The origins of power in buyer–seller relationships

Who, or what, holds power in business-to-business buyer–seller relationships is a debate at the heart of power theory. Power in buyer–seller relationships is variously seen as the property of organizations, individuals or relationships yet to be theoretically valid and useful to management, integration of these schools of thought needs to be operationalized. This paper opens up future research avenues through identifying how buyers and sellers understand the origins of power and the nature of self perceived and countervailing power. The paper presents results from 10 focus groups of both buyers and sellers revealing the underlying origins of experienced power. The results support the proposition that power in buyer–seller relationships is a pluralistic concept and that extant theories focused on organizational, individual or relational elements of power are independently too narrow in their reflections of the power construct; rather, they are all part of the same broad construct.     

The emergence of dependence and lock-in effects in buyer–supplier relationships — A buyer perspective

The industrial marketing literature frequently points to dependence in buyer–supplier relationships (BSRs) as an essential construct in understanding the development of strong, long-lasting partnerships. Although the antecedents of dependence have been discussed, extant research lacks an understanding of the explanatory mechanisms of how dependence – or even lock-in situations – actually evolve. In this article, we examine the emergence of these aspects in BSRs by analyzing the example of a logistics outsourcing relationship. Using a grounded theory approach in a real-life case involving a German mechanical engineering company and its service provider, we identify four interrelated mechanisms (convincing, tying, complementing and lock-in) that explain dependence and lock-in from a buyer's perspective. Based on our empirical findings, we develop a conceptual model that points to the theoretical importance of the interconnected influences and sub-processes between transactional, mental, and operative bonding effects. Our results inform managerial practice on how to plan and manage BSRs. The model enhances existing research on dependence in BSRs and can serve as a starting point for further investigations into buyer–supplier dependence (BSD) and lock-in in dyadic business relationships.     

The role of information technology in strategic buyer–supplier relationships

Information technology (IT) has long been acknowledged as an integral part of inter-organizational business exchange. The extant research, however, tends to emphasize the focal company perspective and focuses on operational issues, perceiving IT and business relationships as separable. Through a qualitative dyadic case study, our study defines how IT is positioned with regard to various elements of a strategic buyer–supplier relationship and the respective actors' operational and managerial behaviors. The study defines the role of IT regarding the structural, action, and management layers of a relationship and shows how IT can be a strong element around which relationship management activities are implemented to improve the consistency and performance of the relationship. The study prepares the ground for further qualitative and quantitative research to enhance a holistic understanding on IT in relation to the structures and processes in inter-organizational contexts of business relationships and networks.     

Power priorities in buyer–seller relationships: A comparative analysis

Power, as a significant dimension of relationships, continues to be of critical interest in the inter-organizational literature. This article assesses how different relationship types and strategic foci are related to buyers' and sellers' power priorities. Contributing to the discussion of buyer–seller power priority areas as commercial detail, operational issues, strategic issues and attitudes, the research focuses on the influence of relationship types (new, approved, preferred, partnership) on these power priorities in B2B contexts. This is important as partnerships do not simply emerge, but evolve over time suggesting that for both parties there is a period that is transitory. Through a survey of buyers and sellers (n = 355), the research highlights that as partnerships evolve, relational issues complement, but do not supersede, the focus on commercial and operational concerns. Furthermore, within partnerships, whilst sellers' focus on strategic issues increases, it is the total power that grows and the influence agenda is extended, rather than re-distributed. Additionally, it provides detail on how power priorities vary and are differentially distributed between buyers and sellers in different relationship types. This paper contributes to B2B partnership and power theories, challenging assumptions about relationships and adding weight to the increasing suggestion that relationship success is overplayed.     

The development of post-project buyer–seller interaction in service-intensive projects

The purpose of this research is to enhance the understanding of post-project buyer–seller interaction, a topic previously studied mainly from the perspective of social exchange or sleeping relationships. With the advent of service-intensive projects, however, the dynamics of post-project interaction has changed, demanding a broader theorization. This research extends the scope of project marketing, by proposing a research framework illustrating interaction development in a longitudinal setting. We utilize the framework to analyze three projects, two of which continued for more than a decade, through a qualitative case study. The research provides empirical insight into the interaction orientations and development patterns arising in the post-project stage. It suggests that post-project interaction develops through three main orientations (cooperative development, buyer-led development, and seller-led maintenance) that vary over time, thus creating unique development patterns. The study concludes with five practical recommendations for managers to deal with evolving post-project interaction.     

Creating value in retail buyer–vendor relationships: A service-centered model

We present a “service-centered” model of retail buyer–vendor relationships, in which retail buyers' perceptions of a vendor's economic and social resources affect their assessments of relationship value and relationship outcomes. Economic resources offered at the organizational level of the vendor include brand equity and customer support activities (e.g., merchandising support and margin maintenance). Social resources offered at the individual level of the salesperson include special treatment and customer advocacy. Relationship outcomes include the buyer's intention to grow the business, and in the event of business termination, maintain the interpersonal relationship with the sales representative. Survey data from 532 retail buyers were collected and analyzed using structural equation modeling. The results show that relationship value mediates the effects of economic and social resources on relationship outcomes. However, the process by which this occurs varies.     

