Buyer Supplier Research Articles

How do customers’ environmental efforts diffuse to suppliers: the role of customers’ characteristics and suppliers’ digital technology capability

PurposeThe growing attention to green supply chain transparency prompts firms to disclose their environmental efforts and manage environmental issues along supply chains. Drawn upon diffusion theory, this study aims to investigate how customers’ environmental efforts can be diffused to suppliers for similar actions, as well as how customers’ (diffusors’) characteristics and suppliers’ (followers’) capability in digital technology application moderate the relationship.Design/methodology/approachThis study collects secondary data of 1,514 unique customer-supplier dyad year observations of Chinese listed firms and their disclosed environmental efforts from 2009 to 2022. A fixed-effect regression model is used to test the hypotheses.FindingsThis study reveals a positive association between customers’ disclosed environmental efforts and those of their suppliers. Furthermore, the relationship is strengthened when customers are state-owned or when suppliers possess higher levels of digital technology application capability. These findings remain robust when alternative measures of variables are employed.Originality/valueThis study contributes to the supply chain transparency literature by uncovering the diffusion mechanism of environmental efforts from customers to their suppliers. It further identifies moderators for this diffusion, including customers’ (diffusors’) ownership and suppliers’ (followers’) capability. Lastly, our study extends the applicability of diffusion theory within a buyer–supplier context.

Bridging versus buffering: how IT capabilities and dependence advantage shape responses to supply chain disruptions?

PurposeDrawing upon resource dependence theory, this study aims to examine how a firm’s information technology (IT) capabilities (i.e. IT integration and IT reconfiguration) influence its responses to disruptions – bridging with a current supplier and buffering with an alternative supplier. We further examine how such relationships are moderated by the firm–supplier relative dependence (i.e. firm dependence advantage and supplier dependence advantage).Design/methodology/approachBased on data from 141 match-paired surveys of firms in China, we test our model.FindingsOur study finds that IT integration positively influences bridging and IT reconfiguration positively influences buffering. Furthermore, our findings indicate that the positive impact of IT integration on bridging is negatively influenced by the firm’s dependence (FD) advantage but positively moderated by the supplier’s dependence advantage. By contrast, the positive impact of IT reconfiguration on buffering is negatively influenced by the FD advantage.Originality/valueOur study provides a more nuanced insight into the effects of IT capabilities on disruption responses and a better understanding of the buyer–supplier dependence boundary conditions under which these effects vary.

Leveraging supplier orientation for innovation: Exploring the impact of supply management innovativeness and innovation partnership

AbstractIndustry 4.0 has created new opportunities for enterprise innovation by leveraging emerging technologies. External innovation represents a valuable source of ideas and knowledge for internal innovation, and enterprises are increasingly leveraging their supplier relationships to gain a competitive advantage. Some researchers suggest that suppliers enhance the effectiveness and outcomes of lean innovation. To deepen our understanding of the relationship between supplier orientation and innovation outcomes, this study explores the mechanisms through which supplier orientation contributes to enhancing innovation performance, with a specific focus on the role of supplier orientation in improving supply management innovativeness and innovation partnerships. Survey data from 209 Chinese firms engaged in innovation practices was analyzed using a hierarchical regression based on resource dependency theory. Results reveal that supplier orientation positively influences supply management innovativeness and innovation partnerships. Supply management innovativeness and buyer–supplier innovation partnerships both contribute to improved innovation performance. Our findings suggest that the buyer–supplier innovation partnership plays a moderating role in the relationship between supply management innovativeness and innovation performance. These insights provide a valuable basis for developing innovative strategies and managing inter‐firm relationships, emphasizing the importance of supplier relationship management practices in enhancing firms' competitiveness and performance by leveraging external resources and knowledge.

