The Impact of Relational Variables On Value Creation in Buyer-Seller Business Relationships - Sachez

Journal of Business-to-Business Marketing, 17:6294, 2010 Copyright Taylor & Francis Group, LLC ISSN: 1051-712X print/1547-0628 online
e DOI: 10.1080/10517120903000389
Journal 1547-0628 1051-712X WBBM of Business-to-Business Marketing, Vol. 17, No. 1, Jan 2010: pp. 00 Marketing
The Impact of Relational Variables on Value Creation in BuyerSeller Business Relationships

JOS NGEL LPEZ SNCHEZ
University of Extremadura, Badajoz, Spain
J. . L. Snchez et al. Relational Variables and Value Creation
MARA LETICIA SANTOS VIJANDE and JUAN ANTONIO TRESPALACIOS GUTIRREZ

University of Oviedo, Oviedo, Spain
Purpose: This research was aimed at attaining a deeper knowledge of how customer value creation can be improved in business markets. Although trust and commitment (as relational governance mechanisms) appear to have a positive effect on customer value creation, limited empirical evidence exists about the combined effect of the aforementioned variables on improving customer value creation. This article studies why trust and commitment are key precursors to improving customer value creation in commercial relationships among companies. Methodology: Following a review of the literature, we introduce and contrast a conceptual model on a sample of 181 manufacturing companies located in Spain by means of a structural equation system. Originality: The study of these causal relationships is relevant because it provides greater knowledge of the role played by the key relational variables of trust and commitment on improving customer value creation in business markets. These variables also have an important influence on the development and maintenance of a relationship in the long term and have been the focus of recent marketing research.
The authors thank the anonymous Journal of Business-to-Business Marketing reviewers for their constructive comments on earlier versions of this article. Address correspondence to Jos ngel Lpez Snchez, PhD, assistant professor of marketing, University of Extremadura, Facultad de Ciencias Econmicas y Empresariales, Departamento de Direccin de Empresas y Sociologa, Avda. de Elvas s/n, 06071 Badajoz, Spain. E-mail: jangel@unex.es 62
Relational Variables and Value Creation
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Findings: The empirical results reveal that: (1) distributor commitment is a direct and positive antecedent of value creation in a relationship, understood from a functionalist perspective; (2) distributor trust, the other relational variable, has an indirect effect on value creation through the distributors commitment; and (3) this research does not tie in with previous studies that found that direct value-creating functions have a multiple-component nature representing a second-order factor. KEYWORDS trust, commitment, value creation, buyerseller relationships, Spain
The creation of customer value has been widely acknowledged as being one of the main objectives in buyerseller relationships (Anderson, Jain, and Chintagunta 1993; Holbrook 1994; Menon, Homburg, and Beutin 2005; Ulaga and Eggert 2006). Adding value to the basic market offer may improve customer satisfaction while strengthening attachment between the parties, thus promoting customer retention (Walter et al. 2003). Understanding how value can be identified, created, and delivered to the customer can therefore be considered a key source of competitive advantage in business markets (Haksever, Chaganti, and Cook 2004). Accordingly, the Marketing Science Institute has included this concept among its research priorities in recent years. The specialist journals have followed suit, devoting special issues to recent developments in this field of knowledge. They include the Journal of the Academy of Marketing Science in 1997 and Industrial Marketing Management in 2001 (Lapierre 2000; Ulaga and Eggert 2005). However, despite these efforts, the complexity of the concept of customer value has resulted in this term remaining ambiguously defined in the literature, which provides many different approaches to its critical components (Ulaga and Eggert 2005). In addition, academic research has identified that value creation can be improved in a relationship through: (1) product innovations resulting from research and development (Mizik and Jacobson 2003; Swaminathan, Feisal, and Hulland 2008); (2) technology improvements in the productiondistribution processes (Nambisan and Nambisan 2008); (3) market-based assets (relational and intellectual) (Srivastava, Shervani, and Fahey 1998); (4) business processes (product development, supply chain, and customer relationship management) (Srivastava, Shervani, and Fahey 1999); (5) collaborative communication between exchange partners (Mohr, Fisher, and Nevin 1996); (6) marketing, research and development, and operations capability (Krashnikov and Jayachandran 2008); and (7) a high level of cooperation (Fang et al. 2008). The present work was aimed at attaining a deeper knowledge of how customer value creation can be improved in
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J. . L. Snchez et al.
business markets. In particular, despite the fact that the improvement of customer value creation is very likely to be based on the trust and commitment of the commercial partners, limited empirical evidence exists about the combined effect of the aforementioned variables on improving customer value creation. In assessing why companies promote or inhibit the development of customer value creation we consider trust and commitment as relational governance mechanisms that can act as antecedents to customer value creation. Understanding the effect of these factors can help companies manage them efficiently in order to improve customer value creation. The compelling nature of the case has attracted the attention of scholars such as Moller (2006) and Holcomb and Hitt (2007), who have insisted on the need for empirical studies in this domain. The present study is an inquiry into the role of trust and commitment as antecedents of customer value creation in business markets in Spain. The study of these causal relationships is relevant because it provides greater knowledge of the role played by the key relational variables of trust and commitment in improving customer value creation in business markets, and because these variables also have an important influence on the development and maintenance of a relationship in the long term. The article is structured as follows. First, the various value-creating functions in a relationship are studied. A theoretical model linking trust and commitment with value-creating functions is then proposed. The empirical section presents the results of research based on a sample of 181 manufacturerdistributor relationships. Finally, the most significant conclusions are presented, and business implications as well as the limitations of the study are highlighted.
VALUE-CREATING FUNCTIONS
The functionalist approach is a line of research that focuses on analysis of the creation of value for the customer (Anderson, Hakansson, and Johanson 1994; Walter, Ritter, and Gemunden 2001; Lindgreen and Wynstra 2005). It is called the functionalist approach because it is based on the premise that buyerseller relations may take the form of a series of tasks or functions that create value for the agents involved (Anderson, Hakansson, and Johanson 1994). More specifically, they allow the parties to link their activities, tie together their resources, and to develop bonds between people . . . enabling the accumulation of knowledge, the creation of new resources, and the development of new activities (Harris and Wheeler 2005: 188). Functions in relationships can be classified as direct or indirect (Vazquez, Santos, and Sanzo 1998; Ryssel, Ritter, and Gemunden 2004). Direct or primary functions represent, in general, the basic benefits derived from the main dyadic relationship. These are performed within the relationship as its actors look for efficiency by means of the interconnection
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of activities, creativity from the heterogeneity of resources, and mutuality based on the interest of the actors themselves. Indirect or secondary functions, also known as network functions, involve the effects of a relationship deriving from its interconnection with other relationships. This type of function includes the chains of activities that involve several organizations, the resource portfolio controlled by more than one company, and the perceptions shared on the network by more than two companies. Among the most significant recent contributions to this analytical approach is that of Walter, Ritter, and Gemunden (2001) who take the functions that create value for the customer to be the activities carried out and the resources used by the supplier company, that is, whatever the supplier contributes to both the main dyadic relationship and to the network of relationships connected to it. The following is a description of each of the value-creating functions that the supplier carries out for the customer.
Direct Functions
Benefit function. The fact that the supplier, in its relationship with a given customer, is able to offer products or services at the best prices, or at least at competitive prices, without the customer having to renounce certain minimum technical quality standards, is a significant factor in customer profitability (Walter, Ritter, and Gemunden 2001). This function reflects the importance of the supplier in the generation of financial benefits for the customer. It also helps customersbecause of the cash generated by the purchase of products from which they gain a high profit marginto stimulate relational exchanges with different suppliers who can carry out complementary functions in their business strategy (Kalwani and Narayandas 1995). Volume function. The supplier carries out this function, creating value for the customer when it can meet the high demand of its counterpart (Walter, Ritter, and Gemunden 2001). It may happen that, for strategic reasons, stable relations with suppliers are more important than obtaining high profits in subsequent transactions. The fact that a supplier can carry out the volume function means that the customer can be sure it will be supplied properly and on time with a large amount of product when necessary (Turnbull 1982). Safeguard function. The supplier carries out this function in a relational exchange once it can guarantee that the client will receive both a certain level of supply, even if this is not so favorable from an economic point of view, and a reduction in its dependence on other suppliers (Hakansson 1982). The seller party therefore acts as an emergency supplier for the trading partner. The argument is that market uncertainty makes it necessary for customers to maintain relations with additional suppliers because, even though these may not always have a benefit
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function and/or a volume function, they provide a sort of insurance against crises or difficulties in other exchange relationships (Walter et al. 2003).
Indirect Functions
Innovation function. In the development of new products and processes, customers tend to establish cooperation relations with suppliers who are technological leaders and who have extensive product experience (Walter, Ritter, and Gemunden 2001). In fact, both product and process innovation are often the result of interactions between two or more agents (Hakansson 1987) so that, under some circumstances, the customer may even sacrifice financial and/or volume benefits because of the long-term usefulness of cooperation of this type (Walter et al. 2003). Market function. Customers can take advantage of the prestige or good commercial reputation of some of their suppliers and use it as a reference point to help gain access to new markets and make new trading links (Walter, Ritter, and Gemunden 2001). The market function can be found when working with suppliers who adopt strict criteria and conditions for selecting their commercial partners (Corstjens and Merrihue 2003). Working with this type of supplier can have a knock-on effect on other trading relationships, even if the suppliers are not the most important in the market in economic terms (e.g., in terms of sales volume). Scout function. It can be argued that a companys success may be largely the result of its being able to obtain significant information from other agents located outside itself (Walter, Ritter, and Gemunden 2001). A possible criterion to be used when selecting new suppliers, therefore, is their capacity to provide relevant commercial information to the customer. Such suppliers can become useful channels of information because of their extensive knowledge about their own sector and about other related markets (Walter et al. 2003). Such useful commercial information may include details of competitors product lines and matters relating to market trends.
THE EFFECT OF TRUST AND COMMITMENT ON VALUE-CREATING FUNCTIONS

