Preferential treatment from the defense industry for the military

Abstract

Purpose The military of today depends on the availability and readiness of high-technology weapon systems. As the military often has to focus on core tasks (the usage of systems), logistics and support tasks are outsourced to industry, which means that industrial suppliers gain importance for making weapon systems available and mission ready. However, companies are profit-maximizing and invest their best resources in the most promising business areas, which might be clients other than the (domestic) military customer. This raises the question of how the military can ensure that the defense industry provides the best performance: preferential treatment for the military. The purpose of this study is to investigate preferential treatment in the specific context of defense. Design/methodology/approach This paper reports on the examination of factors influencing preferential treatment for the military. The analysis uses structural equation modeling and data from a sample of German defense suppliers. Findings The results show that the perceived customer attractiveness has a strong effect on preferential customer treatment. Attractiveness is influenced by trust, commitment and a comparison with other customers. Research limitations/implications There are several implications for defense theory and practice, including the need for further consideration of relational in contrast to transactional practices in military–industrial supply collaboration, as these seem highly relevant for getting the best resources for producing and maintaining weapon systems. In addition, increasing customer attractiveness, in particular if the military lacks a domestic defense industry base, is proposed. Originality/value The findings are based on a focus sample of only defense suppliers. This paper transfers the industrial discussion about the buyer–supplier relationships and preferential customer treatment to the defense logistics research context.