The ending of a relationship should ideally be a conscious decision. Whilst many businesses work hard to establish, develop and maintain relationships, less attention appears to be given to relationship dissolution. For example, Colgate and Stewart’s study of personal banking services in New Zealand found that the personal bankers managed on average 500 customers – far too many with which to maintain satisfactory relationships. However, in the absence of any data regarding the profitability of each customer, the personal bankers were unable to focus their efforts on the most valuable relationships. Instead, they tended to take a reactive stance, giving attention as demanded by each customer (Colgate and Stewart, 1998).
Ending complex relationships
In business-to-business relationships resource ties and the complexity of commercial links between the buyer and supplier usually mean that the process of dissolution must be more carefully considered (Hakansson and Snehota, 1995). This situation also exists in some high value, complex consumer products, such as financial or legal services, where the bonds between customer and supplier may be many and varied. In organizations which operate purely in high value, low volume sectors, failure to manage the process properly in such situations can inflict serious damage on the disengaging organization. Too abrupt a dissolution may lead the ex-partner to engage in negative word of mouth, and be viewed unfavourably by the disengaging organization’s other partners or customers. On the other hand, too gentle an exit may extend the relationship unnecessarily, and create additional costs that do not directly benefit the disengaging organization.
Direct exit strategies
Direct exit strategies are those in which the disengaging organization clearly signals its dissatisfaction with the relationship. Where the former is uninterested in the impact of dissolution on the partner, this may be presented as a fait accompli. If the disengaging organization has already taken the decision to withdraw, but is concerned about the effects of the action on other customers or partners, it may engage in blame attribution to establish that the decision was caused by the shortcomings of the partner, thus abdicating responsibility for the decision. For organizations more concerned about their partners, a negotiated separation allows both parties the opportunity to rationalize the event, and plan for the effects that this will have on their businesses. The revocable exit is appropriate when the relationship is salvageable – the parties discuss the state of the relationship with a view to finding a solution. In the case of a mutual discussion, agreement is possible without serious compromise on either side. In an ultimatum strategy, the views of the two parties will be so far apart that one party will have to compromise its own interests or lose the partner.