Title: Managing complexity through business relationships: the case of the Swedish electricity market

Authors: Lennart Haglund; Tommy Kovala; Cecilia Lindh

Addresses: School of Business, Society and Engineering, Mälardalen University, Mälardalens högskola Box 883, 721 23 Västerås, Sweden ' School of Business, Society and Engineering, Mälardalen University, Mälardalens högskola Box 883, 721 23 Västerås, Sweden ' School of Business, Society and Engineering, Mälardalen University, Mälardalens högskola Box 883, 721 23 Västerås, Sweden

Abstract: In the industrial market, electricity is an essential resource for production, as a stop in its flow may cause expensive production loss and thus tremendous cost. This strong resource dependence and the inevitable competition that comes with deregulation of the market, makes the electricity business complex and relationships of long-term orientation to form. To study such relationships, a mixed method is applied to provide contextual knowledge: by four interviews and a descriptive model and a structural model with three hypotheses developed (n = 122). Managers of products that may seem simple and traded in a market where low cost prevails should think again - stable relationships are a necessity for rational decisions also in this case, particularly since interdependence is influential.

Keywords: business relationship; buyer-seller relationships; commitment; complexity; deregulation; electricity intensive industry; electricity retailers; interdependence; mixed method; pricing; production resource management; services; structural equation modelling; Swedish electricity market; trust.

DOI: 10.1504/IJMDM.2019.098657

International Journal of Management and Decision Making, 2019 Vol.18 No.2, pp.209 - 227

Available online: 15 Jan 2019 *

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