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Testing the life-cycle theory of inter-organizational relations: do performance outcomes depend on the path taken?

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This research provides an empirical test of the Dwyer, Schurr and Oh (1987) lifecycle theory of relationships and considers the role of path dependence in achieving overall satisfaction during each phase. Using survey data of over 1300 channel resellers, the authors find general support for the notion that relationship properties (e.g., goal congruence, investments, satisfaction) first increase and then decrease over the course of the relationship lifecycle, including a significant drop in the decline phase relative to all other phases. Contrary to the theory's predictions, however, minimal empirical differences among these properties do exist in the build-up and maturity phase. The authors also explore whether relationships that followed the expected lifecycle path outperform relationships that followed aberrant (backward) patterns. They find that movement through regressive patterns can exert detrimental effects on overall satisfaction. Moreover, the scars from such movements can last for an extended period of time, which can prove particularly detrimental during the decline phase. Evidence also reinforces the critical role of the individual sales representative in promoting the creation of successful long-term inter-organizational relationships.

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en

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application/pdf

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http://flora.insead.edu/fichiersti_wp/inseadwp2003/2003-17.pdf

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Copyright INSEAD. All rights reserved