Supplier Commitment Research Articles

Managing opportunism in a developing interfirm relationship: The interrelationship of calculative and loyalty commitment

This research develops a framework for investigating associations among the duration of an exchange relationship, the interrelationship between a supplier's calculative and loyalty commitment, and opportunistic behavior on the part of a buyer. The findings indicate that (1) calculative commitment and loyalty commitment by suppliers function as substitutes; (2) a supplier's loyalty commitment increases gradually as a developing exchange relationship endures, whereas calculative commitment increases and then decreases; and (3) a supplier's calculative commitment leads to an increase in a buyer's opportunism, whereas the supplier's loyalty commitment leads to a decrease, and a supplier's loyalty commitment decreases the positive impact of calculative commitment on opportunism. These findings provide insights into how relationship duration affects buyers' opportunism through the interrelation between suppliers' calculative and loyalty commitment.

How Interface innovates with suppliers to create sustainability solutions

AbstractBecoming a sustainable and restorative company can mean rethinking the basic components of your products. This leading carpet manufacturer's innovations, including those developed in collaboration with key suppliers, have changed the industry and moved the company closer to its sustainability goals. The author explains the company's seven areas of sustainability focus, and the role innovation plays in reducing its negative impact on the environment. He then describes Interface's approach for building supplier commitment and participation in these goals, and examines the firm's partnership with Universal Fibers, which led to the first commercially viable processes for incorporating postindustrial and postconsumer nylon in carpet facing and for salvaging old carpet from end‐of‐life disposal and recycling it into materials for new carpet production. © 2009 Wiley Periodicals, Inc.

Supplier satisfaction and commitment: The role of influence strategies and supplier development

Although considerable research is dedicated to influence strategies and supplier development, a lack of empirical support exists of their effects on supplier satisfaction and commitment. This exploratory study aims to fill this gap by investigating first-tier suppliers in the German automotive industry. Supplier reactions to three different influence strategies and two types of supplier development efforts are examined. Results indicate that supplier commitment is affected by the use of promises and both human- and capital-specific supplier development, while supplier satisfaction is affected by indirect, other direct influence strategies and capital-specific supplier development.

SUPPLIER INTEGRATION AND TIME-BASED CAPABILITIES: AN EMPIRICAL STUDY

ABSTRACT Supplier integration is touted as an imperative strategy to improve firm performance and enhance a firm's competitive advantage in the marketplace. This study investigates the relationship between several supplier integration practices and time-based capabilities. We posit that both supplier integration and time-based capability are multi-dimensional constructs and not all collaborative activities are equally important to all aspects of time-based competition. Based on the literature, several supplier integration activities, including supplier involvement, design integration, supplier base reduction, supplier commitment, and information sharing practices are examined regarding their effect on time-based competition, measured as delivery speed, new product development time, delivery reliability, and manufacturing cycle time. The statistical findings indicate while supplier integration contributes to the performance of a firm's time-based competition, some integration practices are more effective than others. The results provide specific guidelines for firms to develop and implement different supplier integration practices for enhancing specific kinds of time-based capabilities. Finally, research propositions are presented and several managerial implications are discussed.

The effects of interorganizational governance on supplier's compliance with SCC: An empirical examination of compliant and non-compliant suppliers

Often, there is a huge gap between the requirements of the Supplier Codes of Conduct (SCC) imposed by buyers from advanced economies and actual compliance with SCC in developing countries. It is difficult for reseachers to reach suppliers who have violated SCC, especially within a large sample, because few disclose SCC violations to the public. In this paper, however, we identified 108 non-compliant Chinese apparel and textile suppliers. Through the investigation of these non-compliant suppliers and their compliant peers, this paper tests the impacts of antecedent factors (price pressure, production complexity, and contract duration) and buyer's governance mechanisms (peer-to-peer and buyer-to-supplier) on the likelihood of a supplier's compliance with SCC. While the buyer-to-supplier governance does not show significant effects, the peer-to-peer governance demonstrates the likelihood of supplier's commitment to SCC. This research reveals that if buyer's governance efforts move away from threat and toward cooperation, supplier's compliance with SCC could be more sustainable.

