Asymmetric customer–supplier relationship development in Taiwanese electronics firms

The purpose of this paper is to analyse the relationship development stages of asymmetric customer–supplier relationships. The structure of relationships between larger customers and smaller suppliers has been the focus of a number of studies in IMP (Industrial Marketing and Purchasing Group) research. But, there is a paucity of research that examines development stages in relationships where a difference in size between the parties exists. The paper links the characteristics of asymmetric customer–supplier relationships and the relationship development stages through a literature review. The findings from a set of five in-depth case studies of asymmetric customer–supplier relationships in the Taiwanese electronics industry are presented. The case studies involved 50 semi-structured interviews with customer and supplier executives and, in addition, multiple observations of customer–supplier interactions within each case study. Individual and cross-case analysis was conducted to examine the links between the characteristics of asymmetric customer–supplier relationships and relationship development stages. The findings revealed that asymmetric customer–supplier relationships in the Taiwanese electronics industry were very unbalanced and vulnerable in the exploratory stage of development. In the developing stage relationships were more likely to develop if suppliers and customers mirrored each other's behaviour and echoed each other's priorities. In the stable stage suppliers and customers worked on shared and balanced contributions to the relationship. The paper contributes to the understanding of how smaller suppliers and larger customers can identify and develop key sets of relationship characteristics through the exploratory, developing and stable stages of asymmetric relationship development from both customer and supplier perspectives.     

Using influence strategies to advance supplier delivery flexibility: The moderating roles of trust and shared vision

This study explores trust and shared vision moderate the relationship between the manufacturer's influence strategies and supplier delivery flexibility. The major components of this study are based on reviews of marketing research that focus on influence strategies and literature regarding supply chain flexibility. The results show that the request strategy has a negative effect on supplier delivery flexibility. The model predicts that trust and shared vision have an asymmetrical effect across recommendations, information exchange, and promises influence strategies. When the relationship contains a highly shared vision, a manufacturer's use of the recommendation influence strongly promotes supplier delivery flexibility, whereas the use of a promise strategy depresses supplier delivery flexibility. In contrast, an information exchange strategy will have a negative effect, but the promise strategy will have a positive effect on supplier delivery flexibility when trust is high. This paper contributes to guidelines for management on how to align their suppliers for delivery flexibility to respond quickly to customer demands.     

Knowing me,knowing you: Self- and collective interests in goal development in asymmetric relationships

This paper investigates how self-interests and collective interests in goal development are manifested in the context of asymmetric customer–supplier relationships. Taking an interaction approach (IMP Group, 1982), a conceptual structure highlighting possible patterns of characteristics of the asymmetric customer–supplier relationship and approaches to self- and/or collective interests in goal development has been created.Based on a multiple case study approach, the findings suggest that smaller suppliers who deliberately pursue self-interest in their business activities with larger customers experience better outcomes. Larger customers recognise that the creation of collective business goals enhances the outcome of joint efforts in terms of market impact and profitability. The findings also highlight that trust is perceived as a necessity for the development of collective interests in asymmetric relationships and that the power of the larger customer is not perceived as a constraint. A key conceptual contribution is the identification of two distinct types of asymmetric relationships: ‘product/technology-oriented’ in which self-interest dominates by focusing on one party's resources for developing new products or technology and ‘complementary competencies-oriented’ in which collective interests link the competencies of the larger and smaller party for new joint business ambitions.     

An exploration of the ‘dark side’ associations of conflict,power and dependence in customer–supplier relationships

The purpose of this paper is to present the findings from a critical literature review of the ‘dark side’ issues related to three constructs, namely conflict, power and dependence, in customer–supplier relationships. Previous research has focused on discrete characteristics that influence relationships, but there is a paucity of research that considers the intertwining of a set of characteristics that may create darker associations or consequences for relationships. The paper contributes to IMP literature through this investigation of darker associations of relationships as much of the previous literature on customer–supplier relationship development has been concerned with building trust, developing commitment or managing long-term goals and mutuality (IMP Group, 1982).The paper considers the research on conflict, power and dependence in relationships, tracing its development from January 1980 to the end of 2014, and assessing the dark side issues raised in previous research, placing particular emphasis on ‘asymmetric’ customer–supplier relationships.The contribution of the paper lies in its critique of this focused body of literature and in the development of a better understanding for future IMP researchers on the derivations, foundations and findings concomitant to the ‘dark side’ of conflict, power and dependence in customer–supplier relationships. The paper proposes themes and future avenues of research related to the dark side of conflict, power and dependence, placing emphasis on the ‘bi-polarity’ of each relationship characteristic, the dynamics of relational benefits, the consequences of their evolution on inter-organizational trust and its impact on the dark side of relationships. Hence, the paper contributes through the identification of potential research areas and propositions to guide future conceptual developments in the field.     

