Journal of Business Research 63 (2010) 840–848

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Journal of Business Research

Creating and appropriating value in collaborative relationships

Stephan M. Wagner a,⁎, Andreas Eggert b, Eckhard Lindemann a
a
Chair of Logistics Management, Department of Management, Technology, and Economics, Swiss Federal Institute of Technology Zurich, Scheuchzerstrasse 7, 8092 Zurich, Switzerland
b
Marketing Department, University of Paderborn, Warburger Strasse 100, 33098 Paderborn, Germany

a r t i c l e i n f o a b s t r a c t

Article history: Business relationships provide means for creating and appropriating superior value in the marketplace. To date,
Accepted 1 July 2009 research pertains almost exclusively to the value after relationship creation and sharing among exchange
partners. Consequently, the interaction between value creation and value appropriation remains relatively
Keywords:
unknown in collaborative relationships. Drawing on equity theory, this study proposes a conceptual model that
Customer–supplier relationships
positions value creation and value appropriation as focal variables within the nomological net of business
Value creation
Value appropriation
relationships. Data collected from industrial customer–supplier projects reveal that value appropriation is the
Survey strongest driver of project satisfaction. Customer firms perceive value creation as positive only if they appropriate
Structural equation modeling a larger slice of the bigger value pie. Information exchange moderates customer firms' evaluations of value
creation and appropriation efforts. In contrast to the highly competitive nature at the project level, embedding the
supplier project in an ongoing sourcing relationship reveals cooperative elements in the customer–supplier
interaction. Greater relational satisfaction favors less aggressive value appropriation efforts. These insights help
bridge the gap between managerial metrics that focus on successful value appropriation and academic models
that attend to variables that capture the quality of ongoing relationships.
© 2010 Elsevier Inc. All rights reserved.

1. Introduction For example, North American car manufacturers historically relied

on an arm's-length model of supplier management, characterized by
Over the past two decades, relationship marketing became the minimal commitment or dependence and the exploitation of bargaining
dominant perspective in academic marketing literature (Palmatier, power. The focus was clearly on value appropriation, frequently at the
2008). Scholars advance understanding of the drivers, mediators, and expense of the suppliers. Competitive pressure from Japanese auto
performance outcomes of business relationships on the basis of both manufacturers forced U.S. firms to reconsider this practice and adopt a
conceptual and empirical perspectives. In particular, widespread partnership model, as firms like Toyota, Honda, or Nissan practiced in
research attention centers on relationship quality as a key mediating Japan and their North American transplants. Chrysler took the lead in
variable (Kumar et al., 1995; Morgan and Hunt, 1994; Palmatier et al., adopting collaborative relationships with suppliers, which prompted
2006). As a composite concept, relationship quality summarizes “the suppliers to expend more relationship-specific investments, share
diverse interaction characteristics required to create a high-caliber knowledge more openly, and better coordinate independent product
relational bond” (Palmatier, 2008, p. 22) by encompassing variables development and manufacturing tasks. In 1998 alone, Chrysler and its
such as satisfaction, trust, and commitment. suppliers removed more than $2 billion in costs from the supply chain
As a mediating variable, relationship quality provides a means to (Hartley et al., 2002) through the SCORE program, which relies on
an end. Companies do not build strong bonds with their customers collaborative relationships. Chrysler and its suppliers shared the
and suppliers for their own sake. Rather, they adopt exchange designs benefits (Dyer, 1996).
that offer the best performance prospects (Carson et al., 1999). The Chrysler example illustrates that collaborative relationships
Companies prefer relational exchanges to arm's-length interactions can help create and appropriate superior value in business markets.
when those exchanges help create and appropriate more business With such a background, empirical research provided little insight
value in marketplaces (Ghosh and John, 1999). into the interaction between value creation and value appropriation
in collaborative relationships though. A growing body of literature
demonstrates the value creation potential of collaborative relation-
ships (Möller and Törrönen, 2003; Walter et al., 2003), yet the shared
“value pie” remains underresearched (Jap, 2001). Empirical research-
⁎ Corresponding author. Tel.: +41 44 632 3259; fax: +41 44 632 1526. ers virtually ignore the interplay between value creation and value
E-mail addresses: stwagner@ethz.ch (S.M. Wagner), andreas.eggert@notes.upb.de appropriation at the individual business relationship level (Fang et al.,
(A. Eggert), elindemann@ethz.ch (E. Lindemann). 2008). Because “value creation and value sharing are the raison d'être