In this research we adopt the commitment-trust perspective of interorganizational relationship performance to develop a conceptual model with which we try to attain a deeper knowledge of how customer value creation can be improved in business markets (Blau 1964; Cook and Emerson 1978; Morgan and Hunt 1994; Palmatier, Dant, and Grewal 2007). Consistent with this perspective, trust and commitment are regarded as key factors for the success of a relationship in the long term (Dwyer, Schurr, and Oh 1987; Morgan and Hunt 1994; Wilson 1995). More specifically, trust and commitment (as
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relational governance mechanisms) are considered to have a positive impact on customer value creation (Dyer 1996; Dyer and Singh 1998). A commercial partner is, therefore, expected to behave positively toward and in the best interest of a committed and trusted counterpart in the dyad (Hakansson 1982; Jap 1999; Palmatier, Dant, and Grewal 2007). Analysis of this perspective shows its usefulness for explaining trust and commitment as key precursors of customer value creation. However, despite the importance of this topic for gaining a greater understanding of how buyerseller relationships work (Dwyer, Schurr, and Oh 1987; Anderson and Narus 1990; Mohr and Spekman 1994; Morgan and Hunt 1994; Fontenot and Wilson 1997; Palmatier, Dant, and Grewal 2007), there are few works providing empirical evidence about the combined effect of these two factors on improving the creation of value for the customer (Gustafsson, Johnson, and Roos 2005; Lindgreen and Wynstra 2005; Moller 2006). Figure 1 shows the theoretical model proposed. The factors are measured on the basis of the evaluation made by one of the members of the main dyadic relationship: the manufacturer who, on the basis of the thorough knowledge it can be expected to have on the relationship, evaluates the level of trust and commitment of its main distributor. The manufacturer also indicates its own degree of fulfillment of a series of direct and indirect functions that provide value to the main distributor. Accordingly, the model evaluates whether the manufacturers value creation activities in the main dyadic relationship depend on its perceptions of its counterparts level of trust and commitment. This approach has been used to determine how organizational resources are related to customers marketing measures or performance indicators (Roth and Jackson 1995; Soteriou and Zenios 1999; Theoharakis and Hooley 2003). We also verified that the respondents companies were ISO 9001:2000 certified. It can then be guaranteed that the companies under study carry out reiterative procedures to evaluate their customers as is
Value-Creating Functions H1 H3 H5 Direct Functions Creating Value for the Distributor
Distributor Trust
Distributor Commitment H4 Indirect Functions Creating Value for the Distributor H2
FIGURE 1 Trust, commitment, and value-creating functions.
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required by this certification. Thus, manufacturers perceptions about their distributors in the main dyadic relationship are well known (as a consequence of the nature of the relationship) as well as being supported more objectively. In the literature, one can find diverse examples in which this methodological approach is employed (Matear, Gray, and Garrett 2004; Agarwal, Erramilli, and Dev 2003; Baker, Simpson, and Siguaw 1999; Gilliland and Bello 2002; Ryu, Min, and Zushi 2008). The following explains each of the causal links identified.
Trust and Value-Creating Functions

Trust is a key element for creating and developing buyerseller relationships over the long term (Lusch, OBrien, and Sindhav 2003; Bart et al. 2005). The tangible benefits of a relationship in which there is trust are greater than those generated when this is not the case, because trust makes a greater level of commitment and sales attainable. There is also a greater probability that the relationship will survive difficulties, that confidential information will be shared, that investments will be made in shared resources, and that the costs of monitoring the trading partner will be reduced (Morgan and Hunt 1994; Kumar 1996; Nielson 1998; Williams 2001). In this study, trust is defined as a willingness to rely on an exchange partner in whom one has confidence (Moorman, Zaltman, and Deshpande 1992: 315). This implies adoption of the two criteria on which this concept is currently based: honesty or credibility and benevolence (Sirdeshmukh, Singh, and Sabol 2002; Sanzo et al. 2003). In this context, we can assume that when there is sufficiently welldeveloped trust, this being a basic norm of conduct, it will facilitate the exchange and sharing of resources, new ways of coordinating activities, and a warmer relationship between the parties (Walter and Ritter 2003). To be more specific, the link trust value creation can be explained on the basis of the following arguments. Direct value-creating functions. If the manufacturer perceives that its main distributor complies with the terms of the agreement and is interested in a mutually beneficial relationship, the immediate consequence will be that the manufacturer will be prepared to do whatever it can to ensure that the relationship lasts (Williams 2001; Lines et al. 2005). This can lead to the manufacturer ensuring that the distributor receives quality products at competitive prices, that the required product volume is supplied, and that the supply continues even in changing demand conditions (Brashear et al. 2003; Mezgar 2003). All this means that
H1: The direct value-creating functions carried out by the manufacturer for its main distributor are positively influenced by the distributors trust in the manufacturer.
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Indirect value-creating functions. Whenever trust exists in a relationship, the situation will be appropriate for innovative activities. Without the customers trust, the manufacturer would not be prepared to cooperate in actions of this type, because there would be a high risk of the distributor acting in an opportunistic way and using previously shared ideas and/or experiences against it (McAllister 1995; Ruppel and Harrington 2000). Moreover, the manufacturer would never agree in principle to work with an unreliable distributor because the latter might make use of the formers good reputation (without its consent and/or knowledge) to gain access to other markets in which the manufacturer has no control over its image. It would also be critical for the manufacturer to reveal information about new business possibilities in other markets to the distributor because in the future the latter might use it to compete against the former (Homburg, Koschate, and Hoyer 2005; Singh et al. 2005). These arguments suggest that
H2: The indirect value-creating functions carried out by the manufacturer for its main distributor are positively influenced by the distributors trust in the manufacturer.
Commitment and Value-Creating Functions

