International Buyer-supplier Relationships Research Articles

Understanding the governance of high-performing international buyer-supplier relationships in China using complexity-based contingencies

• Analyses controversy surrounding governance of Western buyer-Chinese supplier relationships. • Investigates the role of complexity-based contingencies in driving governance choices. • High sourcing process complexity drives the combination of governance forms. • Structural complexity determines the appropriateness of a particular transactional mechanism.

How and when does co-production facilitate eco-innovation in international buyer-supplier relationships? The role of environmental innovation ambidexterity and institutional pressures

Eco-innovation is an important element of a firm's environmental sustainability strategy and provides both competitive and environmental benefits, resulting in a win-win solution. Although previous studies have examined the influence of co-production on innovation, little is known about how and when co-production affects eco-innovation in the context of international buyer-seller relationships. Building upon the resource-based view, the dynamic capability perspective, and institutional theory, this study develops a conceptual model focusing on the effects of co-production on eco-innovation, the mediating effects of environmental innovation ambidexterity, and the moderating role of institutional pressures. The research was carried out using a survey-based quantitative study and the proposed hypotheses were tested using the hierarchical regression analysis. The results of a survey of 124 OEM suppliers in Taiwan show that co-production has a positive effect on environmental innovation ambidexterity. Our findings also show that the direct relationship between co-production and environmental innovation ambidexterity is stronger when institutional pressures are high as opposed to when they are low and that environmental innovation ambidexterity mediates the relationship between co-production and eco-innovation. This study contributes to a theoretical understanding of why some firms develop more environmental innovation ambidexterity than others, by analyzing co-production as a predictor and institutional pressures as a moderator. We discuss the theoretical and managerial implications of our findings.

Trust and knowledge sharing in context: A study of international buyer-supplier relationships in Thailand

How does trust facilitate knowledge sharing between business partners in an emerging market? We advance the relational view of knowledge sharing by theoretically developing and empirically testing moderators of the impact of trust on knowledge sharing between MNE subsidiaries and their local suppliers. Distinguishing inter-organizational and inter-personal trust, we argue that the positive relationship between inter-organizational trust and knowledge sharing is moderated by characteristics of the transaction, while the positive impact of inter-personal trust is moderated by the organizational context in which the relationship is embedded. We test our hypotheses on a sample of 156 buyer-supplier relationships between MNE subsidiaries and local suppliers in Thai manufacturing, and find empirical support for our theoretical arguments. We conclude with managerial implications on how to facilitate knowledge sharing in an emerging market.

Rational or Emotional: Why Does Psychic Distance Inhibit International Buyer-supplier Relationships?

In spite of technological advances and the removal or reduction of tariffs and other barriers to trade, often international buyer- supplier relationships struggle. In this paper we examine the effe...

Institutional distance and knowledge acquisition in international buyer-supplier relationships: The moderating role of trust

Institutional distance can generate expanded opportunities for multinational firms to facilitate learning and responsiveness. However, such distance can also create obstacles regarding knowledge transfer and integration. A theoretical puzzle concerns the mechanisms and conditions in which international buyers and suppliers can overcome institutional distance and acquire new knowledge. We develop an integrative moderated-mediation model in which institutional distance prevents parties from accessing knowledge but, when knowledge is obtained and mutual trust is developed, it promotes cross-border knowledge acquisition in international buyer-supplier exchange, particularly between international firms and firms from the Asia Pacific region. These findings indicate that firms can overcome the challenges of regulative and cognitive distance and facilitate access to knowledge and knowledge acquisition when they are able to develop and cultivate relationships of mutual trust with foreign partners. While normative distance may create learning incentives and opportunities in international buyer-supplier relationships, its impacts on knowledge accessibility and acquisition are insignificant.

Contract Specificity, Contract Violation, and Relationship Performance in International Buyer–Supplier Relationships

This work examines contractual governance in international buyer–supplier relationships by investigating the linkages between contract specificity, contract violation, and relationship performance as well as the roles of contract monitoring and a country's institutional factors (i.e., country business risk and country globalization). The findings, based on a survey of international buyer–supplier relationships, provide new insights into a contract specificity → contract violation → relationship performance model. For example, the results indicate that contract specificity is not directly related to contract violation but, rather, that country-level factors moderate the effectiveness of contract specificity (i.e., contract specificity is more effective in suppressing an international buyer's contract violation if the buyer is from a country characterized by low business risk or high country globalization). The results also demonstrate that contract monitoring can mitigate the negative association between contract violation and relationship performance.

Governance Mechanisms Interplay in Resolving International Buyer-Supplier Relationship Conflicts

The research investigates the impact and interplay of formal and informal governance mechanisms in mitigating conflicts in international buyer-supplier relationships. The study deploys a multi-level analysis by focusing on boundary-spanners and inter-organizational relationships. An organizational information processing theory (OIPT) perspective is deployed to examine the individual roles and complementary effects of governance mechanisms when addressing inter-organizational conflicts. Rich datasets were collected from twelve Indian suppliers and their international buyers. Findings illustrate that ‘soft’ formal governance mechanisms, emphasizing the coordination, communication and sense-making functions, in combination with informal governance mechanisms can be used as an effective combination facilitate conflict resolution. In contrast, ‘hard’ formal governance mechanisms, emphasizing control functions through, for instance, third party involvement, substitute informal governance mechanisms and have a n...

Governance mechanisms in domestic and international buyer–supplier relationships: An empirical study

Governance mechanisms are a key element of business relationships. However, little is known about the possible differences between their uses in domestic versus international business relationships. Drawing on empirical data, we investigate three issues. First, we compare the use of five governance mechanisms (contracts, value-creating norms, value-claiming norms, specific investments, and trust) in purely domestic relationships as opposed to relationships with an international component. We also investigate whether customer satisfaction and commitment differ in these two settings. Second, we extend the model of Palmatier, Dant, and Grewal (2007) by adding two distinct types of governance norms—value-claiming norms and value-creating norms—and analyze the interrelationship between the five governance mechanisms as well as their impacts on business customer satisfaction and commitment. Finally, we analyze the moderating role of internationality on relationships between governance mechanisms and customer commitment. Data from a survey of 296 companies support most of the hypothesized relationships.

Ethical issues in international buyer–supplier relationships: a dyadic examination

AbstractThe author combines extant literature with findings from focus group interviews and a set of surveys to identify the ethical issues involved in relationships of US purchasing managers and their non‐US suppliers. Survey data from matched sets (dyads) of buyers and suppliers is then used to examine the influence of unethical behavior on the satisfaction with the relationship and on supplier performance.