The impact of IT and customer orientation on building trust and commitment in the supply chain

The application of information technologies (IT) to logistics activities may have benefits beyond cost savings, as it can create bonds between the supply chain partners. The objective of this paper is to analyse the influence of customer orientation on the application of IT to the supply chain and of these on the development of channel relationships based on trust and commitment. A questionnaire-based personal survey was conducted among manufacturers. Structural equation modelling was used to test the hypothesis contained in the theoretical model. The results indicate that customer orientation affects the application of IT to logistics, and IT has a positive impact on manufacturer and supplier commitment to the relationship.

It takes a marketplace community to raise brand commitment: the role of online communities

Companies are increasingly using online communities to create value for the firm and their customers. To date, evidence regarding the effectiveness of online communities as a marketing tool has been primarily anecdotal. Yet, industry practice suggests that online communities add value in several ways by: 1) building brand awareness and image, 2) providing access to the voice of loyal customers, 3) increasing supplier commitment, and 4) generating revenue from new and existing customers. Relying on social identity theory and reciprocal action theory, we develop a framework that explores the process of how a firm's online community enhances consumers' brand commitment. We empirically examine how online communities influence brand commitment and subsequent customer behaviour in a field study of over 1,500 members of an existing online community for herbal products. In our analysis, we confirm that online community commitment is a key influence on brand commitment. We also find that online community participants possess stronger brand commitment than consumers who are not members of the community. Finally, our results reveal that among online community members, brand commitment is enhanced for both active brand users and non-users of the targeted brand.

Drivers and barriers to environmental supply chain management practices: Lessons from the public and private sectors

This study explores the factors that drive or hinder organisations to implement green supply chain management initiatives. A literature review identifies the main categories of internal and external drivers of green supply chain management practices, including organisational factors, regulation, customers, competitors and society, but there is little indication of suppliers as drivers for green supply chain management. Internal barriers include cost and lack of legitimacy, whereas external barriers include regulation, poor supplier commitment and industry specific barriers. An explorative study is conducted based on interviews from seven different private and public sector organisations. Encouragingly, across the organisations, more drivers than barriers to environmental supply chain management are identified. Organisations seem to be more influenced by external rather than internal drivers. The barriers to environmental supply chain management experienced by organisations tend to be both internal and external.

Channel relationship and business uncertainty: Evidence from the Hong Kong market

This study examines the dynamics of channel relationships between an end user and multiple suppliers in Hong Kong, a major international logistics hub in Asia. Drawing on the literature on channel relationships, we examine the links between different channel relationship variables and the contingent effect of business uncertainty on the links between these variables and supplier commitment. The results of the study indicate that expected relationship continuity mediates the effects of trust and relationship quality on commitment. Furthermore, the positive effect of trust on commitment is found to be stronger when business uncertainty is high than when business uncertainty is low. As supply chain management is becoming essential for firms to succeed in today's business, industrial marketing managers need to be aware of the dynamics in channel relationships and to better manage their supply chains. The implications of our findings for research and for the practice of channel relationship management are provided.

Supplier Evaluations: The Role of Communication Quality

SUMMARYAlthough manufacturers communicate supplier evaluations in order to influence the supplier, little is known about the role of communication quality from the suppliers' perspective and its impact on suppliers' performance. Using structural equation modeling and data collected from 138 automotive suppliers, the results suggest that the evaluation content and frequency have an impact on communication quality and suppliers' commitment. Surprisingly, frequent communication of strategic criteria was insignificant or negative. In addition, commitment of suppliers to the buying organization mediated the relationship between communication quality and supplier's performance.

Supplier Commitment and Production Decisions Under a Forecast-Commitment Contract

Manufacturing firms in capital-intensive industries face inherent demand volatility for their products and the inability to change their capacity quickly. To cope with these challenges, manufacturers often enter into contracts with their customers that offer greater certainty of supply in return for more predictable orders. In this paper, we study a “forecast-commitment” contract in which the customer provides a forecast, the supplier makes a production commitment to the customer based on the forecast, and the customer’s minimum order quantity is a function of the forecast and committed quantities. We provide a complete analysis of the supplier’s decisions when there is a single customer facing uncertain demand. We first show that the supplier has two dominant commitment strategies: committing to the forecast or committing to the production quantity. We then characterize the jointly optimal commitment and production strategy for the supplier and extend the results to consider a capacity constraint. We show that the proposed contract can moderate the supplier’s motivation to underproduce, and due to the structure of the contract and the form of the supplier’s optimal strategy, also limits the customer’s incentive to overforecast. We also provide results for a capacitated two-customer example, which show that the supplier’s choice of production quantity for each customer is not necessarily nondecreasing in the total available capacity.