0148-2963/$ – see front matter © 2010 Elsevier Inc. All rights reserved.
doi:10.1016/j.jbusres.2010.01.004
 S.M. Wagner et al. / Journal of Business Research 63 (2010) 840–848 841

of collaborative customer–supplier relationships” (Anderson, 1995, creation and value appropriation and its impact on attitudinal and
p. 348), this omission represents a major gap in the relationship behavioral variables. Specifically, this study argues that an exchange
marketing research agenda. partner's satisfaction and future collaboration intentions are functions of
From a conceptual perspective, value creation and value appropri- both the size of the total value pie created and the value slice appropriated.
ation represent two sides of the same coin. Value creation entails the The next section outlines the conceptual model, details the hypotheses,
total net value (i.e., total outcomes minus total inputs) created in a and identifies an appropriate unit of analysis for the empirical study.
collaborative effort among exchange partners. Value appropriation
depicts the net value that a focal firm claims successfully. Value creation
3. Conceptual model
is a win–win scenario; value appropriation means that a larger value
slice for one party diminishes the remaining slice for the other partner.
By their very nature, collaborative interorganizational relationships
Previous relationship marketing scholars researched perceived value
are ongoing, which is a major challenge for investigating the creation and
only after its creation and sharing among exchange partners (Lindgreen
appropriation of value, because empirical research requires a clearly
and Wynstra, 2005; Menon et al., 2005; Ulaga and Eggert, 2006), but this
defined unit of analysis. This study therefore focuses on supplier projects,
research perspective cannot reveal the underlying sources of value
which share certain characteristics, including (1) a clearly defined
perceptions. That is, a focal firm might achieve superior value because of
beginning and end, (2) specified expectations and objectives, (3) specified
superior value creation among the exchange partners, superior
participants, and (4) dedicated resources. In business practice, supplier
appropriation of the value pie, or a combination thereof.
projects serve a wide range of objectives, including joint cost reduction
Understanding how business relationships facilitate value is impor-
(e.g., Cannon and Homburg, 2001), quality improvements (e.g., Ulaga and
tant to marketing managers and academicians alike. From a practitio-
Eggert, 2006), and collaborative innovation (e.g., Hoegl and Wagner,
ner's point of view, value creation and value appropriation enable the
2005).
profitable management of business relationships. For example, many
Although clearly defined units of analysis, supplier projects also
industrial suppliers now provide value-added services to customers, yet
remain embedded in sourcing relationships. They depend on
many fail to extract their fair share of the augmented value pie (Reinartz
relationship history and likely influence partners' future collaborative
and Ulaga, 2008). From an academic perspective, research into value
behavior (Dwyer et al., 1987). The proposed conceptual model (Fig. 1)
creation and appropriation represents an essential step toward crafting
depicts the embeddedness of the supplier project in an ongoing
a value-based perspective of relationship marketing. If value creation
sourcing relationship:
and value appropriation represent the raison d'être of collaborative
Relational satisfaction and relational trust are exogenous variables
customer–supplier relationships, then a thorough understanding of the
in the proposed model. Prior research (Crosby et al., 1990; Doney and
interaction between these value constituents is critical.
Cannon, 1997) underlines the importance of satisfaction and trust as
To shed light on the creation and appropriation of value in
cumulative variables that characterize the quality of an ongoing
collaborative relationships, this study takes the following steps: The
relationship. These variables are not independent. Relational satisfac-
next section introduces equity theory as a framework for understanding
tion represents the company's feeling toward the overall relationship
the interaction between value creation and value appropriation in
with the partner (Crosby et al., 1990), and a satisfactory relationship
collaborative relationships. Against this theoretical background, the
enhances relational trust, or the “confidence in an exchange partner's
authors offer a conceptual model and discuss the hypotheses. After the
reliability and integrity” (Morgan and Hunt, 1994, p. 23).
description of the empirical study, the results and findings appear.
Finally, the article concludes with some limitations of the study and H1. Relational satisfaction has a positive impact on relational trust.
further research opportunities.
A high quality customer–supplier relationship motivates exchange
2. Theoretical background partners to strive for relationship continuity and to collaborate on future
projects (Palmatier et al., 2006). Therefore, both facets of relationship
Equity theory (Adams, 1963; Homans, 1961; Walster et al., 1978) quality — relational satisfaction and relational trust — should increase
provides a suitable framework for researching the creation and the future collaboration intentions of relationship partners.
appropriation of value in collaborative relationships. With roots in social
psychology, equity theory explains the distribution of outcomes in H2a. Relational satisfaction has a positive impact on the company's
interpersonal and interorganizational relationships. Equity theory future collaboration intent.
receives empirical support from diverse research fields (e.g., Austin and
H2b. Relational trust has a positive impact on the company's future
Walster, 1975; Carrell and Dittrich, 1978; Greenberg, 1982; Ring and Van
collaboration intent.
de Ven, 1994). Recently, it increasingly appears in relationship marketing
settings (e.g., Fang et al., 2008; Homburg et al., 2007; Homburg et al.,
Interorganizational collaboration aims to create and appropriate
2002; Jap, 2001; Scheer et al., 2003; Swan and Oliver, 1991).
superior value (Carson et al. 1999), yet what do companies create
In line with traditional economic thinking, equity theory assumes
(value pie), and what do companies claim (value slices)? Jap (1999,
utility-maximizing actors (Walster et al., 1978) and thus extends
p. 461) introduces the value pie metaphor and defines the expansion
traditional economic theory by postulating that exchange partners not
of the pie as the “collaborative process of creating mutually beneficial
only assess their own utility but compare what they take from an
strategic outcomes,” which allows for sharing this “pie of benefits”
exchange (outcomes) to what they bring into the exchange (inputs)
(Jap, 2001). Greater relational trust leads to positive strategic out-
(Homburg et al., 2007). Equity theory also assumes the presence of
comes and helps create value in ways that a transactional relationship
relative justice in the exchange process (Huppertz et al., 1978), such that
could not effectively create or share among partners (Palmatier et al.,
the absence of relative justice (i.e., inequity) produces negative sentiments
2006). Therefore,
and behavioral responses (e.g., dissatisfaction and leaving intentions)
among relationship partners (Adams, 1965). With an explicitly subjective H3a. Relational trust has a positive impact on value creation.
perspective, equity theory regards inputs and outputs as perceived rather
than objective, and relative justice is also a subjective concept that exists H3b. Relational trust has a positive impact on value appropriation.
“in the eye of the beholder” (Donnerstein and Hatfield, 1982, p. 310).
For the research context of this study, equity theory provides the According to equity theory, a negative link occurs between relational
means to develop hypotheses about the interaction between value satisfaction and the value slice appropriated by the focal relationship
842 S.M. Wagner et al. / Journal of Business Research 63 (2010) 840–848

