Business Relationships, Capabilities, and Firm Effectiveness: A Study of SMEs in Lagos State, Nigeria

This study aims at relating business relationships which provides a mutual forum for the interaction of the goals and the influences that affect the achievement of a desired objective by interacting with other firms in the industry and building relationship between employee and customer in other to serve them well with firms capabilities playing an important role in developing other firm capabilities for customer management, process management, and firm effectiveness. This paper attempts to fill the research gap that exist in developing capabilities to the management of business relationships in Small and medium Scale Enterprises(SMEs) by aligning customers business relationships with the firm capabilities so as to attain effectiveness in the firm operations. This paper employed one-way ANOVA to sample 62 SMEs located in Lagos State, it was affirmed that the development of business relationships coupled with management capabilities will lead to firm efficiency and finally effectiveness. This study suggest strategies that SMEs can adopt to manage customer relationships and business relationships shifting from crude methods to a more sophisticated portfolio characterized by a stronger presence of partnership and market relationships.