18

by Shelby D. Hunt and Robert M. Morgan

Relationship Marketingin the Era of

Network CompetitionIn this era of network competition, successful partnerships

require commitment, trust, and choosing partners carefully.

The economies of the world's nation-states have become interconnected andinterdependent to an extent unparal-leled in history. Industry after industryis discovering that competition is no

longer just regional or national, but truly global.The global economy anticipated for years

finally is being realized in the '90s because ofseveral factors:

• The collapse of the world's command economiesand socialism.

• The triumph of market econotnies andcapitalism.

• The explosive growth of technology and itsworldwide dissemination.

• The development of instantaneous worldwidecommunications.

• The rise of knowledge and skills as principalsources of competitive advantage—forindividuals, for organizations, and for nations.

Marketing managers must prepare themselvesto deal with the consequences of a global econo-my and the realities of global competition. First ofall. the traditional multinational corporation isgiving way to the gkibal corporation.' Allhough

EXECUTIVE BRIEFINGT he f^lobalizotion oftnodern econotnies is forcing

countries and corporariotis to Take a newapproach to competition. Finns are fott)iini> alliances—or strategic networks—with suppliers, buyers, gov-ernments, and even cotnpetiTors to produce levels ofqualiTy, efficiency, and effectiveness never possibleunder firm-to-ftrm competition. However, some net-works achieve extraordinary success while others failabysmally. That's because corporate alliances, liketnarriages, are cooperative efforts built oticommitment and trust. Beware of opportunists whenprospective partners come courting.

I1 comi

^ B prosi

MARKETING Mmsmm

Like nations,corporations

must court allies.

multinational corporations, by definition, alwayshave operated across national boundaries, most oftheir high value-added activities—such as productdesign, manufacturing, and R&D—took place inthe headquarter's nation.

In contrast, all the activities of the emergingglobal corporations, including high value-addedactivities, are disbursed worldwide. The Ma/daMX-5 Miata, for example, wasdesigned in California,financed in Tokyo and NewYork, and prototyped in Wor-thing, England. It currently isassembled in Michigan andMexico from components pro-duced in both the United Statesand Japan. The Miata is a trulyglobal car and Mazda is on itsway to being a truly globalcorporation.

Now, as never before, com-panies that "think globally"will enjoy significant competi-tive advantages over those thattreat their foreign operationsand divisions as suhsidiaty todivisions in the headquarter'snation.

As another consequence ofthe global economy, nationsfind it is increasingly neces-sary to seek alliances withother nations in order tocompete. The UnitedStates^the most successful"alliance" the world has ever

known-—isaligningitself withCanada andMexico tocompete

better with Japan and theEuropean Common Market(which is trying to become a"United States of Europe").The emergence of tradingblocs proves that no nation, even the UnitedStates, can stand atone; to compete in the glob-al economy, each nation-state must secureallies and cooperate with them.

Like nations, corporations must court allies topromote their own survival and prosperity. There-fore, a third major consequence of the globaleconomy is the rapid proliferation of alliances,partnerships, and other cooperative agreementsbetween corporations. These alliances give rise towhat we now refer to as "strategic network com-

Relationship Marketing ina New Light

Drawing on the central insightihat it is much easier to keepan existing customer than to

create a new one, the concept"relationship marketing" historicallyhas been ys.sociated with attemptsby firms to develop long-tenn rela-tionships with certain customers orkey accounts. Writers such asLeonard Berry. Barbara Jackson.Theodore Levitt, and A. Parasura-man long have recommended thatmarketers treat their long-standingrelationships with key customers as'"marriages" to be nurtured.

More recently, we have come torealize that many of the relation-ships central to (he success of anyfirm may not involve, strictlyspeaking, "customers" at all. Forexample, in the strategic alliancebetween Apple and IBM, there isneither a "buyer" nor a "seller,"only partners exchangingresources. Thus, the relationshipmarketing concept has broadened toinclude all tbrms of relationalexchange, not just those relation-ships dealing with one's customers.!n this expanded sense, relationshipmarketing refers to marketing activ-ities directed toward establishing,developing, and maintaining allsuccessful relational exchanges.

petition" and also give new meaning to the con-cept "relationship marketing."

