Buyer-supplier Relationships Research Articles

Influence of supplier development on supplier satisfaction: a mediating role of buyer–supplier relationship

PurposeThe study aims to understand the influence of supplier development (SD) activities on supplier satisfaction through the lens of social capital theory (SCT) and to understand the mediating role of the buyer–supplier relationship (BSR) in improving supplier satisfaction (SS).Design/methodology/approachThe research is based on survey of 110 key informants belonging to 50 medium to small supplier companies in the Indian automotive sector. We employed the PLS variance-based modelling technique for the data analysis.FindingsThe investigation resulted in a comprehensive framework for SD activities influencing SS. Further findings recognize a positive influence of SD activities such as payment terms and BSR, which are components of structural social capital on the SS. SD activities such as quality management and delivery, which are indicators of relational capital, affect SS through the mediation of BSR.Originality/valueThe study confirms the role of BSR in SS. The deliberations can help the managers of buyer and supplier firms and researchers to classify and strategize SD activities to improve performance and BSR to become preferred customers through SS.

An investigation of disintermediation on freight exchange platform: the role of buyer-supplier relationships

ABSTRACT The formation of buyer-supplier relationships (BSRs) is a major disintermediation trigger, causing losses for platforms. Utilising data from a freight exchange platform in China, this paper examines the impact of user-platform relationship (UPR) homogeneity, which aggregates BSRs at the user-platform level, on user’s disintermediation. We find that high UPR homogeneity leads to user disintermediation under the joint effect of high mutual trust and low switching costs. Relationship substitutability reduces the effect by influencing the generation of mutual trust. Involuntary transactions reinforce it, while service variety reduces it by influencing the generation of switching costs. This research contributes to the literature by expanding the focus from the dyadic perspective to the platform and highlighting that the benefits of BSRs for buyers and suppliers can harm platforms by influencing user disintermediation. This insight suggests that platforms should oversee users’ BSR portfolios to avoid the potential issue of excessive concentration.

Supplier relationship management and business performance of small-scale grapes processing firms in Dodoma, Tanzania: the moderating role of logistics capabilities

PurposeThis paper aims to investigate the effect of supplier relationship management (SRM) on the business performance of small-scale grapes processing firms in Dodoma, Tanzania. The paper also examines the moderating role of logistics capabilities in the relationship between SRM and business performance.Design/methodology/approachThis research uses a cross-sectional survey design. A structured questionnaire was used to collect data from 202 small-scale grape processing firms. The data were analysed through descriptive and structural equation modelling.FindingsThe findings revealed that buyer-supplier relationships, supplier development and supplier selection were positively and significantly related to business performance. Furthermore, knowledge transfer had no relationship with business performance. On the other hand, the findings showed that logistics capabilities significantly moderated the relationship between SRM and business performance.Research limitations/implicationsThe study was cross-sectional, conducted only in Tanzania, and focussed entirely on small-scale firms processing grapes as raw materials. Thus, generalising the study findings to other countries with different conditions should be done cautiously. Also, this study used subjective measures, and other studies could use objective measures.Practical implicationsThe study helps firm managers understand the importance of supplier relationship management on business performance. The findings also can be used by policymakers to create targeted policies and initiatives that support the firm’s growth and sustainability.Originality/valueTo the best of the researchers’ knowledge, this is the first attempt to find empirical support for the moderating role of logistics capability in supplier relationship management and the business performance of small-scale grapes processing firms in the Tanzanian context.

Investigating the role of relational factors on buyer-supplier relationship commitment to enhance firm performance through supply chain integration

