Till death do us part…but not always: Six antecedents to a customer's relational preference in buyer-seller exchanges

Since its emergence in the early 1990s as marketing's newest paradigm or school of thought, research in the area of relationship marketing has been proliferating. From the customer's perspective, initial attempts to become lifelong partners with key sellers or suppliers were appealing. However, as these propositions multiply in number and carry with them increasing burdens in terms of time and commitment, customers are reticent to enter into long-lasting relationships with all sellers. In this paper, we consider relationship formation from the customers' perspective and examine the antecedents to a customer's preference for a relational exchange orientation versus a transactional exchange orientation. Our belief is that, depending upon a set of contextual factors surrounding the exchange, customers will opt for a relational orientation with suppliers in some cases and for a more transactional orientation in others.     

Key supplier relationships and product introduction success: The moderating roles of self-enforcement and interdependence between buyer and supplier

This study investigates the extent to which strong relationships between a firm and its key suppliers promote effective new product introduction. Building on the relationship marketing literature, we identify self-enforcement and interdependence as two contingent relational variables that influence the strength of the buyer–supplier relationship. We use data from a survey of 2331 manufacturing firms in China to test the hypotheses. The results show that strong relationships with key suppliers correlate with product introduction success and that this positive effect is contingent on the two relational variables identified. Self-enforcement strengthens the utility of strong supplier relationships for these Chinese manufacturers, and buyer–supplier interdependence enhances this relationship.     

Mature relationships: Why does relational orientation turn into transaction orientation?

One of the fundamental assumptions of relationship marketing is that the length of the relationship increases the relational orientation of the partners. Recently, however, researchers have suggested that the benefits of relationship marketing are not evident in a large number of industries [e.g., Journal of Marketing 64 (2000, October) 17]. In this paper, we examine these contradictory results and, using extant research in this area, we model the antecedents of mature relationships that lead to relational versus transactional orientation. Most buyer seller associations follow an s-shaped curve between partners' length of association and the relational orientation of the buyer. However, for some buyer-seller associations, we suggest that there is an inverted u-shaped relationship between relational orientation and length of association. We examine relational attributes and propose variables that are the antecedents of transactional orientation in mature relationships. Implications for theory and managerial practice are highlighted.     

Decomposing the effect of supplier development on relationship benefits: The role of relational capital

Buyers invest considerably in developing their suppliers, yet the performance effects of such investments are not universal. Drawing on social capital theory, this research investigates whether the relationship between supplier development and relationship benefits may be facilitated by the generation of relational capital. The authors examine mediating and moderating roles of relational capital in the relationship between two aspects of supplier development (capability development, supplier governance) and two dimensions of relationship benefits (supplier benefits, buyer benefits), using survey data collected from 185 suppliers of a large manufacturing firm. Investment in supplier development does not automatically result in benefits for the supplier or reciprocated benefits for the buyer. Rather, relational capital “bridges” supplier development and relationship benefits. Without relational capital, benefits from capability development do not accrue, and the impact of a supplier governance regime can be even detrimental. In conditions of high relational capital, capability development results in lower perceived buyer benefits. The results can help managers ensure that the benefits from their supplier development efforts fully materialize.     

The effect of buyer behaviors on preferred customer status and access to supplier technological innovation: An empirical study of supplier perceptions

Buying firms are increasingly looking to suppliers for technological innovations that enhance the competitive position of their new products. However, extant research provides limited guidance on how buying firms may gain access to suppliers' innovative technologies. To address this gap in the literature, we draw from social exchange theory to posit sequential relationships among buyer behaviors, preferred customer status, and supplier's willingness to share technological innovations. We test our assertions by applying structural equation modeling statistical analyses to survey response data from 233 sales personnel of production good suppliers in the U.S. automotive industry. Whereas our results show that two buyer behaviors – early supplier involvement and relational reliability – positively affect preferred customer status, a third behavior – share of sales – has no effect. In turn, we find that preferred customer status is positively associated with supplier's willingness to share new technology with the buyer. Further, our findings indicate that preferred customer status fully mediates the benefits exchanged within a buyer–supplier relationship. Hence, our study highlights why buyers seeking innovations should take care that their behavior is appropriate for managing suppliers' perceptions. Accordingly, our results provide specific guidance to buyers as to how they may increase their access to suppliers' new technologies.     

