Introduction

Strategic relationships between organizations

Strategic account management (SAM) strategies are a prime example of the new type of collaborative, strategic, value-chain relationship which is coming to characterize the route to market for many major supplier organizations (Piercy 2009). Although a distinct strategy in its own right, SAM shares many of the characteristics of other strategic inter-organizational relationships, which underlines the benefits of a broadening perspective concerning the management issues faced in sustainable and effective SAM.

In fact, the formation of strategic relationships among suppliers, producers, distribution channel organizations and customers (intermediate customers and end-users) occurs for several reasons. The goal may be gaining better access to markets, enhancing value offerings, reducing the risks caused by rapid technological change, sharing complementary skills, learning and acquiring new knowledge, building sustained close relationships with major customers, or obtaining resources beyond those available to a single company. Strategic relationships of these kinds are escalating in importance because of the complexity and risks in a global economy, the skill and resource limitations of a single organization, and the power of major customers to insist on collaborative relationships with their strategic suppliers. Strategic alliances, joint ventures and strategic account collaborations are examples of cooperative relationships between independent firms (Cravens and Piercy 2013). We will argue that SAM should be understood as one example of the increasingly complex networks of connections between organizations.

Our reasoning is that along with other strategic inter-organizational relationships, SAM represents an important transformation taking place in industry after industry, driven by two factors. First, the age of mass production is largely over and customers demand unique value, so value is shifting from products to solutions and experiences, and consequently relationships are taking over as the central element of exchange. Second, no single business is likely to be big enough to cope with complex and diverse customer demands. This underlines the importance of alliances and networks to deliver customer value – constellations of suppliers that can be configured in different ways to meet different customer needs. Success will involve managing through new collaborative networks (Prahalad and Krishnan 2008).

Consider, for example, the transformation at IBM. A key element of IBM's business services strategy has been to multiply collaborative projects across all the major parts of the business. Collaborating with customers and even competitors to invent new technologies is part of IBM's strategy of openness. Sharing intellectual property in the form of software, patents and ideas is intended to stimulate industry growth and create opportunities for IBM to sell high-value products and services that meet new demands. IBM's ‘collaboratories’ are joint ventures for research with countries, companies and independent research establishments throughout the world. Through its collaborative strategy IBM has been transformed into a borderless organization working globally with partners to enhance the value of offerings to customers on a worldwide basis (Hempel 2011; Kirkpatrick 2005). Our logic is that SAM represents one form of inter-organizational collaboration, and that it shares the characteristics of other forms of this phenomenon.

Strategic account management relationships

It is clear that in managing relationships with large corporate customers, many selling organizations have moved to the adoption of SAM and global account management (GAM) approaches as ways of building teams dedicated to managing the relationship with the most valuable customers (Capon 2001, 2012). Procter & Gamble's 200-person team to manage its relationship with Wal-Mart, its biggest retailer customer, is illustrative. Importantly, strategic, key and global accounts (customers) are increasingly considered strategic partners.

Indeed, it appears increasingly the case that some customers may dominate a supplier's customer portfolio. These customers may pose substantial challenges because of their ability to exert considerable influence and control over suppliers. For example, like P&G, more than 450 other suppliers have established offices in Wal-Mart's home town of Bentonville, Arkansas, in order to be close to their largest customer, and Tesco exerts a similar effect in the UK (Wiggins and Rigby 2006). Nonetheless, it may be mistaken to regard dominant customers as strategic relationships or partners – they may simply be very large accounts with a conventional, though possibly imbalanced, buyer–seller relationship with suppliers.

However, the strategic significance of customer dominance should not be underestimated. For example, the merger of Gillette with Procter & Gamble in 2006 created the world's largest consumer brands group, with a combined portfolio of brands that gives the company a much stronger bargaining position with major retailers like Wal-Mart, Carrefour and Tesco. However, the merger also represents a significant change to P&G's business model, with a new focus on lower-income consumers in markets such as India and China. In positioning in these emerging markets, P&G is deliberately not partnering with powerful global retailers. In China, Gillette offers P&G access to a huge distribution system staffed by individual Chinese entrepreneurs – what P&G calls a ‘down the trade’ system ending up with a one-person kiosk in a small village selling shampoo and toothpaste. Importantly, the intent of P&G's strategy should be to achieve growth in Asian markets and reduce dependence on mature markets dominated by powerful dominant retailers (Grant 2005).

