Buyer–Supplier Relationships and Embeddedness

Abstract

Abstract This chapter begins with the observation that a supplier is embedded not only within the dyad (i.e., the buyer) but also within its own extended ties (i.e., its suppliers). Looking at the buyer–supplier relationships via the lens of embeddedness allows us to consider the duality of relational outcomes—the primary outcome contained in the dyad and the incidental outcome on the supplier’s part. The chapter conceptualizes dyadic embeddedness in the buyer–supplier context and demonstrates how that dyadic embeddedness is accountable for the diverse relational outcomes and helps resolve some puzzling observations that have been made in the literature. How a supplier relates to its buyer in the dyad constrains how it perceives and behaves outside the dyad, which in turn would have spillover effect on the buyer–supplier dyad. As such, taking the embeddedness view broadens our understanding of the dynamics of buyer–supplier relationships.