The Buyer–Supplier Relationship: An Integrative Model of Ethics and Trust

Dialogues between companies and actors of society often start as a result of a public scandal or in a situation of crisis. They can lead to short-term public relations activism or to long-term reputation gains. On the basis of cases and of a typology of forms of dialogues, the author develops ethical criteria and conditions for a successful dialogue – the ethical basis for such criteria being values such as equality, freedom and participation. A special focus is put on challenges that often result from dialogues such as the ethical judgment of compromises. This article proposes ethical criteria to evaluate compromises. This leads to a model of ethical dialogue.     

A Stakeholder Perspective on Buyer–Supplier Conflict

This study seeks to investigate how stakeholder power and an organization's pursuit of legitimacy influence its reaction to conflict with a supplier. We conducted an empirical study among travel agents and tour operators to test the relationship between conflict and stakeholder power and legitimacy derived from three different stakeholders. Our findings imply that power has a dual role. Whereas supplier power reduces buyer–supplier conflict, stakeholder power increases it. Moreover, this study shows that the quest to achieve greater legitimacy from the firm's competitive arena increases conflict. This study is one of the few that test stakeholder theory empirically. We demonstrate that stakeholder theory provides additional explanations above the hitherto taken dyadic approach toward understanding conflict. This study also shows that power can simultaneously reduce and increase conflict depending on which party possesses power. Greater supplier power decreases conflict, while greater stakeholder power and stakeholder-derived legitimacy increases it. Therefore, organizations have to balance their stakeholder and supplier interests.     

An Integrative Framework of Buyer–Supplier Negative Relationship Quality and Dysfunctional Interfirm Conflict

ABSTRACT

Purpose: Problems of relationship quality and interfirm conflict in business-to-business settings are serious concerns that need to be addressed. Thus, the authors have engaged in an extensive review to promote an understanding of these complex issues. This article develops an integrated framework for analyzing wide-ranging relations between individual representatives and patterns of interfirm incompatibility for managerial control.

Methodology/approach: The review involves numerous sources that include articles and monographs. A theoretical framework is constructed to integrate fragmented empirical data. In particular, social identity and commitment-trust theories are mobilized for this framework.

Findings: The review of studies has a substantial consistency with the theoretical framework. The article outlines a causal chain from interpersonal agent dissimilarities to dysfunctional buyer–supplier relations, culminating in interfirm pathological conflict. Moderating factors in the causal chain are: agent identity differentiation (for interpersonal dissimilarity), supplier relations mismanagement (for buyer–supplier relationship quality), and interfirm opportunism (for interfirm pathological conflict). Buyer–supplier interfirm incompatibility mediates the causal link between interpersonal dissimilarity and buyer–supplier relationship quality. Identity differentiation, the validation of one’s self-image, is introduced as a process that determines buyer–supplier agent interpersonal dissimilarity judgments. This framework uses a contextual perspective. It describes interactions between observations of micro-level phenomena of interpersonal dissimilarities and macro-level models of interfirm fit. From a managerial perspective, interpersonal relations between individual buyer and supplier agents may be further strengthened by such strategies as expanding the scope of the interpersonal relationship, relaxation of role responsibilities, and volunteering business-related contact referrals.

Originality/value: A new theoretical framework has been devised to predict and explain relationship quality and interfirm pathological conflict in the business-to-business context. The framework contributes to the value of the knowledge base by serving as a means for building new diagnostic tools for assessment of interfirm behavioral issues affecting exchanges. New concepts are introduced to enhance current literature on business-to-business marketing. The framework provides concrete

indicators that operationally define ideas and enable or improve measurement for empirical modeling.     

Managing Critical Spare Parts within a Buyer–Supplier Dyad: Buyer Preferences for Ownership and Placement

Despite the criticality and expense of spare parts, many firms lack a coherent strategy for ensuring needed supply of spare parts. Moreover, scientific research regarding a comprehensive spare parts strategy is sparse in comparison with direct material. Our research identifies and tests three literature-based, theoretically anchored attributes that influence a buyer's preference for inventory ownership and inventory placement when managing the stock of a critical spare part. Our findings indicate that item specificity and item supply uncertainty are useful in predicting a buyer's preference for managing the inventory of a critical spare part. Furthermore, we find that buyers have (1) a strong preference for consignment-based inventory management approaches, (2) a bias against inventory speculation despite its use in practice and analytical models, and (3) a strong preference for inventory postponement when the level of supply uncertainty is low.     

