A Capability Perspective on Relationship Ending and its Impact on Innovation and Performance

Abstract

Business relationships are seen as beneficial way of structuring inter-organizational exchanges. For example, transaction cost economics (TCE) posits that relationships as a governance form are specifically important for recurrent transaction types in terms of their mix and ideosyncratic nature (Williamson, 1985; 1996). Interdependencies between the relational partners due to asset specificity are expected, i.e. relationship-specific investments are prevalent in business relationships (Harrison, 2004). In such situations contracts are often seen to provide the foundation for long-term relationships as duration safeguards (Williamson, 1985; Weber et al., 2011), for example against opportunism (Stump & Heide, 1996; Wathne & Heide, 2000). Such business relationships are seen provide specific benefits above and beyond mere transactional exchanges.