Buyer-seller Relationships Research Articles

Coworking spaces and Start-ups: Empirical evidence from a product market competition and life cycle perspective

This paper is an empirical analysis – based on classic buyer–seller relationship theory – of the spatial relationship between coworking spaces and start-ups in an entrepreneurial ecosystem. We examine the relation between product market competition among coworking spaces and the life-cycle stages of their partnering start-ups, both of which influence the level of trust between the partners. In our hand-collected sample of coworking spaces in Germany’s seven largest cities, our findings indicate that mature start-ups are more likely to partner with coworking spaces in regions where product market competition among the latter is high. The relation between the number of nascent start-ups and product market competition among coworking spaces is found to be hump-shaped, indicating that nascent start-ups are more likely to partner with coworking spaces where market competition is neither too low nor too high. Our findings are corroborated by a European study based on WeWork data.

Dark-side-effect contagion in business relationships

Business relationships are often a source of benefits for firms, but they can tip and unleash detrimental effects that diminish or even destroy relationship performance. Although prior studies on dark-side effects in business relationships have advanced the understanding of the phenomenon, they mainly relied on a dyadic perspective exploring single buyer–seller relationships. Yet business relationships are often parts of wider relationship portfolios and networks, and the characteristics of one relationship may have implications for other relationships. This article advances knowledge on the dark side of business relationships by introducing the concept of dark-side-effect contagion, which relies on the idea that dark-side effects can spread between business relationships. We develop a multi-level framework that accounts for inter-organizational, inter-personal, and intra-personal aspects of dark-side-effect contagion. This article contributes to the literature by extending the concept of dark-side effects in business relationships, thereby opening new lines of inquiry.

“That Was Fun, I Gotta Run:” Comparing Exit Strategies of a One-Time Sexual Encounter to Buyer–Seller Relationship Dissolution

Existing literature on sexual behavior has often examined several different types of casual sexual relationships (CSRs) collectively as a CSR as opposed to looking at each type of CSR individually. Research has previously looked at exit strategies in conjunction with committed relationships, but there is a dearth of research looking at how individuals exit noncommittal sexual encounters, such as a one-time sexual encounters (OTSE). This study aimed to examine exit strategies from an OTSE and then compare them to exit strategies used in business relationship dissolution. We gathered qualitative data from 48 participants and analyzed it using thematic analysis. Three main themes from this data were (1) communications that signaled the end of an OTSE, (2) actions taken that signaled the end of an OTSE and (3) agreements made about an OTSE. Eleven of our subthemes mapped on to the business model used. These findings demonstrate that OTSEs may be viewed as a transactional encounter instead of a short-term personal relationship by those who engage in them.

Addressing psychic distance and learning in international buyer-seller relationships: The role of firm exploration and asset specificity

The psychic distance paradox refers to inconclusive findings on whether psychic distance hinders cross-border performance. To examine the paradox in international buyer-seller relationships, we consider sub-dimensions of relationship learning: information sharing, joint sense-making, and knowledge integration. Our findings show firm exploration and asset specificity perform distinctive and complementing roles in addressing psychic distance. Firm exploration mitigates psychic distance challenge on both information sharing and joint sense-making. In contrast, asset specificity only alleviates psychic distance challenge on knowledge integration. Overall, this study extends understandings of the psychic distance paradox by specifying contextualized learning and critical contingencies in international buyer-seller relationships.

Optimizing a Sustainable Supply Chain Inventory Model for Controllable Deterioration and Emission Rates in a Greenhouse Farm

This study investigated how greenhouse managers should invest in preservation and green technologies and introduce trade credit to increase their profits. We propose a supply chain inventory model with controllable deterioration and emission rates under payment schemes for shortage and surplus, where demand depends on price and trade credit. Carbon emissions and deterioration are factors affecting global warming, and many greenhouse managers have focused on reducing carbon emissions. Carbon caps and tax-based incentives have been used in many greenhouses to achieve such reduction. Because of the importance of reducing carbon emissions for developing a green supply chain, various studies have investigated how firms deal with carbon emission constraints. In this continuation, we have used green technology to curb the excessive emissions from the environment or make it clean from CO2. In a seller–buyer relationship, the seller can offer a trade credit period to the buyer to manage stock and stimulate demand. Deterioration may become a challenge for most firms as they are under time constraints control, and preservation technology could help. This study proposes three novel inventory strategies for a sustainable supply chain (full backorder, partial backorder, and no backorder), linking all these important issues. The solution optimizes total annual profit for inventory shortage or surplus. We conducted a numerical study with three examples to evaluate the model’s authenticity and effectiveness and demonstrate the solution technique. The deterioration and emission rates can be included in a trade credit policy to increase greenhouse profits. The results suggest that greenhouse managers could apply the proposed model to manage real-world situations.

