The micro-processes of supplier satisfaction: A longitudinal multiple case study

Supplier satisfaction has often been argued to be an important determinant for supplier performance in the buyer-supplier relationship. The micro-processes of how supplier satisfaction develops and how it relates to supplier performance, however, are not well understood. By means of a longitudinal multiple case study design of 18 buyer-supplier relationships, this paper provides insights into the micro-processes of how supplier satisfaction develops. Our findings provide several new insights. First, we observed how supplier satisfaction levels showed little change even though the buyer's behavior did not align with the supplier's expectations, thereby nuancing current conceptualizations of supplier satisfaction being a function of expected and realized relational value. Second, we show how intra organizational dynamics at the supplier influence the relationship between supplier satisfaction and supplier performance. Third, our findings give insights into the complex interplay between the relational and economic antecedents of supplier satisfaction.     

How and when environmental orientation drives corporate sustainable development in a cross-national buyer–supplier dyad

This study aims at relating the role of environmental orientation to corporate sustainable development within a cross-national buyer–supplier dyad. To this end, it specifically proposes and empirically tests a model delineating how the international buyer's environmental orientation would influence its green supplier development (GSD) activities, then its outsourcing supplier's green product strategies (GPS), and finally total relationship value (TRV) of the entire buyer–supplier dyad. It also examines how supplier overall information technology advancement (SOITA) would further moderate the aforementioned influences. Survey results derived from 202 buyer–supplier dyads have provided empirical support for all the hypothesized relationships of the proposed model. To summarize, the findings show that international buyers' internal and external environmental orientations both serve as a major driver for their GSD, which, in turn, significantly advances outsourcing suppliers' practice of GPS and consequently enhances TRV. Moreover, this study has demonstrated that SOITA exerts a significant and positive moderating effect on the GSD–GPS link. Overall, this study provides important insights into understanding the complex and contingent processes underlying the influence of the international buyer's environmental orientation on the joint performance of the dyad.     

The effect of unethical behavior on trust in a buyer–supplier relationship: The mediating role of psychological contract violation

Research on trust in buyer–supplier relationships has tended to focus on the performance outcomes of a trusting relationship, as well as the processes that serve to build trust. Largely absent from the buyer–supplier literature is an in-depth examination of activities that break down trust, and the resulting effect on supplier trust in the buyer. The authors propose and test a model that evaluates psychological contract violations between a buyer and a supplier as a mediating variable of the effect of unethical activities on trust within a partnership. Survey data was collected from 110 tier one suppliers of major corporations in the state of Ohio. Our results show how a supplier's perception of a violation of the psychological contract either partially mediates or fully mediates the relationship between the buyers unethical activity and the suppliers trust in that buyer. We discuss how suppliers may demonstrate bounded ethicality when they overlook perceived unethical behaviors by the buyer.     

The impact of supplier dependence on suppliers' CSR: The moderating role of industrial dynamism and corporate transparency

To improve corporate social responsibility (CSR) in the supply chain, focal buyers may use supplier dependence to influence the supplier's resource strategy to promote the supplier's CSR initiatives. Thus, supplier dependence is particularly critical to the supplier's CSR, especially for Chinese suppliers with resource constraints. However, there is limited understanding and research on the degree to which a supplier depends on major buyers for the supplier's CSR from the supplier's perspective. Based on a sample of 284 Chinese listed companies, this study analyses the relationship between supplier dependence and suppliers' CSR through the lens of resource dependence theory (RDT). In addition, we investigate the moderating roles of industrial dynamism and corporate transparency in the relationship between supplier dependence and suppliers' CSR. The results indicate that supplier dependence has a negative impact on the Chinese supplier's CSR performance. Meanwhile, the negative impact of supplier dependence is mitigated for the supplier's more volatile industrial context, while improving corporate transparency enhances the negative impact of supplier dependence. This study verifies the applicability of RDT for the analysis of CSR in the supply chain in emerging markets such as China. Moreover, the study further extends research on the role of buyer-supplier relationships in CSR in the supply chain by extending the research perspective to the supplier side and adding the external and internal uncertainty of the supplier to the theoretical framework for analysis. We also provide managerial implications for implementing Chinese suppliers' CSR from the buyer's and supplier's perspectives.     

Exploration of congruence in perceptions of buyer–supplier attraction: A dyadic multiple case study

In long-term complex buyer–supplier relationships, many exchanges are non-contractual, a factor that emphasizes the social dimension of the relationship. Previous studies have shown that attraction is a fundamental aspect of the social dimension and a main driver in non-contractual exchanges. Although attraction is a determinant of a relationship, many studies have examined the relationship only from the buyer's or supplier's perspective. Our study extends this research stream by considering the dyadic aspect of attraction and poses the following questions: Does the success of a relationship require that both parties perceive it to be attractive? How important is it to understand how the company looks in the eyes of the other party? In this paper, we explore the dyadic aspect of buyer–supplier attraction by analyzing six cases, two buyer firms and six supplier firms and by conducting a total of 43 interviews. By using cross-case analyses, we develop a set of proposals for explaining how congruence in perceptions of attraction affects relationship success.     