Exploring Commitment and Dependency in Dyadic Relationships

ABSTRACT This paper examines the constructs of supplier commitment and dependency, and reports the findings of a research investigation involving Medium Sized Enterprise suppliers and Multinational Enterprise buyers. Corresponding dyadic relationships are explored in order to obtain views concerning the Medium Sized Enterprises' commitment to and dependency on Multinational Enterprise buying firms, as perceived by both exchange parties. Whereas the findings confirm much of the existing mainstream literature that “hard” variables related to investments and co-ordinated manufacturing contribute to business relationships, we also discover that a “soft” side, much less emphasised in the literature and characterised by intangible measures, appears to play a significant role in the dyadic relationships evaluated in this study.

Relationship stability and supplier commitment to quality

This study explores the link between relationship stability and supplier commitment to quality, and the contingency of the link on characteristics of transactions within the framework of transaction cost analysis. Data collected from 358 suppliers of a globalized firm suggest that supplier firms regard a stable relationship as being positively linked to their commitment to quality for the focal buyer firm. It was also found that the link is stronger when the suppliers’ perceptions of a certainty of supply with the buyer firm are greater, while asset specificity and transaction frequency have no impact on the link. A discussion of the results and of the implications of the findings is provided.

Supplier segmentation in the automotive industry

The competitive business environment in the automotive industry has forced vehicle manufacturers (VMs) to improve their relationship strategies towards their suppliers. VMs have implemented supplier segmentation in order to optimise current business activities and existing resource allocations. Supplier selection criteria have also become crucial in order to achieve an appropriate evaluation of suppliers. Models of supplier segmentation and supplier selection criteria underpin theoretically this research. Empirical illustrations of supplier segmentation based on the perspectives of a VM and its suppliers are presented. The principal contributions of this study are the various models therein. One of the models consists of two dimensions: the supplier's commitment to a VM; and the commodity's importance to a VM. In extension, another model of dynamic relationship strategies is introduced. It consists of four relationship strategies towards suppliers in the automotive industry, such as family, business partner, friendly, and transactional. Furthermore, a four‐phase process for the analysis, selection, and managerial decision of a dynamic relationship strategy towards suppliers in the automotive industry is outlined.

Attitudes of US and European managers to supplier selection and assessment and implications for business performance

As competition motivates firms to exploit their core competencies, outsourcing takes on greater significance. Increased reliance on supplier capabilities and technologies, however, increases the impact that supplier selection and assessment can have on the buying firm and in particular, its performance. While prior studies of supply management provide considerable evidence of the criteria used by firms to select and assess suppliers, they provide little insight into the relationships between selection and assessment and the buying firm's performance. This research describes an empirical study of attitudes towards supplier selection and assessment of American and European companies and their impact on business performance. Results illustrate that while both American and European managers consider objective selection and assessment criteria such as cost and price to be more important than subjective criteria such as supplier commitment, it is the more subjective criteria that have a greater impact on firm performance. Moreover, while for American companies there are strong relationships between attitudes towards supply management and performance, similar relationships do not appear to hold for European companies.

Reducing buyer decision-making uncertainty in organizational purchasing: can supplier trust, commitment, and dependence help?

Given its negative effects on purchase behaviors, organizational buyers' decision-making uncertainty (DMU) needs to be reduced. The marketing literature still lacks insights on how business marketers can help reduce organizational buyers' DMU, especially through relationship-building approaches. We developed a conceptual model on whether the organizational buyer's DMU can be reduced by the buyer's perceptions of supplier trust, supplier commitment, and supplier dependence. Based on data collected from a national sample, our study confirms the significant negative effect of buyers' trust in the supplier on their uncertainty in purchase decisions. Buyers' trust can be enhanced if buyers perceive suppliers to be trusting of the buyers and if buyers perceive the suppliers to be highly committed to the relationship. Buyers' perception of the supplier's dependence does not significantly increase buyers' trust, but it does have a direct effect on DMU.