In the same way as trust, commitment in relational exchanges has become an essential aspect in marketing research on commercial distribution (Morgan and Hunt 1994; Brown, Lusch, and Nicholson 1995). The fact that the members of the channel act in a committed way may improve their possibilities both of survival and of profitability in the long term (Geyskens et al. 1996). In particular, working in this way makes it possible to generate and offer higher value to the parties involved. In the case of a manufacturer, it provides easier access to market information and stronger support for its products (Kim and Frazier 1997: 848), whereas for distributors it facilitates access to products desired by their customers and more opportunity to differentiate themselves from other distributors (Anderson and Weitz 1992: 18). Commitment is defined as an enduring desire to maintain a valued relationship (Moorman, Zaltman, and Deshpande 1992: 316). That is, commitment involves an emotional component because it is based on a state of positive feelings toward the trading partner expressed through the existence of an emotional link and a spirit of cooperation with the opposite party. It implies the identification of one of the partners with the objectives and values of the other, as well as a certain feeling of belonging and loyalty. Just as with trust, commitment can be associated with one of the main causes of value creation in a relationship. Once the parties to a deal have taken the decision to commit in one way or another, they are recognizing the importance of the relationship for achieving individual and shared goals. It therefore seems reasonable to think that if there is commitment,
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greater value can be created than when this is not so (Ryssel, Ritter, and Gemunden 2004). The link commitment value creation is based on the following arguments. Direct value-creating functions. When commitment is present in a relationship, it is very likely that the relationship will take on a long-term orientation. Organizations assume that long-term cooperation favors greater benefits than discrete transactions with changing partners (Friman et al. 2002; Lambert and Knemeyer 2004). The way in which the manufacturer relates to the distributor will vary greatly depending on the degree to which the distributor is committed. If there is a lasting wish on the part of the distributor to maintain a relationship, the manufacturer will be more likely to offer it products or services under beneficial conditions, allowing the distributor to improve its profitability (McQuiston 2001; Ghosh et al. 2004). The manufacturer, in turn, will be more prepared to provide the volume of products requested by the distributor and, when necessary, to meet any supply needs resulting from changes in demand specifications caused by market uncertainty (Walter and Ritter 2003). This allows us to draft the following research hypothesis.
H3: The direct value-creating functions carried out by the manufacturer for its main distributor are positively influenced by the distributors commitment toward the manufacturer.
Indirect value-creating functions. When commitment exists, the parties in the exchange recognize that their objectives depend on each other, and this means that if the distributor is successful in innovation activities then the manufacturer will also benefit (Simonin 1997; Wong, Tjosvold, and Zhang 2005). In those contexts the manufacturer may act as a sort of catalyst, using its prestige if required so that a distributor considered strategic can set up new contacts and thus expand its own commercial activities. This effort may even include the manufacturer providing the distributor with valuable information on other organizations that could help its insertion into new markets, and business strategies adopted by rivals in end-user segments that were not initially served (Walter and Ritter 2003; Boddy, MacBeth, and Wagner 2000). This reasoning allows us to conclude that
H4: Indirect value-creating functions carried out by the manufacturer for its main distributor are positively influenced by the distributors commitment toward the manufacturer.
Trust and Commitment

Trust can be expected to have a direct, positive impact on commitment because trading relationships based on trust are usually highly appreciated by
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those involved in them. The fact that the parties act sincerely or credibly and that they aim to protect, whenever possible, the interests and wellbeing of the counterpartgenerally results, as shown empirically, in the generation of commitment (Morgan and Hunt 1994; Hadjikhani and Thilenius 2005). This supports the argument that distributors prefer to work in the long term with manufacturers they can trust who will act sincerely and benevolently toward the relationship, thus covering themselves against the risk of damage caused by the manufacturer in any actions taken (Ruyter, Moorman, and Lemmink 2001; Friman et al. 2002). This leads us to suggest that
H5: The trust of the main distributor in the manufacturer has a positive effect on the distributors commitment toward the manufacturer.
EMPIRICAL STUDY Sample and Information Collection

