The Impact of Financial Dependency on Business Relationships : A Case Study

• Main Author: Reis, João Miguel Barradas
• Format: Dissertation
• Language: English
• Published: ProQuest Dissertations & Theses 01-01-2023
• Subjects: Architecture; Entrepreneurship; Government contracts; Landscape architecture; Management; Market shares; Marketing; Municipal government; Political science; Product development; Purchasing; Small & medium sized enterprises-SME; Suppliers
• ISBN: 9798342172745

What is the impact of financial dependency on business relationships? This is the question that this study aims to answer, by running a multiple case study looking at the relationship between Vila Franca de Xira (VFX) city council and its suppliers. It is mandatory for an organization to establish and nurture business relationships with their counterparties, such as clients or suppliers. Dependency is an important topic when discussing business relationships since it influences the nature of the relationship and generates power dynamics between the actors. Thus, dependency affects how the actor’s joint story unfolds, by conditioning the feeling of power, as well as trust, willingness to invest in innovation, and the overall performance of the company.This study employs a mixed-method study. The level of financial dependency was calculated for all suppliers that provided services to VFX city council in 2021. Then, out of this list, three suppliers were selected according to a benchmark, which was identified in the literature review and was extremely important for the development of the investigation. These three suppliers are the sample of the study. Interviews were performed in order to understand how the level of financial dependency influences the business relationship of VFX city council and its suppliers. This study allows to deepen our understanding on how financial dependency affects power dynamics, trust, willingness to invest in innovation and impact on performance.