The extent to which a company is dedicated to a close and lasting relationship with another company is known as their relationship commitment. Without this type of commitment, trading partners are less likely to be able to work closely and cooperatively. On top of this, these inter-company relationships are becoming increasingly viewed as a vital factor in gaining competitive advantage in domestic and international markets.
Developing this type of commitment requires large amounts of time and effort including resources, products and services introduced purely to support the relationship. The related costs are even more of a problem in international business because of the hurdles companies face in developing and retaining business of this nature.
There are both psychological and behavioural dimensions within this relationship commitment, with the former referring to the degree of attachment between the business partners in the relationship. This includes aspects such as the core attitudes towards the relationship, the extent to which they believe them to be the partner of choice and the degree of long-term orientation.
The behavioural dimensions of commitment refer to the aspects of the relationship we can observe, such as how and where resources are allocated and developed. The resources include physical, human and financial. This is known as "behavioral commitment" or "resource commitment".