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Value of relationships

Page history last edited by PBworks 18 years, 5 months ago




Understanding that relationship have value in themselves and that organisations derive value through relationships would seem to be common sense but the the idea that relationships have value for organisations has only recently become significant in management and economic theory.


Indeed, theorists in Value Based Management including Baruch Lev (author of About Intangibles, Management, Measurement, and Reporting), the Philip Bardes Professor of Accounting and Finance the Stern School of Business, New York University,

Leif Edvinsson (author of Corporate Longitude ), the Adjunct Professor of Intellectual Capital, at the Lund University, Sweden and Michael Porter, the exponent of the Value Chain Framework are all late converts to the idear that relationships have value in themselves and that relationship are the means by which wealth can be created.


In the meantime there is extensive literature about vendor relationship value, customer relationship value and employee relationship value. In each case research has provided incontrovertible evidence that effective management of such relationships has a direct impact in areas like cash flow, P&L and balance sheet value.


Indeed, Patricia Hewitt MP , when British Secretary of State for Trade and Industry, called for corporations to have "successful relationships with a wide range of other stakeholders" because they "are important assets, crucial to stable, long-term performance and shareholder value".


These developments mean that it is in the interest of organisations to be able to identify key relationships and to use robust capabilities to measure their values.


As intangible assets, relationships are hard to quantify in pure financial terms but they are measurable and the data derived from using the Clarity Concept is helpful in this regard.


Tapping into relationship value opportunities requires robust methodologies such as the Publigram Focus Groups




Wimmer, A Business Relationships as Value Drivers


Wolfgang Ulaga (2003) Relationship Value in Business Markets: Development of a Measurement Scale.


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Managing business relationships, Chichester, John Wiley


Gassenheimer J.B. – Houston F.S. – Davis J.C. (1998) The role of economic value, social value, and perception

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eds., (1999) Proceedings of the 15 th Annual IMP Conference, University of Dublin


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Business Value of Logistics in the Supply Chain, Council of Logistics Management


Mandják, T. – Durrieu, F. (2000): Understanding the non-economic value of business relationships In: Ford, D., -


Ravald, A. – Grönroos, Ch. (1996) The value concept and relationship marketing In: European Journal of

Marketing Volume 30, No.2, pp.19-30.


Wilson, D.T. (1997) Relationship management and value creating networks, Working draft presented at the 13th

IMP Conference in Lyon, pp.1-16.


Wilson, D.T. – Jantrania, S. (1996) Understanding the value of a relationship In: Asia – Australia Marketing

Journal Volume 2, No.1, pp. 55-66.

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