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

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

The impact of buyer–supplier relationships on supplier innovativeness: An empirical study in cross-border supply networks

Drawing on organizational learning and the relational view of the firm, this study seeks to understand the factors that drive supplier innovativeness in the context of cross-border supply relationships. To address this research objective, a survey included 189 parts and components manufacturers (suppliers) in Turkey; hierarchical regression analysis is used to test the hypotheses. The findings demonstrate that interfirm knowledge sharing routines, relation-specific investments, and governance mechanisms may promote supplier innovativeness by expanding the supplier's knowledge resources and encouraging it to invest in innovative activities. In addition, this research emphasizes differentiating effects of the supplier's tier position for the impacts of buyer assistance and cooperative tie. As such, this study contributes to the purchasing and supply management literature by empirically showing how buyer–supplier relationships, particularly in cross-border supply networks, affect supplier innovativeness.     

The performance implications of power–trust relationship: The moderating role of commitment in the supplier–retailer relationship

The current research examines how coercive power and non-coercive power affect trust and how these relationships are affected by affective and calculative commitment. It also expands the understanding of the role of an under-researched dimension of performance, i.e., strategic performance, and studies it as a mediating variable in the relationship between trust and financial performance. The proposed model is empirically tested using Partial Least Squares (PLS) in supplier–retailer channel in Taiwan. The findings reveal that affective commitment has a positive moderating effect on the negative relationship between coercive power and trust, while calculative commitment has a negative moderating effect on the positive relationship between non-coercive power and trust. The results also indicate that strategic performance partially mediates the effect of trust on financial performance. The research advances theoretical understanding on the complex power–trust relationship and provides insights into the role of commitment in both enabling and undermining channel relationships. The findings highlight the importance of building affective commitment in channel relationships and the critical role of strategic performance in the trust–financial performance relationship.     

Intermediaries in power-laden retail supply chains: An opportunity to improve buyer–supplier relationships and collaboration

Despite the benefits of buyer and seller collaboration and hence relationships extolled in extensive studies, issues of relationship power inhibit implementation of collaborative and relational approaches, particularly in some parts of the retail sector. Further, most research regards buyer–supplier collaboration and relations as dyadic or focal relationships, or perhaps in a network context, and typically investigates buyer–supplier collaboration and relations from a power-dependency perspective; and within vertical supply integration. Little attention has been given to the potential role of supply chain intermediaries, such as logistics service providers, in objectively and independently determining and managing the course of buyer–supplier collaboration and relations in a business-to-business context. This article appraises the potential role of buyer–supplier collaboration and relations and their relevant opportunities in the power-laden, contentious environment of the retail grocery sector. With an interdisciplinary approach, drawn from supply management, relationship management, and logistics and supply chain management, this article emphasises the importance of horizontal collaboration using fourth-party logistics structures as horizontal intermediary conduits, who act independently between retailers and suppliers to facilitate collaborative and relational activity.     

Toward a typological view of buyer–supplier relationships: Challenging the unidimensional relationship continuum

Building on the configurational approach to buyer–supplier relationships (BSRs), we attempt to define a parsimonious framework for relationship integration to create a holistic understanding of relational configurations. Following the principles of typological theory building, this study aims to understand the mechanisms underlying relationship integration and type-specific performance. To that end, we use the relational governance theory to build a three-dimensional (economic, structural, and social) framework that distinguishes BSRs. Using the dimensions from previous BSR-typologies, we propose eight relational configurations, which we test against empirical data from 246 dyadic industrial BSRs. Our results show eight distinct BSR-configurations with varying levels of operational performance. Our work contributes to the BSR literature by providing a unified framework of relational configurations and by demonstrating the link between relational configurations and performance.     

The effect of social capital on local suppliers’ exploitative and exploratory learning in global buyer–supplier relationships: the moderating role of contract specificity

Drawing on the theories of social capital (SC) and organizational learning, a contingency theoretical framework that examines the impact of structural, relational, and cognitive SC on local suppliers’ exploitative and exploratory learning in the context of global buyer–supplier (GBS) relationships in China was developed. The extent to which the impact is moderated by the contract specificity between the buyer and supplier is also examined. The empirical results show significant positive impacts of structural and relational SC on local suppliers’ exploitative learning but significant negative impacts on local suppliers’ exploratory learning. More specifically, contract specificity strengthens the positive effects of all three dimensions of SC on exploitative and the negative effects of structural SC and relational SC on exploratory learning. They put forward several potential implications for practicing managers and policymakers.     