The SABI1 database was used to establish a population of 1,820 companies with the following characteristics: (1) manufacturing companies located in Spain; (2) of medium size, according to the European Union (EU) criterion of 2003; and (3) belonging to more than one economic sector (Table 1).
TABLE 1 Description of the Sample POPULATION No. of firms MAIN ACTIVITY OF FIRMS Food Chemicals and plastics Iron and steel, other metals Other machinery Machinery and electric, electronic, and optical equipment Transport equipment Total NUMBER OF EMPLOYEES Between 50 and 100 Between 101 and 200 Between 201 and 249 Total AGE OF THE FIRM Before 1970 Between 1970 and 1979 Between 1980 and 1989 Between 1990 and 1999 Between 2000 and 2005 Total 406 397 590 172 149 106 1,820 943 737 140 1,820 428 361 553 407 71 1,820 % 22.3 21.8 32.4 9.5 8.2 5.8 100.0 51.8 40.5 7.7 100.0 23.5 19.8 30.4 22.4 3.9 100.0 SAMPLE No. of firms 48 45 50 13 20 5 181 80 71 30 181 45 31 67 34 4 181 % 26.5 24.9 27.6 7.2 11.0 2.8 100.0 44.2 39.2 16.6 100.0 24.9 17.1 37 18.8 2.2 100.0
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Medium-sized companies were chosen for two reasons (Roth 1992; Zahra et al. 2000; Dawson and Larke 2005). First, these companies have a significant role in the development of the socioeconomic circumstances of a country and, consequently, they can be considered a relevant unit of analysis (Roth 1992; Storey 2002). Second, targeting a specific population (e.g., the medium-sized company domain) can further guarantee that the findings are meaningful with reference to that specific domain (McKelvey 1978; Bresnen and Fowler 1996). It was also important to consider more than one economic sector for two reasons. First, empirical results will not be affected so much by the uncontrollable, idiosyncratic effects of any particular sector, thus giving the study a higher degree of external validity (Tippins and Sohi 2003; Gonzalez, Iglesias, and Trespalacios 2005). Second, key relational variables such as commitment and trust are considered to contribute to customer value creation in a wide range of economic sectors (Dyer 1996; Dyer and Singh 1998). The research questionnaire was prepared on the basis of a significant literature review. We carried out a pretest by means of in-depth interviews with five outstanding academic scholars and three senior managers who were aware of the subject under study and were knowledgeable about the Spanish market. The information obtained was used to introduce modifications into the wording of some items and to determine satisfactorily that distributor trust, distributor commitment, and the value-creating function measurement scales covered the domain of each of the corresponding latent variables under study. Once the final questionnaire had been established, a four-stage field study was carried out. First, we contacted by telephone the entire target population of 1,820 manufacturing companies. Despite the laboriousness of this procedure, we considered it essential to work this way in order to be certain that the questionnaire would reach key informants (Dillman 2000; Podsakoff et al. 2003). General managers2 and sales managers were a priori identified as potential key informants because they can be expected to have both information on a wide variety of departments or areas within the company (Santos et al. 2005; Thorpe and Morgan 2007) and detailed information on the main dyadic relationship (Walter, Ritter, and Gemunden 2001; Walter et al. 2003). Telephone conversations allowed the most suitable key informant in each firm (either the general manager or the sales manager) to be identified as well as to personalize the survey (we were always provided an e-mail address or a fax number to which the questionnaire could be sent). Second, whenever possible, questionnaires were sent out on the same day that the contact had been made. Our understanding was that the immediacy with which we sent out the questionnaires would lead to greater possibilities of the key informants identifying our study as a priority and sending back their responses as soon as possible. Questionnaires were accompanied by a cover letter that mentioned the general purpose of our
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study (respondents were purposely not informed of the causal connections under study), the absolute and rigorous confidentiality of the information collected, the commitment to provide them with an executive summary, and the different options for contacting us if necessary while completing the questionnaire. Third, we contacted again those manufacturers that had not yet responded to the questionnaire. In particular, an e-mail or fax reminder (depending on the procedure selected initially) was sent to them at twoweek intervals, reminding them of the urgency and necessity of their contribution for the correct development of the fieldwork. This process was extended, if needed, for up to four waves of reminders. Finally, we concluded the fieldwork with the analysis of the responses received to the questionnaires. There were a total of 181 valid responses, the equivalent of a response rate of 9.95 percent. This rate is comparable with other survey-based studies carried out in Spain (Ordoez 2002; Santos et al. 2005; Perez, Montes, and Vazquez 2006; Prieto and Revilla 2006). A key informant competence test was carried out (Campbell 1955). The parameters considered were the number of years of existence of the business relationship between the manufacturing company and its main distributor, the number of years that the key informant had been working in the company, and his or her years of experience in their current position. The results showed that the respondents companies, on average, had 8.2 years of relationship with their main distributor (which reduces the potential bias associated with relationship newness) (Zahra et al. 2000). The respondents, on average, have been an employee of the company for 10.3 years, and also have been working in their present position for an average of 6 years. We tried to guarantee that the respondent had the required knowledge of the issues under study and was capable of communicating this knowledge properly (Kumar, Stern, and Anderson 1993; Thorpe and Morgan 2007). To deal with the potential no-response bias, we followed the procedure suggested by Armstrong and Overton (1977). The results suggested that there were no statistically significant differences between early and late respondents. We also compared the sample and the population according to the criteria used in Table 1: the main activity of firms, the number of employees, and the age of the firm. The chi-squared tests showed that there were no significant differences between the sample and the population in terms of the main activity of the firms (X2 = 5.008, df = 5, p = 0.414) and of the age of the firm (X2 = 3.204, df = 4, p = 0.524). However, there were significant differences in terms of the number of employees (X2 = 11.444, df = 2, p = 0.004). A firms size (measured in terms of the number of employees) predisposed them to participation in our survey. Firms of between 201 and 249 employees exceeded by almost 9 percentage points the corresponding group in the population, whereas firms of between
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50 and 100 employees were more than 7 percentage points less than the corresponding group in the population. The logic behind this could well be that the larger organizations in our sample (firms of between 201 and 249 employees) have resources specifically dedicated to participating in survey studies (Almeida et al. 2003).
Measurement Scales
With respect to the measurement of the models variables, we used multiitem scales as suggested by consideration of the related literature. The Appendix gives these scales in complete detail. All the variables were measured on a seven-point Likert scale, with 1 meaning completely disagree and 7 meaning completely agree. We used reflective indicators as measures of all the models variables. To measure the value-creating functions, we used the scale proposed by Walter, Ritter, and Gemunden (2001) as referent. In particular, in our study these functions were adapted to express the manufacturers perception of how it contributes to creating value for its most important distributor by performing a series of tasks or functions (both direct and indirect). We assessed value-creating function scales during the pretest by means of in-depth interviews with five outstanding academic scholars and three senior managers (general managers or sales managers) who were aware of the subject under study and who were knowledgeable about the Spanish market (Hoskisson et al. 1993; Boyd and Reuning-Elliott 1998). The rest of the measurement scales were also assessed during the pretest. This allowed us to confirm that the items were valid in the context of our research setting. With regard to the key relational variables of trust and commitment, preexisting measurement scales were selected and adapted to the idiosyncrasies of our study. In particular, the trust of the most important distributor as perceived by the manufacturer (CO) was evaluated from an overall point of view in terms of the elements on which this construct is based at present: honesty or credibility and benevolence (Ganesan 1994; Nielson 1998; Kumar, Scheer, and Steenkamp 1995). The commitment of the most important distributor as perceived by the manufacturer (CM) involves an emotional aspect. It expresses a positive emotional link felt by the distributor toward the manufacturer, which can also be interpreted as a feeling of unity, cohesion, or belonging, or essentially as the wish to continue with the relationship (Moorman, Zaltman, and Deshpande 1992; Morgan and Hunt 1994).
Procedures and Statistical Techniques

