Power, Relationship Commitment and Supplier Integration in Taiwan

Abstract

This research extends power-relationship commitment theory to investigate the impact of power and relationship commitment on supplier integration from manufacturers’ perception toward their major suppliers in supply chain context in Taiwan. The power sources include expert power, referent power, legitimate power, reward power and coercive power, which can be categorized as non-mediated power and mediated power. Two types of the relationship commitment are studied, including normative relationship commitment and instrumental relationship commitment. The integration between manufacturers and suppliers (supplier integration) is measured by information integration and strategic integration. Based on a survey using data on 193 manufacturers in Taiwan, results indicate that coercive power has a positive influence on instrumental relationship commitment; however, reward power has no significant impact on any type of relationship commitment. Expert and referent power have positive impact on normative relationship commitment, while legitimate power has no significant influence on relationship commitment. Both normative and instrumental relationship commitment have positive impact on supplier integration and the former has a stronger influence than the latter. The findings can help companies enhance their supply chain integration by developing appropriate relationships with their suppliers.