Analogous to maintaining a portfolio of different investments, a firm is involved in a wide range of different relationships with suppliers and customers. These relationships are each structured differently. The structure is therefore the manner in which the relationship is constructed (i.e., comprised of its essential parts). Golicic, Foggin, and Mentzer (2003) break relationship structure down into two distinct components, magnitude and type, to better explain the many possible interorganizational relationships. They define relationship type as the group or class of relationships that share common governance characteristics and span a continuum from transactional relationships to integrated, with most relationships somewhere in between these extremes. The same authors define the little-researched construct of relationship magnitude as the degree or extent of closeness or strength of the relationship among organizations. The distinction between these two is important to both interorganizational relationship theory and practice as it provides a better understanding of the portfolio of different relationship structures firms need to manage.
Understanding that companies manage a variety of different relationship structures, but knowing little about relationship magnitude, the purpose of the study is to examine what contributes to various levels of magnitude. This will not only help managers understand what contributes to the magnitude of a relationship, but will also help explain relationship magnitude and its distinction from relationship type. The principal objective is to expand upon the research started by Golicic, Foggin, and Mentzer (2003) and explore the contextual drivers that influence relationship magnitude. Eight drivers were identified: capabilities, expected benefits, external influence, history, importance, interpersonal interaction, performance, and strategy congruence. This was done through a qualitative study of interconnected firms in four different supply chains. The following section briefly describes the theoretical background for the study. The qualitative methodology to explore the phenomenon is then presented, followed by a discussion of the results. Finally, implications and opportunities for future research are provided.