A set of procedures and statistical techniques were used to test the hypotheses formulated. Two different issues were considered in this process.3
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1. Evaluating the measurement model. To examine the reliability and the validity of the measurement scales, a series of recommendations were followed that can be grouped into two phases (Churchill 1979; Anderson and Gerbing 1988; Bagozzi and Yi 1988; Gerbing and Anderson 1988; Steenkamp and Van Trijp 1991). First phase. The process of purifying the measurement scales was initiated with the calculation of Cronbachs a, the minimum acceptable value being 0.7 (Nunally 1978). We continued with an exploratory factor analysis (EFA) using the method of principal components analysis with varimax rotation to evaluate the unidimensionality of the latent variables. In this evaluation, two types of tests were used: Bartletts sphericity test with which, if the level of significance is less than 0.05, the underlying factorial structure of the data is acceptable, and the Kaiser-Meyer-Olkin (KMO) sample adequacy test for which it is recommended that the statistic should exceed 0.7 (Trespalacios, Vazquez, and Bello 2005; Uriel and Aldas 2005). Second phase. Each of the measurement scales analyzed in the first phase were then subjected to confirmatory factor analysis (CFA) by means of structural equation modeling using the statistical package EQS for Windows 6.1. The estimation procedure followed was robust maximum likelihood (ML) estimation to avoid problems of non-normality with the data (Dunn, Everitt, and Pickles 1994; Byrne 1994; Bentler 1995). The following fit statistics were used (Bentler 1990; Hair et al. 1999; Uriel and Aldas 2005): S-Bc2 (Satorra-Bentlers chi-squared), Bentler Bonnett Non-normed Fit Index (BBNNFI), Comparative Fit Index (CFI), Incremental Fit Index (IFI), Goodness of Fit Index (GFI), and Standardized Root Mean-Squared Residual (SRMR). Once it had been verified that the measurement model had acceptable fit statistics, the convergent validity was examined. Standardized parameter estimates (l) between the latent variable and its indicator were required to be greater than 0.6, and an associated robust t value greater than 1.96 for a p value of 0.05. Two complementary reliability indices were also calculated: average variance extracted (AVE) and composite reliability (CR). In the former, a value that surpasses 0.5 is tolerable, and in the latter it is recommendable that the value is at least 0.7 (Bagozzi and Yi 1988; Hair et al. 1999). Finally, we checked that the latent variables of the measurement model were discriminative. This circumstance is satisfied whenever the square root measure of the AVE exceeds correlations between the latent variables (Fornell and Larcker 1981; Johnson, Herrmann, and Huber 2006; Ulaga and Eggert 2006). 2. Evaluating the structural model and research hypotheses. The above fit statistics were also used to evaluate the fit of the structural model, in this case examining the structural parameters (or model paths).
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Again, they were considered to be significant when the robust t value was greater than 1.96 for a p value of 0.05. Finally, Akaikes Information Criterion (AIC) and the Consistent AIC (CAIC) were used to compare the proposed structural model with the competing model (Bozdogan 1987; Steenkamp and Baumgartner 1998; Aragon, Garcia, and Cordon 2007; Rudd et al. 2008). MEASUREMENT
MODEL OF VALUE-CREATING FUNCTIONS
As explained above, value-creating functions can be classified a priori according to two different second-order factors: direct value-creating functions (the benefit, volume, and safeguard functions) and indirect valuecreating functions (the innovation, market, and scout functions). Direct functions. Before proceeding with the study of the reliability and validity of each of the components of the direct value-creating functions (DF), we must point out that the benefit, volume, and safeguard functions had to satisfactorily pass a study of their internal consistency (Cronbachs a) and an exploratory factor analysis separately. At this phase of the process of purifying the measurement scales we had to drop the DF4 indicator (Nunally 1978). We then proceeded to carry out a confirmatory factor analysis of the direct value-creating function measurement model in order to confirm the degree of reliabilitycomposite reliability (CR) and AVEand determine the degree of convergent validity. The results pointed to the existence of an improper estimate in this measurement model, that is, there was a negative error variance associated with the DF8 indicator. We therefore respecified the measurement model (Byrne 1994; Ganesan, Malter, and Rindfleisch 2005). The aim was to test the hypothesis that there is no overall measure for the direct value-creating functions, but rather three alternative types that correspond to the aforementioned value-creating functions (Table 2). The results corroborated this hypothesis for the following reasons: no
TABLE 2 Direct Value-Creating Functions Measure: Validity and Reliability Measures Standardized lambda 0.892 0.891 0.854 0.841 0.683 0.700 Robust t value 15.594 15.779 11.633 12.676 9.025 10.295 Scale CR 0.886 0.836 0.647 Scale AVE 0.795 0.718 0.478
First-order measurement DF1BENEFIT FUNCTION DF2BENEFIT FUNCTION DF3VOLUME FUNCTION DF5VOLUME FUNCTION DF7SAFEGUARD FUNCTION DF8SAFEGUARD FUNCTION Summary statistics First-order model: S-B c2 (9) = 17.960 p GFI = 0.966 SRMR = 0.040
= 0.035 BBNNFI = 0.944 CFI = 0.972 IFI = 0.973
Note: DF = Direct value-creating function, CR = Composite reliability, AVE = Average variance extracted.
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improper estimates were made and the quality of fit was greater than with any of the previous measurement models (Bentler 1995). In sum, this research does not tie in with previous studies that found that direct value-creating functions have a multiple-component nature representing a secondorder factor (Walter et al. 2003). Indirect functions. With regard to the analysis of the reliability and validity of each of the components comprising the indirect value-creating functions (INDF), that is, the innovation function, the market function, and the scout function, we began by studying the internal consistency and carrying out an exploratory factor analysis of each of the measurement scales separately. After satisfactorily evaluating this circumstance for the innovation, market, and scout functions, we continued with a confirmatory factor analysis of the indirect value-creating function measurement model. The results were not acceptable because the INDF7 indicator had a standardized lambda less than 0.6 and the INDF8 indicator had a negative error variance. We therefore had to respecify the measurement model (Byrne 1994; Ganesan, Malter, and Rindfleisch 2005). In particular, we considered the procedure suggested by Hayduck (1987) and Bollen (1989) for working with an alternative factorial structure (where the scout function has only one indicator), obtaining results (see Table 3) that were better than those
TABLE 3 Indirect Value-Creating Functions Measure: Validity and Reliability Measures First-order measurement INDF1INNOVATION FUNCTION INDF2INNOVATION FUNCTION INDF3INNOVATION FUNCTION INDF4INNOVATION FUNCTION INDF5MARKET FUNCTION INDF6MARKET FUNCTION INDF9SCOUT FUNCTION Second-order factor model INNOVATION FUNCTIONINDIRECT VALUE-CREATING FUNCTIONS MARKET FUNCTIONINDIRECT VALUE-CREATING FUNCTIONS SCOUT FUNCTIONINDIRECT VALUE-CREATING FUNCTIONS Standardized lambda Robust t value Scale CR Scale AVE
0.780 0.833 0.772 0.819 0.913 0.715 0.901 0.836 0.880 0.665
12.634 13.571 12.349 17.409 13.662 11.124 14.539 9.805 12.361 7.513
0.878
0.642
0.802 0.812 0.848
0.672 0.812 0.737
Summary statistics First-order model: S-B c2 (12) = 32.681 p = 0.001 BBNNFI = 0.0.857 CFI = 0.922 IFI = 0.925 GFI = 0.942 SRMR = 0.044 AIC = 8.680 CAIC = 41.701 Second-order model: S-B c2 (13) = 32.408 p = 0.002 BBNNFI = 0.876 CFI = 0.927 IFI = 0.929 GFI = 0.942 SRMR = 0.044 AIC = 6.407 CAIC = 48.172
Note: INDF = Indirect value-creating functions, CR = Composite reliability, AVE = Average variance extracted.
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we obtained with any preceding measurement model. In consequence, the indirect value-creating function measurement model tests of reliability, validity, and fit were within the acceptable limits for theory development purposes. After selecting this last measurement model, the next step was to analyze the existence of discriminant validity. The latent variables were found to discriminate between each other, because for every pair of latent variables the square root of AVE exceeded correlations between the latent variables. We therefore proposed a second-order confirmatory factor analysis for the above first-order factors. The second-order measurement model presented lower comparative criteria (AIC and CAIC) and higher fit indices than the first-order measurement model. In particular, the results can be considered acceptable as a whole: (S-B c2 (12) = 32.408, p = 0.002, BBNNFI = 0.876, CFI = 0.927, IFI = 0.929, GFI = 0.942, SRMR = 0.044). The fit indices, except for BBNNFI, lie within reasonable ranges of values bearing in mind the complexity of the factorial structure of the second-order measurement model. The individual reliability (R2) of the first-order factors varied between a minimum of 0.429 (scout function) and a maximum of 0.774 (market function). The standardized gamma coefficients linking the innovation, market, and scout functions with the second-order factor, indirect value-creating functions, exceeded 0.6 and were all significant at a p value of 0.05, thus showing the presence of convergent validity in the measurement model. In short, we can assert that indirect value-creating functions represent a second-order factor (Walter, Ritter, and Gemunden 2001). MEASUREMENT
MODEL OF TRUST AND COMMITMENT
In measuring trust and commitment, we treated them as first-order factors. Based on this premise, we initially carried out a study of their internal consistency (Cronbachs a) and an exploratory factor analysis of each of the aforementioned measurement scales separately. We continued with a confirmatory factor analysis of the measurement model of the key relational variables (trust and commitment) in order to confirm their degree of reliability, that is, composite reliability (CR) and AVE, and determine the degree of convergent validity. The results gave fit indices that fell within the acceptable range of values. The lambda parameter estimates indicated a high degree of convergent validity since they exceeded 0.6, with robust t values exceeding the critical value of 1.96 for a significance level of 0.05 (Table 4). STRUCTURAL
MODEL AND RESEARCH HYPOTHESES
After evaluating satisfactorily the measurement models of the value-creating functions (both direct and indirect), trust, and commitment, we proceeded to analyze the paths of the structural model: H1H5, given in Table 5. It was
Relational Variables and Value Creation TABLE 4 Key Relational Variables Measure: Validity and Reliability Measures First-order measurement CO1DISTRIBUTOR TRUST CO2DISTRIBUTOR TRUST CO3DISTRIBUTOR TRUST CO4DISTRIBUTOR TRUST CO5DISTRIBUTOR TRUST CO6DISTRIBUTOR TRUST Standardized lambda Robust t value Scale CR
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Scale AVE
0.729 0.814 0.758 0.770 0.788 0.713
8.987 10.421 12.448 12.351 9.716 10.227
0.893
0.582
CM1DISTRIBUTOR COMMITMENT 0.899 13.089 0.899 0.748 CM2DISTRIBUTOR COMMITMENT 0.830 15.419 CM3DISTRIBUTOR COMMITMENT 0.864 15.215 Summary statistics First-order model: S-B c2 (26) = 51.006 p = 0.002 BBNNFI = 0.944 CFI = 0.959 IFI = 0.960 GFI = 0.914 SRMR = 0.040
Note: CR = Composite reliability, AVE = Average variance extracted.
TABLE 5 Structural Model Paths specified H1: DISTRIBUTOR TRUSTDIRECT VALUE-CREATING FUNCTIONS H1.1: DISTRIBUTOR TRUSTBENEFIT FUNCTION H1.2: DISTRIBUTOR TRUSTVOLUME FUNCTION H1.3: DISTRIBUTORSAFEGUARD FUNCTION H2: DISTRIBUTOR TRUSTINDIRECT VALUECREATING FUNCTIONS H3: DISTRIBUTOR COMMITMENTDIRECT VALUECREATING FUNCTIONS H3.1: DISTRIBUTOR COMMITMENTBENEFIT FUNCTION H3.2: DISTRIBUTOR COMMITMENTVOLUME FUNCTION H3.3: DISTRIBUTOR COMMITMENTSAFEGUARD FUNCTION H4: DISTRIBUTOR COMMITMENTINDIRECT VALUECREATING FUNCTIONS H5: DISTRIBUTOR TRUSTDISTRIBUTOR COMMITMENT Summary statistics: + + + + + 0.506 0.338 0.495 0.508 0.819 2.811 2.053 2.183 3.000 10.342 + + + + 0.011 0.106 0.012 0.076 ns ns ns ns Expected sign Standardized Robust coefficient t value
S-B c2 (126) = 179.791 p = 0. -001 BBNNFI = 0.946 CFI = 0.955 IFI = 0.956 GFI = 0.874 SRMR = 0.058
Note: ns = not significant.
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first necessary to verify the existence of discriminant validity. We therefore simplified the higher-order factor (indirect value-creating functions) by taking the mean of the scores of the indicators of each of the lower-order factors (innovation, market, and scout functions). The results of the firstorder confirmatory factor analysis based on the aforementioned factors showed a good quality of fit. We thus corroborated the reliability and convergent validity of these factors, as well as their discriminant validity. In light of these results, we continued by evaluating under ideal conditions the structural model specified in this study. The results showed that the fit indices of the model as a whole were acceptable (Table 5). In analyzing the paths of the structural model, it was noted that the influence of distributor commitment was significant in: (1) the generation of profitthe benefit function; (2) the circumstance of being able to guarantee a large volume of supplythe volume function; (3) the ability to create commercial links guaranteeing a certain level of supply in times of crisis or difficultythe safeguard function; and (4) the development of indirect value-creating functions for the distributor. In the case of the other relational variable, distributor trust, it was noted that this does not have a significant direct effect on value-creating functions (direct and indirect functions). A possible explanation for this could be the mediatory effect of distributor commitment. From this point of view, we noted the following indirect effects. 1. Distributor trust Distributor commitment Development of the benefit function for the distributor (0.819 0.506 = 0.414) 2. Distributor trust Distributor commitment Development of the volume function for the distributor (0.819 0.338 = 0.277) 3. Distributor trust Distributor commitment Development of the safeguard function for the distributor (0.819 0.495 = 0.405) 4. Distributor trust Distributor commitment Development of the indirect value-creating functions for the distributor (0.819 0.508 = 0.416) To further examine the validity of our model, we compared it with a competing model (Table 6). The competing model stated that direct and indirect value-creating functions drive trust and commitment (without eliminating the mediating link, H5) in business markets. In this regard, previous research
TABLE 6 Comparison of Theoretical Model and Competing Model Fit statistics BBNNFI Theoretical model Competing model 0.946 0.893 CFI 0.955 0.912 IFI 0.956 0.914 GFI 0.874 0.844 SRMR 0.058 0.151 Comparative information criteria AIC 72.209 19.982 CAIC 601.219 548.993
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has also argued that improving customer value creation may enhance the trust and commitment of the commercial partners (Palmatier et al. 2006). The results indicated that the theoretical model (Figure 1) is preferable to the competing model. Akaikes Information Criterion (AIC) and the Consistent AIC (CAIC) in particular were lower in our theoretical model (AIC = 72.209 and CAIC = 601.219). That the theoretical model gives lower comparative criteria and better fit indices than the competing model is an aspect that is advisable when selecting a model (Bozdogan 1987; Steenkamp and Baumgartner 1998; Aragon, Garcia, and Cordon 2007; Rudd et al. 2008).
CONCLUSIONS AND BUSINESS IMPLICATIONS

