Understanding the Relationship Marketing Process of Family Businesses in the Industrial (B2B) Sector Dr Wing Lam Senior Lecturer in Entrepreneurship The Lancashire Business School, University of Central Lancashire, Preston, Lancashire, PR1 2HE, UK Tel: + (44) 1772 894640 E-mail: wlam@uclan.ac.uk Type of Paper: Refereed Research Paper Objective: This paper develops a theoretical and methodological framework that attempts to shed new light on the process of relationship marketing of family business in an industrial (B2B) sector in a Chinese context. Prior Work: There is a lack of focus on the marketing process in the family business context, in particular the role of family in establishing and maintaining the business-to-business (B2B) buyer-seller relationship. This paper is aimed at exploring the role of family in the process of relationship marketing in a Chinese context. It is argued that a social embeddedness perspective has the potential to shed some light on the complex social process of building and maintaining the buyer-seller relationships. Design/Methodology/Approach: This study was conducted through a longitudinal, interpretive, reflexive qualitative fieldwork. A total of 12 Chinese family businesses (6 pairs buyer-seller firms) and 78 informants participated in the multi-stage fieldwork over a period of 8 years. Findings : Contrary to the popular belief that companies begin to build up relationships with their existing customers with the aim of encouraging repeat purchases, the findings suggest that it is the ongoing negotiation of the personal relationship that gives rise to the business relationship. In other words, personal relationships can be both lubricants and catalysts of business relationships. Secondly, relationships between buyer and seller firms are both emotional and rational. Decisions such as price, quality, reliability and consistency are also key factors in maintaining the business relationship between the firms. Thirdly, business owners and their family members are well aware of the importance of the personal and business relationships that they work hard to ensure that the relationships is kept in the family. Implications: Our in-depth study helps to unravel the complex web of elements that shape the relationship marketing process in family businesses. The findings of analysis challenge the contribution of the studies which tend to measure the impact of relationship marketing by adopting a cause-effect, instantaneous approach. The result of the findings question the prevailing view which sees family as an irrational element which gives rise to many family business issues. Value: This paper contributes to conceptual and practical knowledge in advancing understanding of the relationship marketing process in a Chinese context, and has potential implications for a wider cultural and institutional context. In addition, it contributes to the general knowledge of relationship marketing in the B2B sector. In particular, the result adds to our understanding of the essential role the family plays in the process of relationship marketing in a family business. Secondly, it helps to shed new light on the complex process of formal and informal interaction between buyer and seller firms in a B2B sector. A better understanding of the complex process is particularly important to all the parties involved in the process, including the business owners, family members, and non-kin employees. Furthermore, a longitudinal qualitative approach, with informants from both buyer-seller firms, plus multi-respondents from each firm, is particularly useful in investigating the complex, dynamic relationship marketing process in a family business context. Key Words: Chinese Family Business, Business-to-Business (B2B) Sector, Relationship Marketing, Social Embeddedness, Longitudinal Study, Personal Relationships 1 Abstract This paper develops a theoretical and methodological framework that attempts to shed new light on the process of relationship marketing in an industrial (B2B), family business context. Relationship marketing involves both formal and informal social interactions with multi contact points between firms. By adopting a longitudinal study, using the case of six-pairs of Chinese Family Business, the findings of this study suggest that relationship marketing is a socially embedded process that personal relationships can be both lubricants and catalysts of business relationships. Furthermore, family business owners and their families appreciate the importance of personal relationships and they work hard to ensure that relationships are kept in the family. Introduction In the last three decades, China’s continuous economic growth has attracted attention to Chinese Family Businesses within and outside China (Tsang, 2001; Davies & Ma, 2003; Yan & Sorenson, 2004; Au & Kwan, 2009). Interestingly, despite the increasing volume of research, little attention has been paid to the area of marketing in the context of Chinese Family Business. The same can be said about family business in general – little work is conducted in the area of marketing and family business. Marketing as an academic discipline is a relatively new concept and an universally accepted definition is yet to emerge (Harker & Egan, 2006). Nevertheless few can challenge the assertion that the ultimate function of marketing is to attract and maintain customers (Gummesson, 1987; Grönroos, 1991). As such it can be argued that marketing is an indispensable function of all forms of business, simply because no business can survive without customers. A family business, regardless of its definition, form, objectives or founders’ ethnicity, is a business and therefore has to perform marketing activities in order to survive, grow and prosper. Yet the two bodies of literature on marketing and family business have not been integrated. Drawing upon marketing, relationship marketing and family business theories, supported by a social embeddedness approach, this paper aims to shed some light on the complex and intertwined relationship between marketing and Chinese Family Business in the Business-to-business (B2B) sector. Following this introduction, the paper is presented in seven parts. It commences with the discussion of the Chinese Family Business and family business literature by summarising the antecedents and debates of family business literature. It is then followed by discussion of the history and development of marketing and relationship marketing theories, in particular its relation to the B2B sector. The paper then continues by discussing the connection between relationship marketing and family business before describing the methodological framework of the project. Findings are then presented and discussed before concluding the paper with implications for practice and research. Family business – antecedents and debates Studies of Chinese Family Businesses can be classified into two main categories. The majority of Chinese Family Business literature focuses on the characteristics of the businesses, mainly on their ownership structure and management style (Lim, 1983; Lee, 1996; Carney & Gedajlovic, 2002; Wall et al., 2009; Zhang & Ma, 2009). According to the studies, the most common characteristics that are shared by these Chinese Family Businesses include: single family ownership, that is, the ownership and the power of management in the family business is controlled by one single family (Westhead et al., 2002); paternalism management style accompanied by lack of formal system of regulation (Heller, 1991); small scale businesses - most family business in Chinese society are of rather small scale and the number of employees hired is very limited (Orru, 1997); nepotism –by the time Chinese family businesses grows to the extent that the business activities are beyond the owner’s control, he/she will usually appoint family members or relatives to key posts of the organisation to help him/her to deal with the daily management (Wong, 1985). According to these studies, these characteristics of the Chinese family business are a consequence of the ‘unique’ Chinese culture. Another category of the Chinese family business literature has focused on the impact of family on the business. Studies argue that the family influences Chinese business in different aspects including, sources of finance, human resources, market opportunity and social support (Hamilton & Jai, 1990; Brown, 1995; Palanca, 1995; Haley et al., 1998; Chung, 2001; Zapalska & Edwards, 2001; Au & Kwan, 2009). Some studies have taken one step further by exploring family values in Chinese culture and how this influences Chinese family businesses. Interestingly, despite the large number of studies, there is a lack of attention to marketing processes in Chinese family business, nor is there any study that focuses on the interplay between family business members and marketing activities. In light of this, it is necessary to draw upon family business literature hoping to shed some light in this unresolved area of interest. Like studies of Chinese Family Business, studies of family businesses can be classified into two main categories – the impact of the family on business and the characteristics and/or behaviour of family businesses. Studies that focus on the impact of the family on business argue that the family is a key factor that affects business in different ways. Family influences entrepreneurs’ personality characteristics (Collins & 2 Moore, 1964) and entrepreneurial behaviour (Dyer, 1992; Aldrich & Cliff, 2003; Kellermanns et al., 2008). A family’s involvement in the entrepreneur’s start-up activities, employment of family members in the entrepreneurial firm and the involvement of family members in ownership and management are the key focus of these studies (Davis & Harveston, 1998; Galbraith, 2003; Olson et al., 2003; Klein et al., 2005). A common theme in these studies is that they adopt a view of family as an external resource that can be drawn upon. They argue that family is an attribute in the creation, survival, performance and sustainability of family businesses (Olson et al., 2003; Stewart, 2003). However individuals do not only respond to their environment. They also interact with their environment (Weick, 1995). It is therefore inappropriate to view family as a factor that exists “out there” to influence the business. Instead family and business interact with each other. The view