Influence of supplier development on supplier satisfaction: a mediating role of buyer–supplier relationship

Abstract

PurposeThe study aims to understand the influence of supplier development (SD) activities on supplier satisfaction through the lens of social capital theory (SCT) and to understand the mediating role of the buyer–supplier relationship (BSR) in improving supplier satisfaction (SS).Design/methodology/approachThe research is based on survey of 110 key informants belonging to 50 medium to small supplier companies in the Indian automotive sector. We employed the PLS variance-based modelling technique for the data analysis.FindingsThe investigation resulted in a comprehensive framework for SD activities influencing SS. Further findings recognize a positive influence of SD activities such as payment terms and BSR, which are components of structural social capital on the SS. SD activities such as quality management and delivery, which are indicators of relational capital, affect SS through the mediation of BSR.Originality/valueThe study confirms the role of BSR in SS. The deliberations can help the managers of buyer and supplier firms and researchers to classify and strategize SD activities to improve performance and BSR to become preferred customers through SS.