Maximizing buyer–supplier relationships in the Digital Era: Concept and research agenda

As technology continues to advance and new products emerge, the interactions between buyers and suppliers have changed. The management of buyer–supplier relationships has increasingly become more dependent on new technologies, such as Partner Relationship Management (PRM) systems and computer-mediated communications (CMC). Furthermore, when new technologies emerge, suppliers are expected to educate their buyers about the benefits of the technology, train them on how to use it, and aid with the integration of the technology into pre-existing work processes. Given these issues, this special issue of Industrial Marketing Management explores the changing nature of buyer–supplier relationships in the Digital Era. This article presents a snapshot of the changes in buyer–supplier relationships brought on by new technology, provides an overview of the selected articles in this special issue, and offers a few directions for future research.     

Manufacturer–reseller e-business arrangements: The impact of inequity on relationship performance and the moderating role of dependence

Manufacturer–reseller e-business arrangements are changing the nature of channel relationships. When manufacturers supply e-business tools to their resellers, resellers may perceive that the benefits of technology are not shared equitably. This research explores this issue by examining two technology based antecedents of perceived inequity from the reseller perspective. We also examine the impact of perceived inequity on relationship performance, and the moderating role of reseller dependence on the proposed inequity–performance link. The results of the empirical test involving a sample of 224 resellers suggest that perceived inequity negatively impacts relationship performance, while reseller dependence plays a moderating role. Implications of these findings for researchers and managers are discussed.     

Property rights and transaction costs – The role of ownership and organization in German public service provision

This paper provides evidence that ownership and organization matters for the efficiency of the provision of public services. The results confirm trade-offs implied by the property rights literature and provide important policy implications regarding the organization of public service provision. We find that pure private ownership is more efficient than pure public ownership, and public ownership is more efficient than mixed ownership. The delegation of management in different legal forms also has an impact, highlighting the importance of the design of the government-operator relationship. We apply a structural approach of a production function estimation, ensuring precise determination of total factor productivity for a panel of German garbage collection firms between 2000 and 2012, followed by a projection of those total factor productivity estimates on ownership and organization.     

When does (not) a coopetitive relationship matter to performance? An empirical investigation of the role of multidimensional trust and distrust

Despite substantive evidence showing mixed results on the association between a coopetitive relationship and performance, surprisingly little theory explains the contingencies under which a coopetitive relationship does (or does not) matter to performance. By combining insights from the trust-distrust literature and 18 in-depth managerial conversations, this study unpacks the multidimensional nature of trust (i.e., goodwill and competence) and distrust (i.e., malevolence and discredibility) and suggests that the effect of a coopetitive relationship matters to performance, when both trust and distrust are present (at moderate to high levels), but fails to do so when one of them is low and the other is high. The results based on a sample of Swedish firms provide full support for the hypotheses. In terms of theoretical contributions, this study challenges the old wisdom suggesting trust as good and distrust as bad, extends the current understanding of trust and distrust beyond their one-dimensionality, and provides a novel approach to understanding when a coopetitive relationship performs well and when it does not. In terms of practical relevance, it suggests that firms adopt a paradox mindset (with a focus on both trust and distrust) to unlock the positive potential of a coopetitive relationship.     

Spillover effects of investment in big data analytics in B2B relationships: What is the role of human capital?

Economy-wide investment in Big Data Analytics (BDA) offers retailers a number of opportunities and while there is some evidence that new technologies have been widely adopted by retailers, it also transpires that many retailers have yet to fully exploit the benefits of BDA. Most research on Big Data and productivity (or performance) tends to focus on internal factors that prevent retailers from fully exploiting their investment in BDA. Research has paid scarce attention to the benefits that can accrue to the focal firm from the upstream investment in BDA and the features of the B2B marketing environment that may hamper (or enhance) these benefits. Unlike the previous literature, the paper tests the extent to which retailers, by having access to larger share of graduate workforce at regionally, can benefit more from inter-industry upstream investment in BDA than retailers located in areas where such workforce is scarce. Using data from ORBIS, KLEMS and QLFS, we show that retailers located in regions with a larger proportion of graduate workforce benefit more from inter-industry upstream investment in BDA as they tend to be more efficient on average. Equally, upstream investment in BDA is positively associated to frontier shifts over time (i.e. technical progress).     

Explaining the entrepreneurial orientation–performance relationship in emerging economies: The intermediate roles of absorptive capacity and improvisation

Research has established the relevance of entrepreneurial orientation (EO) to firm performance but skepticism remains because of the ambiguity surrounding how EO might improve firm performance. We examine the key concepts of absorptive capacity and improvisation as two alternative learning modes serving as intermediate steps between EO and firm performance. Locating our study within manufacturing SMEs in Malaysia, we find that absorptive capacity enhances the EO–performance relationship, both as a moderator and a mediator. In contrast to expectations, however, improvisation showed no such effects but conferred its own separate benefits instead. We further discuss the different effects of these learning modes on high performance and low performance groups.     

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.