Scale properties

Scale form dictates the type of data collected, which in turn determines the type of statistical analysis that can be conducted, and can also induce response bias, that is, errors caused by respondents’ conscious or sub-conscious unwillingness to provide accurate answers (Baumgartneren and Steenkamp 2001; Malhotra and Birks 2007). Among several scaling methods that exist in the literature (e.g.

Likert scale, Stapel Scale, Thurstone Scale, self-typing, verbally anchored numerical scale, and graphic positioning scale) (Teas and Wong 1992), this study adopted the Likert scale and a self-typing paragraph, based on theoretical

congruence with the requirements of the data analysis, dictated by the research design, as described below.

6.4.5.1. Likert scale

Likert scales, which entail asking respondents the extent to which they agree or disagree with dimensions of the constructs of interest, were used to measure the relationship, strategy and performance constructs. Likert scales have been held to have several benefits that can reduce non-optimal responses. One of their key benefits is that they are easy to comprehend (Malhotra and Birks 2007). Nevertheless, Likert scales also possess an inherent ability to induce several types of response error and, consequently, several considerations were made when constructing the scales.

Firstly, as argued by Lozano et al. (2008), whilst larger numbers of response categories give better psychometric properties and produce more reliable results, the potential for response error exists when respondents are presented with too many response categories. Several authors thus recommend a maximum of seven response categories (Hair et al. 2006; Lozano et al. 2008).

Although some research has adopted the 5-point Likert scale (e.g. Andersson et al. 2002; Boyle et al. 1992), 7-point scales are more popular (Lozano et al.

2008). Hence, this study adopted 7-point Likert scales.

Furthermore, following the lead of Churchill (1979), constructs in this study were measured using multi-item scales to avoid item response bias. In addition, to increase the reliability of the constructs and to achieve better fit statistics, Hair et al. (2006) recommended the use of at least four items for each construct.

Accordingly, this study constructed the scales with a minimum of four items, except for two constructs (i.e. firm overall performance and marketing effectiveness). These constructs originally comprises 3 items. Given the widespread use of these two constructs (Slater et al. 2007; Vorhies and Morgan 2003), this study also adapted them without adding any extra item. The questionnaire used is shown in Appendix E.

6.4.5.2. Self-typing paragraph

The self-typing paragraph is a popular measurement instrument, used in research to identify respondents’ perceptions regarding a given subject matter (James and Hatten 1995). This approach is widely used in research on strategic adaptations (McKee et al. 1989; Shortell and Zajac 1990) and marketing strategy (e.g. Matsuno and Mentzer 2000; McDaniel and Kolari 1987; Slater and Olson 2000). In this approach, respondents are asked to read a number of unlabelled paragraphs and to identify the type that most closely describes the subject matter. This measurement instrument was used to identify both the business strategy and resource acquisition strategy of the focal strategic business units.

6.5. Measurements

The two configuration models of this study were developed to examine the fit between both business strategy and relationship strategy, on the one hand, and several relationship characteristics, on the other, and to link these to relationship and firm performance. Firm performance was a higher-order construct that comprised firm overall performance, marketing effectiveness and customer satisfaction. In total, the two configuration models comprised thirteen constructs, ‘business strategy’, ‘resource acquisition strategy’, ‘interpersonal trust’, ‘interorganisational trust’, ‘affective commitment’, ‘behavioural commitment’, ‘relationship specific investment’, ‘cooperation’, ‘information sharing’, ‘relationship performance’, ‘firm overall performance’, ‘marketing effectiveness’, and ‘customer satisfaction’. Furthermore, ‘firm size’, ‘firm age’,

‘portfolio age’, and ‘dependency’ were measured as control variables.

‘Relationship quality’ and ‘relationship satisfaction’ were also measured as part of the criteria for selecting the single best ideal profile, which is explained in Section 6.5.12.

Please note that certain questions in the questionnaire were not utilised in this analysis. These refer specifically to those examining ‘reliance’ (questions number 15, 17, 18, 19, 24, and 27) and also the question number 97 based on Hoffmann’s (2007) self-typing scale. Both of these constructs were measured

for purposes beyond the scope of the present study and will be used as the basis for subsequent future analysis.

