Mechanism of Business Relationship Performance

Topic

Mechanism of Business Relationship Performance

Instructions

Choose one of the following two questions

What are ‘mechanisms’ which explain business relationship performance, and how are these mechanisms derived from different underlying theories? What are ‘instruments’ that allow companies to affect these mechanisms? Please provide examples for each instrument you introduce.

How is the network role and position of a manufacturing company selling to other businesses affected by it using an offering strategy of ‘service infusion’? What are underlying theories which explain the mechanisms behind such service infusion?

Answer preview

Firms strive to exploit the benefits of inter-organizational relationships, including resources sharing and other collective capabilities to enhance their financial performance (Hernandez-Espallardo et al. 2018). The relationships also contribute to the bottom lines by positively affecting the sales revenue, share costs, broaden the market and foster innovation. However, leveraging these benefits requires an understanding of the underlying influencers of performance and strengthening them to enhance performance (Hernández-Espallardo et al. 2010). Understanding the mechanism of performance is underpinned in existing theories of inter-organizational performance. For the purpose of this paper, four theoretical perspectives are explored to derive the mechanisms of determining performance.

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