The general view seems to be that real strategic customers are those with which the relationship is based on collaboration and processes of joint decision-making, where both buyer and seller invest time and resources in the strategic relationship. For a growing number of companies SAM provides an innovative model for managing relationships with their most important customers.

Of course, the importance of these developments is underlined when customers actively promote concentration in their supply base and attempt to restrict supplier numbers. For example, in September 2005, Ford Motor announced its intention to cut its supply base of 2,000 by around half to reduce its $90 billion purchasing budget and to improve quality. By 2009, Ford had more than halved its global supply base from 3,300 in 2004 to 1,600, with a goal of quickly getting down to 750 suppliers. Ford targets seven ‘key suppliers’ covering about half its parts purchasing, with enhanced access to Ford's engineering and product planning. Ford will work more closely with selected suppliers, consulting them earlier in the design process and giving them access to key business plans on future vehicles, and committing to giving them business to allow them to plan their own investments (Mackintosh and Simon 2005; Simon and Mackintosh 2009). Interestingly, Ford cut the development cost of seats for the Focus sedan by awarding the entire global contract to a single supplier – Johnson Controls (Simon 2010).

The underlying rationale for SAM is that a supplier's most important customers require dedicated resources and special value-adding activities (such as joint product development, business planning, consulting services) in the value offering. Importantly, SAM is increasingly understood as a new business model that goes beyond conventional buyer–seller relationships to establish partnership and joint decision-making between the customer and the supplier. Nonetheless, there are substantial risks in high levels of dependence on strategic customers. Investments should be weighed against the risks of customer disloyalty and strategic change, as well as the perception of strategic customer privileges by the rest of the customer base. The attraction of SAM may rest on a degree of market and relationship stability which may not exist.

For example, in 2005 Apple Computer announced an end to its long-term strategic relationship with IBM as the supplier of microprocessors for Apple desktop computers, and named Intel as the replacement. Apple believes that Intel can provide components for the products of the future, with higher performance and lower prices. Supplier switch is increasingly viewed as a strategic move by companies like Apple to leverage their competitive position, which takes higher priority than loyalty to existing strategic suppliers. Indeed, supplier switch of this kind may be an inevitable consequence of strategic change (Morrison and Waters 2005).

Importantly, if we see SAM as an alliance-based relationship rather than a simpler buyer–seller linkage, then it is likely that the success of the relationship will depend heavily on effectively matching the capabilities of the participating organizations and on achieving the full commitment of each partner to the relationship. The benefits and the trade-offs in the relationship must be favourable for each of the partners. The contribution of one partner should fill a gap in the other partner's capabilities. However, we will argue below that the unintended consequences of this process of matching and the realignment of goals and processes that is likely to ensue may create serious weaknesses. Alliance-based relationships may create behaviours which would not otherwise be undertaken and which would not otherwise be regarded as attractive or even acceptable corporate practices.

For example, one important concern in the alliance-based SAM relationship is that the partner (buyer or seller) may gain access to confidential technology and other proprietary information, which may be detrimental to the interests of third parties. While this issue is important, the essential consideration is assessing the relationship's risks and rewards and the integrity of the SAM partner. A strong bond of trust between the partners exists in most successful relationships. The purpose of the relationship is for each partner to contribute something distinctive rather than to transfer core skills to the other partner. It is important for the managers in each organization to evaluate the advisability and risks concerning the transfer of skills and technologies to the partner. Poor judgements in this area may lead to breaches of ethical standards and even unlawful degrees of collaboration.

Relatedly, it is important to recognize that strategic account relationships may be fragile and difficult to sustain effectively, particularly if there is a lack of trust or mutuality of interest between partners. Moreover, careful analysis is required of the impact of a failed relationship on a company's remaining ability to compete and survive. The higher the level of dependence on a partner organization, the greater the strategic vulnerability created if the relationship fails.

Broadening the management perspective on SAM

Our goal here, drawing on the comments above, is to suggest a number of ways in which the management approach to SAM may usefully adopt a broader perspective than has been the case in most instances to date. In part this reflects the maturing of the SAM concept itself, as well as important changes in the business environment. The questions we address are concerned with opportunities to build stronger and more sustainable relationships with strategic customers, but also with highlighting the risks and pitfalls that may be encountered and that should be avoided before they become damaging.