New Era of Competition

t takes an appreciation for the dynamics ofthese new relationships to achieve marketingsuccess in this era of strategic network competi-

tion. And managers mustunderstand the processesinvolved in establishing, nur-turing, developing, and main-taining successful relationshipswith all the firm's exchangepartners—^be they suppliers,competitors, nonprofit organi-zations, government agencies,or even the firm's own divi-sions and employees.

Traditional CompetitionExhibit I illustrates the tra-

ditional view of competition,using the auto industry as anexample. Competition is hori-zontal and firm-to-firm at eachlevel; that is, auto manufactur-ers compete with other automanufacturers, materials' sup-pliers compete with othermaterials' suppliers, ad agen-cies compete with other adagencies, and so on.

The advantages of tradi-tional competition in such anindustry structure are numer-ous, both for individual firmsand for society as a whole:

• All firms specialize in thoseactivities they do best, i.e.,their core competencies.

• All firms are optimally posi-tioned to take advantage ofeconomies of scale becausemarketplace forces punish

firms that are either too large or too small.

• The discipline of marketplace price ensures effi-ciency because all firms negotiate at "arms length."

• The capital investment of each firm is kept to theabsolute minimum.• All firms can (and must) adapt quickly tochanges in the environment, such as technologi-cal advances. For example, if a new firm devel-ops a radically new battery that would obsolete

Relationship Marketing in the Era of Network Competition

all the capital equiptnent of current battery pro-ducers, automakers could adopt the new batterywithout thinkitig about the investment losses ofits current battery suppliers.

Traditional, ftrm-to-firm competition is effi-cient, productive, and dynamic because it unleash-es what economist Joseph Schumpeter called theforces of "creative destruction."

Hierarchical CompetitionEven though traditional, ftrm-to-firm competi-

tion has many advantages, it also has some inher-ent disadvantages, so some companies engage inthe kind of integration that results in competitionbetween what economist Oliver Williamson calls"hierarchies." In its early days. Ford was, for allintents and purposes, "just" an assembler of auto-mobiles made from parts that were manufacturedby other companies. Over the years, however.Ford adopted the structure illustrated in Exhibit 2,integrating backward to such an extent that at onetime it even made its own steel!

In contrast with ftrm-to-firm competition, high-ly integrated firms have:

• Lower transaction costs, realized by not having to buyand sell goods/services from independent suppliers.

EXHIBIT 1 x

Traditional view ofcompetition

Aulomobile buyers

• Less likelihood of being the victim of oppor-tunistic behavior, such as suppliers not fulfillingtheir contractual responsibilities.

• More autonomy through increased control overthe resources necessary for survival and growth.

• Better coordination of activities.I

• Greater opportunity to plan for the future.

By 1980, Ford was one ofthe most highly inte-grated corporations in the world (as were Chryslerand General Motors). The benefits of integration,thought many, exceeded the disadvantages:decreased competency fit. potential diseconomiesof scale, lack of price discipline on componentsproduced "in-house," high investment expense,and lack ofthe kind of fiexibility and adaptabilityassociated with creative destruction.

Strategic Network CompetitionDuring the '80s, business academics began tbe-

orizing about a form of competition that couldpotentially combine the best parts of both tradi-tional and hierarchical competition without incur-ring the disadvantages of either. This resulted instrategic network competition, illustrated in

EXHIBIT 2

Hierarchical view ofcompetition

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EXHIBIT 3

Network view of competition

raw[tiale rials!< up pliers

Volkswagen'sparts

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Volkswagen

Volkswagendealers

Networkcompetition bestdescribes thecurrent situationin the auto indus-

Exhibit 3 and exemplified by the Japanese carcompanies and their keiretsu.

