Independent thesis Advanced level (degree of Master (Two Years)), 20 credits / 30 HE credits
Problem formulation:
- Which aspects of a relationship are driving factors for a Swedish company's financial efficiency when working with international agents?
- Which aspects of a relationship are obstacles for a Swedish company's financial efficiency when working with international agents?
Aim: The purpose of the study is to investigate different aspects of the relationship between a Swedish company and its international agents in order to find out which aspects affect economic efficiency. To answer the overall purpose will be studied to examine which specific aspects of the relationships are driving or hindering the financial efficiency of the business. The aim of this study is to expand the understanding of how different aspects of interorganizational relationships affect business economic efficiency.
Theory: The literary framework of the study handles the parts: Design of business relationships, the design of mutual dependencies in relationships, the ARA model, international business, the 4R- model and relationship quality
Method:The study is a case study with a multiple case design which is based on a qualitative method through interviews with a case company and its agents, as well as a descriptive questionnaire survey and document collection to answer the study's research questions. The study presents a theoretical background and a reference framework to expand the understanding of the subject area. Finally, the data were analyzed through the 4-R model and illustrated by radar diagrams.
Conclusion:The study examines the driving and hindering aspects of a relationship that exist in the relationship between a Swedish company and its international agents for its financial efficiency. By adopting a relationship perspective and examining the relationships through the 4R- model, the study designed a resource analysis which portrayed that the most crucial resources for the financial efficiency in the relationship between the case company and its international agents are social resources. These resources were expressed in the form of organizational units and business relationships. Furthermore, the study examined the business relationship in more depth by exploring communication, long-term orientation, and social and economic satisfaction. The case company's organizational units described clear driving forces in the exchange of knowledge between the operations, where the case company as well as the agents' knowledge were combined to give rise to new knowledge that leads to new business and financial efficiency. Furthermore, requests for further knowledge exchange in the form of training from agents as well as the case company were discovered in order to further drive financial efficiency. Additional driving forces were depicted in the long-term orientation of the business relationship, where common goals and an openness to more angles from the case company as well as agents are contributing factors to drive the relationship and financial efficiency forward. Furthermore, the communication between the case company and the agents is a driving factor in high-performing agents at the same time as it acts as an obstacle for agents who perform worse. The agents further point out that this can result in delays in communication and that its continuity hinders potential business and therefore also the financial efficiency of the relationship.
The obstacles illustrated in the relationship are mainly expressed in the fact that joint adjustments and investments are not evenly weighted, which gives rise to mutual dependencies between agents and case companies not being possible. Thus, the overall efficiency of the relationship as well as its financial efficiency are prevented. This is also clarified by the fact that, among other things, routines have not been established in the relationship, which indicates that joint adjustments have not been implemented and hinders the effectiveness of the relationship. Furthermore, more newly established relationships are hindered by continuous adjustments and investments not being made at an early stage, but instead the agent's initiative is a factor in the long-term perspective of the relationship on the part of the case company. The business relationship is further hindered by the fact that informal information exchange and continuous communication are not established more than in cases where such exchanges are supported by an order. Furthermore, such factors are also emphasized more by agents who have a better performance and have been in a relationship with the case company longer, which is an obstacle to the efficiency of the relationship. The study also depicts a need to develop the financial satisfaction in the relationship where the incentives to sell the case company’s products are perceived as unsatisfactory, which reduces the agents sales and in turn hinders the financial efficiency in the relationship. Finally, the financial efficiency is hindered by the fact that different resources of the agents and the case company are not continuously adapted and combined with each other in the relationship, which is a key factor in discovering an effective relationship.
2022. , p. 63
Interorganizational business relationships, ARA model, 4R- model, Business relationships, Industrial network theory