“Stress” in business relationships: a study on corporate bank services

Abstract

Purpose – The paper aims to discuss the interaction processes and short-term behaviours and motives in long-term relationships between banks and their corporate clients. Design/methodology/approach – The discussion is based on findings from four Portuguese case studies. Interviews made to major actors on both sides of each relationship were transcribed and analysed to investigate the buyer-seller interaction process, and the interplay between the actors involved. Findings – The paper contributes to knowledge concerning the nature of business banking relationships, provides insights about instability and stress therein, and suggests some factors that can generate or intensify that instability. Short-term irregularities and stress are found to arise in the context of relationships' longer-term continuity and stability. Research limitations/implications – The irregularities found were endogenous to the relationships and originated from one of the actors or from the transaction. No exogenous factors were analysed and further research should be done about them. Some instability was found associated with clients keeping a portfolio of banking relationships, but the management of such portfolios is largely unstudied, begging for more work. It is also suggested that the present study be replicated in other countries and contexts for comparative analyses. Practical implications – The paper provides a framework for corporate managers and bankers alike to better understand the process of banking relationships. It highlights some factors that should be monitored as they impact on buying behaviour and on the interplay between banks and firms. Originality/value – The paper highlights some “stress” factors that can impact on buying behaviour and on the interplay between banks and firms, providing a new insight about the instability of business relationships in the banking business, and suggests some factors that can generate or intensify that instability.