Formally speaking, a netvyork is a group ofindependently ownedand managed tlrms thatagree to be partnersrather than adversaries.Beeause each partner'sindividual success istied to the success ofthe overall network, thefirms pursue commongoals. They engage in cooperative behaviors andcoordinated activities in such areas as marketing,production, finance, purchasing, and R&D.Allhough each firm is independently owned, theextent of cooperation and coordination among thefirms is so great that company boundaries become'"fuzzy." as illustrated by the broken lines sur-rounding each firm in Exhibit 3.

Network competition best describes the currentsituation in the auto industry. Ford no longer jusicompetes with Nissan and Volkswagen; rather.Ford and all its partners compete with Nissan andits partners and Volkswagen and its partners.Although (arguably) not as far along as the auioindustry, competition in such industries as com-puters, communications, and consumer electronicsincreasingly is leaning toward a network orienta-tion. Firm after firm is turning from discrete,arms-length exchanges with large numbers of sup-pliers toward long*tenn. "relational" exchangeswith a smaller number of partners.

EXHIBIT 4

Relational exchanges in relationship marketing

Supplier partnerships

Lateralpartnerships

Internalpartnerships

^Employees

Buyer partnerships

22 M3Jo.

Relationship Marketing in the Era of Network Competition

As shown in Exhibit 4. relational exchanges innetwork competition take place between firms andtheir {1) goods suppliers, as in jusi-in-time procure-ment: (2) services providers, as in integrated mar-keting efforts involving sales promotion, advertis-ing, and marketing research agencies; (3) competi-tors, as in strategic alliances; (4) nonprofit organi-zations, as in ties with universities, the Olympics,and "green" marketing groups; (5) govemmententities, as in joint R&D; (6) ultimate customers, asin database marketing; (7) intemiediate customers,as in franchising and other distribution channels;(8) functional departments, as in cross-functionalproject teams; (9) employees, as in internal market-ing and total quality management; and (10) busi-ness units, as in cooperation across corporate divi-sions, subsidiaries, or other strategic groupings.

IBM alone is thought to have more than 500strategic alliances, and other examples of relation-ship marketing abound.

• Procter & Gamble has assigned permanentemployees to live and work at Wai Mart's head-quarters to coordinate sales of P&G products.

" Sega Enterprise, a powerhouse in video games,was dubbed a "master collaborator because of itsalliances with AT&T in communications, Hitachiin chips, and Yamaha in sound.'

• Corning now defmes itself as a "network oforganizations."

• Glaxo has an alliance with the city-state of Singa-pore to develop drugs that treat diseases of the brain.

• Rochester. N.Y., has joined with three major uni-versities. Kodak, Xerox, and several smaller firmsin a collaborative effort to make the city the lead-ing center for optics technology.'

• Levi Strauss, using electronic data interchange(EDI), monitors daily product sales at major retail-ers to better coordinate purchasing, manufactur-ing, and inventory.

• Saturn considers its employees and customers tobe partners and uses both groups in its advertising.(Note that in Exhibit 3 ultimate customers are partofthe network.)

• The Pacific Wood Products Cooperative in theNorthwest has a network of more than 185wood-products firms to coordinate purchasingand marketing.

• Leaf Inc. and Ben & Jerry's team up to makeBen & Jerry's Heath Bar Crunch ice cream.

• Motorola allies itself with 11 partners in Iridium.a consortium for developing a global wirelesscommunication system.

• Revlon works with the National Breast Cancercoalition to develop relationships with women bysupporting cancer research and early breast-can-cer detection.

• AT&T develops relationships with small busi-nesses through its Customer Access Program.

• Nestle courts families by operating Le RelaisBebe rest stops—sparkling clean facili-ties, complete with host-esses, where parents canfeed their babies andchange their diapers—along main travel routesin France.

The success of eachpartner depends onthe success of thenetwork.

All of these firms are cooperating with otherentities to compete successfully. The starting pointfor al! partnerships is the exchange of complemen-tary resources. For example, most strategicalliances involve partners exchanging technologyfor technology, technology for market access, ormarket access for market access. But the mere factthat two entities have complementary resourceswill not ensure success.

