Buyer Supplier Research Articles

Contract Types, Institutional Distance and Operational Performance: Evidence from Global Trade Flows in the LNG Industry

AbstractIn this study, we examine the relationship between contract types, institutional distance and operational performance in the context of cross‐border trade in the liquefied natural gas (LNG) industry. Drawing on the buyer–supplier long‐term relationships literature, we argue for a negative link between short‐term contractual agreements and operational performance. Further, drawing insights from institutional theory, we contend that a high level of formal and informal institutional distance between the origin (i.e. supplier) and destination (i.e. buyer) countries reduces operational performance. We also argue that formal and informal institutional distance mitigates the negative effect of short‐term contracts on operational performance. Finally, we draw on the role of ‘asymmetry in distance’ by examining the direct and moderating effect of both the relevance and direction of formal institutional distance. We test our assumptions using LNG global trade flows from 39 source countries to 44 destination countries over the 2008–2017 period (a total of 17,447 shipments). Our study extends our knowledge on the operational performance implications of buyer–supplier relationships and stresses the important role formal and informal institutional distance plays as a direct and moderating effect on this relationship.

Research Trends in Corporate Social Responsibility and Innovation: A Bibliometric Analysis

The relationship between corporate social responsibility (CSR) and innovation has received considerable attention in the last two decades. While several studies have explored the impact of CSR on innovation. While several studies have explored the impact of CSR on innovation, few studies have attempted to use bibliometric methods to analyze and visualize the evolution and trends in the CSR and innovation fields. In this research, 1279 Web of Science (WoS) published papers on CSR and innovation were collected and analyzed using VOSviwer, CiteSpace, and Bibliometrix R-package and the MK trend test. The analysis was conducted in terms of the number of articles published per year, most productive journals, authors, and countries, as well as collaboration between countries and authors, keyword analysis, co-citation clustering analysis, and research frontiers. The results showed that: (a) The MK trend test shows that the amount of CSR and innovation research is increasing. The top three journals in terms of productivity are Sustainability, Journal of Cleaner Production, and Corporate Social Responsibility and Environmental Management. The collaboration between authors forms a loose network and Ahmad, N has the most extensive network of international collaborations. There is close cooperation between countries, with a predominance of Asian, European, and North American collaborations, and the MK trend test shows that each country’s publications on the relationship between corporate social responsibility and innovation in the past 20 years have an obvious upward trend. (b) Through the analysis of keywords, it is necessary to research “corporate social responsibility”, “sustainability”, “innovation”, “financial performance “, and other topics associated with these themes. (c) The intellectual structure of CSR and innovation establishes five core clusters, including social innovation, CSR practice, sustainable global value chain, sustainable business model, and buyer–supplier collaboration. (d) Two forward-looking directions for future CSR and innovation research are proposed, and the limitations of the research are discussed.

Supply Chain Relationships in Circular Business Models: Supplier Tactics at Royal Smit Transformers

Background: Despite growing popularity, Circular Economy has not reached its full potential. One of the frequently mentioned success factors is the adoption of a Circular Business Model. However, fueled by (too) many constraints, its implementation is often hampered by so-called vicious cycles. Successful Circular Business Models require intensive collaboration between buyers and suppliers, with one of the key questions remaining who takes the initiative and leads the development: buyer or supplier? Methods: Through a single case study combining desk research, interviews, participative observations and analysis of vicious cycles, we investigate how supply chain relationships managed by the supplier can enhance the implementation of Circular Business Models. Results: We show that supplier tactics can relax constraints and break vicious cycles through (1) buyer–supplier relationship management, (2) functional integration of stakeholders and (3) incentive management. We also show that, due to supplier captive conditions, a number of enabling factors are indispensable, namely: (1) the availability of buyer incentives; (2) (joint experimenting to develop) circular knowledge; (3) sharing clear visions on circularity; (4) being transparent in possibilities; and (5) supply chain leadership. Conclusions: As a consequence, strategic trust-based partnerships are a prerequisite for turning vicious cycles into virtuous cycles. Future research should also investigate the role of the buyer, including buyer captive conditions, and how to shape supply chain leadership. Finally, the role of supplier tactics in relation to other success factors next to Circular Business Models needs to be further explored.