Fig. 1. Value creation and value appropriation as focal variables.

partner. Because relational satisfaction subsumes the confirmation or the firm's equity perception (i.e., increases negative inequity). If
disconfirmation of expectations over the history of the relationship negative inequity reduces the company's level of project satisfaction,
(Oliver, 1980), satisfaction means the partner consistently fulfills
expectations. Therefore, the focal relationship partner reduces value H5c. Given H5a and H5b, value creation has a negative direct impact
appropriation efforts during the current collaboration to restore on the focal partner's level of project satisfaction.
relational equity (i.e., reduce own positive inequity):
The theory also features the expectation that the intensity of
H4. Relational satisfaction has a negative impact on value appropriation. information exchange between relationship partners during a collab-
oration moderates the negative effect. Frequent and open communica-
tion, which may explain the reasons one partner receives a relatively
Value creation can have both direct and indirect effects on smaller value share, should make the underlying value-sharing process
relationship partners' satisfaction with the collaboration. The indirect clearer and help both partners accept perceptions of negative inequity:
impact is straightforward: Value creation enhances relationship
partners' value appropriation. The more successful the collaboration H6. Information exchange positively moderates the direct link
in terms of value creation and the bigger the value pie, the more value between value creation and project satisfaction.
each company can claim (win–win situation). Value appropriation
then has a positive impact on the firm's satisfaction. The more value Finally, the company's satisfaction with a collaboration influences
the firm can claim from a collaborative relationship, the more likely the future of the relationship. Because current experiences should
the perceived outcomes meet or even exceed prior expectations and recur in future collaborations, companies continue collaborations only
the lower the availability of better investment alternatives in the if their current project experiences meet their expectations.
marketplace, which results in more satisfaction with the current
collaboration. In aggregate, H7. Project satisfaction has a positive impact on future collaboration
intentions.
H5a. Value creation has a positive impact on value appropriation.

H5b. Value appropriation has a positive impact on the focal partner's 4. Method
level of project satisfaction.
4.1. Research setting and data

The basic hypotheses of equity theory suggest the direct effect of The test of the hypotheses employs a survey of industrial firms in
value creation on project satisfaction. Companies not only evaluate the Germany and Switzerland, with purchasing managers as the key
size of their own value slice but also consider the total size of the value informants. The units of analysis focused on recently completed (within
pie and their relationship partner's value slice. Companies prefer an the past 12 months) supplier projects embedded in ongoing sourcing
equitable outcome for invested inputs, but when the absolute size of the relationships. The initial set of manufacturing companies and their
company's value slice remains constant, value pie expansion increases managers with purchasing responsibilities came from a commercial list
the share for the partner (win–lose situation) and consequently reduces provider (n = 1846). The researchers sent personalized e-mails
 S.M. Wagner et al. / Journal of Business Research 63 (2010) 840–848 843