Relationship MarketingNo matter how many partnerships constitute

the overall network—from just two in a "simple"strategic alliance to thousands in a large franchisechain—the success of each partner depends on thesuccess of the network. It is crucial, therefore, foreach firm to manage relationships with its part-ners. "Relationship marketing" refers to all mar-keting activities directed at establishing, develop-ing, and maintaining successful relationalexchanges in the supplier, lateral, buyer, and inter-nal partnerships shown in Exhibit 4. (Historically,relationship marketing referred only to partner-ships with ultimate customers.)

Some partnerships are much more successfulthan others. Indeed, though estimates vary, aboutone third of all strategic alliances appear to be out-right failures, and many others are only moderate-ly successful, as judged by the participants. Astudy of 895 strategic alliances across 23 indus-tries found that paiiicipants rated them to be suc-cessful only 45.3% ofthe time.

As a case in point, consider the auto industry.Although the Ford-Mazda strategic alliance iswidely regarded to be an extraordinary success.industry observers generally view the General

MARKETING mNAGEMEHI

Relationship Marketing in the Era of Network Competition

Motors-Daewoo, Chrysler-Mitsubishi, and Fiat-Nissan alliances as either outright failures or sig-nificantly less successful than Ford-Mazda.

Because all the alliances were cross-culturaland all the partners brought complementaryresources to the table, neither of these factors canexplain the disparity between the marketing suc-cess of Ford-Mazda and the disappointing resultsof the other auto partnerships.

Rather, Ford-Mazda's success results from thepartners managing the relationship to maximizethe likelihood of effective cooperation. The para-dox of relationship marketing is that being aneffective competitor in the era of network compe-tition also means being an effective cooperator.The success ofthe Ford-Mazda alliance can beattributed to two characteristics of their relation-ship that bring about effective cooperation; com-mitment and trust.

In our research on partnerships involving distri-bution channels,^ we found that effective coopera-tion entails both mutual trust and mutual commit-ment—not just one or the other. Successfulalliances, like successful marriages, don't just hap-pen; both require commitment to make them work,and both can be destroyed by mistrust.

Examining the details of the Ford-Mazdaalliance reveals that it has been managed—pur-posefully or accidentally—to promote commit-ment and trust.'' First, both parties must per-ceive every cooperative project to be mutuallybeneficial; senior managements ensure thatthere is an overall balance of benefits for bothcompanies. Second, top management sets the"tone" for the relationship by letting it beknown in no uncertain terms that middle man-agers are expected to cooperate with their coun-terparts to achieve these benefits. Third, thepartners maintain open lines of communicationand hold frequent face-to-face meetings.

For example, the senior management strategygroup, comprised of top executives from bothFord and Mazda, meets for three days every eightmonths to discuss present and future projects. Oneof these days is always reserved for informal "get-ting to know each other" activities, which adds thecritical human dimension to the relationship.

Perfect UnionsOur research investigating the commitment-

trust theory of relationship marketing, outlined inmore detail on the facing page, prompts us tooffer the following maxims for relationship mar-keting success.

Choose partners carefully. Partnerships of allkinds involve significant investments of time,money, personnel, and possibly equipment.

The paradox ofrelationshipmarketing is thatbeing an effectivecompetitor alsomeans beingan effectivecooperator.

Although such investments signal relationshipcommitment to the other party, they also canbecome '"sunk costs" that have little salvage valueoutside the specific relationship. Because termi-nating an unsuccessful relationship can be verycostly, it makes one partner vulnerable to oppor-tunistic behavior by the other.

For example, a partner can exploit thealliance for short-term advantage by not abidingby the (formal and informal) terms ofthe agree-ment. Even written contracts will not necessarilyprotect companies from opportunistic behavior,such as withholding or distorting information,appropriating proprietary technology or key per-sonnel, making late pay-ments, and delivering sub-standard products.

For example. GeneralMotors tore up hundreds ofcontracts with its suppliersand demanded immediate,double-digit price cutsfrom them. Moreover. GMdistributed suppliers* ownproprietary blueprints torivals to satisfy its quest forlower prices. Some GMsuppliers now (privately)claim that they will never again invest in technicalresearch for GM.

