Relationship duration and buyer influence in just-in-time relationships

Heavy investments tailored to a specific JIT-relationship highlight the trade-off between improved value-added and inter-firm dependence in industrial purchasing relationships. The main reason for dedicating specific investments in a JIT-relationship is to enhance production efficiency and logistics performance. On the other hand, such investments induce substantial inter-firm dependence and high switching costs, which must be offset by stronger inter-firm co-ordination. Using transaction costs analysis (TCA) and relational contracting theory (RCT), the authors have examined whether the buyer's influence on a JIT-relationship is contingent upon the length of that relationship. Data from a survey of 165 industrial purchasing relationships demonstrate that as a JIT-relationship evolves over time, inter-firm co-ordination tends to increase reliance on relational governance. When the level of the JIT-investment is substantial, hierarchical buyer control relaxes significantly as the length of the relationship increases.     

Order frequency and the co-ordination of industrial purchasing relationships

Transaction cost analysis (TCA) includes the frequency of exchange as a significant dimension of the transaction, and order frequency is expected to influence the efficacy of inter-firm co-ordination arrangements. To date, transaction frequency has received little attention in empirical TCA-studies. This research focuses in particular on the frequency of inter-firm exchange and how it affects the calibration of inter-firm co-ordination efforts in supplier–buyer relationships. Empirical findings from a survey of 161 industrial purchasing relationships indicate that increased transaction frequency gives rise to administrative economics of scale, and there is a positively and logarithmic-shaped association between the order frequency of standardised items (low asset specificity) and inter-firm co-ordination efforts.Furthermore, increased asset specificity seems to improve the economics of specialised inter-firm co-ordination efforts when the transaction frequency increases. As asset specificity becomes substantial, the marginal co-ordination efforts of increased inter-firm exchange are significantly reduced. This research provides some new insight into the economics of inter-firm organisation and supports the TCA-assumption that the frequency of inter-firm exchange improves the utilisation of specialised co-ordination arrangements in business to business relationships.     

基于社会资本的产业集群交易治理研究——交易域、交易频率及交易对象视角的分析

文章研究了社会资本对于产业集群内部企业间交易的治理机制,从交易域、交易频率、交易对象这三个维度,对匿名市场现货交易进行扩展,建立了基于社会资本的交易治理模型,分析了产业集群内企业进行交易时的主要特点：交易嵌入社会网络、交易频率高、主要与集群内部交易对象进行交易。依据这三个特点,将上述模型进行综合,得出适用于产业集群内部企业间交易的社会资本治理机制模型,并分析了该模型的适用条件。研究结果显示由于社会资本的存在,使得产业集群内部交易得到了有效治理,这种有效治理的水平受到产业集群规模和信息畅通水平的约束,当产业集群规模不大、存在通畅的信息沟通渠道、交易者存在实施集体惩罚的动力时,社会资本能够成为产业集群内部企业间交易的有效治理机制,但是这种机制并不适用于集群内部企业与外部企业间的交易治理。     

To Be or Not to Be [Locked in]: An Investigation of Buyers' Commitments of Dedicated Investments to Support New Transactions

ABSTRACT

This study draws on two prominent theoretical frameworks, transaction cost analysis and social exchange, which serve as the basis for much of the empirical literature in relationship marketing to investigate the investment behavior of industrial buyers. Specifically, we examine the manner by which situational and contextual factors identified from those frameworks influence buyers' commitment of dedicated investments to support new transactions within ongoing exchange relationships. Our empirical results show that buyer dedicated investments are positively influenced by the extent of supplier dedicated investments, thus supporting the safeguarding rationale posed by transaction cost theory and the reciprocal nature of commitments derived from social exchange theory. Such investments are also positively influenced by the extent of past adaptations made within the pre-existing relationship, consistent with the generalized hostage explanation from the transaction cost literature and theories of the incremental development of relationships. These investments are also positively influenced by the size of the procurement but negatively influenced when a multisourcing purchasing strategy is being pursued, which are consistent with means to manage dependency. It was also found that buyer investments are not uniformly influenced by perceived environmental uncertainty related to supply and market sectors and technological conditions, suggesting that buyers respond to the risks associated with each of these environmental sectors in a distinctive manner.     

