The function and character of relationship benefits: Transferring capabilities and resources to the small firm

This paper aims to critique the foundations of the relationship benefits concept and develop a theoretical model that is tested and validated.

A series of exploratory in‐depth interviews were initially conducted and the results considered against extant literature. This was followed by a mail survey of the selected population that resulted in 254 usable responses that represented an effective response rate of 21.4 per cent.

The findings demonstrate that relationship benefits sought by small firms collaborating with larger partners can be classified as cost, service, image and flexibility benefits and suggest that their transfer can facilitate improved small firm competitiveness by building capabilities and resources. It is concluded that this classification of relationship benefits provides a clearer understanding of how value is transferred to small firms engaged in rich and deep relationships.

The classification presented in this paper provides practitioners with a framework for comparing benefit packages offered by partners. In doing so it also provides small firms with a conceptual model that facilitates the application of relationship benefits to the building of competencies underpinning competitiveness in selected markets.