Justice in triad: Revisiting supplier involvement in new product development

AbstractRecognizing the importance of involving suppliers in the new product development (NPD) process, extensive studies have examined this issue at a buyer–supplier dyadic level. However, how supplier involvement leads to better NPD performance is not clearly explained. Additionally, extending the dyadic relationships to triadic relationships and addressing how to manage the two competing suppliers with fair conduct remains unexplored. To answer these questions, this study developed a conceptual model theorizing the role of supplier involvement, information sharing, and justice in the NPD process within a buyer–supplier–supplier triadic relationship. Based on survey data collected from 200 U.S. firms, Structural Equation Modeling is used to test the hypothesis. The results first confirmed the criticality of involving both primary and secondary suppliers during NPD. Second, the positive effect of triadic supplier involvement on innovation performance is fully mediated by information sharing. Finally, this study explored the different roles of procedural justice and distributive justice; the results confirmed that procedural justice acts as a moderator for the relationship between triadic supplier involvement and information sharing, whereas distributive justice moderates the effect between information sharing and innovation performance. Our findings contribute to the literature of triadic supplier involvement‐new product development and relationship management. Accordingly, these findings highlight key implications for managers and policymakers.

Industry 4.0 as an Opportunity and Challenge for the Furniture Industry—A Case Study

The aim of the document is to provide effective guidelines and recommendations for the effective design of the implementation process of Industry 4.0 in the furniture sector and to provide managers with effective guidance in this context. The primary data sources are semi-structured expert interviews and questionnaire surveys. Based on the structured interviews with executives of furniture companies in 2021 and 2022, the main drivers necessary for the implementation of Industry 4.0 in the furniture industry were identified both from the internal company environment perspective using a 7S analysis and from the technological perspective using Industry 4.0 building blocks applied to individual examples in the furniture industry. The respondents agree that the current state of the sector is generally at the Industry 2.0 level. They also recommend SMEs establish inter-company cooperation in production and development, which will enable the involvement of small and medium enterprises in buyer–supplier linkages. They further stress that the application of Industry 4.0 has led to rapid shifts in terms of: an increase in the operational efficiency in a range of 30–50%, a reduction in communication flow, errors and repetitive operations, and thus has directly contributed to the realisation of sustainable production.

Buyer-supplier CSR alignment and firm performance: A contingency theory perspective

Existing studies on the relationship between corporate social responsibility (CSR) and firm performance focus primarily on single firms, overlooking the role of suppliers. Drawing on contingency theory, we examine the impact of the alignment between buyers and suppliers in CSR implementation (CSR alignment) on buyers’ performance. Secondary data on 312 dyads from 2008 to 2019 in China were collected. Our findings suggest that buyer–supplier CSR alignment positively associates with buyers’ performance (specifically, sales growth). Further, we find this positive relationship is strengthened if the buyer is non-state-owned or if its media attention increases. This highlights the need for firms to focus not only on their own CSR but also on their suppliers’ in the pursuit of superior performance. As one of the first to expand the concept of CSR from the individual firm level to CSR alignment at the supply chain level, our study makes both theoretical and practical contributions.

Social auditing in the supply chain: business legitimisation strategy rather than a change agent

PurposeThis paper aims to examine the role of social auditing in legitimising the relationship between the buyer and supplier firms rather than strengthening corporate accountability in the global supply chain.Design/methodology/approachApplying case study methodology and drawing on Suchman’s theory on societal legitimacy, it is argued that social audits are artefacts of legitimacy, and global firms dominate the buyer–supplier relationship across the supply chain. The analysis is based on data collected from different secondary sources, including Walmart’s corporate sustainability reports.FindingsUsing Walmart’s relationship with Tazreen Fashions Limited around the Tazreen factory fire incident as a case study, it explains that the practices which attempt to symbolically demonstrate accountability from social audits need to shift to a more continuous and sincere demonstration of accountability through the social audit process. For this to occur, the cognitive and pragmatic approaches that international buyers have previously used in auditing their supply firms’ social responsibility are no longer sufficient to achieve societal legitimacy. Instead, a moral turn needs to underpin the intentions and actions of these buyers to maintain legitimacy and demonstrate accountability across the supply industry in developing economies.Originality/valueThe findings of the study answer the questions raised in the extant literature about the expectation from social auditing and whether social auditing serves to ensure corporate accountability. The paper contributes to the policymaking discussion of how social auditing can be configured to include a legal provision to ensure that social auditing is not a parroting tool for corporations.