The drivers of customer attractiveness,supplier satisfaction and preferred customer status: A literature review

In this paper, we focus on the preferential treatment of buyers by their suppliers. As there is a lack of detailed information regarding the reasons that suppliers serve some buyers better than others, our research addresses a supplier's evaluation of customers and how this evaluation can be influenced by buyers. To give an overview of the drivers of preferential treatment by suppliers, the provided literature review covers three research fields that are considered crucial to this issue: (i) customer attractiveness, (ii) supplier satisfaction and (iii) preferred customer status. By integrating these research topics, we provide a state-of-the-art analysis and overview of the various drivers of preferential treatment, build a preliminary conceptual model and suggest several directions for future research. The identification of the drivers and the resulting conceptual framework can serve as a stepping stone for additional research in this new field.     

Managing customer share in key supplier relationships

Supply base consolidation is an important issue in many business markets. Against this background, the allocation of purchasing budgets across vendors becomes an area of vital interest to suppliers. In the present research, we argue that customer share is a key decision variable in business marketing settings and investigate how a supplier can proactively manage the share of its customer's business. We report the results of a cross-sectional study among purchasing managers in U.S. manufacturing industries. Our findings confirm the role of customer value as an antecedent to customer share in business relationships. The study further shows that customer share influences the stability of key supplier relationships. Rather than displaying a direct impact, our results suggest that trust mediates and dependence moderates the link between customer share and search for alternative suppliers. Based on these findings, we propose a framework for managing customer share in key supplier relationships. Four approaches of how industrial vendors can proactively manage customer share are discussed.     

More is not always better: The impact of relationship functions on customer-perceived relationship value

Customer–supplier relationships have been promoted as a source of value for customers and as a way for suppliers to differentiate. Customer-perceived relationship value (i.e., a customer's overall assessment of the benefits and sacrifices of a given relationship with a supplier) is driven by relationship functions (i.e., the co\ntributions a supplier makes to a customer's value-creation processes). Earlier research categorizes relationship functions into two groups: direct, operation-related functions and indirect, change-related functions. This research finds that indirect functions have less impact than direct functions. Given the widely discussed advantages of supplier involvement in customer innovation, and the importance of information, access to market actors and motivation, this study analyzes why change-related functions have less of an impact than operation-related functions. The empirical results reveal that change-related relationship functions have a non-linear, inverted u-shaped impact on relationship value, and that the degree of customer innovativeness moderates this impact. Thus, while an analysis of all relationship functions is necessary, suppliers wishing to optimize business relationships should pay particular attention to customer innovativeness. The non-linear impact of change-related relationship functions gives rise to several interesting avenues for further research.     

Supply Chain Relationships for Customer Satisfaction in China: Interdependence and Cooperative Goals

This study develops a model based on Deutsch’s theory of cooperation and competition to clarify the supply chain relationships and interactions that contribute to customer satisfaction. Results of structural equation analyses suggest that organizations and suppliers and organizations and distributors who recognize each other’s importance develop cooperative rather than competitive and independent goals. With cooperative goals, they come to trust each other and work for continuous improvement; these relationships in turn result in the products and service that satisfy customers. Results were interpreted as suggesting that cooperative goals are an important basis for developing effective supply chain partnerships in Asia and perhaps in other regions as well.     

