Assessing the strategic fit between business strategies and business relationships in knowledge-intensive business services

a r t i c l e i n f o Drawing on the configuration theoretic approach, we posit that firms can improve both relationship performance and their overall firm performance through leveraging the structure of their business relationships, i.e. by accurately aligning their relationship structure with their specific business strategy. In the context of this research, we focus on the structural element of the relationship portfolio of a focal firm vis-à-vis its most important partners. We empirically test our argument within a sample of 254 knowledge-intensive business service firms and confirm the existence of an optimum relational configuration for each business strategy type. A fit as profile deviation analysis reveals that the more similar the configurations of relationship portfolio characteristics are to those of the top performing companies for their given business strategy type, the higher is both their relationship performance and their firm's performance. Several robustness tests lend additional support to this finding. Furthermore, we also conceptualize fit as covariation and find that relationship structure and business strategy co-vary, and that their coalignment significantly contributes to performance outcomes. We thus suggest that fit as covariation should be considered as a complementary approach to fit as profile deviation. In the era of knowledge economies, developing and preserving successful business relationships has always been a vital concern to managers of knowledge-intensive business service (KIBS) firms (Miles, 2005). Muller and Zenker (2001, p. 1502) define KIBSs as firms " performing, mainly for other firms, services encompassing a high intellectual value-added. " Miozzo, Lehrer, DeFillippi, Grimshaw, and Ordanini (2010) refer to KIBSs as providing business services based on professional knowledge (such as management consultancy and legal services) and emerging technical knowledge (ICT, and research and development services). KIBS providers are fast-growing and complex in nature, needing to achieve competitive advantage not only by using traditional levers, e.g. improvement in quality and productivity , but especially through building successful and effective business relationships with their clients While research on service innovations in the KIBS sector reveals the importance of such embedded business relationships, the extant literature is mostly linked to the knowledge-based view of the firm, wherein the ties between KIBS providers and their business partners are solely seen as a means for developing and transferring knowledge (Amara, Landry, & Doloreux, 2009; Muller & Zenker, 2001). In this research we look at KIBS providers' business relationships with their most important partners from the …