Specifically, we wish to draw attention to the following issues.

Ethical dilemmas in SAM and how to avoid them

The domain we examine in this section of the paper is defined by the relation­ship between the strategic account manager in a selling organization and the purchasing organization of the large and very large customer. More generally, the advance of the study of marketing ethics has been supported by studies carried out at what may be called critical stress points, such as the ethics of marketing research or salesforce management behaviour. Such critical junctures are points at which marketing ethics considerations are both important and highly pro­blematic. In this tradition, our study is concerned with a critical juncture in the value chain relating to the relationships between sellers and large buyers, most particularly where these are formalized into strategic account management arrangements.

However, it is likely that, as with many marketing and selling situations, many executives will not perceive strategic buyer–seller relationships situations as manifesting ethical issues (Singhapakdi 1999). This differentiation is reflected in the concept of moral intensity – ‘the extent of issue-related moral imperative in a situation’ (Jones 1991). Moral intensity consists of six components: magnitude of consequences, social consensus, probability of effect, temporal immediacy, proximity and concentration of effect. The suggestion is that issues of high moral intensity will be recognized more readily and ethical intentions established more frequently than is the case with issues of low moral intensity (Singhapakdi and Vitell 1990). Nonetheless, manager perceptions of low moral intensity do not necessarily align with realities, particularly as those realities are perceived by others, such as regulators.

Our concern is that major selling and buying organizations have, in effect, created a new type of boundary-spanning role or interface, the successful performance and operation of which potentially requires an individual executive to covertly undertake behaviours which are potentially unethical, possibly dubious morally, and in extreme cases even unlawful. We will provide examples to illustrate the basis for this concern. Our case suggests the need to assess more carefully the definition of the role of the strategic account manager to accommodate stricter limits on what is, and what is not, acceptable behaviour, regardless of short-term performance imperatives.

In spite of the growth of SAM approaches in many sectors, recent studies suggest that while SAM is one of the most fundamental changes in marketing organization, it is one where a sound research foundation to guide management decisions remains largely lacking (Homburg et al. 2002; Workman et al. 2003). In particular, we can find no sign in the relevant literature that any critical study has been undertaken of the potential for ethical problems or moral conflicts in the SAM relationship itself or in its consequences. Certainly, it has been suggested that policies of active collaboration between companies and their suppliers are attractive in avoiding the ‘dog eat dog’ philosophy of buyer–seller confrontation, and that the implementation of these buyer–seller collaborations should be based upon ‘deep-rooted ethical values’ (Valenzuele and Villacorta 1999). However, what has not been considered are the outcomes if collaborative buyer–seller relationships are not, in fact, based on deep-seated ethical values, or if the collaboration is not perceived by executives as having an ethical dimension, or indeed if executives do not believe that they or their organizations should consider moral issues as a significant context for collaboration.

The urgency and topicality of the issue we address is underlined by contemporary suggestions that increasingly corporate incentive structures and business strategies push in directions that are at odds with ethical behaviour, producing a situation where executives may feel penalized, not supported, for raising ethical questions. This personal conflict may be exacerbated by the short-term bias of investors providing yet more pressure to support unethical behaviour in critical business relationships (e.g. Plender and Persaud 2005, 2006).

In this part of the article, we examine and illustrate three aspects of strategic account management relationships which pose moral and ethical dilemmas: (1) the impact of seller strategy which favours a few customers at the expense of the many; (2) the potentially harmful, though sometimes unintended, consequences of the strategic account relationship; and (3) the dilemmas faced in implementing the strategic account manager role, as it relates to information sharing across organizational boundaries, trust between partnered organizations and the principle of ‘keeping promises’, and the hidden incentives encouraging unethical behaviour which may be implicit in some strategic account management models. Finally, we consider the ways in which organizations may address the dilemmas we have identified.

