘we have to have a balance between [price] supply, non-payment or removal of business. The
competitiveness and the level of services’. SDRS categorical differences in relationship strategies,
respondents described service both as a process, which are manifest in different behaviour, may be
e.g. ‘so long as they are delivering these benefits explained as voluntaristic, revealed as differences
and are seen to try to service that’ and as a pseudo in meaning by the social constructionist method-
product, e.g. ‘we’ve increased the range of ology employed.
services we offer these people’. Whatever the reasons for owner-managers’
differing orientation to relationships, relationship
strategies are not fixed. One type of orientation
Discussion tended to dominate the strategies of each owner,
but there was evidence, from the owner-managers’
The evidence and analysis above has unpacked accounts, of changes in their orientation to rela-
the meaning of small-business external stake- tionships over time. For example, moving from a
holder relationships, definitively grounded in personalized approach to a strategic development
the actors’ perspectives, and is complementary and approach. There was no evidence that respond-
additive to the few other empirical sociological ents conceived of stages in moving from one
analyses of this issue, for example (Burrows and strategy to another. Nor did any respondent
Curran, 1989; Curran and Blackburn, 1994; allude to stages in the development of their
Larson, 1992). It provides new and original evi- relationship, as construed by Larsen (1992). Some
dence of how owner-managers make sense of did articulate what they considered a good
environmental change through the instrumental- relationship, for example having rapport.
ity of relationships. Our analysis reveals owner- As far as the sampling allows, there does not
managers’ practice of constructing relationship appear to be any direct relationship between the
strategies to enable the firm to relate to and sector of the firms and their relationship strategy.
interact with its essential stakeholder, and that Different strategies were observed in firms in the
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Small-Business Relationship Strategies in a Reflexive Context 331

same industry (e.g. printing). Owner-managers’ suggests that there are quantitative and quali-
explanations of the reasons for particular activ- tative differences between entrepreneurs and
ities related to the way they did business, not how non-entrepreneurs and between growth-oriented
their industry did business. The linkage between and non growth-oriented firms (Chell et al., 1991),
owner-manager relationship strategies and nor- in their participation in ‘weak tie’ (Granovetter,
mative sectoral business models could be pursued 1985) networks. The point here is that the
in further research. Other research has identified external environment and internal operations are
significantly different relationship strategies in mediated through the meaning of relationships.
the same industry (Human and Provan, 2000), The strategies were all ‘working’ for the firms
although the use of similar technologies is also concerned but to link this with, for example,
reported (North, Leigh et al., 1992). levels of profitability, would in this case identify
Similarly, we found little evidence of direct accidental regularities, which beset management
links being made by the owners between aware- literature. The question of outcomes requires
ness of environmental uncertainty or complexity further research, but we do not claim a theory of
(Gibb and Scott, 1985) and the individual rela- outcomes from this research – our focus is on
tionship strategy pursued. One (SDRS) owner- explanations of differences in orientation and
manager talked about the value of a particular behaviour. It is certainly interesting to speculate
customer who reduced uncertainty through long- on whether, for example, a strong orientation to
term commitment and planning. Mainly there was a strategic development relationship strategy
a sense that the various strategies all assumed (SDRS), or any other relationship strategy can be
high levels of uncertainty. Nor in general was empirically associated with significant growth, or
there any strong articulation of the firms’ net- a desire to grow (Birch, 1979; Chell and Baines,
works in the context of relationships. Only the 2000; Gallagher and Miller, 1991; Hakim, 1989;
NRS and SDRS firms gave any real sense of Storey, 1994).
recognizing a wider network or interrelated busi- Our theoretical claims are modest;
From the evidence, our view is that relationship (a) that the actors make a difference to the effect
strategy is owner-manager-centric, supporting the of structural causal powers in their environ-
widely held view of the significance of the owner- ment, i.e. a non-deterministic paradigm;
manager or entrepreneur (Chell, Haworth et al., (b) that there is continual reflexive (Garfinkel,
1991; Schumpeter, 1934). The power that custom- 1967) shaping of the firms’ activities through
ers have to encourage particular activities does the owners’ interpretation of the interactions
not deterministically cause the relationships strat- with stakeholders;
egy. Nor does competitor activity. Rather, what (c) that distinctive orientations to relationships
customers ask for is reflexively interpreted have been identified, which may inform future
through the relationship strategy and results in intensive and extensive research (Harré, 1979).
particular behaviour. An example of this is the
different ways in which information and com- These claims are not trivial, however, for they
munications technology was used by the firms demonstrate from a social constructionism
interviewed. For instance, firms with a strategic perspective; that the actors are reflexively re-
development relationship strategy made greater shaping the meaning of their experienced world.
use of video links, electronic data-interchange This shaping gives prominence to certain behav-
systems and high-speed digital technologies in iours that, at least in part, form the interrelation-
their relationships. ship of the business leader with the environment.
The research did not address the utility of Insights into this process are grounded in the
different strategies to the firms with regard to explanations and stories of the actors themselves,
long-term outcomes. There is evidence elsewhere as are the defining characteristics. This offers
that the owner’s ability to connect an understand- robust explanations and illustrations of voluntar-
ing of the external environment with internal istic causal mechanisms. It is not a normative
operational aspects of the business makes a theory, for there is no concept of the overall
difference to outcomes (Jenkins and Johnson, outcomes of particular strategies (which reflects
1997). Evidence from Chell and Baines (2000) the tensions in the role of interpretative research
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332 T. Fuller and J. Lewis

