The Moderating Role of Relationship Quality in Determining Total Value Orientation

Among the several approaches to understanding value in business transactions, the one most frequently encountered in marketing, management, and economics literature is the tradeoff of benefits and costs, the difference or ratio of which is operationalized as value. In a complex business relationship involving goods and services as well as multiple business partners, assessing the total value of the system involves more complex transactional and relational dynamics than simpler one-time business transactions. Thus, the purpose of this paper is to offer a model of total value of a business system including antecedent factors and outcomes, and thereupon to study the role of relationship quality in moderating the value of the individuals in the business relationship. This paper uses the transaction cost approach to study the value in a business relationship to both the service-provider and client firm, considering the costs and benefits to each business partner. Next, it discusses the impact of the quality of the business relationship on the value perceived by each business partner. Finally, several outcomes of a total value orientation such as financial performance, competitiveness and, especially, end-customer value is considered