Business-to-business relationships
Networking events can be a good way to make new contacts – in some industries, trade shows are ideal for this. Some say that first impressions count. Others think that someone’s character can only be judged after a lot of contact in business contexts and socially. This is why deciding on a supplier or distributor takes varying lengths of time in different cultures. To emphasise the
importance of relationships like these, companies may refer to each other as partners.
When firms work together on a particular project, they may enter into a strategic alliance.
This may take the form of a joint venture between two or three companies, or a consortium between several organisations. An alliance may be the prelude to a merger between companies.
Journalists often use the language of betrothal and marriage to describe situations like this.
Companies may overcome legal and other barriers in order to merge, but, as in marriage, there is no guarantee that the relationship will work and last. The cultures of the two companies may be so incompatible that the promised increase in profitability and shareholder value does not materialise.
Relationship networks
Stakeholder theory holds that society is made up of a web of relationships, and that each member of this arrangement has its stake of interest and of responsibilities. In a company, the interested parties are its owners (shareholders), managers, employees, suppliers, distributors, and customers, who may or may not be end-users of its products or services. A large company’s activities have an effect on the places where it operates (think especially of company towns dominated by one company) and on society as a whole. Some companies publish an independent social audit that goes beyond the traditional annual report and attempts to give a bigger picture of the company’s place in society, the benefits it brings, the effects of its activities on people and the environment (see Unit 1: Communication). Some say that social audits give a false sense of social responsibility. Optimists reply that pressure from stakeholders such as shareholders and customers can bring positive changes in the way companies work, and benefits to society as a whole. Companies are increasingly sensitive to accusations of causing pollution, tolerating racism or using sweatshop labour. Companies are increasingly aware that their overall image, negative or positive, will eventually be reflected in their share price, an ultimate indicator of building good relationships, not just commercial ones.