Corporate Autonomy and Buyer–Supplier Relationships: The Case of Unsafe Mattel Toys

This article analyses supplier–buyer relationships where the suppliers adapt to the buyers’ needs and expectations to gain mutual advantages. In some cases, such closely knit relationships lead to violations of the autonomy of one or both partners. A concept of corporate autonomy (CA) is developed to analyze this problem. Three different facets can be distinguished: rule autonomy, executive autonomy, and control autonomy. A case study of Mattel’s problems with lead-contaminated toys produced in China shows that the CA of buyer and supplier can be restricted as a result of a dysfunctional partnership involving a moral dilemma.     

The Influence of Contractual Governance Mechanisms,Buyer–Supplier Trust,and Supplier Opportunistic Behavior on Supplier Performance

This article explores the influence of contractual governance mechanisms, buyer–supplier trust, and supplier opportunistic behavior on Uganda's public sector supplier performance. Many outsourced contracts are reported to frequently fail to deliver on time, budget, specifications, and quality and do not deliver value to the public. This could be attributed to poor contractual governance mechanisms, lack of buyer–supplier trust, and high levels of supplier opportunistic behavior. A cross-sectional data set collected from 632 staff of Uganda's public sector is used to validate the theoretical model and hypotheses developed from literature review. Findings reveal that contractual governance mechanisms, buyer–supplier trust, and supplier opportunistic behavior are significant predictors of public sector supplier performance. The results also suggest that supplier opportunistic behavior has a stronger influence toward supplier performance than others. The implications for these findings for future research and practice are also discussed.     

Opportunism in Buyer–Supplier Relations: New Insights from Quantitative Synthesis

After more than two decades of empirical research examining opportunism, a wide divergence of empirical findings regarding opportunism's antecedents remains. The need for more theoretically practicable and managerially actionable insight into the identity, nature, and scope of the antecedents to opportunism is clear. As such, a meta-analysis of the opportunism literature was conducted to (a) investigate the role of six antecedents (dependence, formalization, centralization, control, uncertainty, and relational norms), (b) resolve the disparate relationships' magnitudes and directions, and (c) identify moderators that might explain the disparate effect sizes. Findings suggest extant research findings are affected by socially desirable response bias; the particular operationalization of constructs, for example, whether measured opportunism is actual or perceived or whether the study omitted key antecedents; and whether the sample included firms offering products or services. Theoretical and managerial implications are developed and discussed.     

Customer-Perceived Value in Long-Term Buyer–Supplier Relationships: The General B2B Insurance Sector

This article explores the role of customer-perceived value in long-term buyer–supplier relationships. This article aims to identify what creates value for organizational customers, particularly in the field of professional business-to-business (B2B) general insurance services. On the integrated grounds of customer relationship theory in marketing and the resource-based view in strategic management, qualitative research, coupled with interviews, was conducted to explore insights from various representatives of different Vietnamese general insurance firms. The findings suggest that reliability, risk coverage, reputation, technology, interpersonal skills, and technical skills are the six most important types of resources that insurance companies should possess to enhance customer-perceived value.     

Gift Giving,Guanxi and Illicit Payments in Buyer–Supplier Relations in China: Analysing the Experience of UK Companies

This paper explores the relationship between gift giving, guanxi and corruption through a study of the relationships between UK manufacturing companies in China and their local component suppliers. The analysis is based on interviews in the China-based operations of 49 UK companies. Interviews were carried out both with senior (often expatriate) staff and with local line managers who were responsible for everyday purchasing decisions and for managing relationships with suppliers. The results suggest that gift giving is perceived to be a significant problem in UK-owned companies in China. However the relationship between these payments and established understanding of gift giving within guanxi-networks appears to be weak. Gift giving appears to be associated with illicit payments, corruption and the pursuit of self-interest. Firms seek to reduce the incidence of illicit transactions by changing staff roles, instituting joint responsibilities, which include the separation of different aspects of sourcing/purchasing, ineasing the involvement of senior staff in the process and through the education of employee and suppliers.     