Buyer/supplier partnering in British industry: The automotive and telecommunications sectors

Practitioners and academics in the fields of marketing and purchasing management share an interest in the effective management of inter‐firm buyer‐seller relationships. Buyer/supplier partnering has been advocated as an effective approach to the management of key customer or supplier relationships. Within both the automotive and telecommunications sectors of the British economy there is intense interest among major buying organisations in the development of durable partnerships with key suppliers. However, within both industries the major UK and American owned firms have to operate under the shadow of traditionally antagonistic relations with suppliers. The current state of buyer/supplier partnering within the two industries is evaluated within this historical context, and the key problem identified is the need to overcome antagonism within the inter‐organisational culture. The costs and benefits of partnering approaches to both marketing and purchasing are discussed, and implications for marketing managers seeking to develop partnerships with major customer organisations are outlined.     

A Comprehensive Framework Examining the Issues Involved in the Distribution Channel Integration Decision

Abstract

The extant literature offers two competing perspectives on vertical integration. The transaction cost perspective has focused on the transaction cost aspects of the vertical integration decision. This perspective recommends that firms should integrate when integration is the least cost option. The strategic perspective, however, claims to take a more comprehensive approach to the problem by considering the strategic objective of the firm, its bargaining power over the distributors, competitive pressures, and the life cycle phase of the industry. This paper attempts to incorporate the transaction cost and the strategic perspectives into a unified framework developed toward a more complete explanation of the underlying phenomenon. The framework was tested by examining the distribution channel choices of electronic component manufacturing firms. Structural equation modelling was used to test the hypotheses. The findings indicate that the strategic perspective does a better job of explaining vertical integration than the transaction cost perspective. The strategic objectives of the firm, its bargaining power over the distribution channel, competitive pressure, and certain aspects of the environment, emerged as the key factors affecting the vertical integration decisions.     

The Relationship between Mutual TSI and Interfirm Contracts: The Moderating Effect of Strong Ties

ABSTRACT

Purpose: This study examines the influence that tie strength has on contractual relationships between exchange parties with specific investments and also explores the role of network intensity in contractual relationships between buyers and suppliers. We hypothesize that the relationship between transaction-specific investments (TSIs) and contracts is moderated by network intensity.

Methodology: An empirical test is carried out by analyzing buyer–supplier relationships of manufacturing companies. The construct measures were based on those obtained from prior research, and the reliability and validity were established using exploratory and confirmatory factor analysis. The overall measurement model was then assessed with structural equation modeling using AMOS.

Findings: We focus primarily on contract variables as a governance mechanism that can be affected by the strength of ties among firms and the results of our empirical study indicate that supplier TSIs improve the use of informal contracts while the use of formal contracts undermines the effect on supplier TSIs. In addition, we found that firms with weak ties with their partners in the network are more likely to use both formal and informal contracts than those with strong ties.

Contribution: Our study has several contributions. First, our research improves the understanding of the relationship between TSIs and the choice of contracts as a governance mechanism, especially for mutual TSIs. Second, our research improves our understanding of the network strength in the context of business-to-business relationships extending the understanding of the relationship intensity among firms in a network. Third, we focused on the effects of network intensity on contractual relationships.     

Mobile Phone Use,Transaction Costs,and Price: Evidence from Rural Vegetable Farmers in Cameroon

ABSTRACT

The widespread use of mobile phones in Cameroon should be translated into increased farmers’ income by reducing information-search costs. This study seeks to investigate the effects of mobile phone use on transaction costs related to price information search. Ordinary least-square estimations reveal a positive relationship between mobile phones use and transaction costs. The results show that farmers’ use of mobile phones increases their transaction costs for carrots and tomatoes, unlike for cabbages. This paper suggests the establishment of vegetable information centers that can serve as an interface between stakeholders in agriculture by channeling adequate and timely information to farmers.     

Transactional and Value Creational Sources of Dependence

ABSTRACT

This paper critically reviews the nature and the role of the dependence construct in buyer-seller relationships. A distinction is made between transactional sources and value creational sources of dependence, and five different variables: goals, exchange partner actions mediating goals, motivational investments in goals, the availability of alternative exchange partners and switching costs are found to account for what we refer to as “dependence.” The proposed framework adds potential clarity to discussions and disagreements regarding the dependence concept in buyer-seller relationships by providing a unifying frame of reference that permits us to compare the insights generated by different theories. One important implication is that contradictory recommendations of different governance theories are not contradictory after all since they consider different dependence situations. Accordingly, governance choices should be based on assessments of how firms depend on each other, and not only on assessments of how high this dependence is.     

