Buyer abusive behavior and supplier welfare: An empirical study of truck owner–operators

Abstract

AbstractThe increase in stakeholder pressure for responsible business draws closer public scrutiny when buyers use their power advantage illegitimately to exploit weaker suppliers. In this study, we develop the novel concept ofbuyer abusive behavior(BAB) and examine BABs exerted by buyers of trucking services against truck owner–operators as their suppliers. This focus is timely given the recent emergence of online platform businesses where precarious work and associated worker abuse are prevalent. Building on the theory of power imbalance and risk‐taking behavior, we elaborate on how BAB can jeopardize supplier welfare that comprises performance and safety. The analysis of the data pertaining to 260 owner–operators in South Korea shows that contract‐unrelated BAB (e.g., buyer's request for money and valuables) harms supplier performance and supplier safety while contract‐related BAB (e.g., buyer's unfair subcontract price decision) does not. Furthermore, the positive relationship between supplier performance and supplier safety is attenuated by contract‐related BAB but reinforced by contract‐unrelated BAB. We contribute to the growing body of the literature on decent work by exposing BAB as a major detriment to supplier worker welfare and laying the groundwork for the development of theories on power abuse and working conditions in multi‐tiered subcontracting work environments.