Joint Pricing and Inventory Model for Deteriorating Items with Maximum Lifetime and Controllable Carbon Emissions under Permissible Delay in Payments

Reducing carbon emissions plays a significant role in developing sustainable inventory systems. In a seller-buyer relationship, an allowable delay in payment is considered for the buyer to manage the stock and simulate the demand. Deteriorating items that usually have specific maximum lifetimes have become a challenge for most firms. Contrary to the importance of these issues, very little research has studied the impact of carbon emissions on deteriorating inventory systems. This paper provides a price-dependent demand for perishable items when carbon cap-and-trade regulation fills the mentioned gap. This model provides a carbon reduction investment scheme and illustrates this investment’s effect on the inventory system. This paper determines the optimal replenishment cycle and selling price, in which: (a) perishable items have specific maximum lifetimes, (b) a specific period of delay in payment is allowed for the buyer to accumulate revenue, (c) carbon is emitted due to ordering and storage operations and carbon cap and trade is regulated along with allowable carbon reduction investment. After developing the model, optimal values are obtained from necessary and sufficient conditions of optimality. Numerical experiments are proposed to validate the model. By developing an algorithm, the optimal values of replenishment cycle, selling price, and carbon reduction technology investment are obtained, and the impact of carbon emissions and efforts to control emissions are outlined. Finally, some managerial applications are mentioned, and future research directions are exposed.

Trust, commitment and business expansion in automotive supply chains in a developing country: a principal-agency perspective

The automotive industry is important for sustaining developing countries' economies. Literature states the South African automotive buyer-seller relationships are hampered by conflict where both parties reveal self-serving behaviour. This results in a decrease of trust and commitment, and increased supply chain uncertainty that is hampering business expansion. Hence, this study aimed to investigate the relationships between trust, commitment and business expansion through buyer-seller relationships. A quantitative study was conducted through a structured close-ended questionnaire among 114 managers from automotive component manufacturers. The empirical research found a strong presence of trust and commitment in automotive buyer-seller relationships. The influence of trust and commitment on possible business expansion was determined through a regression-based analysis. Findings revealed trust in a seller (agent) results in business expansion and commitment to a seller acts as a mediator between trust and business expansion. Action plans for both agents and principals (buyers) are recommended to sustain business.

Trust, commitment and business expansion in automotive supply chains in a developing country: a principal-agency perspective

The automotive industry is important for sustaining developing countries' economies. Literature states the South African automotive buyer-seller relationships are hampered by conflict where both parties reveal self-serving behaviour. This results in a decrease of trust and commitment, and increased supply chain uncertainty that is hampering business expansion. Hence, this study aimed to investigate the relationships between trust, commitment and business expansion through buyer-seller relationships. A quantitative study was conducted through a structured close-ended questionnaire among 114 managers from automotive component manufacturers. The empirical research found a strong presence of trust and commitment in automotive buyer-seller relationships. The influence of trust and commitment on possible business expansion was determined through a regression-based analysis. Findings revealed trust in a seller (agent) results in business expansion and commitment to a seller acts as a mediator between trust and business expansion. Action plans for both agents and principals (buyers) are recommended to sustain business.

Contracting under Adverse Selection: Certifiable vs. Uncertifiable Information

The analysis of adverse selection problems in seller-buyer relationships has typically been based on the assumption that private information is uncertifiable, while in practice it may well be certifiable. If a buyer has certifiable private information, he can conceal evidence, but he cannot claim to have information for which he has no evidence, so he has fewer possibilities to misrepresent his information. Nevertheless, we find that the expected total surplus can be strictly smaller in the case of certifiable information than in the case of uncertifiable information. This finding holds when the buyer may have private information with some exogenous probability as well as in the case of opportunistic information gathering, where the buyer can privately decide whether or not to acquire information for strategic reasons.