Table 1 from several firms. To ensure clarity, half of these informants provided
Sample breakdown by industry. their comments while answering the questionnaire, and the other half
Industrial machinery 37 20.2% offered responses after they completed the questionnaire. The relevant
Electronics and optics 35 19.1% comments entered the final version of the survey instrument.
Automotive and transport equipment 24 13.1% Existing scales serve to measure the constructs, with some slight
Metals and metal working 17 9.3%
adaptations to the research context. One person translated the
Chemicals and pharmaceuticals 14 7.7%
Construction 6 3.3% original English questionnaire into German, and then a second person
Food and consumer goods 5 2.7% back translated the items into English. Any differences were
Rubber and plastic products 4 2.2% reconciled (Brislin, 1970). The measure of relational satisfaction
Textiles and clothing 3 1.6%
used items developed by Crosby et al. (1990). Relational trust used
Other 38 20.8%
Total 183 100.0%
Doney and Cannon's (1997) measure. The insights gained from the
pretest suggested recoding one of the reverse-coded items. The
information exchange measure included four items from Heide and
containing a link to an online questionnaire, as well as the offer of a John (1992). The items developed by Jap (2001) serve to measure
summary of the results and a practitioners' purchasing book in return project satisfaction and future collaboration intentions. Relationship
for their participation. Three follow-up e-mail and telephone contacts tenure is the duration of the sourcing relationship in years. The
yielded 186 completed questionnaires. According to telephone inter- assessment of the economic situation of the customer relied on four
views of 100 randomly selected nonrespondents, 45% had not items representing the current market situation and customer's
conducted a supplier project within the previous 12 months. financial performance in comparison with the company's main
The participating companies earned 2006 annual sales volumes competitor in terms of sales growth, market share, profit margin,
ranging from $6.6 million to $138.4 billion, with an average annual and profit margin growth (see the Appendix for item formulations).
sales volume of $3.09 billion. On average, these companies employed To capture the perceived size of the value pie and the appropriated
7350 persons (from 16 to 324,900 employees). A sample breakdown slice of the customer firm, this study used the global measure of equity
by industry appears in Table 1. The average sourcing relationship (Walster et al., 1978), which appears in several studies and research
tenure was 10.48 years at the beginning of the selected supplier settings (e.g., Corsten and Kumar 2005; Scheer et al., 2003) and
project. operationalizes diverse measures (e.g., outcome-input ratio, degree of
Respondents held senior positions in their firms. Most of the key equity, and equality). In accordance with Fang et al.'s (2008, p. 307) claim
informants were purchasing executives, who should have overarching, that suppliers can contribute “more tangible or intangible resources” to
boundary-spanning views of their companies' supply chains and customer projects, this study further distinguished between tangible (e.g.,
supplier activities. The majority of the informants held titles such as financial and personnel) and intangible (e.g., know-how and patents)
head of purchasing or chief purchasing officer (45.9%), purchasing inputs and outcomes of the project collaboration. The resulting 12 items
manager (17.5%), or chief executive officer, owner, or plant manager constitute two reflective measures for the perceived size of the value pie
(11.5%). Others cited their positions as heads of logistics, supply chain, or and the slice appropriated by the customer firm:
operations (8.7%), heads of supplier management/development (2.7%),
and other managers (6.0%). The respondents averaged 7.8 years in their ½Value creation:
current position and 11.4 years with their current firm. VALUE1 = ðOutcome Customer  Input Customer Þ
The survey included two questions to assess the informants' ability
to answer the questionnaire (Kumar et al., 1993). These questions + ðOutcome Supplier  Input SupplierÞ; and
measured (on five-point Likert scales, anchored at 1 = fully disagree; VALUE2 = ðTangible Outcome Customer  Tangible Input Customer Þ
5 = fully agree) managers' degree of knowledge about (1) the specific
project and (2) the ongoing relationship with the respective supplier. + ðTangible Outcome Supplier  Tangible Input Supplier Þ
Most informants rated their knowledge about the project and the + ðIntangible Outcome Customer  Intangible Input CustomerÞ
relationship as 4 or 5 (92% and 96%, respectively). Three informants
with ratings of 3 were dropped from the sample. The remaining + ðIntangible Outcome Supplier  Intangible Input SupplierÞ:
respondents indicated a high average degree of knowledge about the
½Value appropriation:
project (4.4) and the relationship (4.6). In summary, these results
suggest knowledgeable informants. VALUE–CUST1 = ðOutcome Customer  Input CustomerÞ; and
Comparisons of the responses of early (initial e-mail) and late
VALUE–CUST2 = ðTangible Outcome Customer  Tangible Input Customer Þ
(second and third reminders) informants on all model items showed
no statistically significant mean differences (p > .05) (Armstrong and + ðIntangible Outcome Customer  Intangible Input CustomerÞ:
Overton, 1977). The sample of informants also was not significantly
different from the 100 randomly selected nonrespondent companies Tables 2 and 3 indicate the convergent and discriminant validity of
in terms of sales or employees (drawn from an independent industry the scales.
database) (p > .05). In aggregate, these tests indicate that nonre- The investigation of interrater reliability for future collaboration
sponse bias is not a concern. intentions and information exchange relied on 32 dyadic data sets.
The within-group interrater reliability, rWG (James et al., 1984), is the
4.2. Survey instrument and measures most frequently applied index for interrater agreement on Likert-type
scales and among the most acknowledged measures (LeBreton and
The development of the survey instrument and measures proceeded Senter, 2008). The index derives from a comparison of actually
through several stages and followed standard techniques (Churchill, observed variability in multiple informants' ratings and the theoret-
1979; Dillman, 2007). First, the preliminary draft questionnaire derives ical variance of ratings that might be expected in the case of no
from existing literature and the findings of eight case study interviews agreement. Brown and Hauenstein (2005) propose that rWG values of
with purchasing managers in industrial companies. Second, several .80 or more indicate strong agreement, values between .70 and .80
academics with diverse research backgrounds and a few practitioners indicate moderate agreement, values between .60 and .70 show weak
commented on the items in the questionnaire. Third, the pretest of the agreement, and values less than .60 represent unacceptable levels of
survey instrument consisted of interviews with purchasing executives agreement. For future collaboration intentions, 30 of the 32 dyads
844 S.M. Wagner et al. / Journal of Business Research 63 (2010) 840–848

