Taking the leap from dyads to triads: Buyer–supplier relationships in supply networks

A network is made up of nodes and links. The smallest unit that consists of both these network elements is a dyad made up of two nodes (a buyer and a supplier) and the link that connects them (a buyer–supplier relationship).Naturally, the focus of the supply chain management literature has been on this dyad. For instance, a buyer affects a supplier through its supplier evaluation and certificate programs, as well as long-term agreement practices. The relationship between a buyer and its supplier has been characterized as cooperative or adversarial. We have learned a great deal about supply chains through such studies in dyadic context.However, we submit that in a network, a dyad is not the smallest unit of a network. In fact, the smallest unit is a triad, made up of three nodes and the links that connect them. If so, how would this recognition guide us as we move forward to investigate supply chains as a network? What would be its implications to the genre of the literature on buyer–supplier relationships?     

Supplier dependence asymmetry and investment in innovation: The role of psychological uncertainty

A key source of competitive advantage for large firms accrues from investments in innovative products and processes by their suppliers, incentivized by a positive relationship climate. A fundamental hindrance lies in a condition that commonly characterizes buyer-supplier relationships: asymmetric levels of dependence between business partners. Such asymmetry has been shown to be detrimental to the relationship, enhancing the likelihood of conflict, and negatively impacting the performance of the more dependent party. Considering that such dependence asymmetry is likely to persist, large buyers face the challenge of promoting a relationship environment that provides an incentive for suppliers to invest in innovation. In this study, we propose that large, dominant buyers can influence suppliers' intentions and behaviors by mitigating the effects of their perceived riskiness and ambiguity that emerge from a situation of dependence asymmetry. Specifically, using the lens of resource dependence theory, we investigate the effects of these two psychological dimensions of uncertainty on a supplier's trust, commitment, and willingness to invest in innovation, as well as the moderating effect of a buyer's information sharing in shaping a supplier's perceived uncertainty. The model is tested with a scenario-based experiment and results are corroborated by interviews with experienced managers of retail suppliers. Our findings indicate that a supplier's dependence on a large buyer increases its perception of ambiguity and riskiness in the relationship, negatively impacting its trust, commitment, and willingness to invest in innovation. However, a buyer who shares relevant and timely information with the supplier mitigates its perceived uncertainty, promoting the supplier's positive attitudes towards the buyer and incentivizing innovation. Sharing operational and strategic information such as point-of-sales data, sales forecasts, or strategic plans, becomes a valuable strategy to powerful buyers in the pursuit of becoming a preferred customer and enhancing a supplier's resource mobilization towards the relationship.     

Supplier–supplier relationships in buyer–supplier–supplier triads: Implications for supplier performance

A growing number of studies and evidence from industries suggest that, besides managing the relationship with its suppliers, a buyer needs to proactively manage the relationships between those suppliers. In a buyer–supplier–supplier relationship triad, the buyer, as the contracting entity, influences the suppliers’ behaviors and the relationship between them. By considering the relationships in such a triad, we are able to gain a richer and more realistic perspective of buyer–supplier relationships. In this study, our goal is to examine supplier–supplier relationships in buyer–supplier–supplier triads, focusing on how such relationships impact the supplier performance. We frame the supplier–supplier relationship as co-opetition—one in which competing suppliers work together to meet the buyer's requirements. We investigate the role of the buyer on such relationships, and how the buyer and co-opetitive supplier–supplier relationships affect supplier performance. We find mixed empirical support for our hypotheses. However, we are able to demonstrate the dynamics of supplier–supplier co-opetition in the buyer–supplier–supplier triad. We point out the need for further studies in this area.     