Our argument is framed around what we suggest to be some of the important ethical and moral dilemmas faced by senior corporate managers, strategic account managers and strategic purchasing executives in the way they reach decisions relating to the strategic account/strategic supplier relationship, i.e. the moral judgements, standards and rules of conduct they generate and apply (Gundlach and Murphy 1993). In fact, it could be argued with some merit that in fact what we are considering is not an attribute of SAM per se but rather of the relationships that suppliers have with their large and very large customers. This is to some extent true, since the dilemmas on which we focus largely exist because of the imbalance of power and the exercise of that power by one party over the other, albeit in the guise of collaboration and partnership. However, it is also the case that by creating a new organizational role to contain and isolate these problematic relationships, organizations have not removed but have at best obscured the dilemmas we identify. Worse, the SAM role, typically held by a relatively junior executive, is in danger of becoming a way for more senior management to disclaim responsibility for moral issues in relationships with large customers.

While accepting that the situations we describe characterize the supplier–large customer relationship, we are particularly concerned about the effect of strategic account management roles on the reality of that relationship and the risk that this new management approach introduces additional moral and ethical hazards.

Interestingly, analysts of strategic alliances have drawn attention to several aspects of relational risk, including when a partner undertakes self-interested opportunistic behaviour at the expense of the other party (Das and Teng 2001). Several theoretical frameworks indicate that the opportunity to take advantage of the other party in an alliance negates the advantage of strategic alliance, and that opportunism should be replaced by cooperation. However, the mutual trust necessary can be achieved only through ethical conduct between the parties (Daboub 2002; Daboub and Carlton 2002). A study by Daboub and Calton (2002) adds further insight to the nature of the emerging ethical and moral dilemmas faced in strategic account relationships. They argue that the complexity and change in the business environment have mandated the development of new inter-organizational relationships, which importantly ‘has resulted in the disaggregation of the value chain and the disaggregation of ethical and legal responsibility’ (p. 96). If strategic account relationships are a relatively new manifestation of the network forms evaluated by Dabaub and Calton, then a similar conclusion about the loss of ethical foundations may hold true. However, while these issues have achieved some recognition in the strategic alliances literature, they have been largely ignored in the study of strategic account management. We propose that dilemmas exist with respect to several characteristics of strategic account management/strategic supplier management relationships.

The good of the few versus the good of the many

The attractions of a relationship marketing strategy that focuses attention and resources onto strategic accounts have been widely rehearsed in the literature. The underlying logic is that favoured treatment of key partner organizations, as strategic accounts, can reduce customer costs, increase product quality and increase customer satisfaction, while at the same time reducing seller expenses, achieving economies of scale, gaining access to markets and technology, and creating barriers to entry for competitors (e.g. see Fontenot and Hyman 2004; Gundlach and Murphy 1993; Kalwani and Narayandas 1995). SAM offers the promise of sustainable competitive advantage by developing intense, long-term marketing relationships with key partners that are difficult for competitors to duplicate, and by vertical integration, possibly to the extent of exclusive dealing or single-source relationships (e.g. see Buchanan 1992; Weitz and Jap 1995).

However, by implication, strategic account management is a policy that favours the few (the strategic accounts) at the expense of the many (smaller accounts and other organizational stakeholders). The fact cannot be avoided that such focus on strategic accounts can be achieved only at the expense of others who are not party to the collaboration between buyer and seller and its details. Indeed, if there were no such advantage for the buyer, then there would be no basis for a strategic account/strategic supplier relationship. For example, most obviously, concessions and special treatment for strategic accounts may be at the expense of the supplier's smaller customers, who pay higher prices and receive less advantageous terms of trade. This may have a two-fold effect: first, smaller accounts receive poorer value than strategic accounts, thus negatively influencing their profitability; but second, if they compete with the same strategic accounts in a shared end-user market, their competitiveness is undermined and their long-term survival may be threatened. In a very real sense, smaller accounts may pay more not because they are more expensive to serve but because they lack the power to demand and obtain lower prices. A business model which institutionalizes and legitimates this form of cross-subsidy raises a moral question of whether it is right or fair to treat smaller customers in this way. (Relatedly, policies of cross-subsidy are actually illegal in some countries and can attract substantial legal penalties if they are uncovered.)

Alternatively, it can be argued that advantageous terms offered to strategic accounts are at the expense of shareholder interests. Interestingly, while formal strategic alliances are normally matters of public contract and open to scrutiny, and financial mergers are subject to shareholder permission by ballot, strategic account relationships are not normally subject to the same scrutiny or right to reject by the owners of the business. Indeed, conceding excessive advantages to strategic accounts may also be to sacrifice the long-term value of the company to its owners, by sacrificing long-term profitability for short-term gains in sales and market position.