Table 2
Convergent validity.

Construct name/items Factor loading t-value AVE Composite reliability

Relational satisfaction .73 .89

SATISF1 .88 37.60
SATISF2 .87 29.14
SATISF3 .82 19.45
Relational trust .60 .92
TRUST1 .75 16.64
TRUST2 .82 24.94
TRUST3 .83 28.29
TRUST4 .77 22.28
TRUST5 .77 23.75
TRUST6 .72 15.05
TRUST7 .84 33.66
TRUST8 .67 11.04
Future collaboration .93 .98
FUTURE1 .96 88.49
FUTURE2 .97 129.19
FUTURE3 .96 57.03
Information exchange .67 .89
INFEX1 .84 24.07
INFEX2 .85 32.14
INFEX3 .80 18.77
INFEX4 .80 12.30
Project satisfaction .82 .93
PRO_SATIS1 .93 63.97
PRO_SATIS2 .85 26.62
PRO_SATIS3 .93 73.46
Economic situation .64 .87
SITUATION1 .82 5.34
SITUATION2 .54 3.07
SITUATION3 .85 7.41
SITUATION4 .93 8.27
Value creation .75 .86
VALUE1 .84 22.32
VALUE2 .89 32.18
Value appropriation .77 .87
VALUE_CUST1 .87 33.79
VALUE_CUST2 .89 44.31

reveal rWG values of .80 or greater, such that 94% of the dyads show indirect unobservational relationships among constructs. The mea-
strong agreement. The probability of a match in the customer's and surement model represents the epistemic relationships between
the supplier's collaboration intention therefore is high. The average observed variables and constructs. The bootstrap procedure in the
mean rWG of .90 also suggests strong agreement. In addition, 91% of SmartPLS 2.0 software (Ringle et al., 2005) enables the calculation of
the informants are in strong agreement (greater than .80) with regard the standard deviation and an approximation of the t-statistic, which
to information exchange; the average rWG is also high (.88). overcomes the nonparametric methods' lack of formal significance
tests for estimated parameters (Chin, 1998).
5. Results Furthermore, PLS fits the research setting well because it can model
conceptually and assess empirically the latent interaction variables (see
A partial least squares (PLS) analysis tests the hypotheses. As a Lohmöller, 1989). In contrast, LISREL estimation approaches assume
nonparametric estimation procedure (Wold, 1982), PLS provides an uncorrelated error terms among indicators, which cannot hold true by
iterative combination of principal components analysis that relates definition for latent interaction variables that derive through multipli-
measures to constructs and path analysis that captures the structural cation. Therefore, “the error terms for the product indicators are
model of constructs. The structural model represents the direct and partially correlated with the error terms for the indicators of the other

Table 3
Discriminant validity.