Table 6.1 presents the preliminary pool of items adapted in this study to measure the constructs (see final questionnaire in Appendix E). All of these constructs have been utilised previously in the strategic or marketing literature.

As discussed in Chapter 5, resource acquisition strategy was specifically developed for the purpose of this study. Except for this construct, the remaining measures used for this study were adapted from previous research, to reduce concerns regarding construct validity.

Table 6.1: Preliminary items of the constructs

# Measure Adapted

from Business strategy

72 BS1: In comparison to our competitors, the products/services we provide our customers are more innovative and continually changing.

73 BS2: In contrast to our competitors, my organisation has an image in the marketplace as a firm with a reputation for being innovative and creative.

74 BS3: Our firm spends significant amounts of time continuously monitoring the marketplace for changes and trends.

75

BS4: In comparison to our competitors, the increases or losses in demand, which we have experienced, are due most probably to our practice of aggressively entering new markets with new types of products/services.

76

BS5: One of our firm's key goals relative to its competitors is availability of the people, resources and equipment required to develop new

products/services and markets.

77

BS6: In contrast to our competitors, our managerial employees exhibit competencies (skills) that are broad, entrepreneurial, diverse, and flexible-enabling change to be created.

78

BS7: The one thing that protects our organisation from its competitors is that we are able to consistently develop new products/services and new markets.

79

BS8: Our management staff concentrate more on developing new

products/services, new markets, and new market segments than many of our competitors.

80

BS9: In contrast to many competitors, our organisation identifies

marketplace trends and opportunities that can result in products/services offerings new to the industry or enable us to reach new markets.

81 BS10: In comparison to our competitors, the structure of my organisation is market oriented.

82

BS11: Unlike our competitors, procedures within our strategic business unit to evaluate performance are decentralised and participatory, encouraging many strategic business unit members to be involved.

Dyer and Song (1997)

Interpersonal trust

7 IPT1: My contact persons have always been fair in negotiations with me.

8 IPT2: I know how my contact persons are going to act. They can always be counted on to act as I expect.

9 IPT3: My contact persons are trustworthy.

10 IPT4: I have faith in my contact persons to look out for my interests even when it is costly to do so.

11 IPT5: I would feel a sense of betrayal if my contact persons’ performance were below my expectations.

Zaheer et al. (1998)

12 IPT6: Though circumstances change, I believe that my contact persons will be ready and willing to offer me assistance and support.

13 IPT7: When making important decisions, my contact persons are concerned about my welfare.

Kumar et al. (1995b)

Interorganisational trust

20 IOT1: These customers have always been fair in their negotiation with us.

21 IOT2: These customers do not use opportunities that arise to profit at our expense.

22 IOT3: Based on past experience, we can with complete confidence rely on these customers to keep promises made to us.

23 IOT4: We are hesitant to transact with these customers when the specifications are vague. (R)

16 IOT5: These customers are trustworthy.

Zaheer et al. (1998)

Affective commitment

32 AC1: We intend to continue the relationships with these customers, as we personally like their representatives.

33 AC2: We want to continue the relationships with these customers as both parties are on friendly terms.

Lee et al.

(2004)

34 AC3: Even if we could, we would not drop these customers because we like being associated with them.

35 AC4: We want to remain a member of these customers’ networks because we genuinely enjoy our relationships with them.

41 AC5: Our positive feelings towards these customers are a major reason we continue working with them.

Kumar et al. (1995b)

Behavioural commitment

37 BC1: We dedicate whatever people and resources it takes to do business with these customers.

Anderson and Weitz (1992) 38 BC2: We do all we can not to threaten the relationships with these

customers.

Ivens and Pardo (2007) 59 BC3: We take a lot of time and effort to maintain the relationships with

these customers.

MacMillan et al.

(2005) 40 BC4: Our firm puts considerable investment into the business we do with

these customers.

36 BC5: We endeavour to strengthen our ties with these customers during the course of our relationships with them.

Sharma et al. (2006)