Abstract
Background: Individuals share information and form relationships to improve collaboration and joint organisational performance. However, managing these interpersonal relationships within a supply chain management perspective is one of the lesser understood and researched areas within this discipline.
Objectives: The research was aimed to investigate the negative effects of interpersonal relationships between those individuals who represent organisations that buy and supply logistics services.
Method: The research was carried out by the use of a descriptive qualitative research design. Eighteen semi-structured interviews were conducted with 10 suppliers and 8 buyers of logistic services within the South African third party logistics industry.
Findings: Firstly, the results indicate that the primary reason for interpersonal relationships is firstly for improved professional interest and secondly for genuine friendships. Without continuing commitment or intention to maintain the interpersonal relationship between these individuals, it is not possible to sustain the associated benefits of forming interpersonal relationships. Secondly, the findings indicate that enhanced trust, within interpersonal relationships, is similar to business-to-business partnerships which evolve through stages of exploration, formalisation and maturity. Organisations should rather focus to improve competence-based trust than individual interpersonal trust. Thirdly, relationship asymmetry, gender differences and the aptitude to adjust to disparate personalities may steer the interpersonal relationship towards the dark side. Lastly, the benefits of interpersonal relationships have been proven; however, these interpersonal relationships may be difficult to manage over time and can also be the foundation of suboptimal decisions if the relationship takes precedence over business interest.
Conclusion: Managers should not underestimate the potential hegemony between individuals who have interpersonal relationships. Relationships require upkeep, personal involvement, attention and trust. Interpersonal relationship intentions without formal safety measures, such as organisational governance and policies, can expose and even diminish the strongest organisational alliances to suboptimal performance and reduced profitability.
Introduction and problem statement
From as early as the 1990s, research has acknowledged that organisations do not individually compete against other organisations (Autry & Golicic 2010:87; Daugherty 2011:16). The extent of competition has moved to the whole supply chain of the particular organisation (Cao & Zhang 2011:163; Christopher 2011:3; Schoenherr 2009:1). The literature on supply chain management has constantly supported positive aspects of inter-organisational relationships (Cousins et al. 2006:851; Cousins & Menguc 2006:604; Krause, Handfield & Tyler 2007:528).
Senior managers’ commitment to establish interpersonal relationships and to leverage the resulting benefits, such as trust and commitment, is recognised in the supply chain management literature as a key factor for improved organisational performance, collaboration and increased trust (Delbufalo 2012:377; Wilding & Humphries 2006:309; Williams & Moore 2007:469). According to Gable and Reis (2010:195), an interpersonal relationship between parties can be defined as ‘a powerful, intimate connection or understanding amongst two or more individuals based on fondness, commonality, consistent business dealings, or a particular type of social commitment’.
Key focus
Research on interpersonal relationships between individuals working in different organisations is not a contemporary topic; however, the significance thereof within a supply chain context has been conducted comparatively infrequently (Gligor & Autry 2012:24; Gligor & Holcomb 2013:328; Wieland, Handfield & Durach 2016:206). Results from the research by Wieland et al. (2016:205–212) state that the behavioural dynamics of buyers, suppliers and other individuals within a supply chain network have not received much attention within academic research. The unit of analysis in previous research focused on the organisation as a collective and not the interpersonal relationship that is present between the individuals within the organisations (Adobor, 2006:75; Gligor & Holcomb, 2013:329). This research aims to focus on an individual-to-individual dyad (i.e. service provider-to-client) and not on a business-to-business level. Furthermore, the literature review of this study recognises a gap in the literature regarding the negative or so-called ‘dark side’ of the behavioural complexities between the buyers and providers of logistics services (Marasco 2008:141; Villena, Revilla & Choi 2011:561).
Trends
Interpersonal relationships have been researched from various viewpoints. Marketing researchers theorise that individuals within the supplier-buyer dyad may become increasingly dissatisfied with one another as the relationship develops (Celuch, Bantham & Kasouf 2006:573; Grayson 2007:121). Strategic management researchers believe that individuals rely highly on each other initially. As time progresses, the individuals start to understand what the other knows, which leads the relationship to develop into one that can be ambiguous and exposed (Bachmann & Inkpen 2011:281; Day et al. 2013:152). This phenomenon is consistent with the seminal research of Seabright, Levinthal and Finchman (1992:122), which states that there is a greater need for interpersonal relationships in the initial stages of alliance formation than in the later stages thereof. Furthermore, the research indicates that interpersonal relationships go through a life cycle, namely early, growth and maturity phases (Seabright et al. 1992:122).
