Creating and appropriating value in collaborative relationships

Business relationships provide means for creating and appropriating superior value in the marketplace. To date, research pertains almost exclusively to the value after relationship creation and sharing among exchange partners. Consequently, the interaction between value creation and value appropriation remains relatively unknown in collaborative relationships. Drawing on equity theory, this study proposes a conceptual model that positions value creation and value appropriation as focal variables within the nomological net of business relationships. Data collected from industrial customer-supplier projects reveal that value appropriation is the strongest driver of project satisfaction. Customer firms perceive value creation as positive only if they appropriate a larger slice of the bigger value pie. Information exchange moderates customer firms' evaluations of value creation and appropriation efforts. In contrast to the highly competitive nature at the project level, embedding the supplier project in an ongoing sourcing relationship reveals cooperative elements in the customer-supplier interaction. Greater relational satisfaction favors less aggressive value appropriation efforts. These insights help bridge the gap between managerial metrics that focus on successful value appropriation and academic models that attend to variables that capture the quality of ongoing relationships.