Advocates of SAM would doubtless argue that the natural process of market concentration means that some customers will be more important than others, and that it is therefore both reasonable and perhaps inevitable that they will receive more advantageous terms of trade from suppliers than other, less important customers. There is a degree of truth in this viewpoint. However, it is also the case that for suppliers who conform to this pattern of behaviour, one consequence is that they further enhance the bargaining power of their major customers and have to live with the consequences, which may be undesirable both for themselves and for others. Customers with market power are likely to use that power in their own interests, and to use additional power yet more. Of course, there remains the unresolved question of whether any supplier is likely to jeopardize future relationships by making such a formal complaint about a dominant customer.

Importantly, there seem to be some doubts that customers treated as the ‘favoured few’ will actually reciprocate this favour with their suppliers. Strategic account relationships may in this sense be based on an implied promise of loyalty and collaboration which is not kept. Consider, for example, the troubled automotive parts supply marketplace. For some years, suppliers have experienced pressure from their major carmaker customers to hold down or reduce prices, while raw material costs have been escalating. Faced with stagnant demand for cars, and increasingly fragmented markets, car manufacturers have moved back towards treating suppliers as adversaries rather than ‘trusted partners’. Suppliers with long-term strategic relationships with major customers are now faced with the reality that the concessions they have made to sustain a relationship may have been in vain because the customer may not keep the implied promise of partnership. In this sense, inter-organizational relationships that are not grounded in ethical exchange may also be highly unattractive in commercial or economic terms.

Lastly, there are risks that the relatively covert operation of buyer–seller collaboration formalized in the SAM strategy may also lead towards actions that are prohibited under competition law and that are hidden until late in the day. Since the object of relationship marketing and SAM is to create mutually beneficial alliances with strategic accounts, they are likely to restrict trade among competitors by creating barriers to entry (Williamson 1979). If the relationship is coercive, restricts competition, discriminates among different classes of customer or inhibits innovation, then it may violate competition law in several parts of the world, but importantly in such situations ‘stakeholders such as employees, customers, communities, channel members, competitors, and governments may be harmed’ (Fontenot and Hyman 2004). If, for example, a supplier sells products and services to a strategic customer at prices that are less than variable cost, while charging other customers prices higher than variable cost, there is a prima facie case for anti-competitive behaviour.

While global generalizations are difficult, due to differences in legal systems and enforcement policies in different countries, it is certainly valid to underline the pragmatic need to balance ethical, legal and economic responsibilities (Carroll 1991). However, constructs like Carroll's ‘pyramid of social responsibilities’ underline the case that to rely only on legal frameworks to judge the acceptability of buyer–seller relationships is a relatively weak way of confronting issues which may simply be judged as ‘wrong’ against many prevailing sets of norms. The legal boundaries separating abuse from normal business practice are somewhat blurred and are apparently becoming more so (Buck 2005). The puzzle of equating that which is unpunished with that which is morally justified suggests that the rightness or wrongness of actions in managing strategic account relationships may require other forms of evaluation than the purely legalistic.

More generally, it is suggested that the law alone is insufficient to ensure that corporate behaviour does not act against the interests of owners, third parties or the wider interests of society. Legal regulation may simply codify the lowest common denominator, while lagging behind the way in which markets and corporate strategies have evolved. In addition, business strategies have side effects – externalities – that are typically not considered in regulation. Hence, ‘there is a need for ethical behaviour that goes beyond complying with the law, especially in the gray areas where managers face conflicting priorities’ (Plender and Persaud 2006).

Our study of the available literature on strategic account management has failed to locate any consideration of ethical or moral dimensions of this business model. We suggest that perceived moral intensity is low. Nonetheless, a prima facie case can be made for the view that, at least in some cases, strategic account relationships are morally undesirable if they are unfair to smaller customers, introduce or reinforce competitive distortions in end-user markets, provide a vehicle for covert anti-competitive behaviours and lack shareholder mandate. Guidelines for ethical exchange propose principles of equality, commitment, equity and loyalty, while anecdote and observation suggest broken promises, one-sided commitment and illusory reciprocity between partners. It would be exaggerated to suggest that all strategic account relationships are flawed in this way, but we do suggest that the potential for abuse underlines the need for more searching scrutiny of the moral and ethical foundations of strategic account relationships than appears to be the case currently.