Effects of Supplier and Customer Integration on Product Innovation and Performance: Empirical Evidence in Hong Kong Manufacturers

While the beneficial impacts of supplier and customer integration are generally acknowledged, very few empirical research studies have examined how an organization can achieve better product performance through product innovation enhanced by such integration. This paper thus examines the impact of key supplier and customer integration processes (i.e., information sharing and product codevelopment with supplier and customer, respectively) on product innovation as well as their impact on product performance. It contributes to existing literature by asking how such integration activities affect product innovation and performance in both direct and indirect ways. After surveying 251 manufacturers in Hong Kong, this study tested the relationships among information sharing, product codevelopment, product innovativeness, and performance with three control variables (i.e., company size, type of industry, and market certainty). Structural equation modeling with correlation and t‐tests was used to test the hypothesized research model. The findings indicate a direct, positive relationship between supplier and customer integration and product performance. In particular, this study verifies that sharing information with suppliers and product codevelopment with customers directly improves product performance. In addition, this study empirically examines the indirect effects of supplier and customer integration processes on product performance, mediated by innovation. This has seldom been attempted in previous research. The empirical findings show that product codevelopment with suppliers improves performance, mediated by innovation. However, the sampled firms cannot improve their product innovation by sharing information with their current customers and suppliers as well as codeveloping new products with the customers. If the adoption of supplier and customer integration is not cost free, the findings of this study may suggest firms work on particular supplier and customer integration processes (i.e., product codevelopment with suppliers) to improve their product innovation. The study also suggests that companies codevelop new products only with new customers and lead users instead of current ones for product innovation. For managers, this study has demonstrated that both information sharing and product codevelopment affect performance directly and indirectly. Managers should put more emphasis on these key processes, especially when linked with product innovation. Managers should consider involving their suppliers and customers in the early stages of design. Information sharing with suppliers is also important in product development. As suggested by this study, extensive effort on supplier and customer integration should be made to directly augment current product performance and product innovation at the same time.     

How business customers judge customer success management

In business-to-business markets, customer success management is gaining growing practical importance. The concept comprises customer-related activities that aim at monitoring, securing and enhancing customer success as well as the implementation of the corresponding organizational structures and processes within the supplier firm. In contrast to existing research, this article takes a customer perspective to customer success management and investigates how business customers judge respective supplier activities; first, to reveal the quality dimensions business customers apply when assessing suppliers' customer success management activities, and second, to investigate how the quality of suppliers' customer success management activities leads to business customers' perceived value. Addressing these questions, this research contributes to literature by exploring customer success management from a customer perspective. The findings elucidate that customers' perceived value in use does not simply develop over time. Rather, through the implementation of customer-related activities of customer success management, suppliers can actively influence customers' value-in-use experiences thus fostering customers' rebuy decisions. From managerial perspective, the findings support suppliers in successfully shape their customer-oriented customer success management activities as well as the necessary internal structures and processes.     

What drives customer Re-engagement? The foundational role of the sales-service interplay in episodic value co-creation

As existing business-to-business value co-creation (VCC) contracts approach their planned expiration, customers evaluate incumbent suppliers when forming their decisions to re-engage or defect. During this late stage of VCC, supplier sales and service personnel perform unique activities to support one another and foster VCC re-engagement. To investigate this sales-service interplay, the authors employ an exploratory inquiry consisting of 115 depth interviews across 63 customer accounts. Interviews were conducted with customers following the decision to re-engage or defect from an incumbent supplier. Findings suggest that sales' efforts to renew the VCC contract depend on tactical insights provided by service. Through their involvement with customers, service holds a tactical perspective that can extract micro-level customer insights. Findings also suggest that service's ability to influence supplier-specific knowledge stores within the customer organization depends on macro-level strategic customer directives that may be shared by sales. Further, service's activation of such knowledge stores moderates the relationship between sales' RFP response and the customer's VCC re-engagement decision. The results have implications for the industrial sales and service fields, since the integration of the sales and service teams is critical for garnering intrafirm knowledge flows that drive recurrent VCC within collaborative customer-supplier relationships.     

The role of trust and relationship structure in improving supply chain responsiveness

In order to reduce cycle times between supply chain entities, managers must work to create new relational forms that rely on trust to a greater extent. We present a model suggesting that to build relationships based on trust, suppliers must invest in site-specific and human assets, and buyers must judiciously apply contracts to control for relative levels of dependence within the relationship. Our model also suggests that buyer-dependence, supplier human asset investments, and trust are all positively associated with improved supply chain responsiveness, defined in this study as the supplier's ability to quickly respond to the buying party's needs. This model is tested with data gathered from a sample of purchasing managers in North American manufacturing firms. The results suggest that even in cases when buyers do not have a great deal of control over their suppliers, working to build trust within the relationship can improve supplier responsiveness.     

