An exploration of buyer-seller relationship development in a high risk market: a case study of a small British exporter in Indonesia

Relationship development has attracted significant attention from both an empirical and a conceptual perspective. Nevertheless, there has been little attention given to the complexities of managing buyer-seller relationships in high risk markets. Much of the research to date seems to have been carried out in benign environments where markets have been quite stable both politically and economically, for instance, Canada, USA and West European countries. This study therefore makes a significant contribution in that it aims to develop a greater insight into the development and management of business relationships in high risk markets where due to environmental instability, there is also a high degree of uncertainty. This paper examines the case of a British family firm building and managing buyer-seller relationships in Indonesia. The study follows in the inductive tradition and uses qualitative research methods to build insights into the development and management of the relationships. In order to take a multi faceted perspective, a number of face-to-face interviews with key management personnel both in England and with the buyer organisations in Indonesia were carried over a period of time. Based on the analysis, the authors identify three main conclusions. Firstly, in an increasingly unstable market where there is not only high risk but a high degree of uncertainty, trust and commitment within a relationship do not necessarily decline as one would expect but can remain stable or even increase. Secondly, in such a market, whilst there is an increased disposition for the more powerful firm in the relationship to use its position to persuade the partner to adapt and cooperate to meet its demands, a willingness to adapt and cooperate can moderate the negative effect of decreasing sales on mutual satisfaction. Finally, it is social satisfaction rather than economic satisfaction that seems to play the greater role in maintaining a healthy buyer-seller relationship in a market where there is a high degree of risk and uncertainty.