Objectives
While many organisations have successfully benefitted from the interpersonal relationships that increase collaboration between organisations, many others have struggled or have been negatively affected thereby (Kotzab, Grant & Friis 2006:273). Supply chain managers may struggle to develop and implement strategies to overcome these negative impacts, because it may start to become difficult to separate formal business decisions from interpersonal relationships (Lian & Laing 2007:36). The specific contribution of this research is twofold. It aims to investigate the dark side of interpersonal relationships between buyers and suppliers within the South African third party logistic (3PL) services industry. The research also aims to establish possible mitigating factors that may reduce these negative aspects. This study explores the negative intricacies – the so-called ‘dark side’ – of the interpersonal relationships between managers representing the organisations that buy and supply logistics services.
The study is guided by the following research questions:
- Are the interpersonal relationships formed between buyers and suppliers genuine friendships or are these relationships formed merely for the purpose of improved professional interests?
- Is there any degree of power asymmetry present in these interpersonal relationships?
- Do the negative effects or the so-called ‘dark side’ of interpersonal relationships emerge when there is an increase in trust over time?
- Does gender play a role in the formation of interpersonal relationships when buying or supplying logistics services?
- What are the mitigating factors that reduce the negative impact of interpersonal relationships between buyers and suppliers?
Literature review
South African logistics industry
According to Coyle et al. (2013:118), a 3PL service provider can be defined as ‘an external supplier that performs all or part of a company’s logistics functions’. The definition is intentionally broad to include a wide range of services, such as inbound and outbound transportation, warehousing, order fulfilment, logistics network design and any other value-adding service that is performed by an external supplier. From as early as the 1980s, the 3PL industry has developed as an emergent catalyst to help enhance supply chain efficiency (Maloni & Carter 2006:23). Logistics functions are contemplated to be amongst the key activities that no longer need to be managed by organisations, as they can be outsourced to a competent 3PL (Alkhatib, Darlington & Nguyen 2015:102; Ciravegna, Romano & Pilkington 2013:2478).
The research on interpersonal relationships between buyers and suppliers is focused on the 3PL industry for two main reasons. Firstly, its economic contribution to the South African economy is significant. Logistics cost was equal to 11.1% or R393 billion of South Africa’s gross domestic product (GDP) in 2013 (Stellenbosch University 2015). Secondly, multitudinous research focusing on collaboration (Richey, Adams, & Dalela 2012:34), partnership components, such as trust (Johnston et al. 2004:23), and the anticipated consequences rising out of the relationship between the buyers and suppliers of logistics services (Lahiri & Kedia 2011:11) has been carried out on the business-to-business level. Limited research has been carried out to explore the individual-to-individual dyad between buyers and suppliers of logistics services (Thornton, Esper & Morris 2013:789; Wieland et al. 2016:207).
Interpersonal relationships
The literature on interpersonal relationships (Gligor & Holcomb 2013:328; Mocke, Niemann & Kotzé 2016:5; Villena & Craighead 2017:505) provides a compelling motivation for the significance of the research. Wish, Deutsch and Kaplan (1976:409) identified four main dimensions of interpersonal relationships, which are (1) power asymmetry, (2) valence, (3) intensity and (4) social- or work-related. These four dimensions are conclusive and robust and have been empirically proven to be useful in the characterisation of dyadic relationships (Barnes et al. 2015:23; Iacobucci & Hopkins 1992:5; Liden, Wayne & Sparrowe 2000:407).
Power asymmetry
Power is a central theme of relationship dynamics and is considered crucial to the operational and commercial success of relationships (Cox & Chicksand 2005:648; Dahlstrom & Dwyer 2008:47). What is particularly important is the perceived balance of power, hence the fact that it is not the use or the misuse of the power in the interpersonal relationship, but the fact that it is real and legitimate, which can change the actions of the parties involved (Sutton-Brady, Kamvounias & Taylor 2015). Wang, Yeung and Zhang (2011:114) define this interpersonal relationship as one person’s capability to influence the actions and judgement of another person.
Valence
The second dimension, valence (as used in psychology), is described by Frijda (2016:609) as ‘the intrinsic attractiveness (positive valence) or averseness (negative valence) of an event, object, or situation’. A person’s trust in another increases or decreases, improves or breaks, in great part according to the other person’s actions. Trust is cumulative, changing and endless (Villena et al. 2011:561; Zucker 1986:1840). Interpersonal relationships can thus develop from ‘supportive and sociable’ to ‘hostile and argumentative’.
Intensity
Higher dependence on buyer’s levels may also lead suppliers to be more compliant so that the exercise of power may be infrequent (Zhuang & Zhou 2004:673; Zhuang & Zhang 2011:279). Previous research has shown that the appropriate use of power by the stronger party significantly enhances relationship commitment, hence the reluctance to use coercive power (Zhao et al. 2008:368). Consistent with the research of Gligor and Esmark (2015:7), suppliers recognise that interpersonal relationships may lead to a competitive advantage for long-term sustainable business opportunities.