Unlocking effective coordination: A knowledge‐based multilevel perspective on supplier integration into product development

AbstractSupplier integration into product development (SIPD) provides better access to the specialized knowledge of suppliers but brings about interdependencies and difficulties related to effective coordination. The literature implicitly assumes that coordination in SIPD can be understood and resolved through a single‐level view. This article challenges this assumption and argues for simultaneous attention to knowledge interdependencies at the product, supplier, and buyer–supplier levels. Component modularity, supplier knowledge modularity, and knowledge complementarity are focal concepts at each respective level. Theorizing from a knowledge‐based multilevel perspective, this article constructs a typology of effective coordination. Interrelationships among the concepts reveal patterns of required coordination embedded in the system before product development, enabling partners to effectively direct coordination efforts during development. The framework exposes a dilemma overlooked in the single‐level coordination view. For example, when there is low component modularity and high supplier knowledge modularity (i.e., opposing forces for and against coordination), it is difficult to reason how to coordinate SIPD. Proposing that each high/low modularity configuration calls for a specific type of knowledge complementarity, this article contributes to resolving this dilemma.

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 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.

Affect-based dimensions of trust: a study of buyer-supplier relationships in Thai manufacturing

PurposeTrust is an important facilitator of successful B2B relationships. The purpose of this study is to investigate affect-based antecedents of both interpersonal and interorganizational trust, and their impact on the performance of buyer–supplier relationships. The authors ask two research questions: (1) What are affect-based dimensions of interpersonal and interorganizational trust? (2) How do interpersonal and interorganizational trust influence buyers’ operational performance?Design/methodology/approachThe authors use data from an original survey of 156 buyer–supplier relationships between multinational enterprise subsidiaries and local suppliers in the Thai manufacturing sector to develop a structural model in which the authors test the hypotheses.FindingsConsistent with social exchange theory and social psychology, the empirical analysis shows that affect-based dimensions at the individual level, namely, likeability, similarity and frequent social contact, and at the organizational level, namely, supplier firm willingness to customize and institutionalization of cooperation, are important for establishing trust. In addition, interpersonal trust enhances buyers’ operational performance indirectly via interorganizational trust.Practical implicationsBuying and selling firms may develop organizational trust by developing processes that enhance organizational trust. Individuals with purchasing or sales responsibilities may enhance trust in their personal relationship. However, such interpersonal trust needs to be translated to the organizational level to benefit organizational performance.Originality/valueThe findings contribute to the literature on affect-based antecedents and outcomes of trust. Specifically, the authors offer theory and empirical evidence regarding the contribution of salespersons toward affect-based dimensions of trust and its impact on buyer’s operational performance.

Sustainability drivers and national culture in buyer-supplier environmental practices: an institutional perspective

PurposeThis study aims to explore how sustainability drivers interact with national culture to explain the adoption of buyer–supplier environmental sustainability practices.Design/methodology/approachDrawing on Institutional Theory, this study proposes three sets of hypotheses focused on the role of key cultural dimensions: uncertainty avoidance, power distance and institutional collectivism. It uses a sample of 284 manufacturing plants across three industries and 14 countries to test these hypotheses, using regression analysis.FindingsFindings suggest that national culture matters in the adoption of buyer–supplier environmental practices; however, its effect is contingent upon the particular combination of cultural dimensions and drivers analyzed.Originality/valueThis study enhances the understanding of the drivers behind buyer–supplier environmental practices by offering a novel examination of their interaction with national culture. This helps explain the heterogeneity in environmental sustainability adoption across countries.

Sustainability isomorphism in buyer–supplier relationships: The impact of supply chain leadership

AbstractWithin the framework of institutional theory, this study explores how the proactiveness of focal (or buying) manufacturing firms, demonstrated through the adoption of various sustainability practices, influences the sustainability performance of suppliers. Additionally, it examines how the leadership capability of buying firms, particularly in terms of supply chain leadership, can play a crucial role in this link. Through empirical analysis of a sample taken from the fourth round of the High‐Performance Management (HPM) project, our study reveals compelling evidence indicating that buying firms, by adopting diverse sustainability practices, such as internal initiatives, monitoring efforts and collaborative approaches with suppliers, are able to create distinct institutional pressures. These pressures serve as a conduit for the diffusion of a shared set of sustainability goals, values and norms among suppliers, ultimately contributing to the development of sustainability competences and improving their overall sustainability performance. Furthermore, our findings suggest that when buying firms undertake a leading position, they can effectively translate isomorphism pressures into sustainability improvements on the supplier side. Overall, this study sheds light on important and understudied aspects of sustainability practices in buyer–supplier relationships and underscores the critical role that supply chain leadership can play in promoting sustainable practices across the entire supply chain.

