Antecedents and consequences of opportunism in buyer–supplier relations: Research synthesis and new frontiers

Buyers and suppliers must concern themselves with opportunism, a phenomenon empirically established in exchange relationships. What causes firms to behave opportunistically? What are the consequences of firms' opportunistic behavior? To date, these antecedents and consequences have not been comprehensively synthesized. Herein, the opportunism phenomenon is revisited to expose research gaps and chart new directions that will enhance our understanding of buyer–supplier relationships. First, we provide a brief review of two critical theories of exchange that provide a theoretical foundation for opportunism. We next provide an overview of opportunism. Then each of the antecedents and consequences is discussed with emphasis on the contribution of each finding. Finally, and most importantly, several promising paths for further research are proposed.     

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.     

Interpersonal attraction in buyer–supplier relationships: A cyclical model rooted in social psychology

The concept of attraction is not reserved for the study of interpersonal relationships between husband and wife, family members, or lifelong friends. On the contrary, it contains much potential as a variable describing interpersonal business exchange relationships. This potential has been noted by well-known industrial marketing scholars in the past, and recent theoretical advances have incorporated attraction to describe buyer–supplier exchange, although primarily at the interorganizational level of analysis. The in-depth understanding of interpersonal attraction between boundary spanners representing buying and supply companies has yet to be developed. By drawing on social psychology and social exchange literature, this paper attempts to fill some of this gap. It contributes by uncovering the elements and process of interpersonal attraction. Furthermore, propositions are formulated to guide future research efforts on interpersonal attraction in the buyer–supplier context. Finally, the managerial value and challenges of applying attraction to buyer–supplier exchange relationships are discussed.     

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.     

Provider involvement in business service definition: A typology

This paper proposes a typology for provider roles in defining business services. The starting point of the study is the underlying rationale of much of the service purchasing literature that buyers have or can easily access the necessary know-how to procure business services. If this does not hold, the implication is that buying firms would shy away from buying complex services. An alternative perspective recognizes that purchasing business services requires its own set of sourcing capabilities, which may be lacking. Buying firms may have limited know-how in terms of defining and articulating their requirements or not be fully aware of them in the first place. However, the buyer's lack of sourcing capabilities need not be an injunction to internalize the service. In these circumstances, service providers step in, help buying firms specify their requirements and play a key role in defining what is procured and how. We build on this interactive view of service definition to undertake a comparative case analysis of four business service contracting situations arrayed along two dimensions — buyer perceived uncertainty and provider's buyer-specific experience. We conclude that service providers play different roles in each case. These are classified as translating, re-engineering, developing, and fine-tuning roles.     

Becoming a preferred customer one step at a time

A preferred customer is a buying organization who receives better treatment than other customers from a supplier, in terms of product quality and availability, support in the sourcing process, delivery or/and prices. The decision to become a preferred customer implies a continuous commitment by the purchaser to a complex, expensive and often uncertain process. It is important to use a strategic approach, as well as appropriate tactics. Based on well-known models on the development of buyer-supplier relationship, on customer portfolio analysis and on the emergent literature in customer attractiveness and preferred customer status, we suggest four steps to become – and remain – a preferred customer: initial attraction, performance, engagement and sustainability. The process takes the perspective of a buyer willing to obtain the preferential status and focuses on the strategies and tactics that could influence the supplier's decision of granting this status. The proposed process considers that the supplier is continuously comparing the value offered by the customer to its expectations, and to the value offered by other customer relationships.     

The development and diffusion of customer relationship management (CRM) intelligence in business-to-business environments

CRM data is among the most important and comprehensive information available to management in many organizations. This is particularly the case in business-to-business marketing, where the firm's extended working relationship with its customers is frequently crucial for the maintenance of a healthy business. However, in many instances management has treated CRM data as highly specific to its client relationships and has therefore neglected to analyze this information across market segments, customer categories, and customer–firm relationship forms in order to draw meaningful conclusions for driving business decisions.     