Buyer‐seller relationships: A conceptual model and empirical investigation

Increasing emphasis is being placed by marketing managers on the need to build long‐term relationships between themselves and their customers. Analysis of long‐term buyer‐seller relationships has drawn heavily on the literature of social psychology, especially in making comparisons with family relationships. It has been proposed that buyer‐seller relationships go through some form of life‐cycle, paralleling cyclical relationships in other areas of human activity. However, models of the evolutionary development of buyer‐seller relationships have remained largely theoretical, with little empirical validation of the life cycle concept, or analysis of the changing composition of a relationship as it progresses through a life cycle.

This paper provides cross‐sectional empirical evidence of the existence of a buyer‐seller relationship life cycle within the investment services sector. The elements that buyers perceive as being important in holding a relationship together are dependent on the duration to date of the relationship. In the early stages of development, selling pressure is perceived as being a dominant element in relationship development, giving way to judgements of ethical credibility and empathy as the relationship develops.

From this initial survey of investment services customers, a number of implications for relationship marketing strategies within the services sector are suggested.     

The Impact of Relational Variables on Value Creation in Buyer–Seller Business Relationships

Purpose: This research was aimed at attaining a deeper knowledge of how customer value creation can be improved in business markets. Although trust and commitment (as relational governance mechanisms) appear to have a positive effect on customer value creation, limited empirical evidence exists about the combined effect of the aforementioned variables on improving customer value creation. This article studies why trust and commitment are key precursors to improving customer value creation in commercial relationships among companies.

Methodology: Following a review of the literature, we introduce and contrast a conceptual model on a sample of 181 manufacturing companies located in Spain by means of a structural equation system.

Originality: The study of these causal relationships is relevant because it provides greater knowledge of the role played by the key relational variables of trust and commitment on improving customer value creation in business markets. These variables also have an important influence on the development and maintenance of a relationship in the long term and have been the focus of recent marketing research.

Findings: The empirical results reveal that: (1) distributor commitment is a direct and positive antecedent of value creation in a relationship, understood from a functionalist perspective; (2) distributor trust, the other relational variable, has an indirect effect on value creation through the distributor's commitment; and (3) this research does not tie in with previous studies that found that direct value-creating functions have a multiple-component nature representing a second-order factor.     

‘The Muncy–Vitell Consumer Ethics Scale: A Modification and Application’

This study compares college students with other adults in terms of the Muncy–Vitell (1992) consumer ethics scale. Further, the study updates the Muncy–Vitell consumer ethics scale with modifications that include rewording and the addition of new items. These new items can be grouped into three distinct categories – (1) downloading/buying counterfeit goods, (2) recycling/environmental awareness and (3) doing the right thing/doing good. The study also compares these two groups in terms of their attitude toward business. Results show that there is indeed a significant difference between these two groups in terms of ethical perceptions, but not in terms of the “recycling” items and the “doing good” items. There was also little difference between the groups in terms of their attitude toward business indicating that attitude toward business does not explain their different ethical perspectives.     

A Conceptual Framework for Investigating ‘Capture’ in Corporate Sustainability Reporting Assurance

The assurance of corporate sustainability reporting has long been a controversial field. Corporate management and assurance providers are routinely accused of ‘capturing’ what should be an exercise in public accountability. This article responds to recent calls for an analysis of the process by which ‘capture’ takes place. Integrating elements of neo-institutional theory and the arena concept, the article sets out a fresh conceptual framework for investigating the dynamics of the interactions between the various bodies active in the assurance field in the UK.     

Value Creation and Category Management through Retailer–Supplier Relationships

Abstract

This article discusses category management interactions in supplier–retailer relationships based on conceptual insights about value in business markets. Much category management literature has studied supplier–retailer relationships, but despite value creation being central to category management the conceptual approach is often the power-trust controversy. Based on value concept, category management and supplier–retailer relationship literature this study develops a model and hypotheses of retailer perceived benefits and sacrifices from category management collaboration. The article proposes that closer supplier-retailer interactions through the category management process hold the potential for increased value creation through application of complementary information resources, an improved coordination of tactical efforts, and an alignment of category aims and strategies explicitly linked to retailers' value systems. Further, the perceived necessity of trust in these relationships meshes with retailers' perceived sacrifices regarding negotiation power and full control of category marketing variables, thus establishing a trade-off for retailers between benefits and sacrifices.     

Emerging Technologies and Ethics: A Race-to-the-Bottom or the Top?