PurposeThis study assesses how relational factors and buyer-supplier relationship commitment (BSRC) influence supply chain integration (SCI) and firm performance in Bangladesh's apparel manufacturing sector. Firm performance includes operational performance and innovation performance.Design/methodology/approachGrounded in the social exchange theory, a survey data-based structural equation modeling (SEM) approach is applied. Based on two experts and four executives' opinions and an in-depth literature review, 28 measurement items were identified in the close-ended questionnaire design. Further, 144 valid questionnaires from the manufacturer-supplier dyads in Bangladesh were collected and used for SEM analysis.FindingsOur study reveals that relational factors positively influence BSRC. BSRC directly impacts SCI, operational, and innovation performance, whereas SCI is significantly related to operational and innovation performance. Besides, SCI mediates the two relationships: BSRC and operational performance; and BSRC and innovation performance.Originality/valueOur results contribute to the literature and offer a new way to understand relationships that connect relational factors of BSRC, BSRC, and outcomes not only by examining the focal firm but also by examining its dyadic supplier partner separately. Separate assessment in the dyad displays some similar and dissimilar results. Moreover, we suggest practical implications for managers to enhance firm performance by focusing on the significance of linking relational factors, BSRC, and SCI.

Being your ‘authentic self’: A key to success in the buyer–supplier relationship in indirect procurement

Early in a career as a procurement professional, practitioners are focused on the goals of the company and how to achieve their own career goals as they traverse the buyer–supplier relationships, obtaining the company’s needed goods and services. For practitioners in the indirect categories, the sheer number of suppliers that must be interacted with is sometimes daunting. Finding the keys to building successful buyer–supplier relationships is often reduced to a formulaic transactional process. To be truly successful, you must become well versed in how your own personal traits become key in building relationships with suppliers. Suppliers that provide goods and services, considered indirect purchases, are not always transactional relationships. While these suppliers do not provide raw materials for your company’s production, they supply the infrastructure that supports the whole company and helps bring those finished products or services to market. With that in mind, it is integral to the success of your company that you have good relationships with these suppliers, built on the foundation of trust. In building that trust, the practitioner must become comfortable with the aspects of transparency, integrity and being their authentic self when working with the representatives of their suppliers. While there are risks and pitfalls that must be kept in mind, the personal traits that you present to your suppliers could very well be the key to your success or failure in your role as a procurement professional.

Social Capital and Environmental Performance: An Investigation in the Kenyan Meat Supply Chain

Abstract This paper aims to investigate the effect of social capital on environmental performance in the Kenyan informal meat supply chain. Social capital is categorized into three categories: structural capital, relational capital, and cognitive capital. The authors seek to understand which of the three dimensions of social capital influences environmental performance within the meat supply chain. The study was based on data collected using surveys from 85 abattoirs and 164 traders from four counties in Kenya: Nairobi, Kiambu, Machakos, and Kajiado. Statistical analysis was conducted using partial least squares structural equation modelling (PLS-SEM). The results also indicated a positive and significant relationship between structural social capital and environmental performance, while relational and cognitive capital had positive but insignificant relationships. The findings highlighted the disparities in the effect of social capital on environmental performance between formal and informal agri-food supply chains. To our knowledge, this finding presents a distinct contribution to social capital and environmental performance studies in informal buyer-supplier relationships in agri-foods. The study is one of the first to examine social capital and environmental performance in an informal agri-food supply chain with a focus on trader-abattoir relationships. The informal supply chain is an important context in which to examine the effects of social capital.

The influence of collective emotions in the response to supply chain disruptions: a buyer–supplier empirical approach

PurposeThe objective of this study is to examine how emotions play a role in the firm’s reaction to disruptions in the supply chain. Drawing on the upper echelons theory, we evaluate whether managers’ perception of collective emotions (CEs) in the supply environment affects the execution of specific organisational responses (bridging and buffering) to disruptive events. Furthermore, we investigate to what extent companies' own capabilities, such as supply chain resilience, influence this relationship.Design/methodology/approachA web-based survey was distributed among managers involved in supply chain relationship management (e.g. supply chain or purchasing managers). LinkedIn was used to identify and contact adequate respondents, and 221 valid responses were collected. The proposed theoretical model was empirically tested using structural equation modelling based on partial least squares (PLS-SEM).FindingsResults suggest that emotions can shape a firm's response to supply chain disruptions. In fact, managers are more likely to pursue both bridging and buffering strategies as their perception of CEs increases. However, the intensity and underlying motivations for pursuing each strategy differ.Originality/valueWhen CEs are perceived by buyer managers, stronger supply chain resilience incentivises the choice of cooperative practices within existing suppliers, thereby reinforcing pre-existing links. We conclude that combining companies' inherent variables or capabilities with managerial cognition and perceptions can improve our understanding of decision-making processes and buyer–supplier relationships.