This research has aimed at attaining a deeper knowledge of how value can be created through relationships with customers (Lindgreen and Wynstra 2005: 739). The basic underlying premise was that buyerseller relationships entail a series of functions, both direct and indirect, that can improve value creation for those involved. The analysis of the data showed that direct value-creating functions (benefit, volume, and safeguard functions) do not represent a second-order factor, whereas indirect value-creating functions (INDF) do. The results of this study lend partial support to the commitmenttrust perspective to understand the improvement of customer value creation in business markets, which is particularly interesting considering the limited empirical evidence available to shed light on this question. The importance of trust and commitment as precursors of value creation in a relationship was confirmed from a functionalist point of view. However, the type of effect of such relational variables on the proposed model varied. In the case of distributor commitment, it had a significant impact on the benefit, volume, and safeguard functions as well as on the INDFs performed by the manufacturer. In the case of distributor trust, this was seen to have no direct influence on value-creating functions. This is attributable to the mediatory effect of distributor commitment in a relationship. In the light of this, and given the quantitative confirmation of this circumstancethat there are indirect effects involving distributor commitment as a leading variableit is argued that all this may be caused by the existence of a significant risk of opportunistic behavior by the trading partner (i.e., an exchange vulnerability). Conceptually, this is what is known as a semistrong form of trust in a relationship, or, in other words, a scenario in which such a concept may grow and develop but only if the other agents involved in the relationship have some type of protection against the type of risk in question (Barney and Hansen 1994; Lopez 1999). In this debate, it is assumed that there is commitment in a relationship acting as a socially oriented form of governance. Such a commitment, which
82
is characterized by being long term, adopts this protective role in the manufacturerdistributor relationship to the extent that any benefits, whether financial or nonfinancial, resulting from opportunistic behavior would always be less than the cost involved, that of putting an end to a muchappreciated dyadic relationship. According to this view, the existence of distributor commitment in a relationship is identified as an essential mediatory variable in the link established between distributor trust and the valuecreating functions performed by the manufacturer (i.e., there is trust through a social governance mechanism: commitment). With regard to the business implications derived from this research, the main aspect is that a manufacturer should promote commitment with its most important distributor (Palmatier, Dant, and Grewal 2007). If this is achieved, it can provide important support and be the key to financial survival in difficult commercial situations. Above all, when commitment does exist, because of the long-term view adopted throughout a series of interactions, it will necessarily facilitate the exchange and/or sharing of resources, help coordinate activities in new ways, and even lead to emotional links between the parties. In other words, from the instant in which the decision is taken to commit to a relationship, in one way or another, there would be recognition of the relevance this action has for the attainment of certain shared and individual goals pursued by the exchange partners. In short, this could be regarded as the first step toward improving value creation on both sides of the dyad. As a result, trust could be considered a powerful tool to impel and maintain commitment in a commercial relationship. In particular, trust could be treated as a variable that in some way helps discriminate between partners with whom it might or might not truly be of help to maintain a business relationship with a long-term orientation. It also enables transaction costs and the risk of opportunistic behavior to be reduced, and improves the existing level of cooperation, an aspect that could be materialized in a more efficient use of the resources available to the relationship than when trust is not present. It could be argued, therefore, that opting to work with trading partners who can be trusted is an indispensable step toward commitment, that is, with partners who act sincerely and display benevolent behavior toward the relationship. In this way, the members of the exchange will feel less vulnerable to the risk of being adversely affected when carrying out their actions.
LIMITATIONS AND FUTURE RESEARCH DIRECTIONS