Social- or work-related
However, as stated by Gligor and Esmark (2015:7), it is possible that interpersonal relationships are formed by suppliers for the unequivocal goal of drawing business-related paybacks. Individuals who are over-embedded in interpersonal relational ties suffer from unnecessary obligations that require continuous investments of their time and resources (Lechner, Frankenberger & Floyd 2010:865; Villena et al. 2011:561).
Trust in interpersonal relationships
Researchers have accentuated the resolving and regulating role of trust in supply chain relationships (Squire, Cousins & Brown 2009:461). Trust as a construct has been widely researched by academics (Delgado-Ballester, Munuera-Aleman & Yague-Guillen 2003:31; Heath, Seshadri & Lee 1998:40; Larzelere & Huston 1980:596; Rotter 1967:651; Shockley-Zalabak, Ellis, & Cesaria 2003:4). The definition of Van Riper et al. (2016:25) pertaining to trust between the individuals involved in a buyer-supplier relationship is described as ‘perceived competence, objectivity, fairness, consistency, goodwill, confidence, and the prediction that others will act supportively rather than exploitatively’ the belief that an individual will not exploit the interests of another individual. This definition supplements preceding literature that have measured trust to be a reflection of an individual’s acceptance that another individual will conduct themselves in a manner which decreases risk.
Interpersonal trust allows people to function in unsafe and ambiguous conditions (Mayer, Davis & Schoorman 1995:709; Nyaga, Whipple & Lynch 2010:101). High levels of trust can reduce complexity, because it reduces the number of options that individuals perceive as feasible and allows them to anticipate the behaviour of contracting partners (Casadesus-Masanell 2004:375). Lechner et al. (2010:865) also show that relational ties make information sharing more efficient through greater mutual understanding. Ryu, Min and Zushi (2007:48) propose that ‘trust moderates the impacts of uncertainty on vertical control and satisfaction with supplier performance’. Trust and commitment developed through collaborative activities lead to improved satisfaction and performance (Nyaga et al. 2010:101).
Collaboration and improved organisational performance
Most researchers have lauded the benefits of applying supply chain collaboration through the social capital theory (Marasco 2008:141; Villena et al. 2011:561). The ultimate role and outcome of implementing supply chain collaborations are improved organisational performance (Handfield et al. 2009:100; Manatsa & McLaren 2008:18). The most widely used definition of supply chain collaboration describes it as a ‘long-term relationship where members generally coordinate activities, share information, and work together to plan and even modify their business practices to improve joint performance’ (Mentzer et al. 2001:1; Whipple, Lynch, & Nyaga 2010:507). Hence, this is the definition that is used in this article.
Collaboration does not always live up to its expected benefits (Fawcett et al. 2012:44; Sabath & Fontanella 2002:24). Therefore, an understanding of the factors which lead organisations to (or precludes them from) collaboration is invaluable. Although numerous organisations have profited from collaborative actions with their supply chain members, countless others have found collaboration difficult or have even been unable to collaborate at all (Christopher 2011:215). This difficulty might be a direct consequence of a lack of trust between supply chain members on an interpersonal level (Barratt, Choi & Li 2011:329; Sheu, Yen & Chae 2006:24).
The essential goal of supply chain management is to achieve improved organisational performance (Manatsa & McLaren 2008:18; Simatupang & Sridharan 2002:15). The performance of organisations can be measured in numerous ways. According to Chen and Paulraj (2004:119), ‘an organisation’s performance can be measured in terms of financial performance and operational performance’. Organisational performance can also be seen as service effectiveness and cost-effectiveness (Richey et al. 2010:237). Organisations are thus inclined to evaluate their relationship with supply chain members through their respective partner’s performance (Krause et al. 2007:528).
The role of gender in interpersonal relationships
Research by Gligor and Esmark (2015:522) state that, although male–female supply chain interpersonal relationships exist, they are less common in an industry that mainly consists of male individuals. According to the Quarterly Labour Force Survey published by Statistics South Africa in the third quarter of 2016, females make up less than 20.5% of the transportation and storage industry (Statistics South Africa 2016). The transport and storage industry may not be fully benefitting from what gender diversity can offer (Starostka-Patyk, Tomski & Zawada 2015:1038). Furthermore, male individuals typically connect over contemporary conversations, such as sport or mutual interests. Females are inclined to communicate with personal tales and more casual topics, such as relationships (Gligor & Esmark 2015:6). This is consistent with other research on gender role expectations, which states that women are traditionally more attentive on upholding relationships, while men are traditionally more goal-oriented (Baxter & Wilmot 1985:264).
Women seek interpersonal relationships with men for advice or influence, but turn to other women for information and emotional friendship (Ibarra 1997:91; Spurk et al. 2015:121). The dark side thereof is that the two genders relate differently to situations and interactions and this impacts the benefits to enter into interpersonal relationships. Trust between men and women can emerge instantaneously through a first impression, or be gained over a long period of time through the course of a relationship or a series of interactions (Hardin 2006; Möllering 2008).
