Promoting relationship learning

The authors develop a theory of how management can develop and promote the learning capabilities of targeted customer-supplier relationships. The theory suggests that a supplier and a customer can improve their joint learning activities by facilitating information exchange, developing common learning arenas, and updating their behavior accordingly. The authors suggest that learning within a customer-supplier relationship cannot be mandated by either organization, but rather learning depends on both parties' willingness to cooperate in joint learning activities. Management can promote relationship learning by cultivating a collaborative culture, formulating specific objectives for joint learning activities, and developing relational trust. However, as relational trust develops, the effectiveness of learning is reduced as a result of "hidden costs" of trust. The authors use data from 315 dyads to test the theory empirically, and they find that the learning capability of a relationship has a strong, positive effect on performance. Their results also provide insight into how to address the hidden costs of trust.