Mean SD 1 2 3 4 5 6 7 8 9

1 Relational satisfaction 3.62 0.82 .86

2 Relational trust 4.00 0.68 .67 .77
3 Future collaboration 4.21 0.91 .53 .65 .96
4 Information exchange 4.20 0.65 .35 .47 .44 .82
5 Project satisfaction 3.82 0.86 .45 .48 .69 .27 .90
6 Relationship tenure 10.48 9.92 .03 –.02 –.01 .01 –.04 1.00
7 Economic situation 3.41 0.74 .12 .04 .11 –.02 .23 .06 .80
8 Value creation 1.23 2.20 .11 .15 .13 .02 .11 .00 .17 .87
9 Value appropriation 1.26 1.58 .10 .23 .23 –.04 .22 .04 .09 .79 .88

Note: Bold numbers on the diagonal indicate the square root of the average variance extracted, numbers below the diagonal represent construct correlations.
 S.M. Wagner et al. / Journal of Business Research 63 (2010) 840–848 845

Table 4
Parameter estimates for the structural model.

Hypothesis Impact of On Path coefficient t-value Hypothesis supported

H1 Relational satisfaction Relational trust .69 14.36⁎⁎⁎ Yes

H2a Relational satisfaction Future collaboration .06 1.25 No
H2b Relational trust Future collaboration .28 3.18⁎⁎⁎ Yes
H3a Relational trust Value creation .16 1.52⁎ Yes
H3b Relational trust Value appropriation .19 2.86⁎⁎⁎ Yes
H4 Relational satisfaction Value appropriation −.12 2.15⁎⁎ Yes
H5a Value creation Value appropriation .78 17.46⁎⁎⁎ Yes
H5b Value appropriation Project satisfaction .31 2.28⁎⁎ Yes
H5c Value creation Project satisfaction −.23 1.97⁎⁎ Yes
H6 Value creation X Information exchange Project satisfaction .09 2.29⁎⁎ Yes
H7 Project satisfaction Future collaboration .47 7.41⁎⁎⁎ Yes
⁎⁎⁎ Significant at the 1% level (one-sided test).
⁎⁎ Significant at the 5% level (one-sided test).
⁎ Significant at the 10% level (one-sided test).

exogenous constructs…. these correlations may actually help provide a other words, in the absence of frequent and open communication,
more accurate estimation of the interaction effect when using PLS” exchange partners react more negatively to an increasing value pie
(Chin et al., 2003, pp. 197f.). To ease of interpretation, the exogenous that they cannot appropriate successfully. Fig. 2 depicts the strength of
indicators can be standardized before the multiplication. the value creation–project satisfaction link as a function of information
Table 4 includes the path coefficients and t-values of the structural exchange.
model estimation, as well as the listing of which hypotheses receive Finally, project satisfaction has a positive impact on future collabora-
support. With one exception (H2a), the parameter estimates confirm tion intentions (H7). Among the control variables, economic situation has
the conceptual model. Relational satisfaction has a positive impact on a positive and significant correlation with project satisfaction. All other
relational trust (H1). Relational trust has a direct impact on future path coefficients from the control variables are insignificant.
collaboration intentions (H2b). Although relational satisfaction and
future collaboration intentions are highly correlated (Table 3), the 6. Discussion and implications
direct link between both variables is insignificant, so this study must
reject H2a. Other latent variables in the conceptual model perfectly Value creation and value appropriation sit at the core of relationship
mediate the impact of relational satisfaction on future collaboration marketing. Building and sustaining business relationships can create
intentions. The t-value of 1.52 indicates that the hypothesized impact and appropriate value more effectively than can arm's-length interac-
of relational trust on the size of the value pie (H3a) is only significant tions. Yet empirical research on the interaction between value creation
at the 10% level. The hypothesized link between relational trust and and value appropriation remains scarce. This study contributes to a
the appropriated slice of the value pie (H3b) also receives support. better understanding of the fundamental sources of value perceptions in
Parameter estimates confirm the expected negative impact of business relationships.
relational satisfaction on value appropriation (H4). First, this study details the interaction between value creation and
In the interplay between value creation and value appropriation, value appropriation at the supplier project level. This empirical study
value creation has a positive impact on value appropriation (H5a). appears to be the first to capture both sources of value perceptions and
Value appropriation positively affects project satisfaction (H5b). As the link them to satisfaction as an attitudinal outcome variable. Because
background of equity theory implies, value creation has a negative value creation and value sharing are the raison d'être of collaborative
impact on project satisfaction (H5c), assuming H5a and H5b. Informa- customer–supplier relationships, this investigation helps minimize a
tion exchange positively moderates the strength of this link (H6). In fundamental gap in relationship marketing research. Structural path

Fig. 2. Information exchange moderates the value creation–project satisfaction link.