Technological catch-up by component suppliers in the Pakistani automotive industry: A four-dimensional analysis

This qualitative paper reports findings of an investigation into buyer–supplier interaction in the Pakistani auto-parts industry. We conceptualize technological catch-up by Pakistani suppliers in four relatio-spatial dimensions with international joint ventures (IJVs) as mediating gateways between dimensions. A critical realist lens is deployed to connect macro-level constructs with micro-level concepts and expose the interplay between agency (micro-level) and structurally constraining (macro-level) conditions inherent in a late-liberalizing emerging economy. Key findings are that catch-up occurs in four temporally overlapping dimensions in which, different macro-level governance mechanisms and firm-level orientations transform and affect the degree of catch-up. The findings support an optimum pathway for catch-up from an apprentice like transactional state in Dimension One to a fourth dimension in which relational interaction with foreign suppliers becomes lightly mediated by the IJV's gateway.     

Governance of supplier collaboration in technologically uncertain NPD projects

Firms that are searching for new technologies from suppliers through collaborative new product development (NPD) need to devise effective approaches for governing the supplier relationship. Based on in-depth case studies of four collaborative NPD projects, this paper shows that in projects with a high degree of uncertainty (1) firms achieve governance by simultaneously limiting supplier involvement and allowing for high levels of collaboration, (2) transactional and relational governance have distinct roles in achieving limited supplier involvement and establishing high levels of collaboration, and (3) transactional and relational governance are organizationally separated. These findings have implications for the complementary use of relational and transactional governance, as well as for the role of purchasing and R&D in technologically uncertain NPD projects.     

Comparing the resource‐based and relational views: knowledge transfer and spillover in vertical alliances

We compare resource‐based and relational perspectives to examine competitive advantages within the context of vertical learning alliances. Previous research has shown that through such alliances suppliers acquire knowledge to forge new capabilities and attain performance improvements. We ask whether such improvements are exclusive to the learning partnership, or are available in other average partnerships of this supplier. We posit that the extent to which such performance improvements are partnership exclusive depends on whether the newly forged capabilities lie entirely within the supplier firm's boundaries, or at the learning dyad level. As such, we untie two forms of performance improvements arising from learning dyads. While the resource‐based view helps explain the performance gains learning suppliers deploy across average partners, the relational view reveals the additional performance edge that remains exclusive to the learning partnership. Based on empirical evidence from a survey of 253 suppliers to the equipment industry, we find that partnership exclusive performance (i.e., ‘relational performance’), the true source of learning dyads' competitive advantage, is a function of suppliers acquiring know‐how within the dyad, developing dyad‐specific assets and capabilities, and structuring buyer‐supplier relational governance mechanisms. We discuss implications for research and practice. Copyright © 2008 John Wiley & Sons, Ltd.     

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 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.     

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.     

The Chinese paradigm of global supplier relationships: Social control,formal interactions and the mediating role of culture

This paper reports the results of a study that examined how firms can establish successful business relationships with Chinese suppliers. Its aim is to explore salient characteristics of the nature of buyer supplier relationships with the emergence of China as a dominant economic power. Two surveys have been conducted that investigated several factors that inhibit and enable effective supplier relationship management (SRM) between organisations sourcing from China and Chinese suppliers, and explored the impact of cultural characteristics of Chinese management on the nature and performance of supplier relationships. The research highlights the importance of the social control aspect of governance structure of supplier relationships and stresses that both social and formal control mechanisms should be implemented for more effective relationships with Chinese suppliers. It also demonstrates the need for companies to recognise the importance of guanxi and several cultural characteristics of the Chinese style of management in SRM and advocates the need for the development of a hybrid Sino-Japanese and global supplier relationship management paradigm that incorporates elements from the existing SRM models. It generates insights into how the cultural context of emerging markets affects the nature of business relationships and generates a research agenda in the field of supply chain management that can explore the development of new paradigms in supplier relationships management. The main theoretical argument put forward centres on the need for the development of a new global supplier relationship management paradigm that will take into account the cultural elements of the Chinese society.     

