An Interaction Orientation Approach to SME-Intermediaries Relationships

Abstract Small and medium-sized enterprises (SMEs) engaging in foreign operations have drawn significant research attention in recent years. One of the aspects linked to such operations is SMEs’ expansion to foreign markets, often relying on local intermediaries. These intermediaries provide the firms with valuable resources such as market knowledge and recognition and reduce foreign operations’ costs. Hence, they are often considered as strategic partners. The current study aims to expand the existing knowledge regarding the relationships between business to business SMEs and their intermediaries by exploring interaction orientation as an organizational cultural aspect and its linkage to the trust-conflicts balance. Based on a survey of 165 international venture managers, complemented by in-depth interviews with 16 senior export managers, we found that by incorporating interaction-orientation constructs into the relationship management, SMEs can enhance affective trust while mitigating conflicts. We also reveal that the impact of emotional and task conflicts on SMEs’ performance is mediated through calculative trust, indicating the benefits of balancing between relational and formal governance.