Development and implementation of customer solutions: A study of process dynamics and market shaping

A broad, dynamic network perspective on solution processes remains scarce. This article presents the process of developing and implementing customer solutions and its effects on the wider business environment by investigating customers and suppliers in the global mining industry (Australia, Chile, and Sweden), analyzing the deployment of a new customer solution, and assessing the changes to the competitive environment and focal firms' relationships with other customers and suppliers. It shows that the forces that drive customer and supplier interests and motivation to co-develop customer solutions may change over time, thus redefining the aim and scope of solutions and creating failure risks. Customers present problems; suppliers respond, on the basis of not only the feasibility of the customer-specific solution but also of their evaluation of future solutions in a broader market; then suppliers aim to standardize successful solutions across markets. Customers want close supplier relationships and unique solutions but also like standardized and repeatable solutions, so they can share development costs with competitors and expose the supplier to competition to avoid lock-in effects. From a network perspective, a novel solution can have a market-shaping effect and evoke reactions from other actors who want to enhance their market position. However, these changes are not necessarily deliberate, and the dynamics that market introductions of solutions trigger may be difficult to predict.     

Corrigendum to “The effect of spatial variables on the economic and environmental performance of bioenergy production chains” [Int. J. Prod. Econ. 131 (2011) 224-233]

Using a knowledge-based perspective, we identify and test the conditions enabling inter-firm learning in the aerospace supply chain. We focus on buyers accessing knowledge from their suppliers. Hypotheses are tested via a cross-sectional survey of supplier relationships of prime contractors in Canada's aerospace industry. The variables identified as having a significant impact on inter-firm learning are as follows: the quality of the buyer–supplier relationship in terms of trust, collaboration, socialization and information sharing; the proprietary links between both firms; and the use of ITC collaboration tools.     

The use of asset specific investments to increase customer dependence: A study of OEM suppliers

Making asset specific investments without sufficient economic safeguards is usually seen as a poor managerial practice according to transaction cost economics. However, in practice, many suppliers still invest in asset specificity to satisfy their major customers' requirements, who do not make sufficient investment commitments. The objective of this study is to explore how suppliers that make asset-specific investments maintain long-term relationships with their customers and even make their customers reliant on them. Empirical analysis of data from a sample of Taiwanese original equipment manufacturer (OEM) suppliers shows a significant positive indirect effect of asset specificity on the dependence of customers on suppliers, mediated through joint learning capacity. In addition, a positive link between a proactive market orientation and the degree of customer dependence on the supplier was found. This investigation finds evidence that joint learning capacity and proactive market orientation play critical roles in linking asset specificity to customer dependence.     

Market Orientation and Innovativeness in Supply Chains: Supplier's Impact on Customer Satisfaction

As today's firms increasingly outsource their noncore activities, they not only have to manage their own resources and capabilities, but they are ever more dependent on the resources and capabilities of supplying firms to respond to customer needs. This paper explicitly examines whether and how firms and suppliers, who are both oriented to the same customer market, enable innovativeness in their supply chains and deliver value to their joint customer. We will call this customer of the focal firm the “end user.” The authors take a resource‐dependence perspective to hypothesize how suppliers' end‐user orientation and innovativeness influence downstream activities at the focal firm and end‐user satisfaction. The resource dependence theory looks typically beyond the boundaries of an individual firm for explaining firm success: firms need to satisfy customer demands to survive and depend on other parties such as their suppliers to achieve customer satisfaction. Accordingly, the research design focuses on three parties along a supply chain: the focal firm, a supplier, and a customer of the focal firm (end user). The results drawn from a survey of 88 matched chains suggest the following. First, customer satisfaction is driven by focal firms' innovativeness. A focal firm's innovativeness depends, on the one hand, on a focal firm's market orientation and, on the other hand, on its suppliers’ innovativeness. Second, no relationship could be established between a focal firm's market orientation and a supplier's end‐user orientation. Market orientation typically has within‐firm effects, while innovativeness has impact beyond the boundaries of the firm. These results suggest that firms create value for their customer through internal market orientation efforts and external suppliers' innovativeness.     