Trust and control dynamics in buyer–supplier relationships: The case of organic honey certification in Cuba

AbstractThe high complexity of international supply chain (SC) relationships requires mechanisms to build trust among stakeholders. Therefore, understanding the underlying mechanisms of developing and maintaining high trust levels in exchange relationships is essential to managing associated SC risks. Third‐party certification (TPC) is a widely used, control‐based governance mechanism in organic food production that aims to help build trust. Drawing on the concepts of trust and control, this article presents an analytical framework for assessing TPC's effects on trust–control dynamics within food SCs. By using qualitative data on a buyer–supplier relationship between Cuba and Europe, this case illustrates the mutually reinforcing relationship between trust and control. We also demonstrate how trust is built across multiple levels. By considering contextual factors, the case illustrates controls' impact on building institutional trust while also pointing out TPC's limited efficacy in enhancing collaboration in SCs.

An Exploratory Study for Performance Improvement through Supplier Client Services Framework

This research is aimed to study on supplier relationship management particularly on service procurement of the oil and gas industry in Malaysia. Volatile oil price and COVID-19 pandemic required oil and gas companies to re-evaluate their supply chain strategies to minimise the impact. One of the strategies was to build better relationships with suppliers. Based on literature, services procurement is much more complex than goods procurement. The literature reviewed the topic of the oil and gas industry, outsourcing and subcontracting and supplier relationship management. In details, different elements of supplier relationship management are discussed such as its model, benefits, influencing factors and types of suppliers and relationships were discussed. From the literature review, a conceptual framework was developed. “Case study” is adopted as the research method as it provides sophisticated insight on the research topic. Four companies were interviewed to understand the supplier relationship management process. The research findings show that there are different supplier relationship management processes adopted by the four companies selected for case study. All companies agreed that they gained benefits with better supplier relationships. However, all the companies are facing difficulties in implementation of supplier relationship management. In addition, the interviewees expect their suppliers to be more competent in terms of cost, time and quality to contribute to a better buyer-supplier relationship. The conceptual framework is revised based on the research findings and presented as one of the findings.

Supplier pro-relational opportunism: Antecedents and effects on cooperative buyer-supplier relationships

ABSTRACT Purpose Pro-relational opportunism (PRO) is of growing concern in today’s business environment. The premise of this study is to investigate the issues that remain relatively underexplored in previous research – antecedents of supplier PRO and how supplier PRO affects the trust and commitment of brand firms. Methodology Three scenario-based experiments were applied to test the hypotheses. In Studies 1a and 1b, we used a 1 × 2 (Study 1a – inter-organizational identification: low versus high; Study 1b – supplier dependence: low versus high) between-subjects design. Participants were asked to evaluate their ethical philosophies after reading the scenarios. We ran a regression analysis to test for the main and interactive effects of inter-organizational identification, supplier dependence, and ethical philosophy on supplier PRO. Study 2 used a 1 × 2 (supplier PRO: PRO acting versus non-PRO acting) between-subjects design. The bootstrapping method using PROCESS was applied to run a mediation analysis. Findings This study finds that inter-organizational identification, supplier dependence, and managers’ ethical philosophy (utilitarianism and relativism) may increase suppliers’ PRO behavior. Utilitarianism and relativism positively moderate the effects of inter-organizational identification and supplier dependence on supplier PRO. Supplier PRO has both a direct and negative impact on the brand firm’s commitment and an indirect effect mediated by trust. Research implications This study provides insight into drivers and outcomes of supplier PRO based on the relationships with brand firms. Influences of inter-organizational determinants are dependent on individual factors. This research extends the supply chain opportunism literature beyond the typically dyadic perspective. Practical implications Brand firms should be cautioned that strong inter-organizational identification may promote supplier PRO. In addition, brand firms should encourage dependent suppliers to find ethical ways to promote alternative attractiveness. In seeking to avoid damage to the trust and commitment of brand firms, suppliers need to establish systems and norms to help managers develop correct ethical philosophies and understand the harm of PRO behavior. Originality/value/contribution This research may be the first to examine the antecedents of supplier PRO and its boundary conditions in multi-level settings (i.e. inter-organizational and individual levels). Moreover, this study deepens our understanding of opportunism by further developing the consequences of PRO.

