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A RELATIONAL APPROACH TO MATCHING INTERFIRM EXCHANGES BETWEEN SME EXECUTIVES AND CORPORATE BUSINESS EXECUTIVES

Abstract

Research on interfirm exchanges is often concerned with networked partners and the strategic choice between informal and formal governance mechanisms to curb opportunism and to provide optimal exchange performance. However, Viviana Zelizer’s model of “good matches” provides an important cultural perspective about the meaning of transactions within relationships that can provide a more theoretically complex account of these exchanges. In this article, interfirm exchanges between small business executives and large corporate business executives are analyzed with Zelizer’s framework. This research is based on interviews with 22 chemical industry businessmen and women. I find that “good matches” based on relationship type (strong or weak ties) between small business and corporate executives lead to certain kinds of economic transactions (routine or non-routine exchanges) and forms of governance, or transacting media (formal contracts or informal agreements) that helps to sustain relationships between executives, leading to future transactions. The findings extend the good matches framework to interfirm exchange partners leading to the development of a new model that small business and strategy researchers should consider in their studies. The paper concludes with strategies on how small businesses may capitalize on developing unique types of relationships with executives in corporate businesses.

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