Business Relations

AAA

DEFINITION of 'Business Relations'

The connections that exit between entities involved in the business process. The term business relations refers to the connections formed between various stakeholders in the business environment, including relations between employers and employees, employers and business partners, and all the companies with which a company is associated.

For example, one company's business relations may include a long list of customers, vendors, sales leads, potential customers, banks, stockbrokers and any municipal, state and federal governmental agencies. Essentially, business relations are all of the entities with which a business is connected or expects to have a connection.

INVESTOPEDIA EXPLAINS 'Business Relations'

Businesses depend on the development and maintenance of vital relations with employees, business partners, suppliers, customers - any person or entity that is involved in the business process. Companies that intentionally cultivate and maintain connections may be more successful than those that ignore these connections. Strong business relations can promote customer loyalty, customer retention and collaboration between businesses in the supply chain.

From a financial standpoint, business relations can theoretically make or break a business. Strong relations can lead to better business processes, improved communications, better policies and procedures, and mutual cooperation, resulting in better products, services and revenues. Weak relations can lead to detrimental outcomes, including unhappy employees, dissatisfied customers, negative reputations and limited growth.

Many companies use a number of strategies to ensure strong business relations are fostered and appropriately maintained. Relations may be established through a number of means including social media, emails, phone calls, face-to-face meetings, etc. Relations can similarly be maintained through frequent contact (by phone, email, in person, social media, etc.).

Primary advantages of developing and maintaining business relations include customer and employee loyalty, building a positive company image and increased business performance, all of which can be important to the company's bottom line.

RELATED TERMS
  1. Sales Lead

    A prospective consumer of a product or service that is created ...
  2. Business-To-Business Advertising

    Marketing efforts directed toward other businesses rather to ...
  3. Business Model

    The plan implemented by a company to generate revenue and make ...
  4. Business To Business - B To B

    A type of commerce transaction that exists between businesses, ...
  5. Business To Consumer - B To C

    Business or transactions conducted directly between a company ...
  6. Value Of Risk (VOR)

    The financial benefit that a risk-taking activity will bring ...
RELATED FAQS
  1. How do the C-suite members work together to make a successful company?

    Corporate managers, typically chosen by a board of directors in large organizations, are ultimately responsible to stakeholders ... Read Full Answer >>
  2. How can a business determine its most effective value proposition?

    To determine its most effective value proposition, a company must make a purposeful effort to craft a unique value proposition ... Read Full Answer >>
  3. What does a merger or acquisition mean for the target company's employees?

    Suppose one sporting goods manufacturer merges with or acquires another sporting goods manufacturer. Before the merger and ... Read Full Answer >>
  4. What is the difference between a principle agent problem and moral hazard?

    Principal-agent problems and moral hazards are related in that one gives rise to the other. Principal-agent problems occur ... Read Full Answer >>
  5. What is the best reason to pursue a backward integration?

    Saving money on costs and improving efficiency are two good reasons to pursue backward integration. Backward integration ... Read Full Answer >>
  6. Is backward integration the same thing as vertical integration?

    Backward integration is a type of vertical integration, but they are not the same. Vertical integration is the process of ... Read Full Answer >>
Related Articles
  1. Professionals

    Keeping Clients Through Good And Bad Times

    If you work in the financial industry, the secret to keeping clients happy is to be consistent.
  2. Professionals

    How To Target Ideal Customers

    Expand your definition of a lucrative client and uncover a new realm of possibilities.
  3. Entrepreneurship

    10 Breakout Ideas For Small Businesses

    If your business has hit a wall, we've got the answer to break through and increase sales and earnings.
  4. Economics

    Top 10 Cities For Grads To Get Jobs

    A look at latest employment stats.
  5. Investing News

    A New Corporate Governance Initiative In Japan

    Expectations are low that Japan can create a corporate governance climate that meets global standards, but a new initiative is aimed at doing just that.
  6. Investing

    What Tech Companies Seeking Funding Must Overcome

    Tech companies face a unique set of challenges, including a need for timely responses to changes in technology and difficulty recruiting the right talent.
  7. Economics

    Vietnam -- New Asian Hot Spot For Tech Investment

    Vietnam now has a rapidly expanding tech sector that's attracting investors from around the globe due to low business costs and highly skilled workers.
  8. Economics

    Gas Dispute Poses Risks For Both The EU And Russia

    The Russia-Ukraine gas dispute has caused energy insecurity for the EU, which is seeking new gas suppliers, and market uncertainty for Russia's Gazprom.
  9. Stock Analysis

    Will American Airlines Fall Back To Earth In 2015?

    The airline industry enjoys blockbuster profits, and American Airlines Group has been a key beneficiary of the favorable trends that have lifted stocks.
  10. Stock Analysis

    3 Things I Learned From The Container Store's 10K

    Since going public at the end of 2013, The Container Store's shares have fallen by roughly half their value. But not all is not lost.

You May Also Like

Hot Definitions
  1. Adverse Selection

    1. The tendency of those in dangerous jobs or high risk lifestyles to get life insurance. 2. A situation where sellers have ...
  2. Wash Trading

    The process of buying shares of a company through one broker while selling shares through a different broker. Wash trading ...
  3. Fixed-Income Arbitrage

    An investment strategy that attempts to profit from arbitrage opportunities in interest rate securities. When using a fixed-income ...
  4. Venture-Capital-Backed IPO

    The selling to the public of shares in a company that has previously been funded primarily by private investors. The alternative ...
  5. Merger Arbitrage

    A hedge fund strategy in which the stocks of two merging companies are simultaneously bought and sold to create a riskless ...
  6. Market Failure

    An economic term that encompasses a situation where, in any given market, the quantity of a product demanded by consumers ...
Trading Center