Unveiling the value of institutional pressure in socially sustainable supply chain management: The role of top management support for social initiatives and organisational culture

AbstractThis study aims to explore the factors that motivate firms to adopt socially sustainable supply chain management (socially SSCM) practices. To address this question, we seek to investigate the effect of institutional pressure on firms' socially SSCM (i.e., assessment and collaboration) and the mediating role of top management support (TMS) for social initiatives. We also argue that organisational culture, which comprises flexibility and control orientation, influences the process from institutional pressures to TMS for social initiatives. Using survey data from 248 buyer–supplier dyads in China, we find that institutional pressure positively influences companies to enhance socially SSCM, including assessment and collaboration practices. Moreover, TMS for social initiatives plays mediating role in the relationship between institutional pressure and socially SSCM. Moreover, flexibility‐orientated culture weakens the influence of institutional pressure on TMS for social initiatives, whereas the effect of institutional pressure on TMS for social initiatives intensifies as control‐orientated culture increases. This study contributes to the literature by stressing the social dimension of SSCM and linking institutional and organisational factors involved in social ethics issues to understand buying firms' tendency to achieve socially SSCM.

Digitalization of BSR in the recession

Digitalization of BSR (buyer supplier relationship) is generally one of the effective tools to strengthen the supply chain. This study aims to establish the correlations between the perceived importance of BSR, investment in BSR digitalization and ER (economic result) change. Data collecting was realized in the form of a questionnaire survey. This survey was carried out in Czech enterprises of different focuses and sizes. Hypotheses are tested using Pearson's Chi-squared test. The study confirmed that correlation between the perceived importance of BSR and investment to BSR digitalization is stronger for producers than for service providers. The investment in BSR digitalization brings about ER development in the short term only for services providers. Enterprises do not associate the development of ER and the importance of BSR. BSR is considered an important area as part of the SCM whole, but ER development is not associated with this area, nor does investment in this area have a clear economic effect in a recession. Thus, the logical triad of "importance of the process- investment in process development – process effect" is unprovable in the case of BSR digitalization in a recession.

A Market Value Analysis of Buyer–Supplier Relationship Building Awards

The purpose of this article is to study the signaling potential of “supplier awards” in creating shareholder value for the award-giving and the award-receiving firm. We use event study methodology with supplier awards as events that signal mutually beneficial buyer–supplier relationship (BSR) efforts to estimate the firm value generated from these efforts. Supplier awards, apart from being a supplier development (SD) activity in themselves, are also a signal of a mutually beneficial relationship between a buyer and a supplier. This article performs a deep study by investigating the impact of traits, such as award exclusivity and award satiation, on the efficacy of supplier awards as a signaling mechanism. We find that shareholders of firms that give awards (buyers) and those of firms that receive awards (suppliers) react positively to such events, thereby establishing the signaling potential of supplier awards that signal the mutually beneficial BSR and SD efforts. We find that a more exclusive award has a higher positive impact on the buyer's shareholders. We also find that there is a higher impact on the supplier's market value when that supplier receives awards less frequently. This article pioneers a study of interorganizational awards that considers traits, such as exclusivity and award satiation, that are not frequently studied in extant research.

