Rekindled Business Relationships : A study of the re-activation process of buyer-supplier relationships in the defence and security industry in Sweden

Abstract: Most research on buyer-supplier relationships has mainly focused on initiating, developing and ending the relationship with suppliers. However, the firm’s possibilities of doing business again with former suppliers have been largely overlooked. Consequently, there has been scarce research on switching back to a previous supplier and the re-activation of the relationship. Based on buyer-supplier relationship perspectives, the purpose of this thesis is to deepen our knowledge on the re-activation process of business relationships. Seen from the buying firm’s standpoint, the re-activation process involves the decision to switch back to the former supplier and re-activate the relationship as well as de-activate the relationship with the current supplier.Four qualitative case studies of re-activation processes in the defence and security industry in Sweden were conducted, based on 89 open-ended, in-depth interviews with representatives from equipment manufacturers and suppliers of customized industrial products. The interviewees’ perceptions of the re-activation process were studied and analysed together with their views regarding the overall buyer-supplier relationship. The findings of the empirical study indicate that in these four cases, firms tend to form a particular preconception of re-activation, which affects their switching-back decision.When re-activating the relationship, the buying firm and supplier evaluate each other’s expectations, negotiate and accommodate to the specific requirements of each party. Simultaneously, when de-activating the relationship with the current supplier, firms may deal with changing the relationship to continue doing business with each other, or negotiating farewell, which allows for re-activation of the relationship at a later stage.To adapt in dynamic environments, firms use resources in new combinations, entailing that various relationship-specific resources are transformed and may be difficult if not impossible to create independently from the re-activation process. The research highlights that interpersonal relationships play an important role in promoting or hindering the re-activation process, and contributes with new insights by presenting an empirically based typology of the process.Nonetheless, the re-activation process seems to be dependent not only on how well the buying firm performs in interaction with its direct suppliers and vice versa, but also on how these suppliers in turn manage their relationship with one another and the relationships with third parties. The thesis offers an initial conceptualization of the re-activation process, which comprises an important and heretofore underexplored aspect of buyer-supplier relationships.