Total value in business relationships : exploring the link between power and value appropriation

Purpose: The purpose of this paper is to consider how value can be better defined and to understand the drivers of value appropriation in business relationships. In doing so, the authors explore the role that power plays in determining the sharing of value in those relationships. Design/methodology/approach: This paper contains a conceptual discussion about value and the appropriation of value in business relationships, which leads to the development of a methodology for assessing the sharing of value. Findings: In this paper, the authors have developed a view of total value in supply chain relationships. They argue that the value of the relationship is the sum of the customer and supplier value, including both tangible and intangible benefits and sacrifices. In addition, they maintain that the appropriation of value in a business relationship is reliant upon: the power both parties possess; the direct and tangible value each party has to offer; and the indirect and intangible value that each has to offer. They also provide a methodology, which can be used to determine the sharing of value between two actors within a business exchange. Research limitations/implications: In arriving at the conceptualisation of total value and in the discussion of value appropriation in business relationships, the authors drew upon extant literature. However, a limitation is that they were unable to fully consider all the academic discourse centred on value and value appropriation. Originality/value: The discussion brings together the issues of customer value and supplier value to the concept of “total value”. Thereafter, it links the contentious issue of buyer and supplier power, so as to better understand the appropriation of value in business relationships.