Organizational readiness

The organization can only enable a strategic relationship if it organizes itself to do so. In practice this means assigning clear roles and responsibilities for those tasked here, a structure and ways of working that promote relationships and sufficient resources and investment to support a programme of ongoing relationship building with enough time and money to allow this to happen. Relationships will not happen unless the firm is serious about doing so and backs this up with real investment. Many of the attempts to develop strategic relationship that I see simply fail because an organization has attempted to just tag it onto someone's already busy job and then imposes travel constraints that prevent face-to-face meetings. Instead, if organizations want the benefits from strategic supplier relationships then they must invest in making them happen and free up the necessary resources to do so.

Motivational: willingness, benefits and alignment

Behaviour in buyer/seller exchanges can be either opportunistic, ie where one or both party acts selfishly or unilaterally for their own benefit, or can be to build and support relationship continuance (Tangpong and Po, 2009). Each party, and more specifically individuals within in each party, choose their behaviour. Strategic collaborative relationships need willing and motivated parties, who both want to act to build and support the relationship. At a simple level willingness is a product of the potential benefits available and the degree to which these align with our overall goals and direction. However, there is more here and it doesn't follow that a willing partner has the ability to convert this into positive action in the relationship. In fact, looking from our perspective, the degree to which a relationship can be built, developed and maintained with a supplier ongoing depends upon:

• The degree to which they want to - their interest or willingness to develop a relationship with us.

• The degree to which we are able to - the scope for influence of the relationship.

• The way we attempt to - the personality, characteristics and behaviours of the individuals involved.

Interest or willingness for the relationship can be assessed using the Supplier Preferencing tool; we can assess how we believe the supplier would view our relationship based upon how attractive the account is to them and the relative value of business we represent.

Determining scope for influence within the relationship is less simple because of the fact that relationships are held by individuals. Tangpong and Ro (2009) suggest that the degree to which one person can influence a relationship depends upon the boundaries of that which can be controlled. These are:

• Relational norms - the values shared amongst exchange partners, for example how partners determine what is or is not acceptable behaviour in the relationship. If no boundaries are set here then partners might be free to develop all sorts of relationships. Supplier Codes of Conduct or a Relationship Charter help define expected behaviour with suppliers together with boundaries that determine the degree to which the relationship can be influenced.

• Dependency - how dependent one firm is on the other. If one firm has the power and the other is completely dependent, then attempts to influence the relationship by the other, for example to secure supply, could be completely ignored. Put simply, the powerful party does not need to engage in the relationship.

Dependency not only affects the scope we have to influence a relationship, it also helps gauge willingness on their part. If we consider dependency alongside Supplier Preferencing we gain a more accurate insight into willingness. Attempting to build a relationship with a supplier who sees us as a Nuisance or in the Exploitable quadrant seems logical in order to reduce risk, especially if we are completely dependent upon that supplier, and have little choice or ability to switch. Yet there is no imperative for them to respond to our efforts to build a relationship. Dependency can be factored into our assessment by using both the Supplier Preferencing tool together with the Portfolio Analysis tool (where we consider how individual categories of spend should be managed). Figure 13.5 shows the two matrices combined and the likely degree of supplier willingness for a relationship according to each combination. With this information we are able to determine if efforts to develop a relationship are worthwhile and what we might need to work on to influence the relationship.

 
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