as a basis of normative managerial frameworks). strategies (as the research discovered), can rapidly
Our position is of course open to critique where it create a new environment and the requirement
could be argued that actual causes are not for new competences. Perhaps we need to con-
apparent to the actors, and open to critique for its centrate more on these issues in small business
lack of experimental adequacy. We suggest that management in research and teaching.
our evidence shows that deterministic theory, The findings have utility for management
from either an atomized or over-socialized per- practice. Illuminating these alternative strategies
spective (see Granovetter, 1985), is inadequate in and the inherent risks for owner managers may
explaining the actions of owner-managers of small prove emancipatory. Each of the strategies
firms, and that our work contributes to a greater creates different forms of dependency and risk.
understanding of differences in behaviour. Embeddedness can make firms vulnerable to
The nature of further research arising from this exogenous shocks (Uzzi, 1997) as well as pro-
study is considerable. First, a wider utilization of tecting them (Larson and Starr, 1993; Ostgaard
constructionist approaches, that seeks to uncover and Birley, 1994). An understanding of owner-
meanings and reflexivity in the everyday narra- managers’ differing expectations of relationships
tives of people doing business can provide is useful to firms attempting to develop a supplier
insights into issues currently resisting theoretical relationship with small firms. Also, as we noted in
development in small businesses and entrepreneur- our follow-up ethnographic research, changes in
ship, such as the link between intentionality and relationship strategy have considerable organ-
outcome. It provides a methodology to those izational effects that could be better anticipated
calling for the researcher to get closer to the study with an explicit understanding of relationship
of businesspersons in action in their environment strategies and the competences required to
(d’Amboise and Muldowney, 1988). The approach undertake them.
is compatible with an understanding that entre-
preneurship is a process of continual learning and
change. Summary
Second, empirical and theoretical work can be
undertaken to explore how the relationship This research has revealed that people running
strategies of small firms can change in different small businesses have different approaches to
contexts. This study has examined the way that relating to key stakeholders. More specifically,
relationship strategies change through technology. they develop relationship strategies to commu-
Future research could consider the utility of the nicate and do business with their key stakeholders
typology for understanding relational change in a (who they identify almost universally as being
number of different contexts, e.g. growth, sus- primarily their customers.) Unlike the firms inter-
tainability, internationalization, the supply of viewed, we use the term ‘strategy’ to describe their
professional services and finance, breadth of behaviour because, although it is daily practice, it
customer types, etc. has a long-term orientation, through which the
Third, theory of the management of small firms owner-manager reflexively shapes the direction of
needs to be rethought. The way that intention, the firm.
values and identity are inherent and implicit in The ontology is sociologically founded from the
the daily interactions with stakeholders needs to accounts of economic actors embedded in social
be made more explicit. Effective relationships are systems. The actors were key decision-makers in
the medium for recognizing and responding to 36 independent small businesses in a variety of
environmental change. From the firm’s perspec- sectors. The theoretical distinctions between the
tive, a nexus of relationships, including that with strategies are made by analytical interpretation,
the owner-manager, sustains its existence. The grounded in their narratives and language.
diverse relationships that owner-managers need A relationship strategy is a concept that we use
to manage, and the tensions created by the to explain how the owner-manager plans and
different needs and expectations of stakeholders, attempts to put into practice a particular method
internal and external, create the working envir- of dealing with stakeholders. Five categories of
onment. Undertaking different relationship strat- relationship strategy were identified; network rela-
egies requires different competences. Changing tionship strategy, contract relationship strategy,
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Small-Business Relationship Strategies in a Reflexive Context 333

personal relationship strategy, personal service d’Amboise, G. and M. Muldowney (1988). ‘Management
relationship strategy and strategic development Theory for Small Business: Attempts and Requirements’,
Academy of Management Review, 13(2), pp. 226–240.
relationship strategy. Denzin, N. K. (1970). The Research Act: A Theoretical
These strategies are conceptualized as reflexive Introduction to Sociological Methods. Adline Publishing
processes through which owner-managers daily Company, Chicago.
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Appendix 1. Details of the interviewees