Research methodology
Design
A descriptive qualitative research design was used to investigate the phenomenon of interpersonal relationships between buyers and suppliers of logistics services (Plano Clark & Creswell 2015:289; Lambert & Lambert 2012:255). Neergaard et al. (2009:3) indicate that the purpose of a descriptive research design is to describe and explain outcomes, and identify relevant linkages from other researchers, based on information gained from observations of the group, people or organisations under investigation.
Sampling
The unit of analysis for this study is the interpersonal relationships between buyers and suppliers of logistics services conducted within the context of the South African 3PL industry. Seventeen interviews were conducted and eighteen perspectives were received from the interviews. Sixteen of the interviews were semi-structured and face-to-face with one interview conducted over the telephone. Ten participants were from 3PL services suppliers, with two participants from the same organisation. Eight participants were buyers of 3PL services, all from different organisations. The main inclusion criteria for the buyers and suppliers of logistics services were that they had to have developed an interpersonal relationship with an individual in a corresponding organisation (i.e. a buyer of 3PL services with a supplier of 3PL services).
Purposive sampling, more specifically a homogenous sampling strategy, was used to identify the 3PL service providers and buyers of logistics services. The homogenous sampling strategy was used to identify each participant, based on their job title and core responsibilities in the organisation (Plano Clarke & Creswell 2015:334). Snowball sampling was consequently used after the interviews to solicit a corresponding buyer or 3PL service provider with whom the participant has an interpersonal relationship. A total of four direct relational links were made from the 18 participants. The job titles of the senior managers who participated in the research include Key Account Managers, Supply Chain Director, Chief Operations Officer, General Managers, Procurement Managers and Logistics Managers. Male and female managers were interviewed. From the suppliers’ viewpoint, the participants were in charge of handling the client (buyer) account. Their roles were mainly key account managers. From the buyers’ viewpoint, the participants were accountable for the organisation’s logistical functions either from a purchasing, distribution or complete supply chain perspective.
Setting
All the interviews were audio recorded with the consent from the interviewees. The interviews were mainly conducted at the offices of the interviewees. Table 1 provides a profile of the interviewees and indicates that the interviews lasted from 22 min to 82 min, with an average duration of 42 min.
| TABLE 1: Participant and company details. |
Procedure
A pilot interview was conducted before formal data collection commenced. Based on the outcome of the pilot interview, the researchers made the applicable changes to the discussion guide. The participants were only interviewed once with a standardised discussion guide, based on the literature review. A semi-structured interview protocol was used, because it is commonly preferred and associated with a descriptive qualitative research approach (Creswell 2012:238). A semi-structured interview normally starts with a few specific questions, and then follows the participant’s thoughts with the interviewer asking probing questions to gain deeper insight (Cooper & Schindler 2014:153). The researchers transcribed 14 of the interview recordings with the remaining 4 transcribed by a professional transcription service because of time constraints. Transcriptions were subsequently compared to the actual recordings and corrections were made to ensure verbatim transcriptions.
Data analyses
Thematic analysis is the most common data analysis approach for descriptive qualitative research (Braun & Clarke 2012:78). Thematic analysis aims to identify key themes contained within and across texts (Cooper & Schindler 2014:385). The main advantage of thematic analysis is that it is flexible enough to provide a rich and detailed account of data (Braun & Clarke 2012:79). Braun and Clark (2012:60) define themes as describing patterned responses from the data set and codes as a certain label for features of the data that relate to the relevant research questions. Themes and codes were identified as interviews and data collection progressed. Clearly defined themes and codes started to appear repetitively after the eighth interview. The researchers continued to conduct interviews and no new themes emerged after the fifteenth interview, indicating that saturation was achieved. Charmaz (2006:113) states that saturation is achieved when ‘collecting new data no longer triggers new academic understandings’. The researchers conducted two additional interviews and then terminated data collection, as it was evident that saturation was achieved.
Trustworthiness
Creswell (2012:209) explains that at least two techniques must be used in qualitative research to comply with the trustworthiness criteria. For this study, the first is a rich description of the participants, methodology, sites and context ensures the transferability and authenticity of the study (Creswell 2012:209; Polit & Beck 2012:588). Confirmability was assured by relating the analysed data to the literature review. The second technique is peer debriefing. This involves that the study is investigated by an objective third party to address any trustworthiness issues. Consultations with an experienced supply chain academic and methodology expert ensured that any reliability issues were highlighted and corrected. The collected data were obtained by the researchers and the views expressed in this article were originally developed.
Ethical consideration
The research was approved by the relevant research ethics committee before data collection commenced (permit no. 2015/08_Meyer). All recordings and interview transcripts were kept highly confidential and only the researchers had access to the data. Participants had to read and sign an informed consent form that explains the study’s purpose and the research procedures. The form also included assurances of confidentiality and anonymity. To protect the privacy and ensure the anonymity of the participating organisations and individual participants, a pseudonym was assigned to each organisation and each participant (refer to Table 1).
