RELATIONSHIP CAPITAL 2
Managingthe relationship in the global business environment requiresunderstanding its nature. Relationship capital, according to Kocogluet al. (2009) is the knowledge rooted within, available through andused by persons in their networks. It also goes with names likesocial capital and customer capital (Kocoglu et al. 2009). Itincludes aspects of customer relationships, licensing, brand value,trademarks and the relationship with suppliers (Spralls et al.,2011). It is also a reflection of business characters, organizationalconsciousness, customer loyalty and distribution channels (Kocoglu etal. 2009). Dell is a prime example of an institution that hasinstituted a rich social capital. It came into the industry whenmany people were pessimistic about the computer industry (Kumar &Craig, 2007). It has a complete distribution network that employs aset of techniques that enables the forward and reverse approaches. Itemploys a close relationship with suppliers and, therefore,assimilates the information collected from the market (Kumar &Craig). The channel revenues were more than 40 percent of the overallcompany’s revenue in 2014 (Torbit, 2015).
Toeffectively manage relationship capital it is imperative tounderstand whether it is dominantly an internal or externalorganization. The internal relationships are imperative in producingintellectual capital (Wu et al., 2015). However, the externalrelationship contributes to the outcome. Dell’s case is an exampleof a strong relationship with customers and suppliers. They providevaluable information to the company on improving the product anddistribution strategy. However, an internal relationship may not beeffective without an external relationship (Whipple et al., 2015). While both are significant in business, the external relationshipsare dominant. The rationale for this is that customers and suppliersdo not necessarily care about what happens in an organization as longas they get the products they need. Kumar et al., suggest thatinternal relationship may weaken the external relationships.Therefore, I believe that organizations require strong internalvalues to cultivate the external relationship capital.
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Torbitt,D. (2015). DellDelivers Exceptional Channel Partner Revenue Growth and CustomerAcquisition Builds on Progress with New Programs and Incentives toDrive Customer and Partner Value. Retrieved fromhttp://www.dell.com/learn/us/en/vn/secure/2014-11-04-dell-channel-partner-growth-customer-acquisition
Whipple,J. M., Wiedmer, R., & K Boyer, K. (2015). A Dyadic Investigationof Collaborative Competence, Social Capital, and Performance inBuyer–Supplier Relationships. Journalof Supply Chain Management,51(2),3-21.
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