The results of this research are, similar to many empirical studies, subject to limitations. First, we used a single key informant in a dyadic relationship, the manufacturer, to evaluate the constructs in question. We recognize that
83
measuring the same latent concepts on both sides of the dyad would allow one to work at a higher level of precision. Nevertheless, we considered that the difficulties in reaching an adequate response rate using paired data in Spanish industrial markets makes this information collection procedure not truly viable today. Indeed, the present approach has been used elsewhere to determine how organizational resources are related to customers marketing measures or performance indicators (Roth and Jackson 1995; Soteriou and Zenios 1999; Theoharakis and Hooley 2003). In addition, we verified that the respondents companies were ISO 9001:2000 certified. This certification emphasizes that companies should know or estimate their main customers satisfaction. In support of our analytical perspective, there have been studies noting the existence of a significant correlation between the measurements of the same construct that are made simultaneously on both sides of the dyad (Schneider and Bowen 1985; Heide 1994; Soteriou and Zenios 1999; Cullen, Johnson, and Sakano 2000; Homburgh et al. 2002). Moreover, the respondents with whom we communicated in the fieldwork showed themselves to have a profound knowledge of their main distributor. This was a natural reflection of the high level of interaction between the two partners in daily operations that was seen as a guarantee for the relationship to be efficient and enduring. Second, we employed cross-sectional data. This makes it difficult for us to know for certain if there is a possibility that the causal relationships identified may vary or even lose their meaning in the long run. A longitudinal study would overcome this limitation and strengthen the results. Finally, although there were no significant differences between the sample and the population in terms of the main activity of the firm and the age of the firm, this was not the case for the number of employees criterion, which prevents us from extrapolating the present results to other populations. Possibilities for future research are other antecedents for the value-creating functions not considered in this study, such as: the influence of the learning process in an organization, the effect of power relations within a company, and the impact of the type of organizational design used. Also, further effort should be devoted to comparing and synthesizing other theoretical perspectives that can help explain the creation of customer value in business markets.
NOTES
1. The Sistema de Anlisis de Balances Ibricos (SABI) is a database of Spanish and Portuguese companies. It is the result of the collaboration among Informa (responsible for the database of Spanish companies), Coface Mope (responsible for the database of Portuguese companies), and Bureau van Dijk (responsible for the data search, processing, and analysis software). SABI allows access to general information on more than 480,000 Spanish and 40,000 Portuguese companies. 2. In this study general manager is the manager that oversees all of the firms functions as well as the day-to-day operations of the business.
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3. Two statistics programs were used for the data analysis. To evaluate the reliability and validity of the scales used, we first used the SPSS 14.0 for Windows statistics package, and subsequently the EQS 6.1 for Windows program. We also used EQS 6.1 for Windows to evaluate the proposed structural model.
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APPENDIX
Value-Creating Functions Direct value-creating functions (DF) Our most important distributor has achieved Benefit function (Scale Cronbachs a = 0.886) DF1 A high profit margin per product as a result of the nature of our product supply. DF2 High profit. Volume function (Scale Cronbachs a = 0.836) DF3 Is able to meet high demand volumes because we want and can meet the supply of large-volume orders. DF4 Important long-term supply agreements with our firm. DF5 Satisfaction of global demand in the product category or categories bought from us. Safeguard function (Scale Cronbachs a = 0.647) DF6 Knowing it can receive orders at short notice. DF7 Knowing it can place unexpected orders. DF8 Reduced dependence on other manufacturers. Indirect value-creating functions (INDF) Our most important distributor has achieved Innovation function (Scale Cronbachs a = 0.876) INDF1 Suggestions about how to improve or develop its production or management processes. INDF2 Ideas about new products or services that it can sell to develop its business. INDF3 Participation in joint projects thus increasing its technical knowledge about our product services and applications. INDF4 Testing of prototypes so is able to prepare sales strategy in advance. Market function (Scale Cronbachs a = 0.790) INDF5 Knowledge of new potential segments or user groups previously not considered. INDF6 Knowledge of possible customers in other markets. Scout function (Scale Cronbachs a = 0.810) INDF7 Information on outside organizations (such as research centers, business associations, etc.). INDF8 Information on market trends. INDF9 Information on possible competitors. Key Relational Variables Distributor trust (CO) (Scale Cronbachs a = 0.888) How would you describe your relationship with your main distributor? CO1 We can be sure this distributor will meet its commitments. CO2 This distributor is trustworthy. CO3 Takes our interests into account in its work. CO4 Is honest with us if problems arise. CO5 The distributor is well prepared for meeting our demands efficiently. CO6 The distributor has plenty of experience and can advise us, when needed, as to what is best for the company as regards distribution. Distributor commitment (CM) (Scale Cronbachs a = 0.895) How would you describe your relationship with your main distributor? CM1 This distributor is very committed to this relationship. CM2 This distributor plans to keep this relationship going indefinitely. CM3 This distributor is keen to make every effort to sustain the relationship. CM4 The distributor is understanding toward us if we make any sort of mistake.
Note: Italics indicate items that were eventually removed. Cronbachs a is as calculated by Walter, Ritter, and Gemunden (2001).
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IMPLICATIONS FOR BUSINESS MARKETING PRACTICE