Supplier–supplier relationships in buyer–supplier–supplier triads: Implications for supplier performance

A growing number of studies and evidence from industries suggest that, besides managing the relationship with its suppliers, a buyer needs to proactively manage the relationships between those suppliers. In a buyer–supplier–supplier relationship triad, the buyer, as the contracting entity, influences the suppliers’ behaviors and the relationship between them. By considering the relationships in such a triad, we are able to gain a richer and more realistic perspective of buyer–supplier relationships. In this study, our goal is to examine supplier–supplier relationships in buyer–supplier–supplier triads, focusing on how such relationships impact the supplier performance. We frame the supplier–supplier relationship as co-opetition—one in which competing suppliers work together to meet the buyer's requirements. We investigate the role of the buyer on such relationships, and how the buyer and co-opetitive supplier–supplier relationships affect supplier performance. We find mixed empirical support for our hypotheses. However, we are able to demonstrate the dynamics of supplier–supplier co-opetition in the buyer–supplier–supplier triad. We point out the need for further studies in this area.     

The effects of balanced and asymmetric dependence on supplier satisfaction: Identifying positive effects of dependency

Studies argue that balance in dependence is critical to supplier satisfaction in buyer-supplier relationships. We examine whether asymmetric relationships can also lead to supplier satisfaction, arguing that traditional analysis methods are unsuitable for thoroughly analyzing this issue. With polynomial regression and response surface analysis combined with dyadic data, we test the relationship between (1) balanced dependence (i.e., the buyer and supplier are equally dependent on each other) and supplier satisfaction and (2) asymmetric dependence (i.e., either the supplier or buyer is the dominant party) on supplier satisfaction. The results indicate that mutual dependence is positively related to supplier satisfaction, but surprisingly, asymmetric dependence can be related to higher levels of supplier satisfaction.     

Supplier dependence asymmetry and investment in innovation: The role of psychological uncertainty

A key source of competitive advantage for large firms accrues from investments in innovative products and processes by their suppliers, incentivized by a positive relationship climate. A fundamental hindrance lies in a condition that commonly characterizes buyer-supplier relationships: asymmetric levels of dependence between business partners. Such asymmetry has been shown to be detrimental to the relationship, enhancing the likelihood of conflict, and negatively impacting the performance of the more dependent party. Considering that such dependence asymmetry is likely to persist, large buyers face the challenge of promoting a relationship environment that provides an incentive for suppliers to invest in innovation. In this study, we propose that large, dominant buyers can influence suppliers' intentions and behaviors by mitigating the effects of their perceived riskiness and ambiguity that emerge from a situation of dependence asymmetry. Specifically, using the lens of resource dependence theory, we investigate the effects of these two psychological dimensions of uncertainty on a supplier's trust, commitment, and willingness to invest in innovation, as well as the moderating effect of a buyer's information sharing in shaping a supplier's perceived uncertainty. The model is tested with a scenario-based experiment and results are corroborated by interviews with experienced managers of retail suppliers. Our findings indicate that a supplier's dependence on a large buyer increases its perception of ambiguity and riskiness in the relationship, negatively impacting its trust, commitment, and willingness to invest in innovation. However, a buyer who shares relevant and timely information with the supplier mitigates its perceived uncertainty, promoting the supplier's positive attitudes towards the buyer and incentivizing innovation. Sharing operational and strategic information such as point-of-sales data, sales forecasts, or strategic plans, becomes a valuable strategy to powerful buyers in the pursuit of becoming a preferred customer and enhancing a supplier's resource mobilization towards the relationship.     

Questioning the relevance of supplier satisfaction for preferred customer treatment: Antecedent effects of comparative alternatives and multi-dimensionality

Through the construct of supplier satisfaction, recent research explains the supplier's preferred treatment of a given customer. This cause-and-effect phenomenon is often not contrasted with other reasons or controlled for. This work addresses this issue and uses two tactics to elaborate upon social exchange theory, namely, construct splitting and construct contrasting, to analyse the development of preferential customer treatment. For this purpose, a structural equation model is used with data from the international automotive industry. The results extend the breadth of constructs explaining preferred customer treatment (PCT) and challenge the existing reasoning by questioning the relative importance of supplier satisfaction. While supplier satisfaction does affect PCT, the relative supplier satisfaction defined as a comparison of outcomes between the actual and the best alternative business relationships influences PCT much more.Furthermore, by distinguishing between the economic and non-economic dimensions of supplier satisfaction, the study indicate that economic satisfaction has a higher influence on the relative satisfaction whereas social satisfaction a higher one on absolute supplier satisfaction.These findings imply that despite the current debate about the importance of behavioural constructs such as supplier interaction and social capital, supplier resource allocation decisions are actually dominated by economic and relative aspects of satisfaction. This outcome calls for a more economically driven debate about behavioural supply management approaches.     

