Conflict handling in small firms’ foreign business relationships

Abstract

Purpose The purpose of this paper is to indicate how conflicts in foreign business relationships are handled by small firms from a relational point of view and how these conflicts can be used by small firms in a positive way. Design/methodology/approach The paper uses qualitative study and presents the results of in-depth interviews conducted with six small, Poland-based firms. Findings The paper indicates the nature of conflicts in foreign business relationships from the perspective of small firms, including the sources of conflict and its outcomes. The main sources of conflict indicated include service or product quality, financial aspects of cooperation and cultural differences. The study exposes the existence of both negative (e.g. financial consequences) and positive (e.g. gaining new experience) outcomes of conflicts. It shows that positive conflict handling often constitutes a significant challenge for small firms and that the authors cannot really speak of one optimal method of conflict handling. Regardless of the method adopted, the costs involved should be taken into detailed consideration. Practical implications The paper points to actions that could be taken by small firms to handle conflicts in a way that will produce positive outcomes. Originality/value Managing international relationships is a more challenging task compared with domestic ones, especially for smaller firms. The paper exposes the impact of two categories of conflict (called day-to-day problems and severe conflicts) in a foreign relationship on small firms and considers different methods of handling the conflict situations.

The interacting effect of business and cultural distances on relationship management and export performance: the case of wine export between France and China

“…Finally, our findings on the interacting effect of business and cultural distance on relationship management also argue for further investigation vs psychic distance dimensions contingent approaches (Sousa and Bradley, 2006;Khalil, 2019;Brett, 2017;Sánchez-Gutiérrez et al, 2019) to export performance measurements. Firstly, consistent with both previous (Brouthers and Brouthers, 2001;Griffith and Dimitrova, 2014) and very recent studies (Faroque et al, 2017;Ratajczak-Mrozek et al, 2019), we find evidence of a mediation effect of communication quality and investment components on export performance, though possibly geared to different objectives (networking or collaborative culture development) or individual values of the managers. Simultaneously the importance of these factors suggest to us the necessity to verify whether contingent multidimensional approaches may be more effective than universal approaches as has been hitherto suggested.…”

Enabling roles of relationship governance mechanisms in the choice of inter-firm conflict resolution strategies

“…The cost of inter-firm disruptions stresses firms to explore the reasons behind the expensive and time-consuming problems (Fawcett et al , 2015), because these problems function as threats that could turn a stable relationship into a failure (Fernandez et al , 2014). Further, the opposing perspectives and goals incongruence, strategic misalignment, lack of trust, information hoarding and asymmetric interdependence drive firms to conflict and relationship deterioration (Ratajczak-Mrozek et al , 2019; Murfield et al , 2016; Fawcett et al , 2015). The potential negative impact of these inter-firm conflicts overshadows the aggregate effects of relationship behaviors (Ratajczak-Mrozek et al , 2019).…”

“…Further, the opposing perspectives and goals incongruence, strategic misalignment, lack of trust, information hoarding and asymmetric interdependence drive firms to conflict and relationship deterioration (Ratajczak-Mrozek et al , 2019; Murfield et al , 2016; Fawcett et al , 2015). The potential negative impact of these inter-firm conflicts overshadows the aggregate effects of relationship behaviors (Ratajczak-Mrozek et al , 2019). Therefore, conflict realization and resolution through a choice of suitable approaches becomes central to developing effective inter-firm collaboration, and receives a great deal of research interest (Gounaris et al , 2016; Lumineau and Henderson, 2012; Bai et al , 2016; Yang et al , 2017).…”

Marketing through a joint commercial product portfolio: business drivers, benefits and challenges

“…However, some companies might have some reluctancy to go abroad. Potential motivations might include challenges experienced because of differences in culture, government, legislation, language or logistics (Neupert et al, 2006;Ratajczak-Mrozek et al, 2019). Especially for smaller companies, managing international relationships is more challenging than managing domestic ones (Ratajczak-Mrozek et al, 2019).…”

“…Potential motivations might include challenges experienced because of differences in culture, government, legislation, language or logistics (Neupert et al, 2006;Ratajczak-Mrozek et al, 2019). Especially for smaller companies, managing international relationships is more challenging than managing domestic ones (Ratajczak-Mrozek et al, 2019). Co-marketing can shape the industry structure, for example, by developing and promoting a certain technology or standard (Lavie et al, 2007) and preventing competition by creating entry barriers (Varadarajan and Cunningham, 1995).…”