that family and business are interwoven is increasingly recognised (Kelly et al., 2000; Aldrich & Cliff, 2003). Aldrich and Cliff (2003) proposed a family embeddedness perspective which argues that family and business are inextricably intertwined, and that therefore family system characteristics should be taken into consideration when attempting to understand family business. This is supported by recent studies which emphasise the importance of social embeddedness to characteristics and behaviour of family businesses (Le Breton-Miller & Miller, 2009; Steier et al., 2009). Another group of studies sees family business as a special form of organisation (Chua et al., 1999; Westhead, Howorth, & Cowling, 2002; Chrisman et al., 2006; Sundaramurthy, 2008; Yoshikawa & Rasheed, 2010). Despite the lack of universal agreement on the definition of a ‘family business’ (Handler, 1989; Brockhaus, 1994; Litz, 1995; Chrisman et al., 2005), studies on family business characteristics have increased significantly in the last few years. Areas that have received attention include succession (Westhead, Howorth, & Cowling, 2002; Miller et al., 2003; Sharma et al., 2003; Royer et al., 2008); continuity (Winter et al., 2004); strategic management (McCann III et al., 2001; Chrisman, Chua, & Sharma, 2005); credit and financial management (Bopaiah, 1998; Yilmazer & Schrank, 2006); management style (Wong, 1985; Zahra, 2003; Kellermanns, 2005), organisational culture (Dyer, 1986; Zahra et al., 2004; Hall & Nordqvist, 2008) performance (Galbraith, 2003; Randøy & Goel, 2003) and customer relationship management (Cooper et al., 2005). Notably the agency theory approach is a particularly popular theme of studies of family business (Schulze et al., 2003; Le Breton-Miller & Miller, 2006; Westhead & Howorth, 2007; Chua et al., 2009). Interestingly, despite the large number of studies, there is a lack of attention to marketing processes in family businesses, with only few exceptions (Leung, 2001; Wright et al., 2003). Leung’s (2001) study briefly describes the role of family and ethnic networks in the marketing strategies of ethnic Chinese IT businesses in Germany. Another study by Wright et al. (2003), attempted to explore how small, ethnic, family-owned businesses develop their own forms of relationship marketing in building their business. Their findings suggest that family and social networks contribute to the firm’s customer targeting strategies and management of customer relationships. One drawback of these studies is that marketing is being seen as one isolated business function, rather than central to all business operations. This is challenged by researchers who argue that marketing is the central function of a business (Gummesson, 1987; Grönroos, 1991). According to this strand of research, to view marketing as an isolated business function is to ignore the complex, interrelationship functions (eg. accounting, logistics, production, operation management etc) and the business’s social embeddedness. Although Wright et al. (2003) and Leung’s (2001) studies recognise the importance of family, embeddedness and marketing, there is a lack of theoretical insights that help us to make sense of these relationships and make connections between disparate studies of family business and marketing that have been carried out to date. This highlights the need for a conceptual framework to address the complex interplay between family, social embeddedness and the marketing processes. The following section discusses marketing theories in particular in the context of family business. Marketing, Relationship Marketing and Social Embeddedness Marketing as an academic discipline is a relatively new subject and is still lacking an integrated theory (Mattsson, 1997; Harker & Egan, 2006). The genesis of marketing theory came from economics in particular micro-economics (Palmer et al., 2005). Economic models and perspectives, asserted that the business world could be reduced to formulas and equations, were extended to marketing, and led early marketing theoreticians (McGarry, 1950; Alderson, 1957; McKitterick, 1957) to create ‘lists’ of marketing variables that related to profit maximising equations. It is from such a list the originally 12 elements ‘marketing mix’ (McCarthy, 1960) were reduced to the infamous ‘4P’s’– price, product, place and promotion. This is still the backbone of much research and teaching in marketing, partly due to its simplicity and communicability (Harker & Egan, 2006). Mainstream marketing theories, or what is known as the Transactional Marketing (TM) paradigm has been criticised in many regards. The strongest criticism is that TM theories fail to recognise that much marketing activity happens in places, cultures, and societies radically different from the 1950’s post-WWII US consumerproducts sector in which the original fieldwork was carried out (Gummesson, 1987; Grönroos, 1994; Elg & Johansson, 1996; Brodie et al., 1997). Further criticism of TM theory lies in its inappropriateness in the context of Industrial (Business-to-Business, B2B) interactions. The theory and practice of TM assumed that 3 consumers were available in great numbers and behaved passively (Harker & Egan, 2006)). This model does not apply to the B2B context, where the customer-firms are often limited in number and the interactive participation of the customer is required to successfully complete the exchange (Gummesson, 1987). In response to these criticisms, scholars have looked to develop new marketing paradigms by moving away from the product-centric perspective of TM to other perspectives that hold more promise in terms of applicability and relevance (For a detailed review of this, see Harker & Egan, 2006). In essence, two groups of scholars in particular have taken stances that make current marketing research directly relevant and significant to future development in family business studies in the B2B sector. Of these, the first group of immediate relevance has based its position on the now overwhelming dominance of services in developed economies (Vargo & Lusch, 2004). A second strand of research that is particularly useful in advancing understanding family business is what has become known as Relationship Marketing. Central to the notion of relationship marketing is the key idea that interpersonal relationships and personal networks are of crucial significance in business success (Gummesson, 2003). This is particularly relevant for the B2B sector because there are limited numbers of customers and the relationship between suppliers and buyers is completely different to the consumer product sector underpinning the TM paradigm, in which buyers are no longer seen as passive but as active participants in the transaction. The active role consumers play has long been recognised in marketing literature (Gummesson, 1998; Saren, 2007). Elliott and Wattanasuwan’s (1998) study suggests that consumers are not passive recipients of what marketers do. They are actively involved in re-interpreting the information presented to them in the process of decision making. The key feature of relationship marketing is the relationship dynamic of the process. When selling a physical product, the costs of production are offset by the revenue of the purchase. In B2B sector, the majority of costs are often incurred whilst ‘setting up’ the service (Berry, 1995), in other words, the costs include the establishment of the conditions of the business relationship to pave the way for the product and service to be provided. Importantly, the process of relationship marketing is a lengthy and ongoing one (Payne & Holt, 2001; Stanko et al., 2007), in contrast to the view underpinning the Transactional Marketing paradigm, which implies that marketing brings immediate results (Dwyer et al., 1987). Dwyer et al. (1987) point out that interdependence in buyer-seller relationships takes time to develop as relationships progress through stages. This is supported by Gummesson (1991 p.62), who argues that “a relationship between two parties is something that grows in strength through repeated exchange over a period of time”. In other words, relationship marketing is a lengthy, interactive, developmental and ongoing process (Webster, 1992; Blois, 2003; Stanko, Bonner, & Calantone, 2007; Sabiote & Román, 2009). The emphasis on inter-personal relationships and personal networks in relationship marketing theories highlights the importance of embeddedness. The term “embeddedness” was introduced by Polanyi (1944). His work is typically presented as the originator of the embeddedness concept (Granovetter, 1985; Zukin & DiMaggio, 1990; Portes & Sensenbrenner, 1993; Barber, 1995). Polanyi’s concept of embeddedness has been taken forward by Granovetter (1985) in his classic essay “The problem of embeddedness”. He defines embeddedness as the on-going contextualisation of economic activity in social relations. Granovetter criticised studies for either under- or over emphasising social and cultural factors. He argues that economic actors are embedded in an ongoing system of social relations and that economic transactions and social relations are intertwined and interrelated. The concept of ‘embeddedness’ has been widely debated since Granovetter’s (1985) groundbreaking work. Definitions of embeddedness took shape in opposition to the mainstream transactional marketing approach, which featured in neoclassical economics. Whereas transactional marketing defines market transactions as strictly rational, faceless, and independent (Dacin et al., 1999 p.319). Embeddedness theories focus both on social relations and individuals, as well as the outcomes of their interactions. Applying this to the marketing process, a social embeddedness view helps to shift the attention from specific marketing variables to the ongoing interactive social process between buyer and seller firms. It must be noted that the focus on the interpersonal interaction between buyer and seller is not a new concept in marketing practice (O'Malley & Tynan, 1999; Berghäll, 2003; Bhagat, 2009). Some researchers accurately point out that relationship marketing was widely practiced long before it was articulated in marketing literature (O'Driscoll, 2006). This is not to suggest that RM has no contribution to make. Its key contributions lie in its potential to integrate marketing theories and to combine theory and practice to develop a cross-disciplinary