Social exchange in buyer-supplier relationships and innovation speed: the mediating and moderating role of information sharing and knowledge channels

PurposeThis study recognizes service as the majority contributor to global and US gross domestic product and the importance of innovation speed to service innovation. Generating innovative products and services at a faster rate generates advantages for business-to-business (B2B) service organizations in keeping up with and moving ahead of rivals. This study aims to introduce the concept of capacity for social exchange (CSE) in buyer–supplier relationships, which reflects the degree to which individuals possess competencies that enable the exchange of information, and this study also explores how CSE affects knowledge sharing and innovation speed within a supply chain organization.Design/methodology/approachThe sampling frame of this research consisted of service businesses in the USA. The data were collected through Zoomerang, an online survey research firm where the B2B panel of Zoomerang formed the sampling frame. The data was collected from 264 B2B service sector executives.FindingsThe key findings are as follows: CSE facilitates knowledge sharing; knowledge sharing is positively related to innovation speed; and the relationship between CSE and innovation speed is fully mediated by knowledge sharing. Additional analysis reveals that knowledge channels which are designed as boundary-spanning strategies used to transfer and create knowledge between business units, directly increase – and positively moderate – the relationship between CSE and innovation speed.Originality/valueThis study addresses the gap in literature focused on micro-level influencers on innovation. This study sets out by presenting the concept of CSE, and this study addresses limitations in prior work by examining the research questions.

The role of direct equity ownership in supply chains

AbstractThis study examines the effect of direct equity ownership (DO) a buyer holds in its supplier on financial performance and operations of the supplier and buyer. Based on a sample of US buyer–supplier pairs from 1982 to 2017, we find that DO benefits buyer performance, but not supplier performance. The results support the view that DO mainly provides greater control for the buyer. Furthermore, we find that the performance effects of DO are moderated by firm characteristics that engender dependence. The beneficial influence of DO on a buyer's performance is more pronounced when the buyer is more innovative or operates in a more competitive environment. Our examination of the effects of DO on the operations of suppliers and buyers finds that suppliers in buyer–supplier relationships (BSRs) with higher DO invest more in relationship‐specific assets (R&D), provide more trade credits, and have lower gross profit margins. Buyers in BSRs with higher DO receive more trade credits and have lower cost of goods sold when the purchases of the buyer from the supplier make up a high proportion of the buyer's cost of goods sold. Overall, these results suggest that DO primarily benefits the buyer at the expense of the supplier, a finding that is consistent with the effects of bargaining and control power of the buyer. We discuss the implications of these findings for practitioners and for extensions to both relational and resource dependence theories.

Leveraging digital and relational governance mechanisms in developing trusting supply chain relationships: the interplay between blockchain and norm of solidarity

PurposeDrawing on the signaling theory and the relational exchange theory, this study investigates how buyer–supplier trust is influenced through the congruence and incongruence between blockchain and norm of solidarity. The moderating role of technology uncertainty is further examined.Design/methodology/approachUsing a survey data of 110 Chinese firms, this study empirically tests not only the combined effect of blockchain and norm of solidarity on trust, but also how this combined effect is moderated by technology uncertainty. The proposed hypotheses are tested using the polynomial regression analysis and the response surface methodology.FindingsThe results suggest that trust increases along with an increasing congruence between blockchain and norm or solidarity, but in a diminishing rate (i.e. an inverted U-shaped relationship). Simultaneously, incongruence between blockchain and norm of solidarity can also guarantee sufficient trust (i.e. a U-shaped relationship). Moreover, technology uncertainty overturns the inverted U-shaped relationship between blockchain and norm of solidarity congruence on trust into a U-shaped relationship and nullifies the U-shaped relationship between blockchain and norm of solidarity incongruence on trust.Originality/valueThis study enriches supply chain governance literature by introducing the emerging blockchain governance and examining the blockchain governance's interplay with a conventional relational norm. The study emphasizes that the combined effects of these two are quite complex. Blockchain and norm of solidarity can offset each other’s limitations when both are at low to moderate levels. But simultaneous pursuit of both high blockchain and norm has only limited marginal benefits. Furthermore, the study also highlights the importance of technology uncertainty under which the combined effects between the two governance mechanisms vary. Collectively, the results provide nuanced insights into the design of supply chain governance portfolios in the digital era.