How and when environmental orientation drives corporate sustainable development in a cross-national buyer–supplier dyad

This study aims at relating the role of environmental orientation to corporate sustainable development within a cross-national buyer–supplier dyad. To this end, it specifically proposes and empirically tests a model delineating how the international buyer's environmental orientation would influence its green supplier development (GSD) activities, then its outsourcing supplier's green product strategies (GPS), and finally total relationship value (TRV) of the entire buyer–supplier dyad. It also examines how supplier overall information technology advancement (SOITA) would further moderate the aforementioned influences. Survey results derived from 202 buyer–supplier dyads have provided empirical support for all the hypothesized relationships of the proposed model. To summarize, the findings show that international buyers' internal and external environmental orientations both serve as a major driver for their GSD, which, in turn, significantly advances outsourcing suppliers' practice of GPS and consequently enhances TRV. Moreover, this study has demonstrated that SOITA exerts a significant and positive moderating effect on the GSD–GPS link. Overall, this study provides important insights into understanding the complex and contingent processes underlying the influence of the international buyer's environmental orientation on the joint performance of the dyad.     

Financing buyer–supplier dyads: an empirical analysis on financial collaboration in the supply chain

Awareness of capital commitment in the context of supply management has increased tremendously in recent years. However, researchers often only consider the intra-organisational perspective of financing. Consequently, a great optimisation potential, especially in globally dispersed supply chains, remains unlocked. To address this research gap, this paper presents a conceptual research model with hypotheses derived from principal–agent theory to explain the role of collaboration in the context of financing a buyer–supplier dyad and its effect on the resulting financing performance. A cross-industry survey yielding 145 responses was used to empirically test the hypotheses. The results indicate that both strategy alignment between purchasing and finance departments (intra-firm financial collaboration) as well as in the buyer–supplier dyad (inter-organisational financial collaboration) have a significant positive effect on the overall financing performance. These findings provide researchers and practitioners with a clearer understanding of upstream-oriented supply chain finance and the possibilities and constraints in its implementation.     

The effects of balanced and asymmetric dependence on supplier satisfaction: Identifying positive effects of dependency

Studies argue that balance in dependence is critical to supplier satisfaction in buyer-supplier relationships. We examine whether asymmetric relationships can also lead to supplier satisfaction, arguing that traditional analysis methods are unsuitable for thoroughly analyzing this issue. With polynomial regression and response surface analysis combined with dyadic data, we test the relationship between (1) balanced dependence (i.e., the buyer and supplier are equally dependent on each other) and supplier satisfaction and (2) asymmetric dependence (i.e., either the supplier or buyer is the dominant party) on supplier satisfaction. The results indicate that mutual dependence is positively related to supplier satisfaction, but surprisingly, asymmetric dependence can be related to higher levels of supplier satisfaction.     

Understanding the dynamics of global supply chain sustainability initiatives: The role of institutional distance from the buyer's perspective

Research points to sustainable supply chain management as a core strategic goal for most global firms. However, managers continue to struggle with implementing successful sustainability initiatives both internally and throughout their globally dispersed supply chains. Using grounded theory, our findings uncover a potential explanation for how firms manage sustainability initiatives in the context of global supply chain management, from a buyer's perspective. Institutional theory of the firm is applied to help explain the challenges of developing and implementing global supply chain sustainability-related initiatives within buyer-supplier relationships. Analysis of the data from qualitative interviews show that institutional distance is an influential factor that produces mixed effects on the global buyer-supplier relationships in our sample in the context of buyer and supplier strategic orientation toward sustainability. The findings can help guide managers when approaching sustainability-related initiatives in the context of global supply chains. Theoretical and managerial implications are discussed as well as areas for future research.     

An axiomatic design framework to design interoperable buyer–supplier dyads

ABSTRACT

Cooperation arrangements in the form of buyer–supplier dyads are a way that companies have found to deal with the current competitive environment. Despite the contributions in the interoperability literature, a cohesive framework is lacking that would allow the systematization of solutions for interoperable problems in such cooperation. Therefore, we propose a framework for systematically detail interoperability issues and to provide solutions that fit business conditions.Through a case study conducted on an automotive dyad, it is possible to achieve a better interoperable scenario, by systematically addressing the issues and providing solutions that comply with the AD independence axiom.     