Trust and commitment are focal constructs in business relationships. When there is commitment in a relational exchange it is possible for there to be improvement of value creation for the parties involved. In this context, credibility and mutuality need to be considered. Credibility emerges when exchange partners perform actions that make both the promised conduct and the long-term orientation of the relationship likely. Mutuality exists when exchange partners collaborate as a means to obtaining greater benefits than they would from discretionary transactions with changing exchange partners. Trust is also a key factor for the improvement of value creation in business relationships that have a long-term orientation. The benefits when there is trust in a relationship are greater that when this is not the case. For example, it is possible to attain a higher level of sales, to share confidential information, and to reduce the cost of monitoring the exchange partner. In consequence, commitment and trust as relational governance mechanisms breed an emotional link and a spirit of cooperation in the exchange partners that favor positive behavior in the best interests of the relationship. Thus, as a manufacturer works with its most important distributor, over time it will have to promote commitment in the relationship. If this is achieved, it can provide important support and be the key to financial survival in difficult commercial situations. The presence of commitment in a relationship as a result of the long-term view adopted throughout a series of interactions will necessarily facilitate new ways of sharing resources and coordinating activities. From the moment exchange partners decide to commit to a relationship, there is recognition of the importance that this relationship has in attaining individual and shared goals. In consequence, this circumstance can be identified as the first step toward improving value creation in a relationship. At the same time, trust can be regarded as a powerful mechanism to impel commitment in a relationship. In particular, trust can be treated as a variable that, in some way, helps distinguish the partners whom one might not truly want to maintain in a relational exchange. It also enables both transaction costs and the risk of opportunistic behavior to be reduced. Therefore, more efficient use can be made of the resources available to the relationship than when trust is not present. Opting to work with exchange partners who can be trusted is an indispensable step toward commitment. In this regard, exchange partners will feel less vulnerable to the risk of being adversely affected when performing their actions. Finally, determining precisely whether opportunistic behavior will arise is a very complex task as there is bounded rationality about the real intentions of the parties involved. In some cases, in order to gain some intuition about these intentions it will be necessary to examine the level of perceived risk, the power balance
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between the parties, and the available options in the case of deciding to leave the relationship. Another business implication is that the value-creating function framework may help the manufacturer to comprehend how value can be created for distributors. This could be done by the direct functions, which are expected to look for efficiency by means of the interconnection of activities, creativity from the heterogeneity of resources, and mutuality based on the interest of the actors themselves. With these functions the manufacturer can support the distributor in the generation of economic benefits (benefit function), guarantee a large volume of supply (volume function), and help it to foster commercial connections that guarantee a certain level of supply in case of possible crises or difficulties (safeguard function). Another way of comprehending how value can be created for distributors is through the indirect functions, which include the chains of activities that involve several organizations, the resource portfolio controlled by more than one company, and the perceptions shared by more than two companies. In this case the manufacturer would benefit its counterpart in activities related to innovation (innovation function), access to other markets (market function), and more efficient commercial decision making (scout function). This analysis can be applied even to comparing the different distributors that conform the manufacturers distributor portfolio. It can help in the control and follow-up of how and why it is possible to create more value for one distributor than for another. This framework can be used as well as a mechanism or alert device that warns of those inadequate or undesired customers for companies long-term survival. It may also help the manufacturer to face changing situations that may arise while working with the distributor. However, this is not the same as thinking that the value-creating function framework is a panacea for the problems that arise in dealing with distributors. This would be a seriously mistaken appraisal. One can only say that it is a framework that may assist the way a manufacturer interacts with its distributors, but does not fully explain the reason why, with the passage of time, some distributors continue doing business deals and others do not. Finally, it seems reasonable for a manufacturer to invest or allocate resources for the improvement and development of the trust and commitment of the commercial partners, as this action influences the value-creating functions that it performs for the distributor. The manufacturer is expected, therefore, to behave positively toward and in the best interest of a committed and trusted counterpart in the dyad. This allows it to gain an important advantage over its most direct competitors, who in addition may not share this work philosophy. It is also more likely that the manufacturer will admit its own mistakes if they occur when creating value for its commercial partner, and will be able to change a given course of action when circumstances permit. This allows the manufacturer to present itself to the
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distributor as a reliable partner who can carry out commercial operations satisfactorily, a fundamental aspect in working with a long-term orientation. Similarly, this orientation makes it possible for the parties to reduce transaction costs and the appearance of opportunistic patterns of behavior, and above all to improve the existing level of cooperation, which can be materialized in a more useful employment of resources.
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Journal of Business-to-Business Marketing, 17:6294, 2010 Copyright Taylor & Francis Group, LLC ISSN: 1051-712X print/1547-0628 online

The Impact of Relational Variables on Value Creation in BuyerSeller Business Relationships

J. . L. Snchez et al. Relational Variables and Value Creation

MARA LETICIA SANTOS VIJANDE and JUAN ANTONIO TRESPALACIOS GUTIRREZ

Relational Variables and Value Creation

Relational Variables and Value Creation

THE EFFECT OF TRUST AND COMMITMENT ON VALUE-CREATING FUNCTIONS

Relational Variables and Value Creation

Distributor Commitment H4 Indirect Functions Creating Value for the Distributor H2

FIGURE 1 Trust, commitment, and value-creating functions.

Trust and Value-Creating Functions

Relational Variables and Value Creation

Commitment and Value-Creating Functions

Trust and Commitment

Relational Variables and Value Creation

EMPIRICAL STUDY Sample and Information Collection

Relational Variables and Value Creation

Procedures and Statistical Techniques

Relational Variables and Value Creation

= 0.035 BBNNFI = 0.944 CFI = 0.972 IFI = 0.973

Relational Variables and Value Creation

0.802 0.812 0.848

0.672 0.812 0.737

MODEL OF TRUST AND COMMITMENT

MODEL AND RESEARCH HYPOTHESES

0.729 0.814 0.758 0.770 0.788 0.713

8.987 10.421 12.448 12.351 9.716 10.227

Relational Variables and Value Creation

CONCLUSIONS AND BUSINESS IMPLICATIONS

LIMITATIONS AND FUTURE RESEARCH DIRECTIONS

Relational Variables and Value Creation

Relational Variables and Value Creation

Relational Variables and Value Creation

Relational Variables and Value Creation

Relational Variables and Value Creation

IMPLICATIONS FOR BUSINESS MARKETING PRACTICE

Relational Variables and Value Creation

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