Towards an understanding of attraction in buyer–supplier relationships

This paper explores how firms are attracted to one another within buyer–supplier dyads. It draws attention to ways of managing in a relational mode as an alternative to managing in a controlling mode. This study argues that in order to improve value creation and value transfer in buyer–supplier relationships it is not enough to optimize and coordinate management and control systems. Following Dwyer et al. [Dwyer, R., Schurr, P.H. and Oh, S. (1987). Developing buyer–seller relationships. Journal of Marketing, 51: 11–27.], it argues that mutual attraction is important in developing relationships. It is also argued that this can be achieved through a range of perceptual approaches and actions, which enhance performance between the parties involved. A conceptual model of attraction is developed with theoretical underpinnings in social exchange theory. It proposes three behavioral constraints: expected value, trust, and dependence. These components of attraction interact to draw dyadic parties closer together or push them apart. Finally, implications for research and practice are discussed.     

Managing opportunism in a developing interfirm relationship: The interrelationship of calculative and loyalty commitment

This research develops a framework for investigating associations among the duration of an exchange relationship, the interrelationship between a supplier's calculative and loyalty commitment, and opportunistic behavior on the part of a buyer. The findings indicate that (1) calculative commitment and loyalty commitment by suppliers function as substitutes; (2) a supplier's loyalty commitment increases gradually as a developing exchange relationship endures, whereas calculative commitment increases and then decreases; and (3) a supplier's calculative commitment leads to an increase in a buyer's opportunism, whereas the supplier's loyalty commitment leads to a decrease, and a supplier's loyalty commitment decreases the positive impact of calculative commitment on opportunism. These findings provide insights into how relationship duration affects buyers' opportunism through the interrelation between suppliers' calculative and loyalty commitment.     

The role of boundary spanners in the formation of customer attractiveness

This paper examines the question of how to understand the formation of suppliers perceived customer attractiveness. It argues that existing conceptualization of buyer–supplier relationships are too simplistic to understand the full complexity involved in the formation of such perceptions, and models the buyer–supplier relationship as a set of micro-dyads and intra-, inter-organizational exchange relationships. In exploring these micro-dyads this research apply an embedded case study approach and explores three buyer–supplier relationships. Following Bacharach et al. [Bacharach, S.B., Bamberger, P., & Sonnenstuhl, W.J. (1996). The organizational transformation process: The micropolitics of dissonance reduction and the alignment of logics of action. Administrative Science Quarterly, 41(3), 477–506.], it is interested in the involved actors sense-making processes and the concept of “logics of action” is deployed. The analysis demonstrates how suppliers' formation of perceptions related to customer attractiveness can be understood as constituted through a set of discrete historical means/ends alignments and misalignments between boundary spanning roles in the involved organizations.     

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.     

Reexamining the direct and interactive effects of governance mechanisms upon buyer–supplier cooperative performance

This study aims to explore the effect of governance mechanisms (including both formal and social controls) upon the buyer–supplier cooperative performance in supply chains. Empirical evidence obtained via a mail survey from 106 firms participating in the Taiwanese “Center Satellite Production System” indicates that (1) there is an inverted U-shaped relationship between formal control and cooperative performance; (2) social control has a consistent positive effect on cooperative performance; and (3) the joint use of formal control and social control could enhance cooperative performance in supply chains but only in cases with moderate usage of formal control. Otherwise, social control becomes a supportive factor that repairs cooperative performance damage from overwhelmingly applied formal control.     

Covalence and ionic bonding in business-to-business relationships: Insights from chemistry

The paper examines business-to-business (B2B) relationships using the framework of the covalence-ionic bonding theory in chemistry as an analogy to help make soft phenomena and relationships in B2B marketing more understandable to engineers and scientists in organizations and to managers with scientific and technical backgrounds. In the tradition of cross-fertilization of various scientific fields, the authors propose that the covalence-ionic bonding theory may provide insights in determining the factors that contribute to the emergence of bilateral, unilateral, and market relationships. This study compares and contrasts interparticle bonding with ways of managing B2B relationships. Beyond sheer analogy of the two phenomena, an explanation of B2B relationships and decision-making mechanisms is proposed. In adapting this concept theoretically, the meaning of the original parameters in physical science is assigned a new meaning in the marketing context. Furthermore, the paper extends conceptually the predictive capabilities of chemistry theories to relational behaviors in marketing. Drawing from a resource-based view of the firm, complementarity of resources and dependence levels are postulated to have critical roles in business bonding. Appropriate propositions are advanced, along with implications for managers and researchers.     