approach that is of practical value to practitioners (Gummesson, 1998). It is with this in mind that many researchers have attempted to explore and measure variables that are believed to shape the buyer-seller relationships (Payne & Holt, 2001; Stanko, Bonner, & Calantone, 2007; Rogers et al., 2008). A review of the extant literature helps to identify a key issue – studies tend to see the buyer-seller relationship as a concrete, objective entity that can be isolated from its context and therefore measured objectively. This issue is raised by Blois (2003) who points out that the B2B relationship is a socially constructed reality. By using the case of the leading UK department store, Marks & Spencer, and one of its major garment suppliers, Blois demonstrates that a committed relationship repeatedly emphasised publicly by both parties can sometimes mean nothing more than lip-service on one side and “unrequited love” on the other. Blois’ study 4 echoes the findings of Dwyer et al’s (1987) earlier study, which highlights the importance of shared values and understanding between the different parties that are involved in the marketing process. The suggestion that the buyer-seller relationship is socially constructed fits comfortably with the ontological and epistemological stance of social embeddedness. The central themes of social constructionism are the nature of reality, knowledge, language and social order. According to Berger and Luckmann (1967), social order is based fundamentally on shared social reality which, in turn, is a human construction that is created in social interactions. It is recognised that, whilst people as biological organisms confront few limits or constraints in the form of instinctual patterns, constraints develop in the form of a social order. Berger and Luckmann argued that this order “is an ongoing human production. It is produced by man in the course of his ongoing externalisation…social order exists only as a product of human activity” (p.52). Applying this to relationship marketing, it can be argued that a buyer-seller relationship is based on shared social reality that involves sharing understanding between different stakeholders in the marketing process and that this shared understanding influences the behaviour of each party involved in the process. One key feature that must be emphasised in this ongoing social interaction is the level and number of contacts between firms. In a B2B context, the buyer-seller information exchange is complex and often includes multiple contacts points at differing levels across the organisations (Hollyoake, 2009). Furthermore, the social interaction is embedded in the complex web of the institutional context, namely cultural, social, political and economic factors. Incorporating these, a relationship marketing process for the B2B sector is illustrated in Figure 1. [insert Figure 1 about here] It was argued earlier that family business can be seen as a special form of organisation in which the involvement of family members in the ownership and management is the key defining feature, which distinguishes family businesses from non-family businesses (Davis & Harveston, 1998; Galbraith, 2003; Olson et al., 2003; Klein, Astrachan, & Smyrnios, 2005). Studies also suggest that business owners and their family members are involved in different activities in the business (Ram et al., 2001; Dhaliwal & Kangis, 2006), and therefore likely to be involved in the social interactions at multi-contact points between buyer and seller firms. It is therefore interesting to explore the role of family in shaping the complex, ongoing relationship marketing process. Interestingly, although a very strong theoretical case can be made, very little attention has so far been paid to exploring this empirically. There is a lack of a coherent methodological framework that has the potential to fulfil the research objectives. This will be discussed in-depth in the next section. Methodological Framework An integrated view of family, relationship marketing and social embeddedness, supported by a social constructionist stance, has major implications methodologically. The importance of a methodological framework that is consistent with the ontological and epistemological assumptions of the conceptual framework is often neglected in the literature., as pointed out by Alvesson and Skoldberg: “Referring to philosophical ideas without really using them is pointless, bewildering and means a waste of the time and energy both of the researcher and of his or her unfortunate readers”(p.7). It is necessary, therefore, to make explicit the impact of social constructionist and social embeddedness ideas on the research process. Longitudinal study This study was conducted using longitudinal, interpretive, reflexive, and qualitative fieldwork. A total of six pairs of buyer-seller firms, all of which were Chinese family businesses, and a total of 78 informants participated in the multi-stage, in-depth qualitative fieldwork over a period of eight years. It was noted earlier that relationship marketing is a lengthy, developmental and an ongoing social process (Gummesson, 1987; Blois, 2003; Stanko, Bonner, & Calantone, 2007). Therefore collecting information about a buyer-seller relationship from a single point of time can, at best, capture a snapshot into the ongoing, lengthy social interaction process (Blois, 2003). Longitudinal studies are needed to understand the development of the relationship over time. The value of longitudinal studies is widely recognised (Aldrich et al., 1987; Schein, 1987; Dyck et al., 2002). However the difficulties of running a longitudinal study are also well-documented (Fitzgerald et al., 1998; Thomson & Holland, 2003). These difficulties were summarised by Miller (2000:109), ‘financial costs, maintaining a committed research team across years, managing to find a funding body willing to make the very long-term or open ended commitment necessary to fund the research, the difficulty of identifying suitable individuals for study at the onset and keeping the main respondents committed to the study involved over a span of years, all conspire to keep true longitudinal studies rare.’ (p.109). Faced with such difficulties, most studies tend to take the “easy way out” by conducting fieldwork using tools such as quantitative surveys or one-off qualitative interviews (Stanko, Bonner, & Calantone, 2007; Barry et al., 2008; Roberts-Lombard & Steyn, 2008; Callarisa Fiol et al., 2009). Benefiting from financial and institutional support, the researcher in this project was able to tackle these problems to complete this longitudinal study. Since 2000, the researcher has visited the buyer/seller firms annually and spent some time meeting with the 5 members of the family businesses at different levels in the company, ranging from business owners to clerical support staff. This has allowed the researcher to keep track of developments within each of the companies, in particular of the development of the buyer-seller relationships. The main data collection method used was topic-oriented unstructured interviews with the aid of observation. Over 60 company visits were made and 300 interviews with informants at different levels of the company hierarchy were conducted over the timescale of the research. Unstructured interviews have received considerable renewed interest, both as a part of ethnographic work and as a stand-alone data collection strategy to accomplish goals other than those of ethnography (Arnould & Wallendorf, 1994). The researcher’s task in an unstructured interview is to use various probes in a way that builds a dialogue, rather than asking questions that impose categorical frameworks on informants’ understanding and experiences (Arnould & Wallendorf, 1994). The conversation normally started with follow-up from previous conversations, such as: ‘How’s the thing going with the company xyz? Is everything doing alright?’ to get the informants to start talking about their organisational lives. In this way, many aspects related to buyer-seller relationship were then revealed in the conversations. As a consequence, during the different phases of the fieldwork, key themes began to emerge. The key themes then led the researcher to revisit relevant literature and reshape the conceptual framework accordingly. This, in turn, informed the self-reflexive characteristics of research work (Schultze, 2000). Unit of Analysis, Gaining Access & Sampling It was argued earlier that relationship marketing is a complex social interaction process that involves participants in different positions from both buyer and seller firms (Payne & Holt, 2001). This is particularly relevant in a B2B context, because the buyer-seller information exchange is complex and quite often includes multiple contacts at differing levels (Blois, 2003; Hollyoake, 2009). Nevertheless, many studies of relationship marketing have only collected data from either buyer or seller firms (Stanko, Bonner, & Calantone, 2007; Barry, Dion, & Johnson, 2008). The one-party sampling model is challenged by researchers who argue that, to understand the buyer-seller relationship, both the buyer and seller need to be included in the research (Theron et al., 2008), because “the views of one party can at best only provide a partial picture” (Blois, 2003 p.90). In their study of relationship commitment, Theron et al. (2008) considered perceptions of relationship managers from seller firms and clients in the B2B financial service sector. Although their study included both buyer and seller firms, their informants were still limited to one respondent in each firm. Blois (2003) again challenges the reliability of this approach, arguing that “collecting information about a B2B relationship from a single respondent in a firm can, at best, only provide a partial insight into the nature of that firm’s relationship”. In short, to understand the relationship marketing process, it is important to include informants from both buyers and sellers; furthermore, members of staff at different levels who are involved in the ongoing social interaction between the two firms need to be included in the study. Through personal contacts, the researcher was able to gain access to a number of businesses in Hong Kong and China. By building a rapport with these companies, the researcher was then able to gain access to different informants in each company. Furthermore, the researcher