Findings
Four themes – (1) relationship intention, (2) enhanced trust, (3) gender preferences in the establishment of professional relationships and (4) power asymmetry – were identified from the data. These four themes and their associated sub-themes are discussed consecutively in Table 2. For each main theme and sub-theme, illustrative quotations from participants are provided. Parallels are also drawn between participants’ inputs and the literature review.
| TABLE 2: Frequency table of themes and sub-themes identified. |
Relationship intention
Of the 18 participants, 14 reported that the primary reason to form interpersonal relationships is for their own increased professional interest with the other party. This indicates that there is no guarantee that these senior managers will act in the sole interest of their respective organisations. There may be hidden agendas behind these interpersonal relationships that are unanticipated and inconsistent with the intentions of the other individual, thus creating a polarised view on whether interpersonal relationships should be formed. Refer to the exemplary quotes below:
‘My initial intention is professional interest first. Secondary comes a friendship. I will never go and engage in a relationship with a business partner to be his mate. If it migrates and there’s a commonality, you will take it but you’ve got to be extremely aware of the fine line that exists.’ (P12, Male, Business Development Director)
‘I mean the agenda is that I want to keep doing business but I don’t think there’s anything wrong with having an agenda. You know. It’s about getting to know the customer, who they are where they work you know uhm that’s business.’ (P4, Male, Supply Chain Director)
‘It would seem to the party concerned that it would be a genuine relationship being built, if the project ends and I have to move on it would still be there but it would not be genuine because there’s other projects now. So yes, there would be personal contact in the sense of perhaps catching up for a lunch or a breakfast or things like that but it wouldn’t be homebound, now we’re big buddies for life. I would do it for my role, it wouldn’t be genuine, but that is my personality type.’ (P17, Female, Director: Client Solutions)
The other participants who formed genuine relationships reported that these relationships were built over a long and sustained period of working together. Trust was formed by the performance of the organisation’s ability to meet the service-level agreements. Once trust was established in the organisation performance, the potential for genuine friendship arose. Refer to the exemplary quote below:
‘I think when you have been dealing with people for almost 10 years you should hope that you have some friends, so it definitely has developed into something more of a personal relationship uhm and that’s only normal.’ (P8, Female, Key Accounts Manager)
Consistent with the research of Jap and Anderson (2007:260), issues between buyers and suppliers may arise, irrespective of the presence of a genuine relationship. Firstly, during the time it takes to resolve these issues, the interpersonal relationship could deteriorate to a degree that it does not provide a sustained advantage. Secondly, Gligor and Esmark (2015:7) state that increased personal understanding between parties’ enhances their understanding of each other’s organisations. The dark side thereof is that the presence of an interpersonal relationship may be used to influence parties to disclose or withhold information from each other, based on the knowledge one has of the other party. Refer to the exemplary quotes below:
‘There was a problem with our previous logistics manager, he was dismissed due to uhm [pause] bad performance. There were service issues which I did not find out about immediately. I have … you know, I assumed it’s due to the relationship that developed between the two [buyer and supplier] that was more than work. [Translated]’ (P7, Female, Supply Chain Manager)
‘So every now and then I would go play golf with an individual or might have a dinner with a service provider or you know that type of thing. Yes, there will be talks of business. Absolutely. It would [be] more informal because it is out of the office. But yes, absolutely, it would be there. We would talk about current business as well as new business. When you play golf with that person he can give you a heads up, but you still don’t know how many other people he told as well.’ (P4, Male, Supply Chain Director)
Only 6 of the 18 participants believe that interpersonal relationships are sustainable and that it is not guaranteed. The participants conceded that should the individual with whom they have the relationship leave the corresponding organisation within the dyad, then the relationship would most likely not be continued or pursued. The dark side thereof is that if there is not a symbiotic relationship present and one of the parties is negatively affected, the strength of the relationship will deteriorate or be diminished. Furthermore, an additional negative aspect may be the ‘escalation of commitment’. Ross and Staw (1993:701) define escalation of commitment when people perceive that the relationship may cause them to lose their job or position, or when the outcomes of the relationship are not what they have wished for. Refer to the exemplary quotes below:
‘Your problem is when you have someone in an organisation that you have a close relationship with and then that person goes away.’ (P6, Female, Key Accounts Manager)
‘I think some people or not everyone thinks the same way. They regard you being uhm what should I call it … personal with them so to speak … as a benefit to get you in the pocket and might try to … There is definitely people out there that would try and soft soak you for their own benefit.’ (P10, Male, Procurement Manager)
‘The bad is that it could lead you to become out of control you know because you can lose your principles you can uhm end up with your own ethics and morals in question. So you must not lose sight of what is important and draw a line. It is still business.’ (P14, Male, Logistics Manager)
Enhanced trust