A buyer's perspective on collaborative versus transactional relationships

This research examines collaborative and transactional relationships in buying firms to determine whether collaborative relationships offer greater benefits than transactional relationships, and to ascertain which relational factors drive satisfaction and performance for both collaborative and transactional relationship types. Factor analysis, t-tests and step-wise regression were used to analyze data from a survey of buying firms. Results show that collaborative relationships offer higher levels of satisfaction and performance than transactional relationships. Satisfaction factored into two separate constructs: satisfaction with the relationship and satisfaction with the results. Of the relational factors examined, trust is the most important predictor of performance and satisfaction with the relationship regardless of the type of relationship examined.     

Outsourcers’ control mechanisms,vendors’ contract schemas,and project performance in cross-border IT outsourcing: A vendor’s perspective

Relational conflicts are likely to occur in cross-border IT outsourcing between partners with different cultural backgrounds. Extant literature diverges on the role of contract and trust as control mechanisms in managing relational conflicts. Prior studies have examined the effectiveness of the control mechanisms primarily from the outsourcer’s perspective, with little consideration of how vendors interpret outsourcers’ control mechanisms. Based on psychological contract theory, this study addresses the effects of contract-based and trust-based control mechanisms on relational conflicts from the vendor’s perspective and further explores the contingency of the effects on vendors’ psychological contract schemas (transactional contract schema and relational contract schema) towards their relationships with outsourcers. Based on survey data from 180 offshore outsourcing IT projects, the results show that vendors’ transactional contract schema reduces the effect of trust-based control whereas vendors’ relational contract schema strengthens the effect of outsourcers’ contract-based control on relational conflict. Relational conflicts, in turn, exhibit a negative impact on project performance. The findings offer new insights into the role of outsourcers’ contract-based control and trust-based controls in relationship management from a vender’s perspective. The findings also extend the outsourcing governance literature by illustrating the contingency of the control mechanisms on vendors’ psychological contract schemas.     

Demand‐side strategy,relational advantage,and partner‐driven corporate scope: The case for client‐led diversification

Research Summary: We advance research on corporate diversification by joining insights from the demand‐side and relational views in strategy to offer a novel theory of client‐led diversification. We propose that client‐led diversification results from a combination of the customer‐driven opportunities emphasized in the demand‐side view and the creation of added value through relational assets that is a central tenet of the relational view. Furthermore, we hypothesize that suppliers’ client‐specific knowledge, clients’ relational commitment to suppliers, and growth opportunities in clients’ markets (relative to the suppliers’ own markets) will magnify the client‐led diversification effect. We test our hypotheses using a longitudinal dataset on patent law firms and their diversification into new domains of patent prosecution work for their corporate clients. Managerial Summary: Explanations of why firms diversify into new lines of business have largely concerned the redeployment of underutilized resources, with little regard to opportunities or influences stemming from firms’ existing customers. In our article, we show how the changing scope of business needs from a knowledge‐based supplier firm's set of existing clients is a central driver of supplier‐firm diversification, and this is especially the case when the level of relational assets shared between a supplier and its clients is higher. In a competitive landscape where suppliers compete intensively for the business of clients, our results show how managers can increase the likelihood of capturing additional business from its existing exchange relationships rather than bearing the risks of seeking new exchange relationships.     

Performance feedback and supplier selection: A perspective from the behavioral theory of the firm

Drawing upon the behavioral theory of the firm, this study explores the behavioral antecedent of buying firms' decisions in supplier selection through relational referrals, beyond the predominant argument from relational network theory. Centering on the risk and uncertainty of searching for new suppliers, this study attempts to integrate the behavioral theory and relational network theory in explaining buying firms' supplier selection. Data from 112 Chinese manufacturing firms were used to test the hypotheses. The results suggest that performance feedback triggers buying firms' decision on the extent of reliance on relational referrals to select suppliers. Outperforming firms are more likely to use relational network to select suppliers while underperforming firms are less likely to use. This relationship will be strengthened when the intensity of market competition and specific investment in buyer-supplier relationship are high.     