was able to gain access to the respondents’ social relations, including their customers, suppliers and competitors. A total of 12 family businesses which consisted of 6 pairs of buyerseller firms participated in the longitudinal study. The six pairs of buyer-seller firms were selected based on two key criteria. Firstly, all these companies were in the B2B sector, although they came from different industries. Secondly, these firms maintained established business relationships throughout the study, which began in 2000. This allowed the researcher to observe the development of their relationships. There were 78 informants including business owners, members of staff from different areas including sales & marketing, accounting, purchasing, shipping & logistics, production, product design and quality control. Although in a B2B sector, most companies are both buyer and seller, this study will focus only the role they play in the particular buyer-seller relationship. A brief summary of the companies’ profiles and the staff involved in the buyer-seller interaction is provided in Table 1. [insert Table 1 about here] All the companies that participated in the study were Chinese Family Businesses. Chinese Family Business is the single largest type of business in the world (Redding, 1990; Brown, 1995; Orru et al., 1997). It is therefore of promising value to explore the relationship marketing process of Chinese Family Businesses in order to aid understanding of social embeddedness, relationship marketing process and family business. Where possible, interviews were tape-recorded, transcribed and analysed by the researcher, with the aid of Nvivo data analysis software (mainly for data organising rather than ‘analysis’ purposes). Because of the length of the project and richness of data, each of the companies would be a very interesting case study in its own right. The analysis and discussion presented is the result of analysing all the fieldwork material, although 6 the interactions of one pair of buyer-seller firms, C3 and C5, will be discussed in more depth to help illustrate the complex relationship between the firms. In the following section, key themes related to the topic will be discussed. Results & Findings: Making sense of buyer-seller interactions It was pointed out earlier that the interaction between the buyer and seller in a B2B context is far more complex than in the customer-retailer sector because the information exchange quite often includes multiple contacts points across the organisations (Hollyoake, 2009). This claim is well supported by the fieldwork material. In this study, all the six pairs of buyer and sellers firms have several contact points in their business transactions (see Table 1). Figure 2 illustrates the formal interactions in a typical transaction between one pair of buyer-seller firms, C3 and C5. C3 is a factory that provides computer embroidery services, such as embroidering logos, brand names, and patterns on garments or textiles. Its main clients are garment factories such as C5, which produces garments for domestic and overseas markets. A typical transaction would involve information exchange related to many aspects of the order, including the quotation, price and negotiation of terms, placing the order, financial arrangements, production, quality control, logistics and delivery, and shipping documentation. As shown in Figure 2, there are at least nine contact points that involve many individuals from various functions, and provide ample opportunities for information exchanges and interactions between the two firms. Contacts are often conducted across a number of media, including faceto-face meetings, e-mails, mails and telephone conversations. Most of these interactions take place within business premises during office hours. While these interactions help to understand how a business transaction takes place, they offer limited insight of why the business transactions take place. In-depth investigation of the formal and informal interactions reveals a more complete picture of the inter-firm relationship. Figure 3 illustrates both formal and informal interactions between informants from the two firms. As demonstrated in the diagram, there are far more contact points in the informal social interactions. Normally these interactions took place outside office hours at social gatherings such as weddings, birthday parties, occasional functions, games, karaoke evenings and dinners. From the analysis, there is strong evidence that informal social interactions play a key role in shaping the buyer-seller relationship and thus the business transactions between the buyer-seller firms. Some of the key aspects are discussed in the following sections. [insert Figure 2 & Figure 3 about here] Relationship first, marketing next As mentioned earlier, the six pairs of buyer-seller firms have maintained business relationships for some years (see Table 1). The study highlights the importance of the business owners’ personal relationship with the buyer-seller firms. In fact, many personal relationships came into existence long before the buyer-seller relationships were established. In some cases the buyer-seller relationships were established as a result of their personal relationships. “I used to work for a trading firm as a salesman of footwear. As a salesman I had constant contact with some of the business owners and we became friends. One of them suggested to me to start up my business as he wasn’t very happy with my then boss but he wanted to continue doing business with me. It wasn’t a huge investment to start up a trading firm so I started up this firm and have been doing business with him since then.” (TZL, founder of H5, footwear trading firm). Other business owners have similar stories about having their friends or relatives as their key clients, or start up their business because of opportunities arising from their social relations. Furthermore, business owners and their families appear to play an active role in maintaining personal and business relationships to generate sales revenue. The sales people, on the other hand, suggest that they are playing a customer service role rather than the generally recognised role of generating sales revenue. “I joined this company last year. One of my key responsibilities is to maintain constant contact with our clients. I pay visits to them regularly. C5 is one of our key clients. We’ve been doing business with them for many years. There isn’t a lot of selling in my regular visits, it’s more about them telling me what they want and I try to meet their needs. Sometimes they ring me to tell me that a new order is waiting and I’d go there to get the material and take it back to our factory to get the sample done. My boss and C5’s business owner are relatives and we all know that is very important for us to get these orders.” (CTM, salesman of C3, Manufactory of automatic embroidery service) From the accounts of the informants, it is clear the personal relationships between the buyer and seller firms, especially those between business owners, play a key role in shaping the business relationships between buyers and sellers. Those who maintain good personal relationships appear to maintain good 7 business relationships, and vice versa. For example, the owners of C3 and C7 (both manufacturers of automatic embroidery services) are brothers and sisters. Because of the help of C3’s business owner, LTZ, C7’s business owner, LSY and her husband were able to start up a factory next to C3. The two factories used to share orders (in the forms of outsourcing), which was very helpful for C7 as a new business. During the year 2000-2002, about 30% of C7’s orders came directly or indirectly through C3. In early 2003 the brothers and sisters fell out because of disputes related to inheritance, and the two factories ceased their business relationship altogether. In 2007 the brothers and sisters started talking to each other again at social gatherings but it is generally believed in their social circle that their personal relationship has never healed. The two factories’ business relationship has never resumed. It’s business, after all As discussed above, whilst personal relationships play a key role in shaping business relationships, this is not to suggest that the personal relationship is the only factor that is important. From the accounts of the informants, it is clear that other factors such as price, quality, delivery, reliability and reputation also play a key role in maintaining business relationships. This is illustrated in the account of another pair of buyer-seller firms, H3 & H10 (See Table 1) “To maintain a good relationship we have to make sure everything goes alright, you know, price, delivery, quality, consistency etc. Whenever they (H10) request a sample to be made, it’ll be our first priority and we don’t charge any sample fee. We have to work harder with them than with our casual clients. There’s too much at stake, if they know that we’re offering a better price or better service to other customers then it’ll dent our friendship and our business relationship. They’re not just a client but also a friend, and also your face and reputation in the social circle.” (LDY, owner of H3, porcelain factory) Accounts from H3’s buyer appear to share the same understanding about their business relationship: “LDY and I are very good friend. Our friendship dates back for generations. Over the years I’ve been relying on them to produce the samples requested by my clients. I don’t have any production facility yet I need the samples to be made, they don’t have access to clients directly and so we need to work together to get the orders. Of course they need to offer a good price and good quality, otherwise our clients wouldn’t place the order with us and we would have no orders for them. So in many ways we are working for each other, helping each other.” (LB, owner of H10, porcelain trading firm) The accounts from both the buyer and seller firms demonstrate that their business relationship is not all about emotional decisions as one may suggest, but rational business decisions from both the perspective of both the buyer and the seller. For the sellers, dealing with their long term customers is no less than being marketing orientated; whilst for the buyers, purchasing the right product at the best price and quality is still their top priority. Keep it all in the family From