From the data, three main sub-themes emerged as the main reasons for enhanced trust. Firstly, mutual interests between parties acted as a vantage point for interpersonal relationships to develop. However, these mutual interests can also tempt parties to disclose information about their organisation, or an individual may be under a self-imposed strain to protect the relationship. Refer to the exemplary quotes below:
‘Ja, look, I mean, with him and I it was rugby. He was a keen rugby player, I am a very avid rugby supporter, so we talk a lot about rugby. He was a surfer uhm he was a very keen sportsman and I’m really into my sports. We used to connect on that level. I think we would share stuff with each other that we wouldn’t… we wouldn’t share with some of the current people that we are dealing with.’ (P2, Male, Key Accounts Manager)
‘He likes fights, I like fights. We are at EFC fights the whole time etc. He is also a big rugby fan. We just clicked. We just really get along very well. That I will say is a very big positive and negative. If I have to reprimand him in front of other people in a meeting, then he will take it very personally. He will not be happy about it and let me know about it after the meeting. There is times where crossing that line uhm becomes tough. [Translated]’ (P5, Male, General Manager: Transport)
Secondly, perceptions about each other act as a driving force to form interpersonal relationships or not. The fate of an organisational alliance (i.e. collaboration) may be tied to the perception about an individual rather than the organisation the individual represents. Refer to the exemplary quotes below:
‘It’s about identifying their body language the first time you meet with somebody. It’s about identifying the migration of the relationship and continually plotting it. Whenever you meet someone, you can within the first five minutes have a fair idea of what the individual is like and I think integrity is something that needs proving over time. It’s not something that you can pick up straight away.’ (P13, Male, Distribution Manager)
‘So, I think where it works [to] the benefit of the company is … when you come up for price negotiations and price increases they’re a lot more willing to hear you out … when they trust you and you have that relationship when you put certain figures in front of them and you say this is the way it is … and you justify everything you saying, they’re more likely to try and put that price increase through than uhm someone you don’t have a relationship with.’ (P18, Female, Regional Manager: Sales)
Lastly, enhanced communication could lead to poor business decisions. The buying party might want the specific supplier to fulfil the work because of the trust and interpersonal relationship present and not with a focus on the best interest of the organisation. Likewise, the suppliers’ effort to enlarge the benefits or ‘expand the pie’ may be a malicious one. Suppliers may need to make additional investments and change methods and practices to be able to accommodate the additional needs of the buying party. An example is practically explained by Participant P1, a supplier, when asked if he went beyond the scope of his work to protect the interpersonal relationship:
‘Yes, and the contract uhm we sign a new contract every three years. He [the buyer] will push you and if the truck cannot take anymore, then we will send another vehicle along with the truck. I have jumped in my car with four or five extra tyres in the back of my car and raced to him [the buyer].’ (P1, Male, Quality Assurance Manager)
Gender preferences in the establishment of professional relationships
Initially, all the participants reported that they do not have a preference regarding gender when they form interpersonal relationships. However, after further probing, it was found that 3 of the 18 participants prefer to work with male individuals. Interestingly, two of these participants are female individuals. Consistent with literature (Gligor & Esmark 2015:6; Ibarra 1997:91), participants indicated that female individuals tend to connect on an emotional level:
‘I think that women can sometimes be [pause] more protected, whereas a guy would tell you exactly what he thinks … women you never know, you never know what’s she thinking could she be fake, is she genuine, how open and honest is she uh a woman takes a lot more time to tap in. If I haven’t found a ground where I connect with you then it’s very difficult to form a business relationship.’ (P8, Female, Key Accounts Manager)
Furthermore, the findings related to gender confirm the statement by Gligor and Esmark (2015:6) that female individuals are more likely to communicate on a content level than male individuals. This is supported by the following quotation:
‘Yes, well I mean as a man it is easy to relate to another man. I am also finding that females are adding a lot of value into our business relationships. I am finding that women add more to the informal factor than men. Normally when I speak to the director we might bring in sport into our conversation, but with the women colleagues they bring other things and the informal aspects such as remembering your birthday.’ (P14, Male, Logistics Manager)
All the participants commented that the industry consists predominately of men and many participants have only few interactions with women. Participants commented more on the fact that the key factors in the formation of interpersonal relationships are personalities and the attitudes of the employees. A shortfall of personality likenesses and like-minded attitudes may not only cause conflicts that result in dissatisfaction, but also have undesirable effects on organisational performance:
‘In logistics and supply chain you are the ultimate diplomat.’ (P4, Male, Supply Chain Director)
‘Yes of course, of course, attitude and your professionalism are your added value to that person and their company.’ (P17, Female, Director: Client Solutions)
‘You’ve got to have a personality. If you don’t, then you’ve got to mask it and play it. You’ve got to.’ (P12, Male, Business Development Director)
Power asymmetry
Of the 18 participants, 15 claimed to be in a mutually beneficial relationship. There is, however, a negative conscious and subconscious dependency between the parties in a win-win relationship. Considering that the suppliers of logistics services are paid for their services, one would assume that the buyers have more power. This was found to be true for the following (and other) participants:
