Benevolent dictatorship and buyer-supplier exchange

In this research, we identify and advance the concept of benevolence as a key social exchange mechanism in buyer-supplier exchange. Specifically, we (1) advance a theoretical model of benevolence to include affective, calculative, and normative dimensions, (2) highlight specific actions and resources that a focal firm uses to promote the perception of benevolence, including concessions, idiosyncratic investments, and reputation, and (3) identify how these perceptions, mediated by its own rising commitment to the exchange, impact the focal firm's economic response (i.e., concessions and idiosyncratic investments). In particular, we explore the possibility of “benevolent dictators” in exchanges marked by power asymmetry. Our model and conclusions are drawn from the confidential reports of over 500 informants at the boundaries of firms across multiple industries. Our results demonstrate the differential effects of a partner firm's actions and reputation on the three forms of benevolence and find evidence for how powerful partner firms can signal their benevolence to weaker firms through the use of concessions, dedicated investments and marketplace reputation. Moreover, we show that the responses of the partner firm to the focal firm's benevolence are not simply a reciprocation of the focal firm's actions, but are instead mediated through the enhanced commitment of the focal firm with implications for theory and management practice.     

The Impact of Environmental Uncertainty and Asset Specificity on the Degree of Buyer-Supplier Commitment

When manufacturers purchase products from suppliers, the types of relationships they establish may depend on many factors. These relationships can range from formalized, extensive contractual obligations to discrete individual purchases. This study investigates the potential determinants of where on this continuum of commitment the relationship lies. These determinants include uncertainty in both the supplier market and the buyer's customer market, the investment in transaction specific assets by both buyer and supplier, and the investment in product specific assets. Results indicate that market diversity, supplier concentration, investment in product specific assets, and the supplier's investment in transaction specific assets are potential reasons for higher levels of buyer-supplier commitment.     

Factors influencing suppliers’ participation in private electronic markets

This study is intended to identify factors, which influence suppliers’ participation in the private electronic market (PEM). The results of this study show that many suppliers do not recognize the potential benefits that PEM could offer and they do not believe their off-line relationships with a buyer could be transferred to on-line. Thus, buyers need to convince their suppliers that PEM is not just a price based marketplace but instead a business model where mutual benefits can be achieved based on existing trust relationships between a buyer and limited number of qualified suppliers.     

The economics of professional services: lemon markets, credence goods, and C2C information sharing

We discuss how professional service markets are plagued by asymmetric information, by looking jointly at the literature stemming from the seminal work of Akerlof on the “market of lemons”, and at the definition of “credence good” which has been developed especially within the field of health economics. Since consumers cannot evaluate ex post the quality of purchased professional services when these are “credence goods”, they cannot rely with 100 % confidence on other consumers’ and experts’ signals about service providers’ quality. Hence, questions arise on the effectiveness of traditional market features highlighted in literature as market-enhancing when information asymmetry is an issue, namely: advertising, certification, reputation, and liability. Our analysis specifically focuses on consumer-provided knowledge by looking at recent development of Web-based rating and reviewing services. Results point to the fact that consumers in the U.S. heavily rely on such services, and they do so roughly in proportion to their consumption of each professional sector. Therefore, future research on professional services should include a “C2C search technology” when modeling consumer behaviors that allows to define how much each professional service is to be considered as pure or hybrid “credence good.”     

跨国公司外包网络的治理与供应商的升级

本文基于网络治理的分析,研究了跨国公司外包网络中供应商的类型和升级的问题。指出供应商能力、信息(知识)可编码程度是影响外包网络治理的关键因素,从而将供应商划分为附属型、交流型、模块型三类,对三类供应商进行了详尽的分析;进而研究了供应商在跨国公司外包网络中实现动态升级的路径与对策。     

Examining Polish Market Mavens and Their Attitudes Toward Advertising

Abstract

In this paper, we offer some insights about Polish consumers with varying levels of general marketplace expertise, their role in diffusing product information, and their views of advertising. Market mavens are consumers who exhibit heightened interestin and knowledge about the marketplace. Because of their interest in communicating with others about the many aspects of the marketplace, these consumers can play an integral role for companies interested in diffusing marketing information. Our study results indicate that market mavens do indeed exist in Poland and they exhibit similar characteristics to market mavens identified in the U.S. They have more favorable attitudes toward advertising than other consumers. Additionally, they consider advertising as an important source of product and social image information. Although Polish mavens are less critical of advertising being misleading and confusing, they are concerned about advertising promoting materialistic values. Our findings imply that firms doing business in Poland would be well advised to target market mavens because they pay attention to advertising, have favorable attitudes toward advertising, and like to talk about marketplace phenomena with others.     