Managing buyer experience in a buyer-supplier relationship in MSMEs and SMEs.

Monitoring buyer experience provides competitive advantages for suppliers as buyers explore the market before reaching a salesperson. Still, not many B2B suppliers monitor their buyers’ expectations throughout their procurement journey, especially in MSMEs and SMEs. In addition, the inductive research on evaluating buyer experience in buyer–supplier relationships is minimal, leaving an unexplored research area. This study explores antecedents of buyer experience during the buyer–supplier relationship in MSMEs and SMEs. Further, we investigate the nature of the influence of extracted precursors on the buyer experience. Firstly, we obtain the possible antecedents from the literature on buyer–supplier experience and supplier selection criteria. We also establish hypotheses based on transaction cost theory, resource-based view (RBV), and information processing view. Secondly, we employ an investigation based on the social media analytics-based approach to uncover the antecedents of buyer experience and their nature of influence on MSMEs and SME suppliers. We found that buyer experience is influenced by sustainable orientation, management capabilities (such as crisis management and process innovation), and suppliers’ technology capabilities (digital readiness, big data analytical capability).

When the supply chain breaks: strategies for the chip shortage

PurposeThe purpose of this paper is to propose a political economy framework for strategic supply chain decisions by identifying lessons from the global chip shortage.Design/methodology/approachGlobal supply chains have been viewed as holistic political economies because each supply chain is more important than the individual buyer–supplier relationships that comprise it.FindingsEach supply chain is a combination of many different vendor–supplier relationships that seem independent but are actually dependent on one another.Originality/valueWith significant geopolitical shifts, it has become necessary holistically consider the cultural, sociopolitical and economic conditions that surround supply chains. This points attention to managing the entire supply chain, rather than the immediate buyer–supplier relationship at hand.

From target to actor: Contagion of honesty and deception across buyer–supplier negotiations

AbstractUnderstanding negotiators' decision‐making processes in buyer–supplier relationships has been of key interest to behavioral operations and supply chain management researchers. We hypothesize that through the exposure to various counterparts in the supply chain network, negotiators' behaviors are influenced by others' behaviors and prone to behavioral contagion—where the target adopts the behavior he/she is subjected to and exhibits it toward a nonpartisan counterpart. This paper examines such contagion where targets turn into actors of honesty and deception across buyer–supplier negotiations. We analyzed text responses from two studies employing scenario‐based negotiation experiments with 350 and 424 individuals with B2B sales experience and tested for the effects of previously received behavior (honesty/deception) and different frequency levels of the received behavior. Our results show contagion effects for honesty and deception in both studies. These effects are largely independent from the frequency with which the behaviors have been received, suggesting that a low stimulus frequency suffices to induce contagion of honest and deceptive behaviors across buyer–supplier negotiations. Interestingly, in contrast to our hypothesized key mechanism based on the extant literature, neither injunctive nor descriptive social norms mediated the relationship between received and acted behaviors. We offer alternative explanations and discuss implications for theory and practice.

Global buyer–supplier networks and innovation: The role of technological distance and technological breadth

AbstractOne of the critical challenges of technology management for a firm is managing technological knowledge. This study focuses on available technological knowledge in a firm's global supplier network and examines factors that accrue innovation benefits from such knowledge for a buyer firm. Using absorptive capacity as a theoretical lens, we specifically examine technological distance, technological breadth, and extent of global sourcing, and how these factors interrelate in influencing a firm's innovation performance. The panel data is drawn from various sources (Bloomberg SPLC, PATSTAT Global, and Compustat). Our sample spans four years from 2011 through 2014 and comprises an unbalanced panel of 878 firm‐year observations derived from buyer–supplier relationship data of 246 unique buyer firms. Embedded in this data are 846 unique supplier firms and 9291 dyads (buyer–supplier pairs). The findings confirm the negative association between technological distance and innovation performance, and the positive association between technological breadth and innovation performance. Contrary to expectations, technological distance plays a negative moderating role in the relationship between technological breadth and innovation performance. The results also show that while the extent of a firm's global sourcing has a positive relationship with its innovation performance, the relationship changes with technological distance.