The bonding effects of relationship value and switching costs in industrial buyer–seller relationships: An investigation into role differences

Despite the established importance of buyer–seller relationships in B-to-B markets, research to determine the differential effects that keep suppliers and customers in a relationship has been scarce. Referring to transaction cost analysis, this study investigates how switching costs and relationship value as perceived by each side unfold their bonding forces in such a relationship. Based on a large scale survey administered in Germany, Korea, New Zealand, and Argentina among marketing/sales and purchasing managers the study shows that relationship value has a stronger impact on intentions for relationship enhancement, search for alternatives and switch intention than switching costs for both buyers and sellers. Only with regard to relational tolerance and only for buyers do switching costs play a greater role than relationship value. Furthermore, buyers base their future relationship intentions more on the current state of the relationship than suppliers. Our results suggest that role differences must be taken into account when studying institutional arrangements in B-to-B markets.     

Gaining from vertical partnerships: knowledge transfer,relationship duration,and supplier performance improvement in the U.S. and Japanese automotive industries

We study sources of operational performance improvement in supplier partnerships. We argue that supplier performance will benefit most where time‐bound relational assets have developed between a buyer and supplier and the firms exploit the resulting communication efficiency by transferring productive knowledge. We examine the effects of two forms of knowledge exchange together with the prior duration of the buyer–supplier relationship. We find similar interaction patterns in two survey samples of Japanese and U.S. automotive suppliers. The effect of ordinary technical exchanges on supplier performance improvement does not vary with relationship duration. The effect of higher‐level technology transfer, however, grows more positive as relationship duration increases. Other results show relevant contrasts consistent with heterogeneous sourcing behavior between the two countries. The findings highlight the role of relational assets and show that it is important to distinguish between simple techniques and higher‐level technological capabilities when studying interfirm relationships. This research extends the literatures on knowledge transfer, buyer–supplier partnerships, and the performance dynamics of interfirm and intrafirm relationships in general. Copyright © 2002 John Wiley & Sons, Ltd.     

Risky Business or Competitive Power? Supplier Involvement in Japanese Product Design

Notwithstanding the alleged risks of outsourcing design work, leading manufacturers in the Japanese automotive industry collaborate closely with their key suppliers. Despite widespread recognition of the effectiveness of these close-knit supplier networks, however, little research exists on the factors that affect the purchase of design work from suppliers. S. Nazli Wasti and Jeffrey K. Liker fill this gap by exploring the factors that affect Japanese automotive firms' purchase of design work from their component suppliers. Using data from a survey of 122 Japanese automotive component suppliers, their study addresses two key questions. First, what factors lead Japanese buyers to involve some suppliers heavily in design while giving others relatively little control over design decisions? And second, does the Japanese practice of involving suppliers in design offer performance benefits? The study focuses on first-tier suppliers of parts, assemblies, and complete subsystems (e.g., audio, fuel and emissions, heating and air conditioning). The study does not include suppliers of raw materials and chemicals, assembly and processing equipment, indirect materials, tooling and dies, computers and software, or engineering and business consulting services. The study breaks down the broad concept of supplier involvement in design work into three measurable elements: the extent to which the supplier influences decision-making during the early stages of product development; the amount of control the buyer retains over the design; and the frequency of design-related communication between the buyer and the supplier. Factors that have a positive effect on the level of supplier involvement among the companies studied include technological uncertainty of the component and the supplier's in-house technical capabilities. For companies in the study, the level of competition in the supplier market has a negative effect on the degree of supplier involvement in design. The responses indicate that supplier involvement offers performance benefits for both the supplier and the buyer. For the supplier firms studied, increased involvement in the design process permits greater focus on design for manufacturability (DFM). And of course, supplier-generated design improvements clearly benefit the buyers, allowing these firms to capitalize on the experience and the insight that their suppliers have regarding the parts that they supply.