Moral dilemmas in implementing the SAM executive role

In addition to the unintended consequences of decisions made to very large customers, and the degree to which favouring one small customer group at the expense of others meets reasonable standards of fairness and equity, attention should be given to the effects of strategic account management approaches on the individual executives concerned. In particular, these concerns revolve around the possibility that in order to effectively implement the organizational role which has been allocated, executives may be in a position where they are de facto required to take actions and make decisions which offend their own codes of conduct, their own organizations' ethical and governance standards, and more general concepts of fair dealing between buyers and sellers. Indeed, as noted earlier, executives in some circumstances may be placed in a situation where the SAM role presses them to undertake behaviours which may be or may become unlawful. This argument is illustrated by considering the questions of information exchange between buyer and seller within the strategic account relationship, and the degree to which actual or implied promises between the parties can be kept, as well as the incentives for unethical behaviour implicit in the strategic account model.

Addressing the moral and ethical dilemmas in strategic account management

Nonetheless, we have seen that the business attractions of SAM as buyer–seller are substantial. So the question becomes, how should executives protect a valuable business approach from the moral and ethical dilemmas we have identified? At its most extreme, our concern is that the increasingly widely adopted strategic account management approach to managing buyer–seller relationships is a seriously flawed means to achieve an end that may itself be morally dubious. It arises from the relationship between selling organizations and their most important customers – often very large, powerful customers. The existence of the dilemmas we have identified has been largely ignored or denied in the extant literature. For this reason, a significant enhancement of current practice would involve actions simply designed to leverage perceptions of moral intensity in the management of strategic account relationships. At present, this major area of business concerned with critical buyer–seller relationships appears to exist and operate in a moral vacuum, where policies, actions and their consequences are framed only by relatively short-term economic criteria. We suggest that there are a number of ethical and legal considerations, which should be evaluated concerning the operation of SAM/strategic supplier relationships.

The responsibility for stimulating an enhanced moral intensity rests with senior management, not with the relatively junior executives tasked with executing strategic account relationships. In particular, there is no reason why stakeholders should not expect the same standards of due diligence and fiduciary duties from top management in managing these new collaborative forms of buyer–seller relationship, as are commonly expected in other governance situations. This would suggest that senior executives should be asked to indicate the ways in which they have examined all aspects of strategic account relationships and to prove that they have not damaged the company and do not pose excessive risks to its survival and value, by virtue of the way in which these relationships have been enacted and managed. Such scrutiny could encompass wide-ranging issues – from the moral and ethical to the economic – allowing stakeholders to make informed judgements regarding the adequacy of management diligence in managing strategic account relationships. While managers may be misled or simply make errors of judgement, for them not to make a reasonable effort to recognize the plausible effects of strategic account relationships and their consequences for relevant stakeholders would appear to be morally unacceptable.

One starting point would be embracing a degree of openness and transparency in the conduct of strategic account relationships comparable to that required in situations where inter-organizational relationships involve formal mergers or acquisitions or contractual relationships. Generally it appears that strategic account relationships are shrouded in secrecy, conducted with a degree of covertness, and their operations often not fully revealed even inside the companies in question (for example, in terms of information sharing and price concessions). The defence of this lack of transparency is that proprietary and share-sensitive information is at stake, and norms of commercial confidentiality should prevail in considering sensitive relationships with major customers. However, by comparison, mergers and acquisitions involve substantial disclosure and a major duty of due diligence, and formal contractual alliances between companies possibly demand something similar.

We should be wary, of course, of substituting a legal or economic dilemma for an ethical one. For example, under US price-fixing laws, it is illegal under some circumstances to communicate pricing information to competitors (which could occur if a supplier publicized price structures to all buyers) (Fontenot and Hyman 2004). Equally, disclosures that reduce a company's competitiveness by better informing competitors about its strategies may be unreasonable. However, notwithstanding such constraints, there appears little real reason why the existence of ‘strategic partnerships’ between buyers and sellers should escape all disclosure requirements, by virtue of appropriate corporate governance rather than external mandate. Indeed, such disclosure should provide a level of detail allowing relevant stakeholders to evaluate the impact of strategic account strategy on their own interests, although clearly there is no guarantee they would do so.