Does national success with an emerging technology require ethical sacrifices? This question is considered through the simultaneous consideration of ethics, investment, and outcomes in the nine jurisdictions that are making the largest investments in nanotechnologies—an important emerging technology. It is found that while ethical environment has no notable effect on pure and applied research, a more positive ethical environment is associated with measures associated with invention and commercialization. In summary, a race-to-the-top supports invention and commercialization of emerging technologies. A critical finding as it suggests that issues such as corruption and regulation could be critical in limiting the extraction of social and economic benefit from emerging technologies (like nanotechnologies).     

Toward the Automated Detection of Individuals’ Rationales in Large-Scale Online Open Participative Activities: A Conceptual Framework

In large-scale online open participative (LSOOP) activities, participants can join and leave at any time, and they often do not have a history of working together. Although the communication history is usually accessible to the participants in the environment, it is time consuming for them to process the communication data because of the large volume of messages. These characteristics make it difficult for one to keep track of, identify, and interpret the others’ ideas, opinions, and their rationales in LSOOP activities. We argue for a computational approach that automatically identifies and extracts the rationales from LSOOP communication data and presents them to the participants through rationale-based awareness tools. In this paper we bring together different and hitherto independent lines of research, and propose to use them in a conceptual framework integrating three analytical aspects related to the detection of rationales: linguistic, informational, and argumentative and communicative. We also review the design effort on offering rationale-based awareness in the LSOOP activities.     

A Code of Ethics for Social Marketing? Bridging Procedural Ethics and Ethics-in-Practice

We consider the role of codes of ethics in social marketing, distinguishing between “procedural ethics” and “ethics-in-practice” (after Guillemin & Gillam, 2004). We review foundations for “procedural ethics”—formal systems for ethical oversight—including moral and political philosophy, existing codes of ethics, and previous proposals for codes of ethics for social marketing. We then discuss “ethics-in-practice,” the ethical dimensions of the small moments that comprise everyday life. We connect this idea to Aristotle’s concept of phronesis, the practical wisdom to respond in just the right way to particular situations. Supporting the ethical practice of social marketing will require both procedural ethics and ethics-in-practice, iteratively related to one another. We conclude with three tasks for the profession: (1) develop and apply norms, standards, and sanctions; (2) develop formal, procedural ethics, in a just way (e.g., codes of ethics); and (3) support social marketers to develop ethics-in-practice, or phronesis.     

The 2007–2009 Financial Crisis: An Erosion of Ethics: A Case Study

This case study examines five dimensions of the 2007–2009 financial crisis in the United States: (1) the devastating effects of the financial crisis on the U.S. economy, including unparalleled unemployment, massive declines in gross domestic product (GDP), and the prolonged mortgage foreclosure crisis; (2) the multiple causes of the financial crisis and panic, such as the housing and bond bubbles, excessive leverage, lax financial regulation, disgraceful banking practices, and abysmal rating agency performance; (3) the extraordinary efforts of the Federal Reserve, the Federal Reserve Bank of New York, and the Department of the Treasury to stem the financial freefall triggered by the crisis and resuscitate financial institutions, (4) the ethical implications of the unprecedented actions by government institutions to rescue financial institutions and drag the country back from the brink of global financial collapse, and the conduct of the various parties contributing to the financial crisis, such as the shoddy behavior of mortgage brokers, the massive securitization of mortgages into overly complex bonds, the excessive leverage of financial institutions, the disgraceful work of bond rating firms, the abysmal risk management systems employed by financial institutions, and the massive operations of the shadow banking and over-the-counter derivatives markets; and (5) the major provisions of the Dodd–Frank Wall Street Reform and Consumer Protection Act signed into law to in response to the financial crisis and for the purpose of correcting the egregious conduct of major financial institutions.     

The Impact of Service Supplier’s Unethical Behavior to Buyer’s Satisfaction: An Empirical Study

In today??s marketing conditions, it becomes really vital for companies to establish an appropriate relationship with suppliers and salesperson based on ethical values in order to survive. Besides, ensuring an effective relationship between the parties would contribute to increase buyer satisfaction along with economic and social satisfaction. In this study, the direct effects of suppliers?? and salespersons?? unethical behaviors on buyer satisfaction, and the moderator effect of communication between buyer?Csupplier relationships are examined. The results of the study have revealed that unethical behaviors of suppliers and salesperson affect buyer satisfaction negatively and the communication variable has moderately affected. The results are providing important advantages for buyers who want to improve the relationships between the suppliers and their salesperson for pharmaceutical enterprises.