Antecedents to buyer-seller collaboration: An analysis from the buyer's perspective

Abstract

This study investigates factors that motivate buyers to form close, collaborative ties with their suppliers. The resource dependence and transaction cost analysis paradigms provide the conceptual framework used to investigate governance structures employed by buyers with their suppliers in the aerospace and automotive parts industries. A model of the factors hypothesized to influence a buyer’s decision to build collaborative ties was developed and tested on the aerospace and automotive divisions of a large manufacturing firm. It was hypothesized that the importance of the transaction has a positive relationship and specific investments made by suppliers has a negative relationship with buyers’ perceptions of dependence on their suppliers. In addition, this perception of dependence will lead to higher transaction costs. Finally, increased dependence and transaction costs will lead buyers to attempt to forge collaborative ties with their suppliers. The results, based on responses from 65 purchasing managers, show that transaction importance is positively associated with perceived buyer dependence and specific investments have a negative association. The results also support the hypothesized positive relationship between dependence and transaction costs and suggest that higher levels of both buyer dependence and transaction costs are factors that influence the decision to choose a more collaborative governance structure.