Supplier's involvement and success of radical new product development in new ventures

Supplier involvement is essential to a new venture seeking to develop a radical innovation. Despite this, prior literature has not adequately addressed supplier involvement in radical innovation, nor what the antecedents to increased supplier involvement are. We build and test a conceptual model of the antecedents and new product performance outcomes of supplier involvement in the development of radical innovation by new ventures. Antecedent variables (supplier's specific investments and the new venture's qualification of the supplier's abilities) are drawn from the transaction cost analysis literature. We include new venture's relative power and new venture's level of commitment to the supplier as contingency conditions. We develop a set of hypotheses relating supplier involvement to radical innovation performance, relating the antecedent variables to supplier involvement, and also testing the interaction effects of the two contingency conditions. We gather data from both new ventures and their major suppliers for 173 recent radical innovation projects, and use hierarchical regression analysis to test our hypotheses. We find that the contingency conditions moderate achieved levels of supplier involvement, and also find a direct relationship between achieved level of involvement and performance. We conclude with theoretical contributions and managerial implications.     

Does supplier development lead to supplier satisfaction and relationship continuation?

The primary purpose of this study is to find out if supplier development can serve as a means for buying firms to actively increase supplier satisfaction and eventually predict relationship continuity. Supplier relationships provide an essential means for buying firms to access and leverage supplier resources. One way in which buying firms influence the supply management process is through supplier development. The findings show that supplier development is an important means by which buying firms can increase supplier satisfaction. Supplier development significantly predicts the future of business relationships. Further analysis based on polynomial regressions provides evidence to show how congruence or discrepancy between economic and non-economic satisfaction impact continuance.     

Supplier incentives and resource constraints under uncertainty

Procurement in environments of cost uncertainty and asymmetric information require special arrangements such as the linear incentive contract. Usually the buyer is motivated to make investments that can relieve temporary supplier resource constraints during the procurement. Special problems arise, however, due to interactions between investments in suppliers and the risk-incentive trade-off achieved by the incentive contract. A cost signaling model is proposed to overcome these problems, where a supplier offers an equity share in the profit from the incentive contract to the buyer in return for a priori investment. The equity share signals the supplier's private cost information, and forms the basis for the buyer's investment decision. Under equilibrium the buyer can expect to recover the entire amount provided to the supplier through his or her share of the profit.     

Supplier relationship-specific investments and the role of safeguards for supplier innovation sharing

The vast majority of the supplier innovation literature has focused on how buying firms can effectively “pull” innovations from their suppliers. Yet, we know remarkably little about the factors that contribute to a supplier voluntarily “pushing” innovations to its customers. The present study addresses this research gap in the context of industrial buyer–supplier relationships and with a specific focus on relationship-specific investments. Drawing on theory from the relationship-marketing literature and on transaction cost theory, we devise and test a proposed theoretical model that links the level of a supplier's relationship-specific investments to its sharing of innovative ideas regarding products and processes with customers. The model also considers the role of contract length, relationship age, and buyer–supplier cooperation as possible safeguards. The empirical results suggest that a supplier's relationship-specific investments encourage a supplier to suggest ideas of process innovations but to refrain from suggestions about product innovations. The latter effect, however, can be attenuated by appropriate formal and informal safeguards.     

Supplier–supplier relationships in the buyer–supplier triad: Building theories from eight case studies

Many researchers have studied how the buying company manages its relationship with suppliers (i.e. buyer–supplier relationship). Extending this genre of study, researchers have recently shown interest in investigating how the buying company manages relationships between the suppliers (i.e. supplier–supplier relationship). In other words, just as the relationship with the suppliers does, the relationships between suppliers have strategic implications for the buyer. We present in this study eight cases that describe supplier–supplier relationship dynamics. Using theory building through case studies, we identify five archetypes of supplier–supplier relationships. Each type of relationship is a unique configuration of the relational characteristics. We also present working propositions that associate the antecedent conditions that lead to these archetypes and eventual performance implications.     

The effects of volume consolidation on buyer–supplier relationships: A study of Chinese firms

Volume consolidation is a major consequence of supply base reduction. This study explores the relationships between volume consolidation and supply chain outcomes such as buyer coordination costs, supplier performance, buyer environment learning ability, and buyer learning from the supplier. This study also examines the effects of these supply chain outcomes on buyer satisfaction. Based on results derived from an empirical study of 398 Chinese manufacturing companies, it is found that volume consolidation enhances supplier performance, buyer learning from the supplier, and its environment learning ability. It is also determined that coordination costs negatively affect supplier performance and buyer satisfaction. Environment learning ability does not affect buyer satisfaction, while supplier performance and buyer learning from the supplier positively affect buyer satisfaction. As such, the effects of volume consolidation are not limited to enhanced supply chain performance, but also to organizational learning in the supply chain.     

