Fairness and behavioral intentions in discrete B2B transactions: a study of small business firms

Abstract

Purpose: While studies about business-to-business (B2B) relationships have mainly addressed buyer–supplier long-term exchanges, focusing on social outcomes such as trust, commitment and cooperation, there is little research that explores the social outcomes which stem from short-term B2B transactions. The purpose of this paper is to explain buyers’ intention to renew a contract after discrete and time-delimited transactions by suggesting a model that complements social exchange theory with theories of fairness. In detail, this study aims to determine how evaluations of economic and social outcomes are complemented by both procedural fairness and distributive fairness. Design/methodology/approach: The hypotheses are tested in the social couponing industry with a survey of a sample of 199 firms purchasing advertising services from daily deal websites. Data are analyzed using covariance-based structural equation modeling (CB-SEM). Findings: The findings reveal direct effects of procedural fairness on social outcomes (satisfaction) and distributive fairness on the intention to renew a contract, negative moderating effect of procedural fairness on the relationship between economic outcomes (campaign effectiveness) and social outcomes (satisfaction). Research limitations/implications: In discrete, time-delimited transactions, high levels of procedural fairness may partially compensate for low levels of economic outcomes and prevent a reduction in social outcomes. Hence, when economic outcomes are influenced largely by external, uncontrollable conditions, the buyer seems to appreciate the supplier’s efforts to behave fairly. Practical implications: Social outcomes matter even in discrete transactions and considerations of fairness should be integrated in the management of discrete transactions. Sharing economic outcomes fairly is not sufficient to secure the buyer’s intention to renew the contract. Originality/value: This study proposes and tests a model that complements social exchange theory with theories of fairness and explains contract renewal in discrete, time-delimited transactions, encompassing both economic outcomes and social outcomes.