Buyers’ Perspective of Buyer-Supplier Relationship Development: Interaction of Key Variables

Abstract

In this paper, we propose and test a three-stage model. A relationship begins at the Pre-Deal Stage (t-1), where, Buyer and Supplier Power are likely to impact Input Commitment. The relationship moves on to the Deal Enactment Stage (t), where the Input Commitment is likely to foster Low Relational Embeddedness. This, in turn, develops Contractual Trust that leads to a business deal and Attitudinal Commitment. Depending on requirements and mutual satisfaction, the relationship may then move to the Continuation Stage (t+1), where the developed Attitudinal Commitment enhances High Relational Embeddedness. From this comes Competence-based Trust and Temporal Commitment. Temporal Commitment and High Relational Embeddedness is likely to further produce Goodwill Trust and improved Overall Performance. This research study extends existing literature by empirically testing a cohesive model, which explains the different, multidimensional roles relational constructs can play in a relationship, and how these relationships evolve over time.