The undervaluation of corporate reputation as a supplier selection factor: An analysis of ingredient branding of complex products in the manufacturing industry

Prior research studies on supplier selection factors assess vendor reputation as a low ranked criterion. Reputation in these articles, however, only refers to the position in the industry, without considering the role of the final customer. Our results from a survey with 565 individuals suggest that the end user as a stakeholder should be also considered when analyzing a vendor’s prestige. We demonstrate that a supplier’s standing has negative as well as positive reputational effects on the buyer. Depending on the relevance of the purchased good as well as the reputation of the supplier and the buyer, low/high-ranked ingredients significantly decrease/increase the final customer’s perception of the buyer.     

Service triads: A research agenda for buyer–supplier–customer triads in business services

Service triads, in which a buyer contracts with a supplier to deliver services directly to the buyer's customer, represent an emerging business model. This special issue is dedicated to this theme. To set the context, in this lead article, we first define service triads, both as a phenomenon and a research topic. We then provide a review of different strands of existing research and various theoretical frameworks that can inform our study of service triads. This culminates in an outline of a research agenda that can guide future study. As such, this paper not only introduces the articles in the special issue, but is also intended as a point of reference and motivation for further work on service triads, and on triads in general.     

Governing local supplier opportunism in China: Moderating role of institutional forces

China provides a vast and prominent manufacturing base, so curtailing its local supplier opportunism represents a primary concern for local and foreign buyers. Drawing on institutional theory, this study examines how regulatory uncertainty and relationship structure moderate the role of contracts and trust in restricting local supplier opportunism in China. An analysis of 293 buyer–supplier dyads in China reveals that contracts are more effective in deterring supplier opportunism when regulatory uncertainty is high. In addition, contracts help curtail opportunism more in domestic, compared with international, buyer–supplier relationships, whereas trust is more effective in restricting supplier opportunism in international relationships than in domestic ones.     

An intra-organizational perspective on supply management involvement in contracting services

The relationship between an agent (supply management) and a principal (client functional user) can be studied by using agency theory as a theoretical background. In this study, perceptions of conflict, information asymmetry and risk were examined in relation to perceptions of internal outcomes of supply management’s involvement in services contracting in an intra-organizational dyadic context. Structural equation modeling and regression analysis were used to analyze the nature of the relationships. The contribution is integrating a structured view of internal outcomes with three concepts from agency theory to help build a more comprehensive theory of intra-organizational relationships in the context of services contracting.     

The impact of supplier dependence on suppliers' CSR: The moderating role of industrial dynamism and corporate transparency

To improve corporate social responsibility (CSR) in the supply chain, focal buyers may use supplier dependence to influence the supplier's resource strategy to promote the supplier's CSR initiatives. Thus, supplier dependence is particularly critical to the supplier's CSR, especially for Chinese suppliers with resource constraints. However, there is limited understanding and research on the degree to which a supplier depends on major buyers for the supplier's CSR from the supplier's perspective. Based on a sample of 284 Chinese listed companies, this study analyses the relationship between supplier dependence and suppliers' CSR through the lens of resource dependence theory (RDT). In addition, we investigate the moderating roles of industrial dynamism and corporate transparency in the relationship between supplier dependence and suppliers' CSR. The results indicate that supplier dependence has a negative impact on the Chinese supplier's CSR performance. Meanwhile, the negative impact of supplier dependence is mitigated for the supplier's more volatile industrial context, while improving corporate transparency enhances the negative impact of supplier dependence. This study verifies the applicability of RDT for the analysis of CSR in the supply chain in emerging markets such as China. Moreover, the study further extends research on the role of buyer-supplier relationships in CSR in the supply chain by extending the research perspective to the supplier side and adding the external and internal uncertainty of the supplier to the theoretical framework for analysis. We also provide managerial implications for implementing Chinese suppliers' CSR from the buyer's and supplier's perspectives.     