In the era of network competition, firms shouldmaintain traditional arms-length relationships withfirms that have opportunistic tendencies anddevelop partnerships with trustworthy firms. Forexample. Inverness Castings Group Inc. in GrandRapids. Mich., is a major partner of Chrysler Cor-poration. Chrysler recently purchased a new partfrom Inverness that cost 30% more than the part itreplaced. Why? Because Inverness' researchshowed that the new part would save on assemblytime and result in a higher quality final product.As another major Chrysler supplier put it: "AtChrysler, the price does not fall until the team getsthe cost out, as opposed to putting a gun to yourhead and saying 'lower your prices.'""

In all relationships, disagreements are inevitable.The real issue is. do the partners perceive these dis-agreements as an effective way of bringing prob-lems out into the open or do they bristle with angerand begin looking for other partners'?

Our research suggests that parties who trusteach other handle disagreements or conflicts in apositive manner, working to identify ways to solvethe underlying problems that led to the disagree-ment. Because communication is an important partof this process, a key concern in choosing a part-ner should be its willingness to share timely,meaningful infonnation.

MARKETING mHAGEMEHJ

When searching for trustworthy partners, pastpersonal experience with a potential partner isthe most valuable guide. However, in the case oftotally new partners, evaluations must be basedon the company's reputation in the industry

values ' g' " ^ """" ^ ^^°^~

a potentially•r

trustworthy partner."investigate before youinvest" is the credo ofthe international Fran-chise Association, and

it's wise counsel for any firm that is consideringentering a network with a new partner.

Shared values signal a potentially trustworthypartner. Firms should seek out partners that holdsimilar beliefs about what business behaviors areappropriate or inappropriate, right or wrong, prop-er or improper, and acceptable or unacceptable.

In cross-cultural partnerships, for example,one factor that can make an alliance doubly dif-ficult is a potential lack of shared values, eventhough global corporations are becomingincreasingly cosmopolitan. Alas, cross-culturalalliances are like multicultural societies such asthe former Yugoslavia and the Soviet Union;both self-destruct in the absence of a common"core" culture. Like porcupines making love,one should approach cross-cultural partnershipsvery, very carefully.

Structure partnerships carefully. The key struc-tural issue in relationship marketing stems from itsraison d'etre: exchanging resources to provide mutu-al benefits and. thus, achieve mutual goals.

To build a successful partnership, managersmust have not only a clear understanding of eachpartner's contrihutions and goals, but also a struc-ture that ensures an equitable balance of benefits.Baldrige award winner Motorola, for example,uses quarterly confidential surveys of major sup-pliers to track its own performance in providingbenefits to its partners.

Consider Ford's relationship with ExcelIndustries Inc., a maker of car windows. Forddiscovered that windows produced by Excelreduced inventory requirements and assemblycosts. Ford was so impressed that it not only "de-integrated" by selling its own Eulton, Ky., win-dow company to Excel, but also guaranteedExcel 70% of its window business. Thus embold-ened. Excel plowed $4 million more into bettermanufacturing systems.

As a result, Excel's sales and profits have flour-ished, and the company now equips new Fordmodels a year faster than before. "There's a spiritof trust," said the general manager of Ford's glassdivision. "We're both trying to find the most effi-cient solutions,"" Structuring partnerships for

mutual benefits, therefore, leads to better products,lower costs, and relationship marketing success.

Long-term partnerships, again like marriages,either grow in complexity over time or wither on thevine. Therefore, devising formal, written contractsthat cover all future contingencies is impossible.Although negotiating a formal contract may assistparties in communicating their expectations, if thepartners refer frequently to the contract after it issigned, the relationship is already on its way towardfailure status.

If you must have a forma! contract, we highlyrecommend including mediation or arbitrationclauses. In the franchising arena, franchisors havelong known that arhitration is a far superiormethod of dealing with franchisor-franchisee con-flict than is litigation.