Relationship Firm Type Case Employee Status Interviewee/s Gender

Strategy ref. band

Contract Stone Masonry 117 50–99 independent Managing Director M

Printing (Franchise) 139 10–19 franchise Owner-Manager M
Air Humidifier Manuf. 121 100+ independent IT Manager M
Network Telecoms Repair Service 107 1–9 independent General Manager M
Recondition Telecom Products 120 20–49 independent General Manager M
Light Plant & Power Tools Hire 130 1–9 independent Managing Director M
Personal Service Flag Manufacturer 101 1–9 independent Managing Director F
Advertising 102 10–19 independent Managing Director M
Audio Distributor 112 100+ independent Purchasing Supervisor M
Microfilm Service 113 20–49 independent Managing Director M
Pharmacy 116 50–99 independent Managing Director M
Executive Coach Travel 119 10–19 independent Managing Director M
Occupational Hygiene Labs 124 1–9 independent Managing Director M
Stationery Printers 126 1–9 independent Managing Director M
Elect/Mech. Engineering 133 10–19 independent Director F
Architectural Glass 137A 20–49 independent Financial/ M/M
Production Manager
Personalized Eng. Problem Solving 105 10–19 independent Managing Director M
Publishing 106 1–9 independent Managing Director M
Security Installation/Testing 108 10–19 independent Managing Director M
Chemical Processing 110 20–49 independent Finance Director M
Heating & Ventilation 114 20–49 independent Director M
Marketing/PR/Design 118 20–49 independent Director M
Food Packaging Tester 122 1–9 independent Managing Director M
Detergent Product Testing 125 20–49 independent Managing Director F
Engineering 131 50–99 independent Manager (family) F
Industrial Marketing/PR 134 1–9 independent Principal Consultant F
Audio Speaker Manufacturer 135 1–9 independent Director M
Secretarial support 140 10–19 subsidiary Managing Director M
Strategic Development Wedding Bureau/Photographer 141 1–9 independent Managing Director M
Pipework Lining Manuf/Fitters 129 10–19 independent Managing Director M
Sealant Manufacturer 104 50–99 independent Managing Director M
Body Repair Workshop 109 10–19 independent Managing Director M
Hard/soft Landscapers 111 50–99 independent Partner & Financial
Director M
Video Distribution 128 1–9 independent Managing Director M
Printers 136 20–49 independent Partner M

Appendix 2. Interview guide

Typical questions used in the interviews
About the firm
Brief background to history, general overview of the current business activities.
History of the firms introduction and use of IT and any other technologies, e.g. what kinds of
IT/communication systems does your firm use? What are they used for? Why does your firm use these
particular technologies?

Customer/Supplier relationships
Discussion about your firm’s customers.
How does your firm deal with these different customers, e.g. face to face, by telephone?
Which people were involved in setting up and developing relationships?
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336 T. Fuller and J. Lewis

How have particular relationships changed, how much time is spent in contact, what technologies are used?
Similar questions re suppliers.

Examples of questioning:
Context setting
• Interviewer: ‘I am specifically taking a qualitative perspective and trying to really understand
primarily what relationships mean in business, how relationships are changing, and then try and
address and look at how relationships are changing with the impact of IT.’

Typical questions to elicit meaning

• What I’m really interested in, in terms of small business research, particularly for this piece of
research, is what a relationship means to people operating a small business. I just wondered what
you understood by the term relationship?
• Do you have an idea of what a relationship in business means?
• What about relationships with clients what do they mean to you? What do you think is involved?
• Relationships in business is a term that everybody uses – relationships with customers and suppliers.
What does that mean?

Encouraging some narrative in response

• I just wondered whether you could talk me through a few examples of how you gain their business.
How you maintain contact with them and the role that IT has in these relationships?
• Could you take an example of a relationship with a customer or supplier and actually talk me
through how you do business with them. How they initially contact you? How the business
develops? How you follow it through?
• So could you take a few customer relationships as an example and actually go through what you do
for them?

Developing an understanding of relationship characteristics

• Do you have any customers that are long-standing?
• So what’s an important feature of the relationship with customers then, is it the knowledge that you
give them?
• Do you think there is different kinds of knowledge involved in the different relationships?
• What about the word power?
• What part do you think then that knowledge plays in relationships?
• Can you define what relationships with UK customers are like in comparison (to Japanese
• And what about relationships with suppliers. What kind of suppliers do you have?
• And how does a relationship differ with suppliers to customers then?
• Do you find that your relationships with suppliers then however large or small the organisation is, is
pretty much similar or do you have a sense of difference?
• And what about your suppliers. What kind of suppliers do you use, are they long-standing suppliers?