A model of buyer-supplier relationships in a transnational company: the role of the business network context

Abstract

The paradigmatic shift in marketing from the beginning of the 1990’s has transformed marketing in its view of business exchange to increasingly start addressing the relational aspects of market exchanges. This is particularly true in transnational supply exchanges, where specialization and outsourcing have increased the importance of effective and efficient management of buyer-supplier relationships, and their corresponding networks in which they are embedded in. In this regard particularly, TNCs are seen “as a [key] method of organizing international exchange” . The purpose of this paper is to analyze selected elements of buyer-supplier relationships within a specific TNC business-to-business (B2B) setting, vis-a-vis their impact on business performance and TNC competitiveness. This is done through the perspective of the TNC’s suppliers. The paper analyzes the impact of the functional aspect of the business network context on selected elements of buyer-supplier relationships, and their impact on business performance and the overall competitiveness. This is analyzed within a confirmatory testing of a reflective structural equation model . A unique feature of the model is its focus on the business network context - namely information obtained from the network and network spillover effects – as key network-embedded determinants of the “traditional” elements of buyer-supplier relationships (i.e. transaction-specific investments , trust , flexibility , and collaboration ), where these elements have been so far mostly studied at the dyadic level in buyer-supplier relationships. The dataset includes a sample of 157 suppliers of the focal TNC world-wide (47.9 response rate on a web-based survey).