846 S.M. Wagner et al. / Journal of Business Research 63 (2010) 840–848

estimates reveal that value appropriation is the strongest driver of Third, the model explores how relationship- and project-level
project satisfaction. The impact of value creation on project satisfac- variables work together to produce future collaboration intentions as
tion mainly gets mediated by the value appropriation construct. That a behavioral outcome variable. Relational trust has a direct impact on
is, the perceived size of the value pie has little importance in future collaboration intentions, but the effect of satisfaction indicates
satisfaction judgments unless the respective relationship partner perfect mediation by the other latent variables. The strongest driver of
claims it. This interesting and important finding underlines the future collaboration intention is project satisfaction, which highlights
competitive nature of supplier projects. the importance of managing the value creation and value appropri-
Furthermore, the direct link between the perceived size of the value ation processes effectively at the project level to achieve the stability
pie and project satisfaction is negative when this study controls for the and future development of ongoing sourcing relationships.
indirect path (i.e., value creation → value appropriation → project In aggregate, sourcing relationships emerge as Janus-faced entities
satisfaction). This empirical evidence highlights the relevance of equity that combine both competitive and collaborative elements. Relationship
theory in collaborative customer–supplier relationships. The respon- marketing literature tends to focus on the cooperative nature of business
dents appear to assess not only the size of the value pie they can claim relationships, but this analysis reveals that value creation prompts
but also take the other party's slice into account. From a buying firm's positive perceptions among purchasing managers only if they can claim
perspective, increasing the value pie is beneficial only if doing so their fair share of the augmented value pie (Carson et al., 1999; Ghosh and
translates into a bigger value slice for its appropriation. Without more John, 1999).
value for the buying company, a bigger value pie increases only the An effort to link the constituents of relationship quality to value
perception of inequity and thus reduces satisfaction with the supplier creation and value appropriation could help align academic marketing
project. Despite much discussion of cooperative sourcing strategies and research with business practice. Variables such as trust and commit-
joint value creation in the procurement department, charity still begins ment enjoy a dominant position in academic relationship models, yet
at home. they rarely appear in practice by managers. For example, purchasing
Open and frequent exchange of information can ease the compet- managers regularly receive assessments based on — and therefore pay
itive nature of supplier projects. Information exchange positively close attention to — value extracted in customer–supplier relation-
moderates the direct link between value creation and project ships. Relational mediators such as trust and commitment do not
satisfaction (Fig. 2). If a supplier wants to capture a bigger share of the appear on purchasing managers' scorecards. To bridge the gap
value pie, open and frequent communication is key for securing between managerial metrics and academic variables, the field
customer satisfaction and future collaboration intentions. This finding requires a better understanding of how constituent elements of
underlines the importance of communication in collaborative relation- relationship quality drive the creation and appropriation of value in
ships. Marketing literature depicts communication as the “glue” that collaborative relationships. This study represents a first step in this
holds relationships together (Mohr and Nevin, 1990). Similarly, Bleeke important yet underdeveloped direction.
and Ernst (1993, p. XVI) emphasize that even the “most carefully
designed relationship will crumble without good, frequent communi- 7. Methodological considerations and limitations
cation.” This study offers a value-based perspective of the stabilizing
effect of communication in collaborative relationships. As communica- Value creation and value appropriation represent two interrelated,
tion helps relationship partners develop a better understanding of the distinct constructs. Using the background of equity theory, this study
value-sharing process, they can better accept (temporary) inequity for conceptualizes value creation and value appropriation in subjective
the sake of ongoing value creation. terms. The size of the total value pie and the slice appropriated by a
Second, this study sheds light on the embeddedness of supplier relationship partner exist in the eye of the beholder. Adopting input
projects in ongoing sourcing relationships. To explore the impact of and outcome items from the global measure of equity, this investiga-
relationship quality on the creation and appropriation of value in tion computed the perceived size and slice of the value pie that can be
supplier projects, the proposed model includes relational satisfaction created and claimed in supplier projects. To improve the reliability and
and relational trust as exogenous variables. As hypothesized, the link validity of the measurement models, the authors distinguished
between relational trust and value creation is positive, though the path between tangible and intangible inputs and outcomes (Fang et al.,
estimate is significant only at the 10% level. From a theoretical 2008). Both value measurement models have acceptable psychometric
perspective, relational trust should have the potential to affect the size properties. The psychometrically sound measurement models also
of the value pie through both improved benefits and reduced costs. Trust enabled a distinction between the sources of value perceptions and
reduces the risk of opportunistic behavior and increases the chances for their link to antecedent, mediator, moderator, and outcome variables.
value creation. In addition, trust can substitute for costly control However, items capturing the customer's input and outcome appeared
mechanisms and diminish transaction costs (Wathne and Heide, 2000). in the calculations of both value creation and value appropriation. To
In this sample though, these effects produce only a weak level of assess the validity of these findings, further research should develop
significance. The high standard deviation of the value creation construct new measurement models to assess the size and slice of the value pie
(Table 3) may provide a statistical explanation for this finding. with exclusive sets of items.
Compared with the other constructs, the size of the value pie exhibits Dyadic data show that the customer and supplier firms agreed
strong variation, which increases the difficulty of reaching acceptable about the degree of information exchange in the project and that their
levels of significance. future collaboration intentions matched. The assessment of the first
The hypothesized link between relational trust and value appro- construct with dyadic data helped verify the true organizational
priation may exist at a higher level of significance. In addition, response, and agreement on the latter construct indicated firms
parameter estimates support the expected negative impact of would collaborate in the future. From an equity theory perspective,
relational satisfaction on value appropriation. The higher the relational dyadic data and aggregated measures are not ideal for the central
satisfaction of the buying firm, the more value it extracted from the constructs. The size and slice of the value pie depend on the eye of
sourcing relationship in the past. In line with the basic premise of the beholder and thus differ from the customer's and supplier's
equity theory, buying firms claim their share of the value pie less perspectives. Additional research should extend this model, add
aggressively when they enjoy a high level of relational satisfaction. In relationship marketing constructs (see Palmatier et al., 2006), and
contrast with the competition depicted in previous analyses, embed- include other theoretical perspectives (e.g., commitment–trust theory
ding a project in ongoing relationships leads to cooperative elements and social exchange theory). Such extensions would require dyadic
between suppliers and customer firms. approaches to assess whether various relationship marketing variables
 S.M. Wagner et al. / Journal of Business Research 63 (2010) 840–848 847