The integration between marketing and purchasing in the traceability process

This paper provides an overview of the implications of integrating marketing and purchasing offered by traceability. The research offers some evidence of the adoption of different traceability approaches by actors along the supply chain, illustrating the relevance of the traceability issue and how traceability can be exploited. The paper presents findings from a case analysis process of five actors in the fashion industry. This industry has experienced strong integration between industrial and retail functions and relevant changes in the organisation of production networks (global shift of production to new industrialized countries and emerging markets) which place emphasis on the traceability topic. Traceability emerges as a complex concept that concerns the sharing of information about the product and production processes along the supply chain in BTB networks up to the consumers in the final market. The issue analysed focuses on organising, with a discussion of two different uses of traceability: traceability as a tool for inter-organisational control and traceability as a tool for market power. The two approaches give rise to different implications at the individual company and business network levels. The traceability process has intraorganisational consequences in terms of contents, technologies and actors involved in its implementation. These consequences are different according to the role played by the process.     

Paradigms of derived exchange value effects in market network

Customer consumption value ultimately derives from enterprise production the consumption benefits which originating from inter-organizational cooperation as well as the transferred and accumulated exchange value of the enterprise with external organizations. This study plans to clarify the effect of the derived exchange relationship on enterprise exchange value, and also to identify the network models of different derived effect relationships. An analysis of the Taiwanese public health system revealed both positive and negative exchange value effects that impacted relationships among actors in the overall health system. Four generic models were presented by analyzing the qualitative data from phenomenon of different types of inter-organizational exchange behaviors, and other more complex models deduced from four generic models were also proposed.     

The relationship between technology adoption and strategy in business-to-business markets : The case of e-commerce

Firms have been traditionally advised to adopt information and communication technologies (ICT) to support the achievement of existing business objectives. However, entry into business-to-business e-commerce may require the concurrent adoption of new business strategies. This paper argues, therefore, that ICT analysis needs to be considered at the same time and at the same strategic level, as internal, competitor and market analysis. This is because the source of the competitive advantage brought by ICT has changed, to be largely obtained through increase in customers' perceived value. The literature presents a confused picture of the likely consequences to a firm of its adoption of e-commerce. This paper concludes that any such adoption must be evaluated in the environment of the individual firm. A multidimensional analytical framework, taking a combined informational and marketing perspective, is presented to assist with such evaluations.     

The significance of trust and renqing in the long-term orientation of Chinese business-to-business relationships

While business relationships with China are receiving increased attention in both practitioner and academic discourse, very little empirical work however, has been undertaken to isolate and examine measures that focus on business-to-business relationships, and as such, research in this area is somewhat scant. In an attempt to bridge this gap, and add to the knowledge in this emerging discipline, the research aims to develop a conceptual framework to explore the relationship between trust and the long-term orientation in Chinese business-to-business market relationships. Based on a survey with Hong Kong companies that have a buyer-seller relationship with Chinese companies, the empirical findings indicate the mediating role and significance of ‘renqing’ for enhancing trust and contributing towards the long-term stability in relational exchange. The results highlight several implications for practicing managers to consider when aiming to establish and develop relationships in a Chinese business-to-business context.     

It ain't over 'til it's over: Evaluating reacquisition opportunities in business-to-business markets

Using a qualitative critical incident research technique, this paper examines how sales firms evaluate defected customers in order to determine their worthiness for reacquisition. Findings from interviews with fifty professional salespeople suggest that, when sales firms assess reacquisition opportunities, these opportunities are evaluated based on the likelihood of reacquisition and the value of the customer (i.e., ease of reacquisition and value of the customer). Salespeople report that the barriers to reacquisition, leveraging remaining customer relationship and investigating their own value-adding capabilities are critical in determining the ease of reacquisition. In addition, salespeople report that account size, profitability, market influence and cross-selling potential are fundamental in determining the value of a customer. Furthermore, the importance of ease and value in reacquisition assessments varies with (1) the reason for the customer defection, (2) the formalization of a firm's reacquisition process, and (3) market opportunities. Managerial implications and future research directions are discussed.     

Co-evolution of trust and dependence in customer–supplier relationships

The relational and dynamic aspects of interfirm trust and dependence produce a crucial, but insufficiently addressed, challenge for successful relationship coordination. In this paper we concentrate on this issue by examining how trust and dependence co-evolve in customer–supplier relationships. Building on a case study, we develop propositions and a model that illustrates how interorganizational trust and dependence co-evolve through the different phases of customer–supplier relationships and how we may distinguish cooperative and trustworthy actors from those who will behave opportunistically. Theoretical and practical implications are offered.