For example, in a strategic account relationship the almost inevitable reality is that the purchaser will know the prices paid by other (usually smaller) customers, though possibly not always those paid by other strategic accounts. However, it is rare for smaller customers to be informed of the prices paid by larger, strategic accounts. A governance mandate of transparency for strategic account relationships would suggest that buyers and sellers should declare openly prices being paid, so that they are known to all relevant stakeholders. Indeed, this would potentially also expose whether the lower prices paid by strategic accounts do actually reflect economy of scale (which is probably unobjectionable) or whether they are the product of the use of market power by the large customer (a matter of considerable concern to smaller customers who consequently pay higher prices, as well as to shareholders who might question the attractiveness of allowing the majority of customers to effectively subsidize the largest customers). There appears a compelling case that enhanced transparency surrounding strategic account relationships would help to reinforce an ethos of ethical behaviour by executives.

There might also be appeal, given the strategic significance of large customers to suppliers, in providing a simple ethical framework for managers to consider. Here we draw on the recent work of Plender and Persaud (2006), who propose that developing an ethical culture surrounding a corporate issue may be approached more effectively by senior managers routinely asking probing questions about the nature and consequences of decisions being made, than by adopting formalized and complex ethical guidelines that reduce business ethics to a ‘box ticking’ exercise. In the area of strategic account management and strategy, such interrogation might take the form of such questions as:

• Who are all the people affected by the strategic account relationship with this customer – employees, managers, shareholders, competitors, other third parties, and the wider community and environment?
• Does this customer relationship actually or potentially cause harm to any of those affected, beyond the acceptable effects of fair competition? Are there reasonable things we can and should do to avoid or compensate for this harm?
• Has our behaviour been deceptive? Would you regard it that way if you were in any of the other stakeholders' positions?
• Are there disguised conflicts of interest between parties to the strategic account relationship, shareholders and those affected by the customer relationship?
• If everyone behaved in the way we are behaving, what would happen? If harm would result from everyone treating customers, third parties and shareholders as we are doing, should we refrain from continuing this customer relationship in its current form?
  
  

In addition, such questions should be incorporated in the training and development of executives for strategic account management positions, and addressed in personal appraisals. It has been suggested that in addition to the role of codes of ethics and ethical policies to promote ethical practice, one major impact on achieving ethical standards in marketing can be achieved by encouraging executives to consider the importance of ethics as a determinant of business success (Singhapakadi 1999). Asking questions becomes more significant if the questions are perceived to address issues that are truly important to executives.

However, while advances may be made through greater transparency and designing training and development activities that help executives to identify ethical issues in the situations they face, and to develop appropriate ethical responses, as well as designing evaluation and compensation plans that motivate and reward ethical behaviour (Roman and Ruiz 2005), this does not address the proposal that organizational conduct relies on top management leadership. Indeed, one long-standing argument in marketing is that because of its importance, ethics should be made an explicit and integral part of the strategic planning process (Robin and Reidenbach 1987; Wotruba 1990).

In the broader terms of developing appropriate governance mechanisms for new types of buyer–seller relationships, Daboub and Calton (2002) underline the importance of emerging frameworks, such as: (1) global corporate citizenship, emphasizing the links between financial performance, social performance, sustainability and environmental performance, to address the claims and rights of all stakeholders (Waddock 2002; Wood and Logsdon 2002); (2) the integrated social contracting theory of economic ethics, concerned with generating ethical norms appropriate to particular economic groupings, for example in the form of specific corporate- to industry-wide codes of ethics (Donaldson and Dunfee 1999); and (3) stakeholder learning dialogues, as a way of handling complex, interdependent and awkward problems, involving the social construction by shareholders of a trust-based form of governance (Daboub and Calton 2002). Approaches of these kinds provide mechanisms for addressing ethical concerns across partnered organizations, but also involving business leaders as well as more junior executives.

Certainly, Daboub and Calton (2002) provide an optimistic point to conclude. They underline the potential for developing relationships and culture for new organizational forms, such as buyer–seller collaboration, that are not only functional in delivering business success but are also consistent with legal and ethical norms. They stress the goal of governance that includes the voices of all stakeholders, particularly those with legitimate moral claims, but without the power to establish those claims. The challenge here is for managers to respond to these challenges in strategic account management.