the accounts of the informants, it is clear that the business owners and their families play active roles in maintaining the personal and thus business relationships with their clients. It is also clear that many of the social interactions take place in an informal way. Another key feature that was identified from the analysis is the shared understanding among the business owners and their families that the personal and business relationships should be kept in the family. “Now I’m semi-retired, I leave most of the daily operation to my son and daughter. But one thing I need to keep doing is to maintain the good friendship with my customers. That’s why I’m so busy travelling all year around. Many of them are my friends and relatives. Last month I attended one of my client’s son’s wedding. Next month my daughter is getting married and they’re invited. I travel almost every month to different countries, including the US, the UK, Australia and Canada. It’s important to see your clients and to maintain good friendships, because that’s how business is run. In the last few years I’ve asked my son to go travelling with me because when I’m retired, he’s to take over and if the clients don’t know him, that’d be the end of the friendship and business relationship.” (TZL, owner of H2, footwear trading firm) It appears that business owners are passing on the personal and business relationship to their successors (normally their sons or daughters). Business owners repeatedly emphasised that the business relationship “has to stay in the family” because “outsiders cannot be trusted”. In light of this, special arrangements are made to ensure that the relationship is passed on to the successors, and one common way of doing this is to get the business owners’ sons or daughters involved in the informal social gatherings with the buyer firms. Furthermore, arrangements are made in the structure and daily operations of the business to ensure important customer related information is under full control of the family. For example in H2, the owner’s son is in charge of marketing and is dealing with ongoing contacts with customers in relation to sales, while the owner’s daughter is in charge of accounting and has full control of all financial transactions between firms. Similar 8 arrangements can be found in many firms that participated in this study, for example C3 (see Figure 1), in which case the owner’s son is also in charge of marketing activities. The business owners made no effort to hide the rationale of their arrangements: “The business relationship has to stay in the family, if you leave it to the outsiders to deal with it, you basically give your business away to outsiders. If they have established the business relationship with the customers, they wouldn’t need you, they would leave and start up their own business or sell your orders to other suppliers. That’s why I have my son in charge of sales and marketing and my wife to keep a close eye on the books. It’s too important to leave it to outsiders.” (LTZ, owner of C3, owner of automatic embroidery factory) From the accounts of the informants, it is clear that the role of family in attracting and maintaining the personal and business relationships, and its impact on relationship marketing process is understood by the informants, including not only the business owners and their families, but also their non-kin employees and customers. Discussion - Family, Social Interactions and Relationship Marketing Process The analysis in the in last section helps to shed some light on the process of relationship marketing in a Chinese context. The findings of this study support the view that relationship marketing is a lengthy, complex social process between multi-informants from both buyer and seller firms (Webster, 1992; Blois, 2003). Nevertheless, the key finding of this study relates not to the formal interactions between buyer-seller firms, but to the impact of informal interactions between buyer and seller firms. This study highlights the importance of personal relationships in shaping business relationships and transactions between the buyer and seller firms. The important role of personal relationships and personal networks in business success is well documented in the literature (Granovetter, 1973; Redding, 1990; Jack, 2005). Our analysis goes a step further than this, and suggests that personal relationships are the backbone of business relationships in at least two key aspects. Firstly, on some occasions personal relationships give rise to business relationships. Secondly, good business relationships tend to be supported by healthy personal relationships between buyer and sellers firms, whilst deterioration in personal relationships can often lead to the disruption of business relationships between buyer and seller firms. These findings challenge the prevailing view that personal relationships are established after business transactions take place and a business relationship established (Thach & Olsen, 2006). The in-depth analysis helps to extend understanding of the respective role each member of staff plays in the relationship marketing process. The important role of salespeople in generating sales revenue is well recognised in the literature (Bäckström et al., 2009; Steward, 2009), mainly because salespeople are dealing with customers directly and therefore are at the frontline. In-depth analysis of the interactions helps to reveal an interesting finding. Although it is the salespeople who are engaged in constant formal interactions with the customers, their role is not necessarily to generate sales revenue, but to provide a contact point for customer service in an established business relationship. The analysis also highlighted the important role the business owners and their families play. Business owners and their family members are actively involved in informal social interactions with their buyers and sellers, which help maintain healthy personal relationships with them. This in turn shapes the business relationships between the buyer and seller firms. In other words, actively engaging in social interactions with their personal networks can be seen as part and parcel of the business owners and their families’ relationship marketing activities. From the analysis it is possible to infer that many important business decisions are made during informal social interactions, whilst formal interactions that happen on the business premises can be seen as a result of personal relationships. It must be noted that the importance of personal relationships no way undermines the importance of the quality of the business transactions between the buyer and seller firms. The buyer-seller partnership relationship in the B2B sector is well supported in the literature (Thach & Olsen, 2006; Purinton et al., 2007). Business owners from both buyer and seller firms repeatedly emphasise the importance of “working together” with their buyer or seller in order to be competitive in terms of price, quality, reliability, consistency and customer service, which in turn helps them to succeed in generating sales revenue. As such it can be argued that the business transactions are based on both rational and emotional decisions on the foundation of mutually trusted, interdependent personal relationship. From the analysis it is clear that business owners and their families are well aware of the importance of personal relationships to the success of their business, and they are therefore actively involved in maintaining these personal relationships. Importantly, their attitudes towards personal relationships and business relationships are characteristic of their status as family businesses. The fieldwork analysis shows that business owners and their family members are working very hard to keep the personal relationships and 9 business relationships in the family. Business owners and their families repeatedly use “outsiders” to refer to non-kin employees, and a lack of trust of non-kin employees can be identified in their discourse. Indeed, a central theme across the analysis is the different level of trust and commitment towards family, friendship and kinship. This appears to influence how business is conducted between buyer and seller firms and how relationships are managed in a family business. To make sense of this, it is essential to understand the social and cultural background of the informants, who are all ethnic Chinese. Redding (1990) has provided a useful explanation in his landmark study of Chinese society. He points out that the institutional and historical contexts of Chinese society gave rise to a distinctive feature of interpersonal attitudes: “You trust your family absolutely, your friends and acquaintances to the degree that mutual dependence has been established and ‘face’ invested in them. With everybody else you make no assumption about their goodwill” (p.66). Redding’s findings are useful in making sense of the attitude of informants in this study, whether they are business owners, family members, or non-kin employees. Because strangers cannot be trusted, it is not only desirable, but indeed necessary to do business with those whom they can trust and depend on, ie., their friends and relatives. Because “outsiders” cannot be trusted, family business owners need to ensure that the personal relationships are kept in the family to protect their family interests. To achieve this, the business owners ensure that their successors are involved in ongoing social interactions with their customers. On the other hand, the customers of family business are equally eager to maintain personal relationship with their suppliers’ family in order to maintain the business relationship. Through ongoing social interactions, this give rises to the shared understanding among individuals, which in turn further reinforces the institutionalised meanings of personal relationships and impact on relationship marketing in the specific social context. Conclusions and Implications This paper began by reviewing literature in order to provide a background and context to the Chinese Family Business, family business in general and the relationship marketing process. It is clear that there is a lack of attention to the marketing process in the family business literature, in particular to the role of family in establishing and maintaining the business-to-business (B2B) buyer-seller relationship. The paper then went on