The Impact of Key Retail Accounts on Supplier Performance: A Collaborative Perspective of Resource Dependency Theory

Existing literature suggests that the increasing concentration in the retail industry is allowing powerful retailers to exploit their weaker suppliers, which causes the suppliers’ performance to suffer. This study takes a collaborative perspective of resource dependency theory and suggests that when suppliers engage in supply chain relationships with key retail account (KRA) customers, their performance may improve, depending on the varying levels of the supplier's and KRAs’ market shares. The empirical analysis of data from two large retailers, Wal-Mart and Target, and a broad cross-section of their suppliers provides ample support for most of the hypotheses set forth in this paper: Suppliers that depend on KRAs for a significant share of their total revenues relinquish some of their leverage in the marketplace, but as the KRAs gain market share, their suppliers’ performance tends to increase. Cumulatively, these results provide evidence of collaborative supplier–KRA relationships, such that a supplier's dependency on KRAs may positively affect supplier performance. This finding supports a more positive, symbiotic view of dependency, resulting in important implications for key account management, supply chain management, and retail research and practice.     

Advertising and R&D investments in the wealth-maximizing firm

Advertising and R&D outlays are more similar to than different from capital outlays in modern corporations. All three can properly be thought of as investments, and can be ranked and evaluated using the tools of modern capital budgeting. One problem with bringing advertising and R&D outlays into the same planning framework as capital outlays is the constraints implicitly imposed by suppliers of external capital on the use of funds they advance. These constraints basically restrict the use of external funds to capital projects. A simple model is constructed of the cash flow-maximizing firm faced with both market and internal funds constraints. This model shows that marginal productivity rules evolve for these outlays and that a multiplier process is present in the movement of advertising and R&D from one equilibrium to another. Implications of this view of advertising and R&D for financial managers are discussed.     

Owning and Operating a Destination Management Company

ABSTRACT

Attorneys are the top revenue category for the yellow pages and the yellow pages arc the most popular form of attorney advertising. We studied over 14,000 attorney yellow page ads from three cities including a detailed analysis of all display ads. We compared the advertising strategy used in attorney yellow page ads with the literature on the information consumers desire from attorney ads. This comparison of consumer desires with the actual advertising strategy used by attorneys in the marketplace led to several recommendations for improving attorney yellow page advertising.     

Asset specificity's impact on outsourcing relationship performance: A disaggregated analysis by buyer-supplier asset specificity dimensions

Using hierarchical regression analysis on a sample of UK service firms, this study tests the impact of asset specificity on outsourcing relationship performance within a disaggregated methodological framework that allows to discern the specific effects of various buyers and suppliers' individual dimensions of asset specific investments. The results indicate that the impact of asset specific investments on outsourcing relationship performance varies according to the particular specificity dimension examined. While all statistically significant dimensions of buyers' asset specificity have a negative impact on relationship satisfaction, suppliers' human and dedicated asset specific investments exert a positive and significant influence. The results also show that, in three interaction instances, reciprocal specific investments are positively associated with outsourcing relationship performance. These findings have profound theoretical and methodological implications.     

供应链管理模式下的供应商柔性评价

顾客需求的变化和竞争的加剧使供应链柔性受到了越来越多的关注,供应商的柔性评价是构建柔性供应链的基础。不仅要从耗费指标和范围指标来分析供应商的外在柔性特征,还要从资源储备、制造技术、协调机制、信息系统等几个方面来分析供应商柔性的内在支撑要素,综合内在柔性和外在柔性的分析,才能全面评价出供应商的柔性水平。     

Entrepreneurial Signaling via Education: A Success Factor in Innovative Start-Ups

Unlike traditional start-ups, innovative start-ups and their respective market partners are faced with severe problems of asymmetric information due to their lack of prior production history and reputation. Here, we study whether and how entrepreneurial signaling via education can help innovative entrepreneurs signal their abilities to banks and prospective employees. We argue that innovative entrepreneurs signal their quality by means of certain characteristics of their educational history. In particular, we expect potential employees to use an entrepreneur’s university degree as a quality signal when deciding whether to accept a job at an innovative start-up, and we expect banks to use a more precise indicator, namely the actual length of study in relation to a standard length, as a signal when deciding to extend credit to an innovative founder. By contrast, traditional start-ups are not faced with the same problems of asymmetric information, so we do not expect employees or banks to require the same signals from them. We empirically test our hypotheses using a dataset of more than 700 German start-ups collected in 1998/99. All hypotheses are borne out by the data.     

Manufacturing technology and the supply chain: Linking buyer-supplier relationships and advanced manufacturing technology

The literature on advanced manufacturing technology (AMT) implementation and buyer-supplier relationships is reviewed, and the links between the two factors are examined. These links are summarized and highlighted through a causal influence diagram. A major influence is focused on, namely that the adoption of AMT causes adopters to change their relationships with their parts suppliers to more collaborative forms. Empirical data drawn from a recent survey of the Turkish automotive industry demonstrate support for this major influence.     