are antecedents, moderators, or outcomes in extended value creation Appendix A (continued)

and appropriation models. Relational trust
The analysis of value creation and sharing in projects embedded TRUST5 When making important decisions, supplier X considered our
in ongoing customer–supplier relationships indicated some initial welfare as well as its own.
TRUST6 We trusted supplier X keeps our best interests in mind.
conclusions on the project and interorganizational relationship level, TRUST7 Supplier X was trustworthy.
but this research also suffers some restrictions. The history of past TRUST8 We found it necessary to be cautious with supplier X. (R)
projects and potential future project collaborations, as well as the
history of customer–supplier relationships independent of joint Project satisfaction
PRO_SATIS1 The project with supplier X has been a successful one.
supplier projects, bear on value creation and value sharing (e.g.,
PRO_SATIS2 The project with supplier X has more than fulfilled our expectations.
relationship-specific investments with multiple benefits). Researchers PRO_SATIS3 We were satisfied with the outcomes from this project.
should attempt to capture value creation and value appropriation
mechanisms in the context of multiple-project collaborations over Future collaboration
time. FUTURE1 We would welcome the possibility of collaboration with supplier X in
additional projects in the future.
Finally, previous research hints that equity and fairness perceptions FUTURE2 We would be willing to work with supplier X in projects in the future.
in customer–supplier relationships depend on the cultural setting FUTURE3 We would be willing to collaborate with supplier X in projects,
(Scheer et al., 2003). Therefore, extended studies should investigate should the opportunity arise.
North America and/or Asia. Such research could introduce the combined
Information exchange
value creation and sharing approach to extant literature on supplier
INFEX1 During the project, it was expected that any information that might
relationship management and compare North American with Asian help the other party would be provided to them.
approaches (e.g., Dyer et al., 1998). INFEX2 Exchange of information during the project took place frequently
and informally.
Acknowledgments INFEX3 It was expected that the parties would provide proprietary
information during the project if it helped the other party.
INFEX4 It was expected that we kept each other informed about events or
The authors thank Lisa Scheer, Robert Palmatier, and Wolfgang changes that might affect the other party during the project.
Ulaga for their helpful comments on a previous version of this
Note: All items measured on five-point Likert scales: 1 = strongly disagree, 5 =
manuscript. They acknowledge the helpful comments of the partici- strongly agree.
pants at the 2008 AMA Summer Educators' Conference in San Diego,
California, USA, and the participants at the 2008 European Marketing
Academy Conference at University of Brighton, UK. Economic situation
How would you consider the current situation of your company in comparison to
your main competitor considering…
Appendix A. Item formulations SITUATION1 …sales growth?
SITUATION2 …market share?
Inputs and outcomes SITUATION3 …profit margin?
Input customer Our company's contributions to the project. SITUATION4 …profit margin growth?
Input supplier Supplier X's contributions to the project. Note: All items measured on five-point Likert scales: 1 = significantly worse, 5 =
Outcome customer The outcomes we received from the project. significantly better.
Outcome supplier The outcomes supplier X received from the project.

Tangible inputs and outcomes Relationship tenure

Tangible input customer Our company's tangible (financial and personnel) For how many years had your company been working with supplier X at the
contributions to the project. beginning of the project (in full years)?
Tangible input supplier Supplier X's tangible (financial and personnel)
contributions to the project.
Tangible outcome customer The tangible (financial) outcomes we received from
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