Antidotes to the Dark Side of Collaborative Buyer-Supplier Relationships

Abstract

Some scholars have recently warned us of the potential “dark” side of collaborative buyer-supplier relationships (BSRs). They are concerned about the loss of objectivity, increased opportunism and unnecessary redundancy. Our study extends this research stream by examining the mechanisms that can prevent or mitigate these negative outcomes. We consider, as social/incentive mechanisms, rotation policies and challenging goals, and as transactional mechanisms, detailed contracts and bilateral dependence. We also examine time-horizon factors such as the shadow of the past (interaction history) and shadow of the future (expectation of continuity) that can moderate these negative outcomes. We build on the theory of social capital and use primary survey and archival data encompassing 133 BSRs. As post hoc, we identify and interview seven buying companies on the dark side and four of their suppliers to collect contextual data on how they were coping with the dark side. The results confirm that buyers fall prey to the dark side when they have long working history and high expectation to continue with their collaborative suppliers. The results also point out that buyers can delay the arrival of the dark side by using contracts with detailed contingencies, fostering challenging goals, and adopting a policy of negotiator rotation. We finally discuss our study’s implications to theory and practice.