The role of certification in service relationships: Theory and empirical evidence

In this paper we draw upon multiple theoretical perspectives and develop a conceptual framework regarding the role of certification signals in service relationships. The central premise of this study is that sellers who use certification display for making promises also institute appropriate mechanisms for controlling service providers. Furthermore we hypothesize that the degree of certification display and agent screening is moderated by the relative costs of certification and screening respectively. We empirically test our model by analyzing data from a mail survey of automotive service managers. Our results support the theoretical notion that building customer relationships involves making and keeping promises in service delivery.     

关系专用性投资的全球价值链升级功效——基于浙江本土代工企业的实证研究

本土代工企业在全球价值链嵌入中进行代工关系专用性投资,具有何种升级功效？针对主流全球价值链理论的“升级”与“伪升级”争议,文章基于跨国买供间关系治理理论与关系租金攫取视角的升级界定,采用浙江本土代工企业146个二元代工关系层面调查数据的实证研究表明,关系专用性投资通过关系建构,有助于本土代工企业的关系租金攫取,具有“升级”效应;但同时会导致权力销蚀,存在“伪升级”效应。当代工能力具有较高的专有性水平时,升级效应处于主导,反之则伪升级效应处于主导。结论表明,本土代工企业在全球价值链嵌入中进行关系专用性投资,只能锦上添花、不能雪中送炭。这一结论澄清了本土代工企业“升级”与“伪升级”争议,对代工企业升级的战略决策具有直接应用价值。     

Organics: marketplace icon

This essay explores and debates the status of organics as a marketplace icon. Organic products are somewhat unique in having a place in both mainstream and niche markets. The breadth of organic products and sales continue to rise, and certification processes have become more sophisticated, stringent and successful. Organics are loved and loathed by consumers, and loved and loathed (and often parodied) in popular culture. The market is both friend and enemy of organic products and organic consumers. What organics mean is complicated and confusing, and their benefits for both the natural environment and human health are contested. Scrutiny of organics allows us to explore how the relationship between regulations, the market and popular culture contribute to the development of an icon, firmly rooted in the marketplace, while also maintaining its status as ambivalent commodity. I conclude that organics are indeed marketplace icons – but decline to offer advice on whether or not I recommend becoming an organic consumer (despite my own avid purchase of all things organic).     

Supply Chain Management and Retailer Performance: Emerging Trends, Issues, and Implications for Research and Practice

In an environment with increasing competition and a growing need for operational efficiencies and customer orientation, retailers are looking beyond their organizational boundaries to develop and leverage the resources and capabilities of their supply chain partners to create superior value and competitive advantages in the marketplace. In this article, the authors discuss how three recent trends—global sourcing practices, multichannel routes to market, and relationship-based innovation—are transforming the retail landscape and leading to a variety of performance improvements with regard to brand image, reputation, sales and profits, innovation, and relationships. For each of these major trends, this article highlights key issues, identifies relevant literature, and offers propositions for further research.     

Avoiding Over-Reliance on a Single Large Customer: The Impact of Technical Capability,Product Development and Alternative Key Customers

ABSTRACT

This study examines three investments that component suppliers can make to circumvent their large customers' ability to achieve significant power advantages. A large scale survey of component suppliers was conducted approximately 12 to 24 months after Original Equipment Manufacturers (OEMs) began flexing their increased purchasing power to demand price reductions and costly design services. The results show that suppliers' technical capability, suppliers' efforts to develop segment-focused products, and supplier investments to build relationships with alternative key customers lessened their large customers'power advantage. The urgency of balancing relationships with large OEMs is illustrated with the finding that customers'power advantage has a strong negative influence on the suppliers'forecast ofc their own performance. In contrast, no relationship between forecasted performance and the level of interdependence between large OEMs and their suppliers was found. The rapid increase of customer power across a broad range of industries has placed many companies in situations similar to the component suppliers investigated in this study. Thus, the outcomes of these suppliers'investments should be of interest to a large audience of managers. The theory used to frame and examine this important managerial situation provides a vantage point that complements the work done by other researchers.     

Purchasing power

The concept of power in commercial exchange relationships is defined in terms of changes in purchasing and product specifications. A distinction is drawn between actual and potential purchasing power. The relationship between the interdependent nature of buyer-supplier relations, the attractiveness and availability of the resources offered by both suppliers and buyers, and the factors affecting the ability of buyers to convert potential into actual power, are explored.     

The Reliability of Certification: Quality Labels as a Consumer Policy Tool

Given the large number of certification systems in the food industry, it is surprising that there are only a few research approaches to the economics of certification. Certification schemes are used to ensure marketing claims for unobservable quality attributes. Under asymmetric information, process-oriented quality characteristics such as organic farming, animal welfare, or fair trade raise the question of mislabelling. In the long run, only a reliable control procedure can reduce the risk of food scandals. The article presents a model which includes several starting points to enhance the efficiency of certification systems and the corresponding labels. On the whole, tendencies towards price wars on the certification market and considerable differences in performance reveal the necessity of institutional changes. Strategies for reducing auditors dependence, intensifying liability, increasing reputation effects, and minimizing audit costs are suggested. Finally, policy implications for public and private monitoring are discussed.