The role of customer entertainment in B2B sales strategy: Comparative insights from professional buyers and salespeople

Customer entertainment is any activity considered to provide entertainment, amusement, or recreation. Business-to-business firms, as part of their sales strategy, have entertained customers for decades in hopes of influencing purchasing and building long-term relationships. Using social exchange theory and the element of reciprocity, this study examines how customer entertainment influences buyers' perceptions of gratitude, indebtedness, and purchase intention within their relationship with the B2B seller. In order to assess the importance and strategic role of customer entertainment in building and strengthening buyer-seller relationships, this study investigates customer entertainment throughout the sequential relationship stages of exploration, expansion, and commitment. A multimethod research design was developed comprised of 2 qualitative studies, 3 pretests, and a conclusive experimental field study that compared buyer attitudes with salespeople's perceptions of buyer attitudes. The final study contrasts results between 248 buyers and 245 salespeople and consists of a 3 × 3 experimental field study, with the levels of customer entertainment events and stage of relationship as manipulating variables. The analysis reveals that salespeople and buyers view of reciprocity differs, with salespeople being more socially oriented and focused on gratitude while buyers are more economically oriented and more attuned to indebtedness.

The missing option in firm boundary decisions

Abstract Integration involves two firms, the integrating firm and the integrated firm. This paper argues that both firms matter in the integration decision. To explain how, I construct two property-rights models by introducing the two-directional integration setup in Grossman and Hart (1986) into Antras (2003) and Antras and Helpman (2004). One model features homogeneous firms; the other model features heterogeneous firms. In these models, a buyer firm and a seller firm choose one of three ownership structures: buyer integration of the seller, seller integration of the buyer, and outsourcing. Both firms’ idiosyncratic characteristics influence the choice of ownership structure. Predictions of the models are examined in a novel dataset of 209,062 buyer-seller relationships in 154 countries/territories. Both models receive strong and robust support. By allowing either firm to become the owner in an integrated relationship, this paper explains the coexistence of backward and forward integration, which occurs in 758 of the 2282 industry pairs that contain integrated relationships and is assumed away by the existing literature.

Digitalization of the buyer–seller relationship in the steel industry

PurposeThe purpose of this paper is to cast light on the nature of the digitalization process that occurs when digital technologies are adopted in buyer–seller relationships.Design/methodology/approachThe study features a case study from the steel processing industry.FindingsThe present research builds on and extends the interaction approach to the context of buyer–seller relationship digitalization process. The study explicates the interrelated elements of digital infrastructure, digital communication and degree of digitalization of the buyer–seller relationship.Research limitations/implicationsThe study aims at theoretical generalization and thus produces conceptual understanding that is to some extent applicable to various contexts. The generalization of the empirical insights to other process-focused industries is to some extent possible. However, further research in versatile empirical contexts is needed to validate the results.Practical implicationsFor managers, the study presents a success case of digital technologies use for improving a buyer–seller relationship.Originality/valueThe originality of the present research is in the way it depicts how a buyer–seller relationship is gradually digitalized in successive digital technology adoptions, that is, a virtuous cycle of digitalization, that creates and alters the digital infrastructure and digital communication processes between the buyer and the seller resulting in different outcomes (degrees of digitalization in the buyer–seller relationship).

Contracting under adverse selection: Certifiable vs. uncertifiable information

The analysis of adverse selection problems in seller-buyer relationships has typically been based on the assumption that private information is uncertifiable, while in practice it may well be certifiable. If a buyer has certifiable private information, he can conceal evidence, but he cannot claim to have information for which he has no evidence, so he has fewer possibilities to misrepresent his information. Nevertheless, we find that the expected total surplus can be strictly smaller in the case of certifiable information than in the case of uncertifiable information. This finding holds when the buyer may have private information with some exogenous probability as well as in the case of opportunistic information gathering, where the buyer can privately decide whether or not to acquire information for strategic reasons.

