Indirect exit strategies
Indirect strategies are subtler, but usually take longer, and leave the partner uncertain as to the state of the relationship. Disguised exits involve a conscious attempt to conceal the intention to end the relationship. By cost escalation or otherwise signaling dissatisfaction by making greater demands on the partner (e.g. more frequent deliveries, more stringent quality requirements etc.), the disengaging organization alters the terms of the relationship in such as way as to be unacceptable to the partner. This transfers the initiative, and, therefore, the responsibility for making the decision to exit onto the partner. The disguised withdrawal strategy involves letting the partner down gently, by scaling down the business conducted with the partner over a period of time, without revealing the ultimate intention to exit. This allows the partner to adapt to the loss of business over time, and soften the impact of final dissolution. Tacit strategies involve the least effort on the part of the disengaging organization. Business is simply discontinued without explanation, either gradually in the fading strategy or abruptly in withdrawal. The former is classified as partner orientated, since it allows them to adjust gradually to the end of the relationship.
Choice of strategy
Alajoutsijarvi et al. (2000) identified examples of the various exit strategies in four relationships between businesses. They noted that different strategies were appropriate in different circumstances, but from their findings, the following key factors can be identified:
Power of the partner: in a market were there are few alternative partners, or the partner to be ‘dropped’ enjoys an influential position, partner-centred strategies are more appropriate. The possibility that the disengaging organization may need to reactivate the relationship, or that the ex-partner will damage other relationships, means that the disengaging organization should be sensitive to its partner’s interests.
The mechanics of the relationship: when the relationship involves strong personal bonds between individuals in the two organizations, partner-centred strategies are more appropriate, to avoid damaging staff morale and retention.
The relationship network: where the details of the dissolution are likely to be widely known throughout the disengaging organization’s relationship network, the disengaging organization should behave in line with the relational norms of the network. For example, a network that values trustworthy, partner-centred behavior will react badly to self-centred strategies, whereas one that values direct action and economy of effort may react badly to partner-centred strategies.
Implications for relationship maintenance
Alajoutsijarvi et al. (2000) note that the organizations in the study tended to move from one strategy to another, signaling dissatisfaction through an indirect strategy, before moving on to a more direct approach. In the same way, Stewart (1998) found that in the consumer banking sector, customers rarely took an abrupt and unilateral decision to close their accounts. Exit usually occurred only after they had made a deliberate effort to signal their dissatisfaction or negotiate a solution to their problem. If the bank responded positively at this stage, it was likely that the relationship could be saved. Few could be salvaged once the customer had taken direct action to withdraw. In other words, an organization will normally be given early warning of a customer’s intention to withdraw, if it remains sensitive to indirect withdrawal strategies