Social capital as a facilitator of successful buyer-supplier performance management

Performance management in supply chains is an increasingly important, rapidly developing but challenging area. It may benefit from sufficient levels of social capital, such as frequent interactions between buyers and suppliers. However, social capital has not yet been studied as a facilitator of performance management. To bridge this knowledge gap, we examine buyer-supplier performance management and social relationship characteristics as perceived by suppliers. We analyze empirical data gathered through a survey of 482 suppliers by employing PLS-SEM and PLS-MGA. The findings elaborate on the role of cognitive, relational, and structural capital in performance management activities within a buyer-supplier relationship. Moreover, the results demonstrate how a supplier's positive perception, in the form of preferred customer status, can be facilitated through performance management activities. The findings reveal that there is a difference in the role of structural and relational capital between key and non-key supplier groups in performance management activities. We conclude that successful performance management in buyer-supplier relationships requires more than simply a system for sharing information. The mature use of performance measurement is also essential, with cognitive capital being especially beneficial in this endeavor.     

Monitoring in service triads consisting of buyers, subcontractors and end customers

Organisations increasingly outsource service delivery to specialist subcontractors. These buyers, their subcontractors and their end customers operate in a triadic service relationship. In these triads, the buyer lacks direct control over service delivery and completely depends on the subcontractor for its performance towards its end customers. Subcontractors are confronted with two principals (buyer and end customer) who may have conflicting objectives.Although traditionally focusing on dyadic buyer–seller relationships rather than triads, Agency Theory provides valuable suggestions on the type of contract to be used and the type of monitoring to be employed. We adopt Agency Theory as a theoretical lens to look at the buyer–subcontractor–end customer triad and develop propositions on the design of contractual arrangements and monitoring activities. We use the results of two cases of service triads to provide some initial validation for these propositions.     

The role of buyer and supplier knowledge stocks for supplier-led improvements in logistics outsourcing

In service outsourcing, supplier-led relationship-specific improvements (RSIs) are vital to buyers, yet, often falls short of the buyer's expectations. One explanation for the lack of such RSIs are insufficient relationship-specific knowledge stocks. However, it is not understood how relationship-specific knowledge stocks facilitate RSIs. Our research addresses this gap by providing a nuanced view of knowledge stocks as relationship-specific resources in service outsourcing. This research is based on a multiple case study of ten logistics outsourcing dyads. The findings build on the Relational View of Dyer and Singh (1998) and extend the understanding of how different types of relationship-specific-knowledge stocks and their sub-dimensions affect proactive and reactive RSIs. In this respect, supplier knowledge of the specific value-creating processes (e.g., logistics processes) at the buyer form the foundational layer for RSIs, flowed by a second layer of supplier knowledge of the buyer company and its up- and downstream interconnections with the customers and other suppliers. The third knowledge-layer is formed by more generic relationships-related market knowledge. In addition, the buyer’s knowledge of the service supplier showed vital in facilitating RSIs by removing barriers that hamper the supplier’s improvement efforts.     

The role of intermediaries in establishing a sustainable supply chain

In sustainable supply chain management, buyers may use intermediaries to bridge exchanges with suppliers when knowledge of suitable sustainability practices is weak and in need of facilitation. Understanding how supply chain intermediaries perform this role and what happens when intermediation is no longer needed is important in establishing more sustainable supply chains. Two supply chain intermediaries have been investigated with the resulting case study evidence analysed using the Gioia methodology. The findings suggest supply chain intermediaries add value to the buyer-supplier exchange by facilitating sustainability-related information transfer, knowledge development, risk management and improved capabilities. For example, specific practices such as corrective action reports, often managed by the intermediary, underpin the development of a sustainable supply chain. When the intermediary is no longer needed, they become disintermediated from the specific buyer-supplier exchange but may be re-employed in a new triadic relationship in the future with previous parties. This provides positive spill-over effects through intermediation–disintermediation–post-intermediation cycles for both the buyer and supplier populations and for broader society. Overall, the findings highlight the value of the transient position of supply chain intermediaries in establishing sustainable supply chains and the intended consequences of their involvement.     