‘I would say that it is more a win-win although uh sometimes I get the impression that when we shout they jump.’ (P10, Male, Procurement Manager)
‘As a customer or as a client will hold the power because suppliers want the business from us, so we can play whatever game we want to play.’ (P11, Male, Procurement Manager)
‘So, at the end of the day with some clients we are always the servant. It’s more dependent on the person and not so much the organisation. So the organisation would want to be doing it one way, and the individual would want to do it another way.’ (P16, Male, Key Accounts Manager)
However, buyers are dependent on their chosen supplier, because the majority of buyers and suppliers have been working together for more than three years. This creates a situation where the supplier has a very good understanding of the buyer’s business. The suppliers are in a situation where their service levels are such that if a buyer should choose to change suppliers the switching costs and barriers to exit will be extremely high and costly. Refer to the quotes from suppliers:
‘We have become dependent on them because they are doing their service so good. So yes, there might be a risk involved on our side.’ (P14, Male, Logistics Manager)
‘At the end of the day, you want to make their life efficient … our life efficient and then it’s win-win. I don’t believe in win-lose in any way. If you’re benefitting and we’re not benefitting, then there is no point to the relationship.’ (P3, Female, Key Accounts Manager)
Buyers’ service levels could decrease during the time when a new supplier is introduced to their operations. In addition, the contracts that are awarded from the buyers’ perspective are multimillion rand contracts, and the suppliers are dependent on that scale of business because of the cut-throat nature of the logistics industry:
‘So if we look at the industry now. Everyone does the same service in this industry. Your differentiator is how well you do the service and what your price is. That’s literally the only differentiators between companies. Our products are exactly the same. We don’t have the same buying power. Our buying power might be better than a smaller company for example, but in terms of the major players in the supply chain, we all offer the same products. It’s just how well we execute those products.’ (P16, Male, Key Accounts Manager)
‘The art to building a relationship with a principal is to make sure that you navigate your way around that power symmetry. Nobody holds the power. If one party starts to hold the power then you’re game over.’ (P12, Male, Business Development Director)
Discussions
Outline of the results
The intent of the research was to investigate interpersonal relationships between buyers and suppliers of logistics services and the negative effects these relationships may have on the respective organisations. No meaningful differences were found between interpersonal factors mentioned by 3PLs and clients and, therefore, the following discussion will not compare the views of buyers and suppliers, but rather provide a combined screenshot of reality. This research finding is in line with previous studies that investigated interpersonal relationships between buyers and suppliers (Droge, Vickery & Jacobs 2012:250; Gligor & Autry 2012:24; Gligor & Esmark 2015:7; Gligor & Holcomb 2013:328; Villena et al. 2011:561).
Relationship intention
The results indicate that the primary reason for interpersonal relationships is firstly for improved professional interest, and secondly for genuine friendships. This addresses the first research question which aimed to determine the intentions of individuals to form interpersonal relationships. From a buyer’s perspective, these interpersonal relationships are used as a lever or catalyst to mitigate risks like operational and service issues. Similarly, it is also clear from the data gathered that 3PL service providers may form interpersonal relationships to improve their likelihood to be awarded a contract when a contract needs to be renewed or when a new contract for additional business is required.
Power asymmetry
The second research question determined the degree of power asymmetry between individuals. Fourteen of the participants, including six of the eight buyers that were interviewed, indicated that their respective organisations strive to work towards mutually beneficial partnerships. The research, however, clearly identified negative aspects. Participants in interpersonal relationships create a situation the authors call ‘mutual hostages’. The mutually beneficial relationships and strategic partnerships claimed by both parties are in reality more likely to be ‘self-enforcing agreements’ because of the presence of mutual dependability (Villena & Craighead 2017:505).
Enhanced trust
This third research question determined whether or not increased trust over time causes increased negative effects. Organisations can reduce the dark side of interpersonal relationships by knowing when managers should focus on the dyadic relationship and when to moderate or eliminate such ties. As discussed in the literature, one helpful approach is to use the life cycle model developed by Seabright, Levinthal and Finchman (1992:122). During the early phase of interpersonal relationships, it is imperative that a mutual agreement should be established as to what the relationship is supposed to achieve. As the interpersonal relationship moves into the growth phase, organisations need to create additional inter-organisational ties to be able to maintain the alliance in the event that the interpersonal relationship diminishes or individuals reach an impasse. Finally, in the mature phase of the relationship, organisations should ensure that the enhanced levels of trust that accrued have evolved from an interpersonal level to an inter-organisational level. Organisations should focus on competence-based trust because of organisational capabilities rather than individual interpersonal relationships when trying to achieve increased operational performance.
