The Determinant of Buyer’s Dependence in Value Creating Supplier Relationships in Industry Malaysia

Abstract

Purpose – The purpose of this paper is to identify the determinant of buyer’s dependence in value creating supplier relationship in industry Malaysia. Design/Methodology/Approach –The data for this quantitative study were gathered from 100 questionaire. The results are based on regression analysis and equation modelling by using SPSS software. Then, the data will be analysed in the relationship of each construct using the structural equation modelling approach. Findings – The findings of the study indicate that the value-creating activities of inter-firm learning and early supplier involvement increase buyer’s dependence, but a supplier orientation does not have similar effects. Practical Implications – The results have implications for supply chain managers and practitioners in terms of shedding light on the approaches of dependence and value creation at the same time. Managers need to understand the factors that create dependence, but which also have a substantial influence on value creation in supply chains and networks. Originality/Value – The literature review reveals that the supply chain situations in which the supplier is strategically important and its role in the value-creation process is significant, and when the buyer is dependent on the supplier, have rarely been discussed. Moreover, by focusing on the supplier relationship management activities that can be seen as value-creating activities and by combining this to the dependence perspective, this study aims to narrow the research gap identified from the previous research.