Allow time for relationship growth. Becausecommitment and trust develop slowly, start withsmall projects with a new partner and expand thescope of the relationship gradually. As the rela-tionship grows, a complex set of norms willevolve for making therelationship work.These norms coversuch aspects of therelationship as howeach party willexchange informationof value to the otherand how each partymust react to safeguard the relationship in theface of unexpected circumstances. Norms, then,substitute a kind of psychological agreement forformal contract clauses.'"

When Harley-Davidson cut 200 membersfrom its supplier roster and entered long-termrelationships with its remaining 120 suppliers,Harley's legal department suggested a 40-pagebook that codified every detail of the relation-ship." Harley's president, in his words, "threwthe lawyers out" and signed brief documents witheach supplier outlining goals and a way toresolve disputes. Harley-Davidson now relies oninformal norms to guide the relationship, notclauses in formal contracts.

Maintain open lines of communication. Networkorganizations should have multiple points of con-tact because communications—both fonnal andinformal—enable partners to align their expecta-tions of what the partnership can produce. Infor-mal socializing builds the personal relationshipsthat contribute significantly toward the develop-ment of trust. As International Computers Ltd.puts it in its guidelines for successful collabora-tions, "friends take longer to fall out."''

Devising formal,written contractsthat cover all futurecontingencies isimpossible.

26 M 3. No. 1

Relationship Marketing in the Era of Network Competition

Opportunism bringsshort-term gains at

the expense oflong-term success.

Consider the case of the Blimpie sandwichchain.'^ As rival Subway began to comer the sub-marine sandwieh market. Blimpie ignored its ownfranchisees to concentrate on developing newMexican food concepts.

When Blimpie franchisees complained that theywere not receiving appropriate marketing suppt>rt,the chain's cofounder Anthony Conza set out torebuild trust by opening communications. He trav-

eled to more than 75cities to meet the fran-chisees personally anddiscuss their problems,formed a franchisee advi-sory council lo get con-tinuing Input on keyissues, launched a

newsletter to communicate with franchisees on a reg-ular basis, established an 800-number franchisingtips hotline, and gave franchisees more control overtheir own advertising through regional advertisingcooperatives.

Moreover, recognizing that all the partners inthe network must share in the benefits, ConzaifcUowed some franchisees in distress to divert their6% royalty fees to advertising. "We don't want toopen a bunch of stores...and have them fail," hesaid. "That's just not the way we like to do things."

Maintain a corporate culture that is trustwor-thy. In the global village, there is no place foropportunists to hide. Therefore, having a reputa-tion for corporate integrity is critical in the era ofnetwork competition. Character counts, andopportunism brings short-term gains at theexpense of long-term success.

Consider the press reports of alleged billingfraud at Sears, Roebuck and Co.'s auto servicecenters in 1992. The California Department ofConsumer Affairs accused Sears of systematicallyovercharging auto repair customers 90% of thetime at 33 Sears centers, with overcharges averag-ing $223 each.

"Sears has used trust as a marketing tool, andwe don't believe they've lived up to that trust,"said the Consumer Affairs Department director.Indeed, the retailer's ads maintain that "You cancount on Sears."

Sears's response has been to scrap commis-sions and product-specific sales goals for autocenter employees nationwide. Maybe Sears eanregain consumers' trust and maybe not. Butwouldn't it have been better for Sears to moni-tor the behavior of its own employees to ensurethat such policies as commissions and salesgoals were not encouraging unethical, if notillegal, behavior?'''

Time and time again, research shows that suc-

cessful relationships of all types are built on trust.As the Sears example illustrates, to be recognizedas a trustworthy partner at the organizational level,firms must be recognized as trustworthy at the per-sonal (employee) level. After all. customers don'tinteract with "Sears" the organization, they inter-act with the employees.

Research on corporate culture and relationship-building implies that when a firm's culture empha-sizes the values of honesty, fairness, responsibili-ty, and competence in its relationships with itsown employees, this in turn helps ensure thatemployees perform their jobs in a way that por-trays the firm as a trustworthy partner for others.