Adapting business models in buyer-seller relationships: paradoxes in the fast fashion supply chain

Purpose This paper aims to deal with the issue of business model change in industrial markets. It considers the fast-fashion supply chain by addressing the following research questions: What are the paths of change of the supplier’s business model to match the business model of fast fashion customers? How can a supplier’s business model be adapted to customer’s requirements in these paths of change? Design/methodology/approach Empirically, the paper presents a multiple case study of 10 semi-finished textile suppliers, carried out through a long-term research programme in the Italian textile industrial district of Prato. Findings The multiple-case study shows some key drivers of change in the suppliers’ business models. Three main paths emerged from the interactions with fast fashion clients. Paradoxes in the supplier’s business model changes are identified and discussed. Research limitations/implications The paper proposes implications for suppliers interacting with fast fashion clients and discusses how the adaptation of business models may be interpreted. This study points out how matching the business model of the customers does not call for alignment of similar features. Originality/value The paper deals with an understudied topic within the literature: business models change in business to business markets, taking into consideration the perspective of the supplier. It considers buyers-seller relationships in industrial supply chains as being part of a chain of business models and the need for the supplier’s business model to adapt and match one of the clients. The paper proposes two potential interpretations of such adaptation.

The Impact of Seller-Buyer Relationship Quality in the Financial Service Industry

The investigation examined some issues regarding relationship quality between buyer and seller from the perspective of an (a) financial service industry. The aim of the research investigate factors affecting relationship quality between buyer and seller in the financial service industry, and maintain a stronger and long-term relationship include client knowledge, customer orientation, expertise and similarity. The study will apply quantitative analysis which use sample instrument with the multiple regression analysis and employed the SPSS 23.0 version software. The paper has been argued customer relationship quality that will be determined by a few independent variables. Thus, it is timely to test the significance of relationship quality among buyers and sellers in the financial service industry. The research will utilize a questionnaire survey to examine customer relationship quality between buyer and seller perceptions of the influence of the various factors on relationship quality.

Strategic agility, dynamic relational capability and trust among SMEs in transitional economies

Rapid growth and urbanizing populations are transforming Africa, despite environmental turbulence, uncertainty and relational complexity. Research highlights how small firms rely upon trust-based buyer-supplier relationships in such contexts. Our study adopts a micro-foundational perspective and builds on dynamic capabilities literature and psychological trust theory. Our conceptual model shows how relational dimensions (i.e. communication, social bonds, and knowledge), influenced by meta-capabilities (strategic sensitivity, resource fluidity and leadership unity) embedded in micro-foundational activities build trust in small business cross-border buyer-seller relationships to support dynamic relational capability and enhance strategic agility in transitional economies.

Perspective-taking and cooperation in customer–supplier relationships

PurposePerspective-taking is an overlooked relational competence that matters to interaction, problem-solving and cooperation in inter-organizational buyer–seller relationships. This paper aims to distinguish perspective-taking from empathy with which it has often been associated. It uses aptitude theory to propose a conceptualization of perspective-taking consisting of perspective-taking ability and motivation components that are used to explore the scope of perspective-taking in customer–supplier relationships.Design/methodology/approachAn experiment and survey, are conducted among customer managers to apply and test measures to capture the ability and motivation components of the perspective-taking aptitude. The two perspective-taking components are used to propose a 2 × 2 matrix that provides a four-type typology, labelled: “talented”, “ineffectual”, “fervent” and “indifferent”. Data are collected from a sample of senior managers of manufacturing firms responsible for the dyadic relationship with a business support agency.FindingsThe data supports the presence and distribution of the four typologies among customers in business relationships and regression analysis confirms the impact of the proposed perspective-taking typology types on customer–supplier cooperation. The different combinations of the perspective-taking dimensions of ability and motivation that make up the perspective-taking aptitude type result in different dispositions to cooperate. “Talented” and “ineffectual” members with high and low perspective-taking ability and motivation scores, respectively, provide the highest and lowest cooperation dispositions. “Fervent” and “indifferent” members occupy an intermediate perspective-taking aptitude on the typology, with the former impacting cooperation moderately and the latter not found to be significant.Practical implicationsUnderstanding counterparts, inferring their motives and anticipating reactions, is a critical capacity for mutual dyadic adjustments in customer–supplier relationships in business markets. Such an understanding of perspective-taking can prove useful to effective interaction, solution development and relationship building, as interacting managers belonging to different typology types exhibit different levels of cooperation. In addition, an understanding of perspective-taking can prove useful to identify the right talent that can foster effective interaction and solution development in customer–supplier relationships. It also raises the issue as to how best sellers can interact to influence the perspective-taking of buyers in their quest to achieve better solutions and cooperation.Originality/valueProvides a useful supplement to theory by bringing perspective-taking, grounded in aptitude theory, as an essential relational competence in business marketing that can provide an additional explanation to cooperation and joint problem-solving in inter-organizational business relationships. The paper develops and proposes a typology of perspective-taking that brings together ability and motivation dimensions, operationalizes and assessed their measures and tests the impact of the proposed perspective-taking typology types on cooperation in customer–supplier interaction.