Social capital and supply chain relationships

AbstractWe examine the role of social capital in influencing decisions pertaining to buyer–supplier relationships. We report that firms make larger relationship‐specific investments when their supply chain partners are headquartered in states with high social capital. This result is more pronounced when supply chain partners have incentives to engage in opportunistic behavior. Furthermore, the duration of supply chain relationships is longer when the firm and its supply chain partner are both headquartered in high social capital states, and when the partner invests in relationship‐specific assets. Collectively, the evidence suggests that social norms reflecting trustworthiness facilitate investment and stability along supply chains.

The grey side of procurement: Measuring the prevalence of questionable purchasing practices

Buyer-supplier relationships may be exposed to ethically questionable purchasing practices. This can have major financial and reputational consequences for individuals and organisations. Various studies have assessed procurement professionals' ethical judgements regarding questionable purchasing practices and a handful have estimated the prevalence of these practices. The insights from these studies, however, cannot be straightforwardly extrapolated to today's practice. First, the studies have mostly estimated prevalence without controlling for social desirability bias. The estimation of the prevalence of questionable practices based on subjects' responses is non-trivial, as it may be prone to socially desirable response behaviour. Second, most of the studies were conducted decades ago and the role of the purchasing function has changed significantly ever since. Based on these observations, the present study makes two main contributions to the literature. First, it methodologically extends extant studies by estimating the prevalence of questionable purchasing practices in Europe while controlling for social desirability bias. Specifically, the present study applies the recently developed Extended Crosswise Model to test for socially desirable answers and presents these prevalence estimates in comparison to estimates obtained via a direct questioning technique. The findings highlight the ongoing prevalence of unethical practices in buyer-supplier relationships and the need for organisations to be vigilant in addressing them. Post-hoc analyses indicate that gender, work experience, perceived levels of public sector corruption, and governmental procurement agreements affect the involvement in questionable purchasing practices. Second, the present study examines how earlier and newly identified questionable practices are perceived in the current business environment. The results suggest that ethical perceptions have changed and that most unethical practices are observed in supplier selection. From a theoretical perspective, the present study responds to both the call to further investigate ethical issues in supply chains (Quarshie et al., 2016) and the call to address social desirability bias in purchasing and supply management research (Ried et al., 2022). From a managerial perspective, our research can serve as a starting point for organisations to develop strategies to mitigate their impact and promote ethical behaviour throughout the purchasing process.

Sustainability Amplified: Servitization, Integration and Buyer-Supplier Nexus

This study examines the dynamics of buyer-supplier relationship connectors and sustainable supply chain performance, with the moderating role of the level of Servitization and the mediating role of Supply Chain Integration. A purposive sampling survey conducted by a well-structured questionnaire has been administered through a sample of 120 organizations. The manufacturing industries of Pakistan, including, automotive, textile, chemical, electronics, and pharmaceutical were selected for data collection. Using the theoretical lens of Social Exchange Theory, the outcomes reveal that a positive relationship exists between buyer-supplier relationships and sustainable supply chain performance. The results imply that companies that actively engage in building strong and collaborative relationships with their suppliers are expected to achieve higher levels of sustainability in their operations. Moreover, through a mediated moderating model, supply chain integration and servitization emerged as significant mediators and moderator among buyer-supplier relationships and sustainable supply chain performance. Besides the theoretical contribution, this study offers substantial evidence to policymakers regarding how to improve and reshape their relations to accomplish supply chain integration and enhance sustainable supply chain performance.