Cooperate to Compete

The very nature of competition in the globaleconomy is changing. Firms increasinglyrealize that they need allies to compete

effectively in the era of network competition.The message here is not ihat national

economies should turn toward cooperative struc-tures similar to state monopolies or cartels; thecentral lesson of the 20th century is that suchstructures hecome not only massively inefficientand stagnant, but economically and spirituallyimpoverished as well. Rather, the message is thatthe unit of competition has shifted from the firmto the network. And companies that engage innetwork competition must cooperate within theirown networks.

There are no guarantees for relationship mar-keting success in the global economy. But thismuch is eertain: In the era of network competi-tion, going it alone and/or opting for the short-term gains of opportunism are sure-fu^e formulasfor failure. WB

Endnotes'Reich, Robert B. (1991), "Who is Them?"

Harvard Business Review. (March-April). 77-88.'Business Week {1994), "Sega!" (Feb. 21),

66-74.^Gabor, Andrea (1991), "Rochester Focuses: A

Community's Core Competence," f1an>ard Busi-ness Review (June-August), 116-26.

^Harrigan, K.R. (1988), "Strategic Alliancesand Partner Asymmetries," in Cooperative Strate-gies in International Business, F.J. Contractor andP.L. Orange, eds. Lexington, MA: D.C. Heath &Co.. 205-26

^Morgan, Robert M. and Shelby D. Hunt(1994), "The Commitment-Trust Theory ofRelationship Marketing," Journal of Marketing(July).

MARKETING MUmEMrn i3Jo.iV

^•Business Week (1992), "The Partners" (Feb.10), 102-7.

' (1993), "Can Jack Smith Fix GM?"(Nov. 1).

'Wall Street Journal (1993), "Chrysler's Manof Many Parts Cuts Cost" (May 14), B1.

^Business Week (\992), "Learning From Japan"(Jan. 27).

'"Heide, Jan B. and George John (1992), "DoNorms Matter in Marketing Relationships?" Jour-nal of Marketing (April), 32-4.

'^Business Week (1992), "Learning FromJapan" (Jan. 27).

'^Ohmae, Kenichi (1989), "The Global Logic ofStrategic Alliances," Harvard Business Review(March-April).

'^Business Week (1993), "Blimpie Is TryingHard to Be a Hero to Franchisee Again" (March22).

"Wall Street Journal (\992), "Sears IsAccused of Billing Fraud at Auto Centers (June12), BI.

About the Authors

Shelby D. Hunt is the Paul Whit-field Horn Professor of Marketing atTexas Tech University. Lubbock. Apast editor of the Journal of Marketing.,he has authored several books, includ-ing Modern Marketing Theory: CriticalIssues in the Philosophy of MarketingScience (South-Western, 1991). Shelbyhas written numerous articles onmacromarketing, ethics, channels ofdistribution, and marketing theory. Twoof his articles, "The Nature and Scopeof Marketing" (1976) and "GeneralTheories and the FundamentalExplananda of Marketing" (1983), wonHarold H. Maynard Awards for the bestJM articles on marketing theory. Hisarticle "Reification and Realism inMarketing: In Defense of Reason"(1989) won the Charies C. SlaterAward from the Journal of Macromar-keting. In 1992, Shelby was selected asthe AMA/lrwin "Distinguished Market-ing Educator of the Year." He alsoreceived the Paul D. Converse Awardfrom the AMA's Central Illinois Chap-

ter in 1986 for "outstanding contribu-tions to theory and science in market-ing" and was named the "OutstandingMarketing Educator" for 1987 by theAcademy of Marketing Science.

Robert M. Morgan is AssistantProfessor of Marketing in the Depart-ment of Management and Marketing atthe Manderson Graduate School ofBusiness, University of Alabama,Tuscaloosa. He received a BS in biolo-gy from Wichita State University, a BSin pharmacy from the University ofKansas, an MBA from the Universityof Dallas, and a PhD in businessadministration from Texas Tech Uni-versity. His teaching and researchfocuses on marketing strategy, industri-al marketing, relationship marketingand organizational commitment. Hiswork has been published in the Journalof Marketing. Acadetny of ManagementJournal, and American Journal of Hos-pital Pharmacy.

28 U3,Ho.] MARKETING MmGlMiNI