to discuss marketing and relationship marketing theories, focusing on their usefulness in understanding family business in the B2B sector. It was argued that a social embeddedness perspective has the potential to shed light on the complex social process of building and maintaining buyer-seller relationships. A theoretical and coherent methodological framework that embraces theories of relationship marketing and social embeddedness in a family business context was then presented. Using longitudinal, interpretive approaches, fieldwork was carried out with a total of 12 family businesses (6 pairs buyer-seller firms) and 78 informants, who participated in the multi-stage fieldwork over a period of eight years. Using discourse analysis, the way in which informants talk about business transactions, marketing, personal and business relationship was presented and analysed. An investigation of the shared meanings and underlying assumptions of the discourse used by the informants revealed the complex process of relationship marketing. The analysis supports the view that relationship marketing is a lengthy, ongoing social process that involves both formal interactions and informal social interactions with multi contact points across the buyerseller firms. The paper revealed three key findings. Firstly, in-depth analysis demonstrates the importance of social embeddedness to informants’ attitude and behaviour towards the relationship marketing process. The paper challenges the prevailing view that companies begin to build up relationships with their existing customers with the aim of encouraging repeat purchases, suggesting instead that it is also possible for business relationship to be developed from personal relationships. In other words, personal relationships act as both a lubricant and a catalyst of business relationships. Secondly, the study finds that relationships between buyer and seller firms are both emotional and rational. Factors such as price, quality, reliability and consistency also play a key role in maintaining the business relationship between firms. Thirdly, business owners and their family members are well aware of the importance of the personal and business relationships and they work hard to ensure that the relationships are kept in the family. Further analysis shows that the social and cultural context is essential in shaping the shared understanding and behaviour related to personal and business relationships and thus relationship marketing process. The findings of this study have important implications for relevant parties. Practitioners Marketing has always been an important function for practitioners in industry, although the relevance and appropriateness of applying mainstream Transaction Marketing theories to the B2B sector is questioned. This paper presents an alternative view of relationship marketing that helps to shed new light on how, why, when and where buyer-seller firm interactions take place in the B2B sector in a Chinese context. The findings of this study suggest that under specific social and cultural context, personal relationships are equally important, if not more important, than business relationships between buyer and sellers firms. Although the importance of personal relationships is well recognised in the literature (O'Malley & Tynan, 1999; Berghäll, 2003; Iyer et al., 2006), it is not necessarily welcomed by the practitioners. Indeed some might considered it as irrational or even unethical (Dunfee & Warren, 2001; Wang, 2007). The findings of this study suggest that personal 10 relationships and business relationships are intertwined to such an extent, that to ignore one aspect in favour of another will inevitably affect the effectiveness and efficiency of the relationship marketing process. Furthermore, in-depth knowledge of the relationship marketing process can help the practitioners, whether they are business owners, non-kin manager or employees, to understand the role each participant plays in the process and to ensure that appropriate resources and support is provided to the right department. Finally, an advancement in understanding of the relationship marketing process is equally important for newly established business since it helps them to realise their strengths and weaknesses in the new business sector they enter and it helps to inform their decision-making related to developing personal and business relationships. Family Business members The findings of this study demonstrate the important role the business owners and their families play in the relationship marketing process in a Chinese context, which echoes findings of studies across cultures (Wright, Martin, & Stone, 2003). Importantly, the analysis shows that family business owners and their families are well aware of the important role of personal relationships and also work very hard to keep them in the family as a means to protect their family interests. The key reason for this is the absolute trust among family members and the lack of trust of non-kin. Whilst this attitude is perfectly understandable, it may not be in their best interests to exclude non-family members in this way. By ensuring that personal relationships stay in the family, the family business owners have in many ways excluded the non-kin employees in the key interactions between buyer and seller firms. Not only may this affect the morale of non-kin employees in the family business, but it may also prevent competent non-kin employees from fully contributing to the family business. Furthermore, family members are not necessarily the most competent members of staff to deal with customer interactions. Where they are not the most competent people to deal with key decisions, a policy of keeping key positions for family members can potentially put the company’s competitive advantage at risk. Researchers Although this study is based on fieldwork conducted in a specific cultural context, the findings of this study have potential implications for research. The first is it provides a conceptual and theoretical framework to address the socially embedded, interactive, ongoing relationship marketing process. It was pointed out earlier, that many studies focus on specific factors which only allow partial insights into the relationship marketing process. This comprehensive framework provides insights for a broader picture of relationship marketing and family business research. It allows researchers from different disciplines to produce complementary work that contributes to the area of relationship marketing and family business, particularly in the B2B sector. The second implication is the importance of a coherent methodological framework to support a social embeddedness view of relationship marketing. This highlights several key features that are essential in project design. Including multi-respondents from both buyer and seller firms provides a fuller picture of the complex interactions, and a longitudinal in-depth qualitative study allows an investigation of the development of the interactions between buyer-seller firms over time. Contribution to knowledge, limitations and directions for future research This paper contributes to conceptual and practical knowledge in advancing understanding of the relationship marketing process in a Chinese context, and has potential implications for a wider cultural and institutional context. In addition, it contributes to the general knowledge of relationship marketing in the B2B sector. In particular, the result adds to our understanding of the essential role the family plays in the process of relationship marketing in a family business. Secondly, it helps to shed new light on the complex process of formal and informal interaction between buyer and seller firms in a B2B sector. A better understanding of the complex process is particularly important to all the parties involved in the process, including the business owners, family members, and non-kin employees. Furthermore, a longitudinal qualitative approach, with informants from both buyer-seller firms, plus multi-respondents from each firm, is particularly useful in investigating the complex, dynamic relationship marketing process in a family business context. This study is based on fieldwork material collected from a Chinese context, as such some of the findings may be limited to the specific cultural context and therefore the applicability across cultures need to be further explored. Although it is not a small project, since it lasted over eight years, involved hundreds of lengthy conversations with the informants, and generated very rich data, it is still a study of a relatively small number of people. Further research can take forward the findings of this study and conduct larger scale, quantitative and/or qualitative research to 1) compare the relationship marketing process between family business and non-family business; 2) conduct cross-cultural comparative studies to investigate the impact of institutional context on the relationship marketing process; 3) conduct cross-sector studies to investigate the impact of industry sector on the relationship marketing process; 4) undertake a cross-national comparative survey of relationship marketing from a social embeddedness perspective. It is expected that these research topics have the potential to yield more insightful findings to contribute to this interesting, relevant but underresearched area of interest. 