A comparison of the importance of wine supplier quality attributes for on-premise and off-premise wine retail establishments

PurposeGiven the intensified competitiveness in the wine retail industry, partnering with quality suppliers becomes critical to ensure a steady supply of high-quality products and sustainable business growth. This study aims to explore how wine supplier quality attributes impact wine retail businesses and if such effects differ depending on wine retail types.Design/methodology/approachData were obtained from wine purchasing managers in Korea. To validate the proposed relationships, structural equation modeling was used. A multigroup analysis was conducted to test distinct roles of on/off-premise wine retail types within this research framework.FindingsResults support the significance of supplier quality attributes in shaping the landscape of wine retail businesses. Operational and strategic benefits exhibited a positive effect on both financial performance and suppliers’ relationship satisfaction, thereby improving the intent to continue working with suppliers. This study revealed noteworthy distinctions in the effects of supplier quality attributes on operational and strategic benefits between on-premise and off-premise wine retailers.Research limitations/implicationsFindings provide valuable insights to wine suppliers and buyers concerning the establishment of a mutually beneficial long-term interdependent relationship. The approach sheds light on the unique dynamics of wine retail types, contributing to a more comprehensive understanding of the distinct roles of supplier quality attributes on on-premise and off-premise retailers.Originality/valueThis study developed an integrative framework, emphasizing the importance of supplier quality attributes in the wine retail industry. This model offers valuable insights into creating favorable buyer–supplier relationships that result in mutual benefits for both wine retailers and suppliers.

Interdependence in buyer–supplier relationships

Interdependence in buyer–supplier relationships

“If only we'd known”: Theory of supply failure under two‐sided information asymmetry

AbstractSupply failures are persistent and costly in contemporary supply chains. Viewed through the lens of agency theory, such failures are potentially caused by hidden actions of the supplier under information asymmetry and goal incongruence in the buyer–supplier relationship (as principal–agent). However, by reversing the direction of information asymmetry, an alternative cause arises: hidden expectations, where the supplier has good intentions but incomplete information regarding the buyer's true preferences and specifications. Further, following a failure, the buyer forms a causal attribution and takes subsequent action. Yet these attributions suffer from cognitive biases potentially causing buyers to misattribute supply failures, leading to costly conflict and even relationship termination. Combining agency and attribution theories, this article develops a theoretical framework to explain antecedents to a buyer's attribution process under conditions of two‐sided asymmetric information. It discusses the harmful relationship effects of misattribution. The framework can assist in identifying and minimizing cognitive biases causing misattribution, hence avoiding the unintentional deterioration of relationships that often follow a supply failure. A research agenda to examine hidden expectations and misattribution is also provided.

Mitigating the damage of a global pandemic on the international buyer-supplier relationship: Evidence from Chinese suppliers

The coronavirus disease 2019 (COVID-19) pandemic severely damaged the global supply chain, resulting in markdowns across the global economy. A growing body of research has explored the influence of this global pandemic on firm strategy and performance. However, despite the substantial impact of the pandemic on the global supply chain, no empirical studies have examined its impact on buyer–supplier relationships. Building on the literature on transaction cost economics (TCE) and interfirm governance, this study examines the effects of COVID-19 pandemic severity on interfirm conflict and opportunism in international exchange relationships, as well as the role of contractual and relational governance in shaping these effects. Based on data from a two-period survey of manufacturing firms in China and their foreign buyers with archival data, our findings reveal that pandemic severity increases interfirm conflict and buyers’ opportunism in international exchanges. Moreover, contractual governance aggravates the detrimental effect of pandemic severity on buyers’ opportunism, while relational governance weakens the detrimental effect of pandemic severity on interfirm conflict. When contractual and relational governance are implemented jointly, they can weaken the detrimental effect of pandemic severity on buyers’ opportunism.