Managing challenges in social care service triads – Exploring public procurement practices of Dutch municipalities

Buying services in a triad constellation is associated with challenges related to quality control, performance monitoring, and a deteriorating information position for the buyer. There is growing attention for service triads in Supply Chain Management (SCM) literature. However, these studies are mainly theoretical. The studies suggest to manage the identified challenges by monitoring supplier performance, maintaining a strong position in the service triad, developing collaborative trusting relationships, using outcome-based contracts, and aligning incentives between buyer and suppliers. Empirical studies on service triads and management mechanisms are rare, especially in a public procurement context. We study the application of management mechanisms in a public procurement context where 393 Dutch municipalities each had to contract social care service providers at the same time. This context allows us to study which of the management mechanisms proposed in literature are actually employed in a public procurement context, and whether other mechanisms are applied that are not addressed in the literature. We find municipalities deviate from traditional bureaucratic procurement procedures and apply a relational approach to the procurement procedure, including establishing social contracts, to cope with buyer challenges in service triads. Furthermore we identify municipalities apply ex post competition to drive up service quality through tendering framework agreements and allowing clients to choose their care provider of choice. This mechanism of ex post competition through the use of framework agreements has not been suggested in service triad literature before, and may be an effective mechanism in other service triads to address service quality and customer needs fulfilment issues.     

A contingency-configurational view of purchasing operations: The mediating role between supplier relationship and firm performance

The literature has considered purchasing and supply management activities from a strategic perspective, but the tactical role of purchasing operations has yet to be explored. Purchasing operations represent the internal modus operandi for transactions with suppliers, comprising three main activities – purchasing transactions, purchasing document management, and purchasing assessment – and supportive activities like purchasing knowledge management. Following the contingency theory, we hypothesize that these internal activities mediate between external supplier relationship management and firm performance (financial, customer and delivery performance). Complementarily, we adopt the configurational theory to hypothesize that this link between external and internal activities can be combined to increase firm performance. To test this contingency-configurational view of purchasing operations, we conducted a quantitative survey with 234 companies. The regression results of the contingency analysis show that purchasing operations activities have a full mediation role in most relationships between supplier relationship management and firm performance, while knowledge management positively moderates the association between purchasing assessment and customer performance. Moreover, the cluster analysis for the configurational analysis shows that supplier relationship management and purchasing operations follow maturity levels of joint implementation of internal and external activities. Our findings shed light on the purchasing operations by defining the activities representing this concept and showing their role in supply management. We also contribute to practice by proposing an integrative system that helps managers organize the firm's purchasing and supply management activities.     

Understanding supplier motivation to engage in multiparty performance-based contracts: The lens of Expectancy theory

Research on performance-based contracts (PBCs) has emphasized outcome uncertainty (lack of outcome attributability) as an obstacle to applying such contracts effectively and has investigated possible ways to mitigate this uncertainty. Most studies primarily address dyadic buyer-supplier contracts and the uncertainty that originates in the environment or in buyer behaviour. However, suppliers often also depend on other suppliers and sub-suppliers in the process of outcome creation. Such reciprocal interdependencies between more than two parties cannot easily be addressed through dyadic contracts. This paper examines how effective multiparty PBCs can be designed to align the interests of multiple suppliers. To develop our a priori conceptualisation, we first review the literature and identify the factors that affect suppliers' willingness to engage in PBCs, drawing on Expectancy theory to unravel the motivational effects of rewards. We then use case studies from the construction sector to investigate how these factors apply to multiparty PBCs and identify specific variables that influence supplier motivation in such settings. Based on our findings, we propose that expectancy (the relationship between effort and performance) is enhanced by parties’ joint participation in the planning and control of project activities, their reputation, and specific contractual elements such as the codification of collaboration or reward design in hybrid PBCs. Instrumentality (the link between performance and reward) is primarily affected by the perceived fairness of the reward sharing and codified collaboration, and valence (the relationship between reward and supplier objectives) is mainly influenced by the monetary amounts at stake.