11 References Alderson, W. (1957). Marketing Behaviour and Executive Action. Homewood, Illinois: Irwin. Aldrich, H., et al. (1987). The impact of social networks on business founding and profit: a longitudinal study. In N. C. Churchill, J. A. Hornaday, B. A. Kirchhoff, O. J. Krasner & K. H. Vesper (Eds.), Frontiers of Entrepreneurship Research (pp. 154-168). Wellesley, MA: Babson College. Aldrich, H. E., & Cliff, J. (2003). The pervasive effects of family on entrepreneurship: toward a family embeddedness perspective. Journal of Business Venturing, 18(5), 573-596. Arnould, E. J., & Wallendorf, M. (1994). Market-Oriented ethnography: interpretation building and marketing strategy formulation. Journal of Marketing Research, XXXI(Nov 94), 484-504. Au, K., & Kwan, H. K. (2009). Start-Up Capital and Chinese Entrepreneurs: The Role of Family. Entrepreneurship: Theory & Practice, 33(4), 889-908. Bäckström, L., et al. (2009). Personal acquaintances and salespeople in financial services: Differences between customers and friends. Journal of Financial Services Marketing, 14(1), 26-39. Barber, B. (1995). All economies are "embedded": the career of a concept, and beyond. Social Research, 62, 387-413. Barry, J. M., et al. (2008). A cross-cultural examination of relationship strength in B2B services. Journal of Services Marketing, 22(2/3), 114-135. Berger, P. L., & Luckmann, T. (1967). The Social Construction of Reality. New York: Random House, Vintage Books. Berghäll, S. (2003). Perceptions of dyadic business relationships: In search of the social psychological basis of interpersonal relationship perceptions in socio-economic exchange relationships. Marketing Theory, 3(1), 59-77. Berry, L. L. (1995). Relationship marketing of services—growing interest, emerging perspectives Journal of the Academy of Marketing Science, 23(4), 236-245. Bhagat, P. (2009). Relationship Development: Tracking the Formation of Relationship Commitment in a Controlled Setting. Journal of Relationship Marketing, 8(3), 267-278. Blois, K. (2003). B2B 'relationships' - a social construction of reality? Marketing Theory, 3(1), 79-96. Bopaiah, C. (1998). Availability of credit to family businesses. Small Business Economics, 11(1), 75-87. Brockhaus, R. H. S. (1994). Entrepreneurship and family business research: comparisons, critique, and lessons. Entrepreneurship Theory and Practice, 19(1), 25-38. Brodie, R. J., et al. (1997). Towards a Paradigm Shift in Marketing? An Examination of Current Marketing Practices. Journal of Marketing Management, 13, 383-406. Brown, R. A. (1995). Chinese Business Enterprise in Asia. London: Routledge. Callarisa Fiol, L. J., et al. (2009). Customer Loyalty in Clusters: Perceived Value and Satisfaction as Antecedents. Journal of Business-to-Business Marketing, 16(3), 276-316. Carney, M., & Gedajlovic, E. (2002). The coupling of ownership and control and the allocation of financial resources: evidence from Hong Kong. Journal of Management Studies, 39(1), 123-146. Chrisman, J. J., et al. (2005). Trends and directions in the development of a strategic management theory of the family firm. Entrepreneurship Theory and Practice, 29(5), 555-575. Chrisman, J. J., et al. (2006). Personalism, Particularism, and the Competitive Behaviors and Advantages of Family Firms: An Introduction. Entrepreneurship: Theory & Practice, 30(6), 719-729. Chua, J. H., et al. (2009). An Agency Theoretic Analysis of the Professionalized Family Firm. Entrepreneurship: Theory & Practice, 33(2), 355-372. Chua, J. H., et al. (1999). Defining the family business by behaviour. Entrepreneurship Theory and Practice, 23, 19-39. Chung, C.-N. (2001). Market, culture and institutions: the emergence of large business groups in Taiwan, 1950s-1970s. Journal of Management Studies, 38(5), 719-745. Collins, O. F., & Moore, D. G. (1964). The Enterprising Man. East Lansing: Michigan State University. Cooper, M. J., et al. (2005). Customer relationship management: a comparative analysis of family and nonfamily business practices. Journal of Small Business Management, 43(3), 242-256. Dacin, M. T., et al. (1999). The embeddedness of organizations: dialogue & directions. Journal of Management, 25(3), 317-356. Davies, H., & Ma, C. (2003). Strategic Choice and the Nature of the Chinese Family Business: An Exploratory Study of the Hong Kong Watch Industry. Organization Studies, 24(9), 1405-1435. Davis, P. S., & Harveston, P. D. (1998). The influence of family on the family business succession process: a multi-generational perspective. Entrepreneurship Theory and Practice, 22(3), 31-53. Dhaliwal, S., & Kangis, P. (2006). Asians in the UK: gender, generations and enterprise. Equal Opportunities International, 25(2), 92-108. Dunfee, T. W., & Warren, D. E. (2001). Is guanxi ethical? A normative analysis of doing business in China. Journal of Business Ethics, 32(3), 191-204. 12 Dwyer, F. R., et al. (1987). Developing buyer-seller relationships. Journal of Marketing, 51(2), 11-27. Dyck, B., et al. (2002). Passing the baton: The importance of sequence, timing, technique and communication in executive succession. Journal of Business Venturing, 17(2), 143-162. Dyer, W. G., Jr. (1986). Cultural change in family firms: understanding and managing business and family transitions. San Francisco: Jossey-bass. Dyer, W. G., Jr,. (1992). The entrepreneurial experience. San Francisco: Jossey-Bass. Elg, U., & Johansson, U. (1996). Networking when national boundaries dissolve. European Journal of Marketing, 30(2), 61-74. Elliott, R., & Wattanasuwan, K. (1998). Brands as resources for the symbolic construction of identity. International Journal of Advertising, 17(2), 131-144. Fitzgerald, J., et al. (1998). An analysis of sample attrition in panel data. Journal of Human Resources, 33(2), 251-299. Galbraith, C. S. (2003). Divorce and the Financial Performance of Small Family Businesses: An Exploratory Study. Journal of Small Business Management, 41(3), 296-309. Granovetter, M. (1973). The strength of weak ties. American Journal of Sociology, 78, 1360-1380. Granovetter, M. (1985). Economic action and social structure: the problem of embeddedness. American Journal of Sociology, 91(3), 481-510. Grönroos, C. (1991). The marketing strategy continuum: towards a marketing concept for the 1990s. Management Decision, 29(1), 7-13. Grönroos, C. (1994). From Marketing Mix to Relationship Marketing: Towards a Paradigm Shift in Marketing. Management Decision 32(2), 4-20. Gummesson, E. (1987). The New Marketing - Developing Long-Term Interactive Relationships. Long Range Planning 20(4), 10-20. Gummesson, E. (1991). Marketing orientation revisited: the crucial role of the part-time marketer. European Journal of Marketing, 25(2), 60-75. Gummesson, E. (1998). Implementation Requires a Relationship Marketing Paradigm. Journal of the Academy of Marketing Science, 26(3), 242-249. Gummesson, E. (2003). Relationship marketing: it all happens here and now! Marketing Theory, 3(1), 167169. Haley, G. T., et al. (1998). New Asian Emperors - The Overseas Chinese, their Strategies and Competitive Advantages. Oxford: Butterworth Heinemann. Hall, A., & Nordqvist, M. (2008). Professional Management in Family Businesses: Toward an Extended Understanding. Family Business Review, 21(1), 51-69. Hamilton, G. G., & Jai, C. S. (1990). The institutional foundations of Chinese business: the family firm in Taiwan. Comparative Social Research, 12, 135-157. Handler, W. C. (1989). Methodological issues and considerations in studying family business. Family Business Review, 2(3), 257-276. Harker, M. J., & Egan, J. (2006). The past, present and future of relationship marketing. Journal of Marketing Management, 22(1), 215-242. Heller, R. (1991). How the Chinese manage to keep it all in the family. Management Today, Nov, 31. Hollyoake, M. (2009). The four pillars: Developing a 'bonded' business-to-business customer experience. Journal of Database Marketing & Customer Strategy Management, 16(2), 132-158. Iyer, G. R., et al. (2006). Global marketing of industrial products: Are interpersonal relationships always critical? Industrial Marketing Management, 35(5), 611-620. Jack, S. L. (2005). The Role, Use and Activation of Strong and Weak Network Ties: A Qualitative Analysis. Journal of Management Studies, 42(6), 1233-1259. Kellermanns, F. W. (2005). Family firm resource management: commentary and extensions Entrepreneurship Theory and Practice, 29(3), 313-319. Kellermanns, F. W., et al. (2008). An Exploratory Study of Family Member Characteristics and Involvement: Effects on Entrepreneurial Behavior in the Family Firm. Family Business Review, 21(1), 1-14. Kelly, L. M., et al. (2000). Founder Centrality and Strategic Behavior in the Family-Owned Firm. Entrepreneurship: Theory & Practice, 25(2), 27-42. Klein, S. B., et al. (2005). The F-PEC scale of family influence: construction, validation, and further implication for theory. Entrepreneurship Theory and Practice, 29(3), 321-339. Le Breton-Miller, I., & Miller, D. (2006). Why Do Some Family Businesses Out-Compete? Governance, LongTerm Orientations, and Sustainable Capability. Entrepreneurship: Theory & Practice, 30(6), 731-746. Le Breton-Miller, I., & Miller, D. (2009). Agency vs. stewardship in public family firms: a social embeddedness reconciliation. Entrepreneurship: Theory & Practice, 33(6), 1169-1191. Lee, J. (1996). Culture and Management - A Study of Small Chinese Family Business in Singapore. Journal of Small Business Management, 63-67. Leung, M. W. H. (2001). Get IT going: new ethnic Chinese business. The case of Taiwanese-owned computer firms in Hamburg. Journal of Ethnic and Migration Studies, 27(2), 277-294. 13 Lim, L. Y. C. (1983). The Chinese in Southeast Asia: Identity, culture and polities (Vol. II). Singapore: Maruzen Asia. Litz, R. A. (1995). The family business: toward definitional clarity. Family Business Review, 8(2), 71-81. Mattsson, L.