Mediating the impact of power on supplier satisfaction: Do buyer status and relational conflict matter?

Abstract

Recent sociological and psychological studies suggest that the power dynamics (coercive and reward power), relational conflict, and the quality of the status-affecting relationship between partners should be analyzed in conjunction. This study applies this notion to supply chain management and buyer-supplier relationships to assess the implications for supplier satisfaction in buyer-supplier relationships. Structural equation modeling was used to analyze the survey data of suppliers of three buying organizations. The results show that a buyer's coercive power, conflict, and status have a strong impact on supplier satisfaction. However, the effect of coercive power is only indirect, significantly mediated by status, and causes relational conflict. Remarkably, the status of the buyers seemed to play a significant role in improving supplier satisfaction and reducing relational conflict. With regard to contributions, this study implements the concept of status to buyer-supplier relationships and highlights the strong and highly significant influence of a buyer's status on reducing relational conflict and improving supplier satisfaction. This implies that future studies on conflict and supplier satisfaction must consider buyer status as a central variable. Furthermore, this study suggests that although coercive power is not directly detrimental to supplier satisfaction, it indirectly impacts it by increasing relational conflict and demoting buyer status. Both status and conflict appear to be the significant mediators of the relationship between coercive power and supplier satisfaction. Future studies can build on these findings and continue research on the complex interplay among conflict, status, and power in buyer-supplier relationships.