Fairness and trust in organic food supply chains

PurposeThe authors analysed fairness as an antecedent of trust to understand how trust building can be actively managed to facilitate collaboration in buyer–supplier relationships.Design/methodology/approachA case study was employed to buyer–supplier relationships of five organic food companies from three different sectors. The research was developed with data collected in 2022 through qualitative research interviews and analysed using a structured content analysis. A practitioner workshop served to complement findings and confirm the interpretation of data by discussing interview results from a managerial perspective.FindingsA conceptual model based on organisational trust and justice theory was developed to examine causal relations between fairness and trust. Findings show that perceived distributional, procedural and interactional fairness mutually interact with the perceived trustworthiness of business partners and that both contribute to building personal, organisational and institutional trust. Qualitative data support the conceptual model and show that trust is a valuable relational resource that affects relationship quality and the willingness to collaborate and to take risks in times of uncertainty.Practical implicationsHigh trust levels developed through positive fairness perceptions can lower risk perceptions whilst increasing the willingness to collaborate in supply chain relationships. This can help deal with market uncertainties.Originality/valueThrough the lens of organisational trust and justice theory, this study extends the literature on collaboration in supply chains by including a comprehensive view on the formation of trust in business-to-business (B2B) relationships.

The impact of boundary conditions on the relationship between value creation and value appropriation in buyer-supplier relationships

Purpose This study aims to investigate whether higher value creation leads to higher value appropriation and to identify the boundary conditions in a buyer–supplier relationship that can explain why a particular supplier can appropriate higher value than others. Design/methodology/approach The study uses questionnaire surveys. The sample of the survey has 150 publicly-listed supplier firms in Taiwan. The unit of analysis is the buyer–supplier relationship. Findings In the buyer–supplier relationship, suppliers’ bargaining power, partnership and a supplier’s original brand manufacturing (OBM) business can strengthen the positive relationship between value creation and value appropriation. Research limitations/implications This study adopts the unilateral viewpoint of suppliers; however, some constructs might require dyadic evaluation. This study only explores the spillover effect of OBM business on the relationship between value creation and appropriation. Practical implications The spillover effect of a supplier’s OBM business in a buyer–supplier relationship allows the buyer to share more common benefits and the supplier to capture more private benefits as compensation. By broadening its customer base, a supplier can increase its bargaining power. A supplier can also maintain a strategic partnership with each essential buyer. Originality/value To avoid the dark-side effect of partnership, the model provides the contingency that a supplier can capture more value from a buyer–supplier relationship.

Examining the impact of market power discrepancy between supply chain partners on firm financial performance

Market power reflects a firm's competitive advantage and plays an important role in its performance. However, in a buyer-supplier relationship, how the asymmetric market power between a firm and its partners affects the firm financial performance remains an open question. This study investigates the impact of market power discrepancy (MPD) between a focal firm and its supply chain partners on the focal firm's financial performance, as measured by return on assets (ROA). With empirical evidence from China's listed firms between 2001 and 2021, we find that a higher MPD between the firm and its supplier or the firm and its customer negatively affects the firm's financial performance. A supplier or customer that has a matched market power with the firm is the best candidate for building a relationship. In addition, our findings suggest that the strength of the buyer–supplier relationship amplifies the negative impact of MPD on the firm's financial performance, whereas the level of relationship embeddedness reduces the MPD's negative effect. Moreover, our findings suggest that firm-specific institutional, industry, and regional economic heterogeneities affect the MPD's financial impact. Further, we find that MPD not only negatively affects a firm's financial performance but also worsens its environmental, social, and corporate governance performance. Our study recommends that firms should alleviate the asymmetry of market power with their partners and leverage the relationship dependence to balance power and benefits.

Procurement under pressure: shifting governance strategies in turbulent times

ABSTRACT Organizations in the public sector generally use contractual governance mechanisms to govern buyer–supplier relationships. Little is known about what happens when procurement is put under pressure and which governance strategies are used in such turbulent times. News articles, parliamentary documents, and internal communication regarding the procurement of personal protective equipment during the COVID-19 crisis in the Netherlands were analysed to address this question. The findings show a brief shift from contractual to relational governance, followed by an attempt to return to contractual governance, albeit with different procedures. After the contract closes, limited governance strategies are applied, resulting in ‘laissez-faire’ governance.