Examining collaborative buyer-supplier relationships and social sustainability in the "new normal" era: the moderating effects of justice and big data analytical intelligence.

The COVID-19 pandemic has resulted in a slew of new business practices that have put the society and environment under strain. This has drawn the attention of supply chain researchers working to address the COVID-19 pandemic's looming social sustainability issues. Prior literature has indicated that collaborative relationships improve organizational performance. Over the past years, problems related to justice are reported (e.g., between Walmart Canada and the Lego group), which might negatively affect the buyer-supplier relationship. In the new normal, the effect of justice on collaborative buyer-supplier relationships on social sustainability in the COVID-19 context is obviously essential but under-explored. The current study examines buyer-supplier collaborative relationships' influence on social sustainability under the moderating effect of justice and big data analytical intelligence. In this paper, we employ the stakeholder resource-based view, loose coupling theory, and resource dependency theory as the theoretical lens to establish the research hypotheses. Using primary survey data collected from supply chain practitioners in South Africa, hypothesis testing is done using a covariance-based structural equation modelling technique. To enhance research rigor, we have checked the dyadic perspectives of both buyers and suppliers. Our empirical results reveal that collaborative buyer-supplier relationships positively influence supplier social sustainability in the new normal era. However, it is relatively stronger from the suppliers' perspective when compared with the buyers' perspective. Secondly, the moderating effect of perceptions of organizational justice and big data analytical intelligence on the relationship between collaborative buyer-supplier relationships and supplier social sustainability is also statistically significant. However, it is relatively stronger from the buyers' perspective when compared with the suppliers' perspective. These are major findings of this study. Theoretical and managerial implications are further discussed.

Revenue sharing bids of a loss-averse supplier for a new product development contract: a multi-method investigation

PurposeWhen developing a new product, a buying firm solicits revenue sharing bids from two competing suppliers. Bidding behaviors of suppliers do not always align with predictions from rational agent models due to task uncertainty and bounded rationality, which could result in non-optimal supplier offers and ultimately hurt buying firm interests. This paper aims to discuss the aforementioned issues.Design/methodology/approachThe authors built an analytical model that considers the impact of supplier technological risk, buyer–supplier coordination cost and supplier loss aversion on the optimal bid of the supplier. Next, using limited information processing capacity as a theoretic lens, the authors explore antecedents to the size of a focal supplier's bidding error, the absolute difference between the actual bid and the optimal bid. The authors used quantitative lab experimental data to test the hypotheses.Findings(1) Bounded rational bidders often fail to differentiate between relevant and irrelevant competitive information when placing bids, (2) loss aversion of a bidder significantly affects not only levels of bids, particularly for bidders with competitive disadvantages, but also sizes of the bidding error and (3) competitive information that has clearer performance implications are more influential in reducing sizes of bidding errors.Originality/valueThe results provide a comprehensive view of the bidding behaviors of a bounded rational supplier in an innovation outsourcing context with competition. With the results, managers now have a better understanding of behavioral influencers behind non-optimal supplier bids in an innovation outsourcing context.

Generalized quick-switch sampling systems indexed by Taguchi capability with record traceability

Acceptance sampling plans of variable measurements quantified by process capability index have become compelling because they can validate how well the upstream lots (process) fit the downstream high-yield requirements in a more discriminatory and economic way. Recent research has accomplished two contrasting systems of quick-switch sampling (VQSS) based on the Taguchi capability index, namely acceptance criterion-switching VQSS (Balamurali and Usha, 2019, published in Journal of the Operational Research Society) and sample size-switching (Wang and Wu, 2021, published in Computers & Industrial Engineering) VQSS. Both studies, nonetheless, lacked in discerning the system’s inspection strengths and weaknesses, nor investigated their joint performance regarding sampling efficiency and sensitivity towards abrupt deviation of the process capability. Moreover, for a sequential lot-inspection process, their simplified mathematical formulation has overlooked the importance of lot-and-sample identification in the supply chain. To forward improvements, we develop a generalized VQSS (GVQSS) system with lot-and-sample records traceability. The GVQSS system activates the concurrent changes of sample size and acceptance criterion based on the past result for lot disposition. It can also accommodate two existing VQSS systems. Additionally, an R-Shiny interactive web app is constructed for practitioners to easily acquire the optimal criteria of VQSS systems. These advancements enable the GVQSS to deal with different phases of supplier–buyer partnerships. Finally, we demonstrate how to apply the GVQSS system through a real-world case.

