Abstract
The purpose of this paper is to illustrate how the so called resource-advantage perspective can be used to determine the importance of specific relational and transactional dimensions of buyer- supplier relationships in driving relationship competitiveness within a transnational company (TNC). The main objective of our research was to analyze which and how much specific relational and/or transactional dimensions of buyer-supplier relationships affect TNC buyer-supplier relationship competitiveness. Based on an illustrative empirical example, we tested a simple variance-based reflective Structural Equation Model (SEM) with main effects based on a sample of 130 TNC buyer-supplier relationships. Our results show that buyer-supplier relationship competitiveness is mostly driven by interpersonal trust and joint problem solving (both relational determinants), as well as by two kinds of transaction-specific investments (TSIs), namely investments into people and physical assets. In terms of theoretical implications, our results show that the resource-advantage theory of competition can link both the relationship marketing and the transaction cost economics perspective of buyer-supplier relationship management. We further provide some managerial recommendations for more effective management of TNC buyer-supplier relationships in terms of leveraging competitiveness.
Highlights
Within the marketing literature, Dyer & Singh (1998), Kaufman, Wood & Theyel (2000), and Nishiguchi & Anderson (1995) explicitly point to buyer-supplier relationships as an important source of a company’s competitive advantage
Each mean score was calculated as a simple average from all the items reflecting a specific latent construct
If the square root values of Average variance extracted (AVE) on the inter-construct correlation matrix diagonal are larger than any single pair-wise correlation coefficient between any two constructs, this further satisfies the requirements for appropriate discriminant validity of our Partial Least Squares (PLS) Structural Equation Model (SEM) model, as pointed out by Chin (2010)
Summary
Within the marketing literature, Dyer & Singh (1998), Kaufman, Wood & Theyel (2000), and Nishiguchi & Anderson (1995) explicitly point to buyer-supplier relationships as an important source of a company’s competitive advantage. If a company’s competitive advantage is based on its supply relationships (Gaddé & Håkansson, 2001; Nagurney, 2010), the development and management of these relationships should be seen as an important source of organizational competitive advantage; which in turn provides the foundation for overall organizational competitiveness (Mráček & Mucha, 2011; cf Zich, 2010) This is believed to be especially true for transnational companies (TNCs), which Hymer (1979) has described as both “the dominant organizational form of modern capitalism” The increased specialization and outsourcing activities employed by TNCs today have made buyer-supplier relationships a focal point of organizational competitiveness, performance and long-term success (Veludo, Macbeth and Purchase, 2006).
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