On How Relationship Embededness Influences Business Performance

Relationship management plays a decisive role in Chinese enterprises. In this paper, relationship embeddedness is defined as relationship strength and relationship stability, which can be further divided into relationship sustainability, relationship tightness, relationship integrity, relationship reciprocity and relationship stability. The six external relationship bodies are defined as suppliers, customers, peers companies, regulatory agencies, research institutions and financial institutions. A path model through which relationship embeddedness influences business performance is constructed in this paper and a questionnaire is designed. What´s more, the results of two experiments are analyzed empirically with the help of structural equation modeling and regression analysis. Through these analysis, the path how relationship embeddedness influences business performances via organizational learning capacity is proved and the degree of importance of various factors is also obtained. Based on these results, suggestion is proposed that relationship management should be conducted from three aspects: firstly, the content of relationship management need to be clarified; secondly, effective measures need taking concerning relationship strength and relationship stability; thirdly, classified management is needed to manage the six external bodies in order to improve the management effects.