Addressing a product management's orphan: How to externally implement product eliminations in a B2B setting

While product eliminations (PEs) may help suppliers reduce unprofitable products and the cost of increasingly complex portfolios, they often have deleterious consequences for customer–supplier relationships. This dilemma even increases as a supplier's attempt to mitigate deleterious consequences for customers through customer-oriented PE implementation may at the same time hinder optimal internal adjustments and related cost-saving potential, thus running counter to the actual purpose of PEs. This study investigates whether and how a supplier should act in the customer's interest to maximize gains from implementing PEs. We identify key approaches of customer-oriented PE implementation and performance outcomes. Using a multiple-informant supplier sample and a customer validation sample, we show that, depending on the availability of alternatives to customers and the type of PE implementation activity, customer-oriented PE implementation can either pay off considerably or be disadvantageous to a supplier. While PE compensation is always detrimental to overall PE performance, both PE communication and PE support are mostly beneficial. By contrast, PE participation is ambiguous to overall PE performance, as it generally helps retain customer goodwill but also decreases supplier cost-savings from PEs.     

How does green innovation affect supplier-customer relationships? A study on customer and relationship contingencies

As the demand for eco-friendly products arises, many suppliers have devoted significant effort to green innovation. Prior studies have investigated how green innovation influences product and firm performance; however, its influence on the relationship between suppliers and organizational buyers (customers) is still unknown. Organizational buyers' receptivity to green products is uncertain as they must adjust their current systems to accommodate the new products. As such, understanding how supplier green innovation effort affects the supplier-customer relationship is essential for green innovation success. Using data collected from 196 B2B customers, we find that the relationship between supplier green innovation effort and relational performance depends on several customer- and relationship-level contingencies. Specifically, green innovation benefits a relationship more if customer participation and relational embeddedness are high, or if customer risk aversion and customer-perceived product criticality are low. This research provides valuable guidance for the effective implementation of green innovation.     

Outcome-based contracting from the customers' perspective: A means-end chain analytical exploration

Within the context of servitization, manufacturing firms increasingly offer outcome-based contracts (OBCs) which sell the outcome of a manufacturing process instead of the resources required for outcome creation. While extant studies have focused on the provider's viewpoint, this research explores industrial customers' requirements and goals when sourcing OBCs. We report the results of laddering interviews with purchasing and engineering managers from 32 actual and potential OBC customers. Based on a means-end chain analysis we find that, in addition to organizational goals, such as reducing costs or ensuring reliable supply, individual goals of the decision-makers also play a key role when purchasing OBCs. Specifically, the risk of being held accountable for problems that may occur in an OBC's implementation and operation emerges as an important concern of decision-makers. In contrast to extant research, that highlights how OBCs transfer operational risk from the customer to the supplier firm, our study indicates that customers also perceive elevated levels of individual and organizational risk when making OBC purchase decisions. Against this backdrop, OBC salespeople should address both individual and organizational goals of key decision-makers in the customer firm and focus on building trust in the supplier's ability to realize and operate an OBC.     

Distributors' customer-driving capability under supplier encroachment

Suppliers in business-to-business (B2B) markets often directly approach end customers in addition to using third-party distribution channels. This phenomenon, known as supplier encroachment, poses an increasing challenge to the distributor's profitability in the supply chain. However, little research has adopted the distributor's perspective to examine how it can overcome this challenge. This study addresses this gap by adopting the dynamic capability and network embeddedness theory to postulate the critical role of the distributors' customer-driving capability in tackling encroachment. Using survey data from 125 distributor firms in the semiconductor industry, we show that distributors' customer-driving capability significantly improves firm performance and that the impact strengthens when supplier encroachment is high. Moreover, we delineate the positive impacts of supplier relationship exploration, distributor relational embeddedness, and customer service excellence on distributors' customer-driving capability. Interestingly, supplier encroachment weakens the effects of supplier relationship exploration and customer service excellence but strengthens that of distributor relational embeddedness, indicating the importance of leveraging peer relationships under high supplier encroachment.