-G. (1997). "Relationship Marketing" and the "Markets-as-Networks Approach"- A comparative analysis of two evolving streams of research. Journal of Marketing Management, 13(5), 447-461. McCann III, J. E., et al. (2001). Strategic Goals and Practices of Innovative Family Businesses. Journal of Small Business Management, 39(1), 50-59. McCarthy, E. J. (1960). Basic Marketing. Homewood: Irwin. McGarry, E. D. (1950). Some Functions of Marketing Reconsidered. In R. Cox & W. Alderson (Eds.), Theory of Marketing. Chicago: Irwin. McKitterick, J. B. (1957). What is the Marketing Management Concept? In F. Bass (Ed.), The Frontiers of Marketing Thought in Action. Chicago: AMA. Miller, D., et al. (2003). Lost in time: intergenerational succession, change, and failure in family business. Journal of Business Venturing, 18(4), 513-531. Miller, R. L. (2000). Researching Life Stories and Family Histories. London: SAGE. O'Driscoll, A. (2006). Reflection on contemporary issues in relationship marketing: evidence from a longitudinal case study in the building materials industry. Journal of Marketing Management, 22(1/2), 111-133. O'Malley, L., & Tynan, C. (1999). The utility of the relationship metaphor in consumer markets: a critical evaluation. Journal of Marketing Management, 15(7), 587-602. Olson, P. D., et al. (2003). The impact of the family and the business on family business sustainability. Journal of Business Venturing, 18(5), 639-666. Orru, M. (1997). The institutional logic of small firm economies in Italy and Taiwan. In M. Orru, N. W. Biggart & G. G. Hamilton (Eds.), The Economic Organization of East Asian Capitalism (pp. 340-367). London: SAGE. Orru, M., et al. (1997). Organizational isomorphism in East Asia. In M. Orru, N. W. Biggart & G. G. Hamilton (Eds.), The Economic Organization of East Asian Capitalism (pp. 151-187). London: SAGE. Palanca, E. H. (1995). Chinese business families in the Philippines since the 1890s. In R. A. Brown (Ed.), Chinese Business Enterprise in Asia (pp. 197-213). London: Routledge. Palmer, R., et al. (2005). Relationship marketing: schools of thought and future research directions. Marketing Intelligence & Planning, 23(3), 313-330. Payne, A., & Holt, S. (2001). Diagnosing customer value: integrating the value process and relationship marketing. British Journal of Management, 12(2), 159. Polanyi, K. (1944). The Great Transformation: The Political and Economic Origins of Our Time. Boston, MA: Beacon Press. Portes, A., & Sensenbrenner, J. (1993). Embeddedness and immigration: notes on the social determinants of economic action. American Journal of Sociology, 98, 1320-1350. Purinton, E. F., et al. (2007). Marketing relationship management: antecedents to survival and dissolution. Journal of Business-to-Business Marketing, 14(2), 75-103. Ram, M., et al. (2001). Making the link: households and small business activity in a multi-ethnic context. Community, Work & Family, 4(3), 327-348. Randøy, T., & Goel, S. (2003). Ownership structure, founder leadership, and performance in Norwegian SMEs: implications for financing entrepreneurial opportunities. Journal of Business Venturing, 18(5), 619-637. Redding, S. G. (1990). The Spirit of Chinese Capitalism. New York: Walter de Gruyter. Roberts-Lombard, M., & Steyn, T. F. J. (2008). The relationship marketing practices of travel agencies in the Western Cape Province. South African Journal of Business Management, 39(4), 15-26. Rogers, B., et al. (2008). Integrating the value of salespeople and systems: Adapting the benefits dependency network. Journal of Database Marketing & Customer Strategy Management, 15(4), 221-232. Royer, S., et al. (2008). Promoting Family: A Contingency Model of Family Business Succession. Family Business Review, 21(1), 15-30. Sabiote, E., & Román, S. (2009). The influence of social regard on the customer-service firm relationship: the moderating role of length of relationship. Journal of Business & Psychology, 24(4), 441-453. Saren, M. (2007). Marketing is everything: the view from the street. Marketing Intelligence & Planning, 25(1), 11-16. Schein, E. H. (1987). The Clinical Perspective in Fieldwork. Beverly Hills, CA: SAGE. Schultze, U. (2000). A confessional account of an ethnography about knowledge work. MIS Quarterly, 24(1), 3-41. Schulze, W. S., et al. (2003). Exploring the agency consequences of ownership dispersion among the directors of private family firms. Academy of Management Journal, 46(2), 179-194. Sharma, P., et al. (2003). Predictors of satisfaction with the succession process in family firms. Journal of Business Venturing, 18(5), 667-687. 14 Stanko, M. A., et al. (2007). Building commitment in buyer-seller relationships: A tie strength perspective. Industrial Marketing Management, 36(8), 1094-1103. Steier, L. P., et al. (2009). Embeddedness Perspectives of Economic Action Within Family Firms. Entrepreneurship: Theory & Practice, 33(6), 1157-1167. Steward, M. D. (2009). A typology of coordination strategies employed by business-to-business salespeople. Marketing Management Journal, 19(1), 37-45. Stewart, A. (2003). Help one another, use one another: toward an anthropology of family business. Entrepreneurship Theory and Practice, 26(2), 383-396. Sundaramurthy, C. (2008). Sustaining Trust Within Family Businesses. Family Business Review, 21(1), 89102. Thach, E. C., & Olsen, J. (2006). Building strategic partnerships in wine marketing: implications for wine distribution. Journal of Food Products Marketing, 12(3), 71-86. Theron, E., et al. (2008). The antecedents of relationship commitment in the management of relationships in business-to-business (B2B) financial services. Journal of Marketing Management, 24(9/10), 9971010. Thomson, R., & Holland, J. (2003). Hindsight, foresight and insight: the challenges of longitudinal qualitative research. International Journal of Social Research Methodology, 6(3), 233-244. Tsang, E. W. K. (2001). Internationalizing the Family Firm: A Case Study of a Chinese Family Business. Journal of Small Business Management, 39(1), 88-94. Vargo, S. L., & Lusch, R. F. (2004). Evolving to a New Dominant Logic for Marketing Journal of Marketing, 68, 1-17. Wall, K. L., et al. (2009). Conducting Trade with Chinese Family Businesses. Organization Development Journal, 27(2), 53-68. Wang, C. L. (2007). Guanxi vs. relationship marketing: Exploring underlying differences. Industrial Marketing Management, 36(1), 81-86. Webster, F. E. (1992). The changing role of marketing in the corporation. Journal of Marketing, 56(4), 1-17. Weick, K. E. (1995). Sensemaking in Organization. Thousand Oaks, CA: SAGE. Westhead, P., & Howorth, C. (2007). 'Types' of private family firms: an exploratory conceptual and empirical analysis. Entrepreneurship & Regional Development, 19(5), 405-431. Westhead, P., et al. (2002). Ownership and management issues in first generation and multi-generation family firms. Entrepreneurship & Regional Development, 14, 247-269. Winter, M., et al. (2004). Tracking family businesses and their owners over time: panel attrition, manager departure and business demise. Journal of Business Venturing, 19(4), 535-559. Wong, S. L. (1985). The Chinese family firm: a model. The British Journal of Sociology, 36(1), 58-72. Wright, L. T., et al. (2003). Exploring the characteristics, attitudes to targeting and relationship marketing of small ethnic minority businesses. Journal of Targeting, Measurement and Analysis for Marketing, 12(2), 173-184. Yan, J., & Sorenson, R. L. (2004). The influence of Confucian ideology of conflict in Chinese Family Business. International Journal of Cross Cultural Management, 4(1), 5-17. Yilmazer, T., & Schrank, H. (2006). Financial intermingling in small family businesses. Journal of Business Venturing, 21(5), 726-751. Yoshikawa, T., & Rasheed, A. A. (2010). Family Control and Ownership Monitoring in Family-Controlled Firms in Japan. Journal of Management Studies, 47(2), 274-295. Zahra, S. A. (2003). International expansion of U.S. manufacturing family businesses: the effect of ownership and involvement. Journal of Business Venturing, 18(4), 495-513. Zahra, S. A., et al. (2004). Entrepreneurship in Family vs. Non-Family Firms: A Resource-Based Analysis of the Effect of Organizational Culture. Entrepreneurship: Theory & Practice, 28(4), 363-381. Zapalska, A. M., & Edwards, W. (2001). Chinese entrepreneurship in a cultural and economic perspective. Journal of Small Business Management, 39(3), 286-292. Zhang, J., & Ma, H. (2009). Adoption of professional management in Chinese family business: A multilevel analysis of impetuses and impediments. Asia Pacific Journal of Management, 26(1), 119-139. Zukin, S., & DiMaggio, P. (1990). Structures of capital: the social organization of the economy. Cambridge, MA: Cambridge University Press. 15 Figure 1. Relationship Marketing Process in Industrial (B2B) Sector Business relationship Seller Firm Buyer Firm • • • • Business owners/managers Purchasing Accounting Admin & support etc. • Ongoing, multipoint contact social interactions • • • Business owners/managers Sales & Marketing Accounting Admin & support etc. Personal relationships 16 Figure 2. Formal interaction between buyer-seller firms in a typical transaction Seller Firm C3 - Automatic Embroidery Factory Buyer Firm C5 - Garment Factory Business Owner Business Owner Accounting Manager (Owner’s wife) Accounting Manager (Owner’s daughter) Sales Manager (Owner’s son) Purchasing Manager (Owner’s daughter) Production Manager (Owner’s daughter in- Production Manager Non-kin employee law Shipping & Logistic Manager (Owner’s cousin) Shipping & Logistic Manager (Owner’s nephew) Other staff Other staff • Account clerk (non-kin) • Shipping clerk (non-kin) • Quality Control officer (owner’s distant relative) • Admin clerk (non-kin) • Purchasing clerk (non-kin • Account clerk (owner’s niece) 17 Figure 3. Ongoing formal and informal interaction between buyer-seller firms Seller Firm C3 - Automatic Embroidery Factory Buyer Firm C5 - Garment Factory Business Owner Business Owner Accounting Manager (Owner’s wife) Accounting Manager (Owner’s daughter) Sales Manager (Owner’s son) Purchasing Manager (Owner’s daughter) Production Manager (Owner’s daughter in- Production Manager Non-kin employee law Shipping & Logistic Manager (Owner’s cousin) Shipping & Logistic Manager (Owner’s nephew) Other staff Other staff • • • • Salesman (non-kin) Account clerk (non-kin) Shipping clerk (non-kin) Quality Control officer (owner’s distant relative) • Admin clerk (non-kin) • Purchasing clerk (non-kin • Account clerk (owner’s niece) 18 Table 1. Buyer-Seller Firms Profiles and Staff Involved in Buyer-Seller Interaction Shipping, Logistic & Admin staff Trading – footwear R R R U 2 15 14 C3 20 Manufacturing – automatic embroidery R R R R + U 3 43 8 C7 9 R R U U 4 10 9 H7 10 Manufacturing – automatic embroidery Trading - textile R + U R + U R R R R U U C6 12 Manufacturing garment U R R R 5 55 12 H3 21 Manufacturing porcelain U R R R H10 12 Trading – porcelain R R U U 6 28 14 C4 19 Manufacturing snack R R U U N A U C8 18 Wholesaler snack U R U R R U R+U NA – Industry Staff involved in formal or informal buyer-seller interactions H5 15 Exporter footwear R R R U U C5 23 Manufacturing garment R R U R + U H6 17 Trading - textile R R R/U U R + U U Others Business Age* Others Production & Quality Control 11 Co. Name Shipping, Logistic & Admin staff Sales & Marketing H2 Staff involved in formal or informal buyer-seller interactions Production & Quality Control Accounting & Finance 11 Industry Purchasing Business Owners 20 Business Age * Accounting & Finance Longest business relationships* 1 Co. Name Business Owners Longest personal relationships* Buyer Firms Pair Seller Firms N A U N A Business owner involved in buyer-seller social interaction Business owner not involved in buyer-seller social interaction Family member involved Non-kin employee involved Family member and non-kin employee involved No family member or non-kin employee involved * data dated Dec 2009 19