The performance presumption

Middleware has a variety of qualities, such as size, cost, complexity, flexibility, and performance. For each application, different qualities are more important than others. Choosing the right middleware means first determining the qualities that matter most for your application, and then evaluating different types of middleware to see how well they meet your requirements. Sounds simple, straightforward, and perhaps even obvious, right? In reality, however, properly evaluating middleware in this fashion can be a nontrivial project that can cost much more time or money than allotted in your budget. It also can require skills and experience that nobody on your staff possesses. Because of the difficulties involved in thoroughly and accurately evaluating middleware, consumers routinely take shortcuts. Perhaps most common among these is avoiding the issue altogether through supplier loyalty: they simply buy or adopt middleware systems based on recommendations from their current middleware supplier. This approach tends to work reasonably well, because it avoids the switching costs associated with moving to a new supplier. Obviously, it requires that you select a supplier that can supply viable middleware systems that survive across the life cycles of multiple technologies, rather than going with a "one-trick pony" that is tied to a single technology. It also works only as long as your supplier's middleware systems actually fulfill your requirements. Of course, supplier or brand loyalty is a general market phenomenon - one that's certainly not limited to middleware.

Reputation, trust and supplier commitment: the case of shipping company/seaport relations

Relationships between a supplier’s corporate reputation, trust in the supplier, co‐operation, buyer commitment, and willingness to undertake relationship‐specific investments were examined in the context of interactions between three UK seaports and a sample of 144 of their customer shipping firms. It emerged that the model proposed by the International Marketing and Purchasing Group performed well as a predictor of supplier/purchaser relationships within this sector. Seaports’ corporate reputations (as measured by the Fortune reputation index) significantly affected shippers’ desires for close relationships with particular ports, and acted as a quasi‐moderator of the impact of supplier trust on closeness. Reputation, moreover, constituted a pure moderator vis‐à‐vis the influences of trust on commitment and on relationship‐specific investments and adaptations of business systems. Additionally reputation modified the effects of experience (i.e. the period for which a shipper had been doing business with a specific port) on trust.

On the effects of customer conditions on distributor commitment and supplier commitment in industrial channels of distribution

Commitment in channel relationships has received increasing research attention lately. Although a number of driving forces of commitment have been identified, all of them are dyad-specific factors, and the potential influence of the environmental conditions on commitment has been ignored. The author broadens the scope beyond the distributor–supplier dyad and suggests that the commitment of channel members is affected by not only the dyadic factors, but also by the changes in customer conditions. The results of a national survey of industrial distributors and suppliers indicate that the impact of customer conditions on supplier commitment is different from their impact on distributor commitment.

Control Mechanisms and the Relationship Life Cycle: Implications for Safeguarding Specific Investments and Developing Commitment

Powerful suppliers often require retailers to make significant idiosyncratic investments to improve coordination between organizations and to enhance the supplier's presence in the end market. The authors examine how a retailer might better manage the hold-up potential of these transaction-specific investments (TSIs) through the use of three control mechanisms: supplier's TSIs, the development of relational norms, and the use of explicit contracts. Moreover, the authors consider the time-dependent nature of these mechanisms by observing their effects on commitment over the course of a relationship life cycle. The results indicate that (1) a retailer's TSIs have a negative effect on its perceptions of supplier commitment; (2) a supplier's TSIs and relational norms increase the retailer's perception of supplier commitment, whereas explicit contracts are associated with perceptions of lower supplier commitment; and (3) each of the three control mechanisms moderates the negative impact of retailer investments on perceptions of supplier commitment contingent on the relationship phase. Specifically, bilateral TSIs enhance commitment in the exploration phase and a positive effect during the decline phase. The results also indicate that the retailer's perceptions of supplier commitment are positively related to its evaluation of supplier performance and satisfaction and negatively related to conflict.