SAM and corporate social responsibility

We now turn our attention to another dimension to the integrity and social standing of business that is also relevant to broadening the SAM concept, in the form of corporate social responsibility. Certainly, there is plenty of evidence that interest and concerns about ethics and social responsibility are escalating rapidly in importance for business organizations throughout the world, impacting on SAM and other new business models. In part these issues are driven by the belief that businesses should behave in an ethical way because it is the right thing to do, but also that they should deliver social benefits as well as meeting business goals. Importantly, perceptions of a seller's ethical standing and social contribution can have a direct impact on its attractiveness to customers and their willingness to buy (Piercy and Lane 2009, 2011). For this reason ethics and social responsibility questions are increasingly significant to the creation of effective customer relationships, the central issue in effective SAM.

Conclusions

Our focus here has been on the relationships between suppliers and large, often situationally powerful customers, which are at the centre of SAM models. Our goal was to broaden the SAM model to incorporate dimensions related to ethical and moral concerns and the related impact of corporate social responsibility on buyer–seller relationships. The first part of the paper started with the observa­tion that the ethical and moral issues implicit in SAM relationships have been largely ignored by the literature, perhaps because of the relative newness of the SAM approach, and perhaps because of the somewhat different scope of the model.

First, we raised questions about the moral attractiveness of a business model that favours the few (large customers) at the expense of the many (smaller customers, shareholders, third parties). Indeed, the relationships formed may even move into the forms of anti-competitive behaviours, which are unlawful. The morality of business decisions being made on the basis of the unbridled use of bargaining power by buyers, and the consequent concessions from suppliers, with scant regard to the harm caused to others, appears questionable. The evidence suggests also that those entering into such relationships should be aware that implied promises of loyalty and partnership may be an illusion, suggesting that economic consequences may also be unattractive in some cases.

Second, we considered the consequences of strategic account management relationships between suppliers and their large customers, albeit that some of those consequences may have been unintended. We suggest that the more harmful consequences of strategic account relationships appear to be neglected or perhaps unimagined by those establishing this type of business model. Whether those (unintentionally) harmed are employees, managers, competitors or society at large, there appear to be major ethical concerns about a business model that produces such consequences.

Third, we examined the potentially unfair and harmful impact of strategic account management on executives responsible for the implementation of this strategy, concerning primarily the potential for hidden incentives for unethical behaviour.

We suggest that the ethical and moral dilemmas in strategic account management approaches, and more generally in the relationships between suppliers and large customers, should be made more explicit, i.e. that management should make efforts to heighten the moral intensity surrounding these relationships. The ethical climate of strategic account relationships could also be enhanced by far greater transparency and openness and the pursuit by management of basic questions of fair and ethical conduct with those executives responsible for strategic account relationships. Progress could be made by recognizing moral and ethical issues in the training and development of executives for these management roles, as well as reflecting ethical standards of behaviour in evaluation and reward approaches. However, the underlying issue is more broadly about developing governance systems that address the impact of increasingly common inter-organizational business models on all stakeholders in the value chain, and that address issues of ethical and moral behaviour as well as economic interests.

In the second part of the paper, we turned to the related issue of the societal dimension of SAM, as it related to corporate social responsibility initiatives. At one level, it is clear that the minimum acceptable standards for ethical behaviour and social impact in business organizations have increased and continue to do so. Some of the behaviours of the past and denial of social responsibility are no longer sustainable by companies pursuing market success. Yet some of the case examples we have examined of ‘vanguard companies’ and a push for ‘creating shared value’ in new business models point the way to something more exciting than compliance and defensiveness. They underline the real and pragmatic potential for business models that deliver against both social and ethical mandates and against commercial business goals. However, we retain the argument that a starting point in linking CSR initiatives more closely to strategic marketing imperatives lies in the concept of customer value and particularly the development of value propositions built around CSR which resonate with customer priorities and needs. We argue that CSR will be important to strategic relationships with customers from several perspectives: the danger of becoming toxic and unattractive to the buyer because of poor CSR performance; the risk of competitive disadvantage if competitors can offer a better match with a customer's CSR aspirations and goals; but the opportunity to build real competitive edge based on matching CSR with customer strategy and partnering to deliver both commercial and social benefits.

While not welcomed wholeheartedly by all executives, we believe there is growing evidence that CSR will be a significant way of how business is done in the future, with particular implications for successful SAM.