Financial benefits and risks of dependency in triadic supply chain relationships

The economic consequences of interdependent relationships with suppliers and customers have long been of interest to supply chain managers and academics alike. Whereas previous studies have focused on the benefits or risks of embedded relationships that accrue to buying firms, this study simultaneously investigates the effects of a supplier's and a customer's embeddedness, arising from resource dependency, on a focal firm's financial performance in triadic supply chain relationships. Using 1,144 unique focal firm-years for U.S. firms from Compustat, we find that a supplier's and a customer's dependency both increase the focal firm's performance in terms of return on assets (ROA) and return on sales (ROS) by increasing asset turnover (ATO). As levels of supplier and customer dependency on the focal firm increase, however, the economic benefits of customer dependency diminish beyond a certain point, while those of supplier dependency continue to increase above that threshold. Thus, our findings show the paradoxically differing risks of the supplier's versus the customer's dependency, while establishing the unequivocal economic benefits of supplier and customer relations for focal firms in the middle of concentrated triadic relationships.     

The allocation of specific assets,relationship duration,and contractual coordination in buyer–seller relationships

This study explores the interaction effect of bilateral dependence and relationship duration on contractual coordination. In particular, the study compares how the allocation of specific assets, unilateral or mutual, affects contractual coordination across buyer–seller relationships with a short prior history as opposed to a long one. Data from a survey of 157 industrial purchasing relationships demonstrates that unilateral investments in specific assets by either the buyer or the supplier are more strongly supported by contractual coordination as the length of the relationship increases. On the other hand, contractual coordination of mutually deployed specific assets is significantly relaxed as relationships evolve over time.     

A theory of supplier network-based innovation value

To understand how a supplier helps a buying company create value through innovations, studies have focused on a supplier's internal resources or its relationship with a buying company. Building upon this body of literature, we develop a theory of supplier network-based innovation value in this conceptual paper. This theory explains how a supplier's upstream and downstream value network can be a source of competitive advantage for a buying company. Specifically, it proposes that the levels and types of supplier innovation value is contingent on the configuration of a dual-ego value network, characterized by the locus and degree of buyer-supplier structural equivalence. This theory also explains how a supplier's ties with a buying firm's competitors can pose both opportunity and risk to buying company innovation. This theory contributes to the literature by showing when “seemingly undesirable” suppliers, due to a lack of technical capability or strong relationship with a buying company, might still be valuable to a buying company's innovation.     

Assessing the contingent effects of collaboration on agility performance in buyer–supplier relationships

Several studies in the buyer–supplier relationship literature have addressed the impact of collaboration on agility performance. While some studies have concluded that collaboration leads to beneficial effects, others have questioned the positive effects of collaboration on relationship performance. Drawing on contingency theory and transaction cost economics (TCE), we seek to better understand the linkage among collaboration, trust and agility performance in a buyer–supplier relationship. Further, we study the contingent influence of requirements certainty and supplier asset specificity, two key TCE constructs in buyer–supplier relationships, on the collaboration–agility performance relationship. We show that while trust mediates the impact of collaboration on agility performance, the indirect effect of collaboration on agility performance via trust is significant only beyond a threshold level of collaboration. The theoretical implication of this result is that the performance relationship is non-linear, a result that has not been recognized in current literature. The practical implication is that organizations need to establish a certain level of collaboration before its positive impact can be realized. In addition, we show that the impact of collaboration on agility performance in buyer–supplier sourcing relationships can be positive, negative or neutral depending on the levels of trust, supplier asset specificity and requirements certainty, emphasizing the need to develop contingency theories.     

Taking the leap from dyads to triads: Buyer–supplier relationships in supply networks

A network is made up of nodes and links. The smallest unit that consists of both these network elements is a dyad made up of two nodes (a buyer and a supplier) and the link that connects them (a buyer–supplier relationship).Naturally, the focus of the supply chain management literature has been on this dyad. For instance, a buyer affects a supplier through its supplier evaluation and certificate programs, as well as long-term agreement practices. The relationship between a buyer and its supplier has been characterized as cooperative or adversarial. We have learned a great deal about supply chains through such studies in dyadic context.However, we submit that in a network, a dyad is not the smallest unit of a network. In fact, the smallest unit is a triad, made up of three nodes and the links that connect them. If so, how would this recognition guide us as we move forward to investigate supply chains as a network? What would be its implications to the genre of the literature on buyer–supplier relationships?