Tie strength, tie brokerage and buyer–supplier co-exploration: a novelty–action trade-off

PurposeIn the pursuit of co-exploration, the strength and brokerage dimensions of dyadic ties create a novelty–action trade-off: tie strength facilitates coordination but constraints novelty, while tie brokerage expands knowledge diversity but aggravates coordination difficulty. This study contributes towards a better understanding of this tension by comparing two dimensions of relational ties and examining their contingent values given different environmental factors and exchange characteristics.Design/methodology/approachThe authors used survey data from 194 matched buyer–supplier dyads in China's high-tech industries and employed hierarchical moderated regression analysis to test the proposed hypotheses.FindingsThe authors find that compared with tie strength, tie brokerage has a stronger positive effect on co-exploration. Moreover, guanxi importance amplifies the effect of tie strength while decreasing the value of tie brokerage. As market uncertainty increases, the role of tie brokerage becomes more salient. Additionally, tie strength becomes less effective when buyer centralization is high, whereas tie brokerage exerts a stronger impact on co-exploration when an exchange is highly formalized.Originality/valueThis study contributes to the supply chain literature by adopting a relational perspective to integrate relational ties into the study of buyer–supplier co-exploration and by elaborating on the different implications of tie strength and tie brokerage in resolving the novelty–action trade-off. Furthermore, it provides a more nuanced understanding of when distinct dimensions of relational ties are effective, by clarifying boundary conditions in terms of environmental factors and exchange characteristics.

Fairness asymmetry, changes in mutual trust, and supplier performance in buyer-supplier exchanges in China: A dyadic view

Despite the crucial role of fairness in establishing and maintaining interfirm trust, the literature on how asymmetric perceptions of fairness affect mutual trust over time is limited. Adopting a dyadic view, this study investigates the impacts of fairness asymmetry on changes in mutual trust in marketing channel relationships. We further suggest that fairness asymmetry inhibits supplier performance through the mediating role of changes in mutual trust. With a two-wave sample of 239 buyer–supplier dyads, our study demonstrates that fairness asymmetry leads to a decrease in mutual trust over time, which in turn reduces supplier performance. Moreover, joint asset specificity weakens, whereas market uncertainty and behavioral uncertainty aggravate the negative effect of fairness asymmetry on buyer–supplier mutual trust. Our work offers fresh insights into the implications of fairness in ongoing buyer–supplier relationships and guidelines for practitioners to better manage their channel partnerships.

Why joint learning is not enough: the role of motivation and opportunity for customer responsiveness in the international supply chain partnerships

PurposeDrawing on the theoretical model of ability–motivation–opportunity (AMO), the author conceptualizes joint learning as the ability, relational capital as motivation and co-production as an opportunity. The purpose of the study is to explore whether joint learning, relational capital and co-production, representing the constituents of the AMO, can enhance customer responsiveness.Design/methodology/approachThe authors explore three possible configurations of the AMO framework, the additive model (primary effect), the combination model (two-way interactions) and the multiplicative model (a three-way interaction). The model is empirically tested by collecting primary data from 149 manufacturers in the information technology industry from Taiwan. In addition, hierarchical regression analysis was performed to test hypotheses.FindingsThe findings indicate strong support for the additive model, suggesting that joint learning, relational capital and co-production can enhance customer responsiveness, respectively. Also, the results of this study show strong support for the multiplicative model, indicating that the relationship between joint learning and customer responsiveness is positively significant only when both relational capital and co-production are high.Practical implicationsSuppliers can use the findings from this study to develop their joint learning and understand how joint learning in a buyer–supplier relationship enhances customer responsiveness. Specifically, this study guides firms that seek to understand relational capital and co-production seem to support the effectiveness of joint learning.Originality/valueThis study suggests that although joint learning enhances the ability to engage in customer responsiveness, the suppliers need adequate motivation and opportunity to exploit this ability entirely.