Mapping the Research Landscape of Buyer-Supplier Relationships: Insights and Trends from Bibliometric Analysis

Mapping the Research Landscape of Buyer-Supplier Relationships: Insights and Trends from Bibliometric Analysis

The ambiguous impact of supplier involvement in product development on supplier relationship resilience and company performance

PurposeI aimed to obtain a deeper insight into the link between supplier involvement in product development (SIPD), supplier relationship resilience and company performance.Design/methodology/approachTo collect data, a survey among 500 Polish manufacturing companies was conducted. I used quantitative methods (structural equation modeling) to test several research hypotheses referring to a single supplier–customer relationship. Thanks to the use of multi-construct measurement of SIPD and supplier relationship resilience, the study provides detailed research results on the topic.FindingsCollaborative practices implemented during SIPD increase procurement flexibility and decrease redundancy in the relationship with the involved supplier. Communication during SIPD increases supplier flexibility and procurement flexibility. Increased supplier flexibility and increased procurement flexibility in the relationship with the involved supplier as well as collaborative practices during SIPD positively impact company performance. I confirmed the indirect effect between communication during SIPD and company performance when the mediators are supplier flexibility and procurement flexibility. Decreased redundancy in relationship with involved supplier does not impact company performance.Practical implicationsSupply chain managers need to rethink SIPD practice to effectively ensure supply chain resilience (SCRES), especially in the face of the contemporary global crisis and black swans affecting the supplier base. My article provides important managerial insights into drivers of SCRES and company performance.Originality/valueTo the best of my knowledge, this research is among the first to conclude that SIPD does not have an unequivocally positive or direct impact on supplier relationship resilience. The research fills the gap by analyzing the impact of SIPD on two main SCRES elements. The study examines supplier relationship resilience, understood as flexibility and redundancy elements, in a single supplier–buyer relationship perspective. Thus, the presented considerations go beyond the traditional understanding of flexibility and redundancy in supplier relationship management, that is through the prism of double or multi sourcing and having back up-suppliers.

The impact of perceived buyer justice on the diverse supplier-buyer relationship building

The origins of supplier diversity in the U.S. can be traced back to the Civil Rights Movement in the 1950s and 1960s, with legislations promulgated and agencies established to facilitate market participation of many groups. Since that time, companies have been incorporating diverse supplier businesses into their procurement strategy and supplier selection decisions. However, how buying companies manage diverse suppliers in supplier diversity programs is under-researched. This research takes the perspective of a diverse supplier and investigates how the diverse supplier perceives the relationship with the buyer. Drawing on justice theory, the impact of the diverse supplier’s perception of the buying company’s justice behavior (distributive, procedural, interpersonal, and informational justice) on the supplier’s commitment to, and investment in, the diverse supplier-buyer relationship is investigated. Survey data from 131 women-owned businesses were used to test theoretically derived hypotheses. Analysis shows that perceived buyer distributive justice and interpersonal justice positively affect supplier commitment, and perceived buyer informational justice positively relates to diverse supplier investment in the relationship. Perceived buyer procedural justice, however, has a negative effect on diverse supplier commitment. Diverse supplier commitment and supplier investment positively influence the diverse supplier’s relationship performance. The results contribute to a nuanced understanding of different justice dimensions and offer managerial insights to buying companies on better managing diverse supplier-buyer relationships to increase inclusivity in the supply chain.

The Influence of Digital Innovation and Reputation on Buyer-Supplier Relationship Mediated by Supply Chain Flexibility

This research aims to determine and analyze the influence of digital innovation and reputation on the buyer-supplier relationship mediated by supply chain flexibility. Empirical study: PT vendors. Astra Daihatsu Motor. The method used in this research is quantitative research. The population in this research is the buyer-supplier of the Automotive Manufacturing Company Vendor PT. Astra Daihatsu Motor. The sample required for this research is around 222 respondents from 500 employees. So, the research results show that digital innovation positively impacts buyer-supplier relationships and supply chain flexibility. Likewise, company reputation also has a positive influence on these two variables. In addition, the results of the analysis show that supply chain flexibility mediates the relationship between digital innovation/reputation and buyer-supplier relationships. The practical implication of this research is the importance of investing in digital innovation and maintaining a company's reputation to strengthen business relationships and increase flexibility in dealing with changing markets and customer needs. This research provides insight for managers in managing supplier relationships, improving their supply chain performance through technology, and building a strong reputation.

Estimating the loss of economic predictability from aggregating firm-level production networks.

