EMPIRICAL FINDINGS
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Hangzhou is the capital of Zhejiang province and Jiangsu is its neighbour province.
Both provinces are known for their comparative advantage in textiles and related ac-
cessories.
The purpose of this case study is to examine the evolution of specific relationship
patterns within the company’s supply and production networks in China and to dis-
cuss the role and effects of interpersonal relationships to nurturing, developing and
maintaining supplier relationships at firm level. Initially, it would be useful to note
the organisational structure of the foreign-owned company in China. There are four
interrelated departments: the Operations, Technical, Sales and Administration Depart-
ments. The Operations department includes the project, purchasing, and production
functions. The key informants in this study are the Operations Director and the PD
and Project managers. In terms of the social sampling technique used to identify key
informants, it should be noted that the Project manager is a close friend to the re-
searcher. The Project manager in turn introduced the other two participants. The Op-
erations Director, who co-founded the company in China almost a couple of decades
ago allowed access to company sites.
As has been noted the foreign-owned company has a large supply base in China and
multiple relationships with indigenous Chinese manufacturers. Hence, this case study
provides potential ground to examine how a foreign-owned company manages sup-
plier relationships in China. In the beginning of 2008, Endysis HZ set up a Supplier Re-
lationship Marketing (SRM) function to assist with developing and maintaining rela-
tionships with suppliers. However, after three months of operations, the SRM function
was dissolved. The Operations director explains in an interview that Chinese central
business actors were not satisfied in interacting with employees of the SRM function,
as these employees could not make decisions at once, mainly because they were not
senior employees and they had to communicate internally with other business actors,
which slowed down response time and caused knowledge hoarding problems in vari-
ous stages of the product development process. The Operations director also notes
that communication with local Chinese suppliers takes place through phones rather
than emails and in general, relationships with suppliers in China are nurtured, devel-
oped and maintained through face-to-face communications on a daily basis.
The Operations director explains that in China due to close interpersonal relationships
sometimes it feels like Endysis HZ owns a supplier’s factory. Paradoxically, the same
interviewee notes that in China everything can happen and business relationships
are not based solely on interpersonal relationships and trust. However, the inform-
ant stresses the significance of interpersonal relationships to the product develop-
ment process and the implementation of contractual agreements. As it is mentioned
later on, although having established a good working relationship with a supplier, and
signed a contractual agreement, interpersonal relationship ties may become weak or
