Mobile Technology Usage in Business Relationships

Mobile Technology Usage in Business Relationships

Jari Salo (University of Oulu, Finland)
DOI: 10.4018/978-1-60566-026-4.ch416
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Business relationships have been studied for decades (Wilkinson, 2001). However, the literature has been criticized of the lack of focus on information technology (IT) usage within business relationships (Reid & Plank, 2000). As managers have started to employ digital tools such as the Internet, intranets, and extranets, buyer-seller relationship scholars have realized the need to focus on IT deployment within relationships. There is a growing body of research that focuses on the different types of technologies being employed such as electronic data interchange (EDI) (Naudé, Holland, & Sudbury, 2000), Internet-based EDI (Angeles, 2000), and extranet (Vlosky, Fontenot, & Blalock, 2000) and their influence on business relationships. Nevertheless, mobile technology usage within business relationships is a nascent field of scientific inquiry. Besides buyer-seller relationship literature, mobile commerce (MC) (conducting commercial activities via mobile networks) literature also noticeably lacks academic research on business usage of mobile technology (Okazaki, 2005; Scornavacca, Barnes, & Huff, 2005). By combining these indications for further research from the buyer-seller relationship and MC fields it can be argued that there is a clear call for research in this area. Hence, I aim to bridge some aspects of the identified research gap. The research gap is filled in by discussing bonding within buyer-seller relationships to illustrate how mobile technologies create a novel bond in business relationships. It is acknowledged that some research on the adoption of mobile technology in the business context exists (see e.g., Kadyté, 2005). The paper is organized as follows: First, a brief discussion of the background of business relationships, mobile technologies, and bonding is provided. Then, I highlight how mobile technologies are used within relationships with a case study. After that, future trends in this pertinent area are presented. The paper finishes with a concluding discussion.
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Basically, it can be stated that both the popular as well as academic press has regularly indicated that the number of relationships that exist between buyers and sellers has decreased, but the amount of trade contracted within existing relationships has simultaneously increased. The fact remains that in many cases, it is not profitable to play dozens or even hundreds of competing suppliers or customers off against each other, but working directly with a few of them within a business relationship is profitable for all parties. This is because, as the number of possible partners increases so do the transaction costs. Thus, it is evident that existing business relationships are a vital area for research.

Within the business relationships domain there are multiple and overlapping fields of inquiry (Ritter & Gemünden, 2003) that have provided specific frameworks applicable to different types of problems. Here, I use the bonding discussion as it provides a means to evaluate changes occurring in business relationships. A bond can be seen as a building block for a relationship that is created through interaction between business parties. Academic literature to date has identified 10 bonds that are pertinent in business relationships: technical, time, knowledge, legal, economic, geographic, social, cultural, ideological, and psychological (Wendelin, 2004). Bonds have an important role in value creation and destruction in business relationships.

Social bonds were the starting point of studies focusing on bonding (McCall, 1970). Before a business relationship is built through business exchanges, there are many distances between the two interacting companies. Johanson and Wiedersheim-Paul (1975) identified social, cultural, technological, and time-related distances. For example, social distance measures the extent to which the actors are unfamiliar with each other’s ways of thinking and working. Bonding is seen to reduce the distances. This paper focuses on technical bonds.

Key Terms in this Chapter

Wireless Local Area Network (WLAN): In short, a local area network without cables. Airwaves are used to transmit and receive data. The most commonly used WLAN is based on standard 802.11b.

Wi-Fi: 802.11.b based WLAN is often labeled Wi-Fi.

Mobile Technology: A form of information technology that can be used to mobilize various traditional activities. Includes sales force automation (SFA), mCRM, order pick-ups and other information and transaction flows between business parties.

Bond: Can be seen as a building block for a business relationship. Bonds are created through interaction between business parties.

Business Relationships: Relationships are created through the interaction between parties involved in exchange. Single acts and episodes, that is, the elements of interaction build the relationship over time. Satisfaction, commitment, and trust emerge as the distance between the parties is reduced. In due time, bonds are created on several levels of the relationship.

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