To estimate the reaction of economies to political interventions or external disturbances, input-output (IO) tables-constructed by aggregating data into industrial sectors-are extensively used. However, economic growth, robustness, and resilience crucially depend on the detailed structure of nonaggregated firm-level production networks (FPNs). Due to nonavailability of data, little is known about how much aggregated sector-based and detailed firm-level-based model predictions differ. Using a nearly complete nationwide FPN, containing 243,399 Hungarian firms with 1,104,141 supplier-buyer relations, we self-consistently compare production losses on the aggregated industry-level production network (IPN) and the granular FPN. For this, we model the propagation of shocks of the same size on both, the IPN and FPN, where the latter captures relevant heterogeneities within industries. In a COVID-19 inspired scenario, we model the shock based on detailed firm-level data during the early pandemic. We find that using IPNs instead of FPNs leads to an underestimation of economic losses of up to 37%, demonstrating a natural limitation of industry-level IO models in predicting economic outcomes. We ascribe the large discrepancy to the significant heterogeneity of firms within industries: we find that firms within one sector only sell 23.5% to and buy 19.3% from the same industries on average, emphasizing the strong limitations of industrial sectors for representing the firms they include. Similar error levels are expected when estimating economic growth, CO2 emissions, and the impact of policy interventions with industry-level IO models. Granular data are key for reasonable predictions of dynamical economic systems.

The Delicate Equilibrium: Unveiling the Curvilinear Nexus Between Supply Concentration and Organizational Resilience

AbstractThe ability of organizations to remain resilient in the face of supply chain disruptions has been severely tested due to their increased frequency and impact. This study leverages the adaptive cycle framework to investigate the intricate dynamics between supply concentration and organizational resilience. We unveil a paradox where, up to a critical threshold, supply concentration fortifies resilience through tight‐knit buyer–supplier relationships and a bolstered resource base. Yet, surpassing this tipping point precipitates a rigidity trap, eroding the resilience fabric of organizations. Additionally, we scrutinize the nuanced roles of three dimensions of entrepreneurial orientation – proactiveness, innovativeness and risk‐taking – in shaping this complex interplay. We test our hypotheses using both secondary and primary data collected from Chinese firms, employing ordinary least‐squares regression and survival analysis. The results show that an inverted U‐shaped relationship emerges between supply concentration and organizational resilience. Furthermore, our research generally confirms the conjectured moderating influences of entrepreneurial orientation dimensions, enriching our understanding of how they calibrate the balance between concentration benefits and vulnerabilities. This study offers a new perspective on the implications of supply concentration for organizational resilience and contributes to the intersection of supply chain management, organizational resilience and entrepreneurship.

Sustaining commitment in preferred buyer-supplier relationships: How to retain the ‘customer of choice’ status?

Securing commitment and preferential treatment from suppliers is crucial for buying firms in a competitive marketplace. This study delves into the dynamics of how buying firms, which have already earned preferential treatment and thus already had been recognized as preferred customers or ‘customers of choice,’ can sustain supplier commitment and preserve this coveted status in a competitive market. Anchoring our investigation into the foundational principles of transaction cost economics and social exchange theory, we offer a novel theoretical perspective by examining the interplay of buyer behaviors and attributes, including supplier development and involvement, information sharing, market attractiveness, operative excellence, importance for the supplier's business, and relationship continuity expectations. To gain insight into these dynamics,we analyze primary survey data from 215 strategic buyer-supplier dyads through structural equation modeling. Our analysis reveals that supplier development and involvement directly fosters sustained commitment. Intriguingly, the role of information sharing is found to have asignificant impact as well, albeitindirectly, mediated through the buyer's characteristics. Additionally, while supplier development, involvement, and information sharing positively influence expectations regarding relationship continuity, a similar mediating effect on sustained commitment is absent. By further employing Fuzzy Set Qualitative Comparative Analysis, our study uncovers three distinct configurations that buyers can leverage to sustain supplier commitment and secure their ‘customer-of-choice’ status. These findings extend the theoretical understanding of buyer-supplier collaboration dynamics and provide practical insights for buyers striving to enhance the value and longevity of their supplier relationships.