Loyalty or lethargy? Keeping sellers committed, not entrenched

While business sellers frequently enjoy long-term relationships with their buyers, not every extended association is based on a genuine sense of customer loyalty. Many organizations remain in relationships with providers for too long; while the seller has stopped providing value, the buyer sticks to the routine. Building from empirical research and theory on buyer-seller relationships, this research extends our understanding of customer complacency and seller entrenchment and introduces the concept of customer lethargy. Synthesizing theory from multiple domains with exploratory interviews conducted with business customers, this article offers insight into the functioning of organizational buying centers, the evolution of business exchanges over time, and how some exchanges can be undermined by various forms of relational dysfunction. I define customer lethargy, explore its root causes and offer business buyers a strategy which aims to help them self-audit their loyalty, avoid complacency and lethargy, and keep sellers committed, not entrenched.

Digital Adoption by Agri-Based Enterprises in District Jammu : Benefits and Barriers

The pervasiveness and ubiquity of technology have brought significant changes in customer behavior and preferences. In light of the rapidly changing social, psychological, and recently, health-related paradigm, diffusion of technology is becoming more of a necessity. In the business context, digital metamorphosis has changed the dynamics of buyer-seller relationships around the world, irrespective of the size and scale of operations. However, this change has been non-uniform and highly versatile with consumer-based businesses showing greater acceptance and digital orientation than B2B businesses. Underlying the significance of digital technologies for adapting to the new normal in the agri-business context in India, this paper focuses on exploring the benefits and barriers of digital adoption by agriculture based (agri - based) enterprises (manufacturing/processing and trading). Findings show that technology used by businesses follows an overlapping pattern with an evident low to moderate usage of tools. Asmall percentage of businesses have shifted to advanced functions such as e-commerce. The overall perception is positive but restricted to information and communication-based functions only. In terms of hindrances, accessibility as well as lack of technical know-how drastically affects the institutionalization of such technologies.

Relationship quality and supplier performance in food supply chains

The importance of procurement relationships in food supply chains is increasing in importance due to issues of food safety, food security, changing consumer preferences, ethical concerns and greater awareness of the environmental impact of food production. Despite the considerable research on buyer-seller relationships in the marketing and management literature, only a small proportion of this has focused on procurement relationships between producers and buyers in food supply chains. Hence, this paper specifically focuses on examining the impact of relationship quality on supplier performance in the context of food supply chains. The theoretical framework is derived from the tenets of the resource-based view and the relational view of firms. Using this framework, the definition, measurement and structural dimensions of relationship quality is established in the context of food producers and buyers. This construct is then tested in relationship to supplier performance. Utilizing data from a mail survey of 954 red meat producers in New Zealand, the model of supplier-buyer relationship quality and its effects on supplier performance is tested using structural equation modelling. The results demonstrate that relationship quality is an essential factor in procurement relationships with suppliers in food supply chains and shows that, as hypothesized, higher quality relationships lead to positive performance outcomes. The results support the theoretical framework indicating that relationship quality, conceptualized and defined in this context, is indeed a valuable relational resource due to its impact on supplier performance. Managerially, this resource can be manipulated to improve supplier performance, and hence potentially provide firms with competitive advantage that has high replication barriers.