Interpersonal interaction in business triads—Case studies in corporate travel purchasing

Abstract

This study applies a triadic perspective to business triads of an industrial buyer, its service supplier and intermediary partners. The focus is on the structural, relational and cognitive features of interpersonal interaction. The study also takes into account strategic level interactions and interactions related to daily operations, thus providing insight into long and short-term interactive processes. Dedicated contacts and the social bonds between them provide important channels for both tacit and explicit information within and between the organizations, specifically at the operational level. The study contributes to service purchasing and supply literature by analysing complicated supply networks at the micro-level, and by providing concepts and models for the study of interactions in triadic contexts. Managerial implications relate to the importance of creating trusting relationships within and between the organizations. The longitudinal approach adds to our understanding of ongoing service purchasing processes and the dynamism of business relationships.

Introduction

Service purchasing is an ongoing process involving individuals at different organizational levels in buyer and supplier firms (Crosby et al., 1990; Feisel et al., 2011; Grönroos, 2007; Wang and Davis, 2008). Purchasing services is generally viewed as more challenging than purchasing goods. There is increasing interest among academic researchers in service purchasing (Baltacioglu et al., 2007; Tate et al., 2010), but comparatively little research has so far been conducted on inter-organizational socialization processes that create relational value in buyer–supplier relationships (Cousins et al., 2006).

Although three actors are often involved in service purchasing, since service provision is increasingly outsourced to professional service providers, business relationships are generally studied from a dyadic perspective. It was therefore decided to apply a triadic perspective in this study to business relationships between an industrial buyer, its service supplier and intermediary partners. The purpose of the study was to investigate interpersonal interaction in business triads in service purchasing processes. The focus is on the interactions between individuals at two levels: strategic and operational. The specific question addressed is: How does social capital develop in business triads in the service purchasing and supply context?

The empirical setting of the study is corporate travel purchasing. Corporate travel is a business consumption service focusing on individual employees (cf. Wynstra et al., 2006). The supply side consists of a large network of suppliers, and a business trip with multiple destinations usually involves several suppliers. Corporate travel buyers traditionally outsource service delivery to a business travel agency to simplify the network, and to guarantee suitable routes and rates for each trip. Corporate travel is generally the second or the third largest controllable cost for a company (Upton, 2005), which makes it worth monitoring. The amount of money spent on corporate travel-related services is increasing, while the resources allocated to managing the purchasing are not increasing proportionally (cf. Ellram et al., 2004, Ellram et al., 2007). Corporations aim to decrease travel costs by reducing the cost per trip, not necessarily by diminishing the number of trips (Aquilera, 2008), thus putting pressure on efficient supply management. However, academic literature has paid little attention to effective management of corporate travel (Gustafson, 2011; Zhang et al., 2009).

In business research, there has been comparatively little application of social capital theory (Krause et al., 2007; Lawson et al., 2008). In this study, the structural, relational and cognitive dimension of social capital, as defined by Nahapiet and Ghoshal (1998), are applied in order to understand interpersonal interactions in the core relationships. The study contributes to the service purchasing and supply literature by analysing complex supply networks at the micro-level, and by providing concepts and models for the study of interactions in triadic contexts. The longitudinal approach adds to our understanding of ongoing service purchasing processes. Managerial implications focus on the importance of interpersonal interaction and trust creation between the firms and between the levels.

The study is organized in the following way. Section 2 sets the theoretical framework by discussing interpersonal interaction and social capital in the organizational context, the specific features of interactions in triads and in corporate travel purchasing. The Section 3 explains the research method and analysis procedures. Section 4 provides a description of the case firms and the informants, and the corporate travel purchasing function. Section 5 discusses the findings of the study. Finally, Section 6 concludes the study, and discusses its contributions and avenues for further research.