There is another option open to the aggrieved party and this is to “exit” the
relationship. Yet “exit” is, given the specificity of a modern organisation’s resources
(employees; knowledge; physical capabilities; reputation; etc.), not always, in the
short-term, a realistic option. Indeed the ability of many firms to make radical
changes to their product range or to find substantial new customers is very limited
and it is because of this that ‘exit’ is seen to be a “fairly radical means of coping with
inequity” (Adams 1965, p. 292) which will only be pursued where the inequity is
perceived to be substantial and likely to be on-going. Just how radical “exit” can
be is illustrated by Coats Viyella’s decision, after decades as a supplier to Marks
and Spencer, to withdraw from the relationship as this action resulted in Coats
Viyella closing factories and making 2,000 UK employees redundant (Barrie 2000,
p. 14). The implication of a supplier “exiting” a relationship is that, rather than
continuing its interaction with the existing customer, it can utilise its resources in
some other way which will enable it to achieve a more acceptable situation. In Coats
Viyella’s case its assessment was that the combined cost of closing its factory and
meeting redundancy payments was less than the on-going losses2
it was incurring and
expected to incur as a Marks and Spencer supplier. The closure was a “least worst
case” scenario. Alternatives open to a supplier in this situation include many different
policies such as, for example, engaging with a new customer to supply the same or
similar products; supplying a new range of products either to the existing customer(s)
or new ones; closing the business; etc
There is another option open to the aggrieved party and this is to “exit” therelationship. Yet “exit” is, given the specificity of a modern organisation’s resources(employees; knowledge; physical capabilities; reputation; etc.), not always, in theshort-term, a realistic option. Indeed the ability of many firms to make radicalchanges to their product range or to find substantial new customers is very limitedand it is because of this that ‘exit’ is seen to be a “fairly radical means of coping withinequity” (Adams 1965, p. 292) which will only be pursued where the inequity isperceived to be substantial and likely to be on-going. Just how radical “exit” canbe is illustrated by Coats Viyella’s decision, after decades as a supplier to Marksand Spencer, to withdraw from the relationship as this action resulted in CoatsViyella closing factories and making 2,000 UK employees redundant (Barrie 2000,p. 14). The implication of a supplier “exiting” a relationship is that, rather thancontinuing its interaction with the existing customer, it can utilise its resources insome other way which will enable it to achieve a more acceptable situation. In CoatsViyella’s case its assessment was that the combined cost of closing its factory andmeeting redundancy payments was less than the on-going losses2 it was incurring andexpected to incur as a Marks and Spencer supplier. The closure was a “least worstcase” scenario. Alternatives open to a supplier in this situation include many differentpolicies such as, for example, engaging with a new customer to supply the same orsimilar products; supplying a new range of products either to the existing customer(s)or new ones; closing the business; etc
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