Gender preference
Considering the fourth research question on whether gender plays a role in the formation of interpersonal relationships, the research indicated that gender is not a major barrier to the formation of personal relationships. Of the 18 participants, 6 were female individuals. In total, only three participants prefer to work with male individuals rather than female individuals. Three of the participants prefer to work with females. Two of the participants that prefer to work with female individuals are female. The remaining 12 participants have no gender inclination and are able to form personal relationships regardless of the gender of the individual. Participants indicated that attitudes and personalities of individuals play a superior role in the formation of interpersonal roles.
Practical implications
The findings contribute to the understanding of the dark side of interpersonal relationships in the South African 3PL industry. The research confirms that knowledge and reputation have a significant influence on both buyers and suppliers of logistics services in the formation of interpersonal relationships. Both individuals need to believe that the other party is knowledgeable, reputable and capable to provide the required service. Managers need to avoid the use of coercive tactics when they deal with the respective individual in die opposite organisation. Coercion may initially benefit the more powerful individual within the dyad, but the coercion diminishes the opportunity to create a value generating interpersonal relationship.
In response to the fifth research question, the authors identified three critical factors that organisations can use to mitigate the dark side of interpersonal relationships. Firstly, on an individual level, it will be either mitigated or promoted by the individual’s own personal personality. The individual’s beliefs, personality and values will be the catalyst to make a cognisant decision to form interpersonal relationships or not. Secondly, there should be organisational boundaries mitigating the risks. This refers to the culture of the organisation. Employees should know that the organisation fosters a culture of an above-board practice and would not jeopardise their own integrity or that of the organisation to secure a contract. Thirdly, the organisation should have a detailed corporate governance policy in place so that every employee can clearly know what is acceptable and what is not. Ethical practices should always be the priority. The reporting of any gifts should be actively monitored and the organisation should set a maximum monetary value allowed for gifts. The formations of relationships should not be prohibited, but management should provide training to employees to not fall victim to master–servant situations and to be more assertive in relationships. This monitoring can be used to ensure that both organisations benefit from the relationship and that the dark side of interpersonal relationships does not creep in, as discussed by Gligor and Esmark (2015:7).
Limitations of the study
The collection of the data has some limitations. The results may include some bias because the study was only carried out in Gauteng and only participants from large and established organisations were interviewed. Findings of this study are based on opinions of a limited number of participants. The aim of the research was not to generalise the findings and this can be seen as a limitation. A larger and wider study can be conducted to evaluate the generalisability of the findings. It is important to highlight the fact that because of the minority of female practitioners in the supply chain industry, future research could be performed to investigate the role of gender in the formation of interpersonal relationships within the industry. A longitudinal study could be considered. This will enable researchers to investigate how a buyer and supplier relationship develops and evolves over time, whether or not it reaches the dark side and at what point in the relationship, and how formal governance interacts with relational ties at various stages. The participants in this study, buyers and suppliers, were all from large organisations that are required by law to have formal corporate governance policies in place. They also have strict business processes in place, which to some extent can restrict the formation of personal relationships. It would be interesting to conduct this research on smaller organisations, where adherence to formal processes and governance might not be as stringent. The research can also be replicated in other settings to determine transferability.
Conclusion
The research aimed to investigate the interpersonal relationship complexities of buyer and supplier dyads within a South African perspective and to provide practical and feasible managerial solutions to mitigate any negative effects. A qualitative research design was used to explore the various perspectives from participants, as well as to identify underlying themes from semi-structured interviews. The results revealed the negative intricacies or so-called dark side of enhanced communication, enhanced trust and increased business risks that are associated with interpersonal relationships. The researched endeavoured to recognise how buyers and suppliers of logistics services work together once an interpersonal relationship is extant. The results revealed that performing on an organisational level serves as a prerequisite for the forming of interpersonal relationships.
Interpersonal relationships can subside at any point, even if individuals have worked together for a long time. The idiom ‘familiarity breeds contempt’ can be used to describe this occurrence. Establishing how to successfully maintain a partnership can be a foundation for sustainable inter-organisational relationships. The key is to be able to achieve a balance in the need for interpersonal relationships as an asset for an organisation, while being cognisant of the limitations of such relationships.
Acknowledgements
Competing interests
The authors declare that they have no financial or personal relationships that may have inappropriately influenced them in writing this article.
Authors’ contributions
This article is based on the MPhil dissertation of A.M. A.M. was, therefore, the main researcher. W.N. assisted as a supervisor with the conceptualisation, literature review, research instrument and review of the draft manuscript. T.K. provided methodological guidance.
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