Exploring the Role of Product Development Capability for Transforming Marketing Intelligence into Firm Performance

ABSTRACT

Purpose: This study examines the role of product development capability for transforming marketing intelligence activities into firm performance on industrial markets.

Methodology/Approach: The authors apply structural equation modeling to analyze survey data from 342 industrial manufacturing companies.

Findings: Results reveal that sales integration and holistic macroeconomic view are particularly important features of the marketing intelligence capability on industrial markets to gain additional insights in order to develop products successfully. Results also reveal that product development capability transforms the marketing intelligence activities into firm performance on industrial markets.

Research Implications: This study offers new insights on marketing theory by extending and concretizing the concept of market orientation to a broader concept of the marketing intelligence capability for industrial markets. Further, this research reveals that the product development capability serves as a mediator to business performance.

Practical Implications: This study’s systematic and tangible outline of the dimensions of marketing intelligence and its link to the product development capability helps firms to better understand how to capitalize on market orientation’s potential values.

Originality/Value/Contribution: This research (a) reveals the relevant dimensions of marketing intelligence on industrial markets and (b) shows how the product development capability tranforms marketing intelligence activities into firm performance on industrial markets.     

Toward an Understanding of Strategic Inter-Organizational Relationships in Franchise Channels

Abstract

Information technology, globalization and the emergence of boundary-less communication networks are creating strategic networks of inter-organizational relationships. As inter-organizational relationships continue to evolve, there is a growing mandate for high levels of interdependency. Franchises are contractual vertical marketing systems and, by definition, represent highly interdependent linkages between franchisors, third-party providers, franchisees and customers. Organizational learning is posited as a strategic linkage in franchise systems.     

“Relationship marketing” and the “markets‐as‐networks approach”—a comparative analysis of two evolving streams of research

Predating the increased attention by marketing academics on relationship marketing, European marketing scholars developed a network approach to the study of industrial markets that is also based on relationships between seller and buyer as a fundamental concept. This article aims to analyse the similarities and the differences between relationship marketing studies and network studies. After comparative analyses of definitions, empirical and research foundations, attributes related to governance structures and to the marketing mix approach and of major issues addressed in the research agendas, the conclusion is: relationship marketing in its limited interpretation is just a development within the marketing mix approach. Relationship marketing in its extended interpretation is, or rather could become, close to the markets‐as‐networks approach. However the basic attribute in network studies of “embeddedness” is largely missing in relationship marketing. To develop relationship marketing as a generic concept, researchers need to address also the issue of the generic nature of the market. Because when relationships are regarded as the generic governance form for transactions, then the market itself becomes network‐like!     

物流外包的交易成本理论分析

物流外包（第三方物流）近年来在全球得以快速发展，除却第三方物流的产业技术经济优势外，还有着深层次的经济理论根源。运用交易成本理论，本文主要分析了物流外包的交易成本构成、纵向一体化与物流外包边界、物流外包的优势等问题，并从社会分工角度探讨物流外包的优势。     

International Production Sharing Opportunities in Mexico and the Caribbean

Abstract

In an effort to take advantage of access to valuable resources and increased market presence, many U.S. manufacturers have pursued production sharing relationships in a variety of overseas locations. These efforts are seen as methods of combating several threats to firm performance: increased domestic production costs, escalating international manufacturing competition, and ever changing barriers to entry regulations. From the perspective of an integrated North American competitive strategy, two geographic areas-Mexico and the Caribbean Basin-have received much attention as potential operating locations. Using a survey of corporate managers responsible for strategic business unit operations, this study investigates and compares the manufacturing and logistics performance of U.S. manufacturers operating in Mexico and the Caribbean. Relationships between logistics performance, manufacturing performance, and firm performance are examined and managerial implications are discussed.     

Corporate Governance,Agility, and Survival

Abstract

Most corporate research has focused on (i) dimensions of governance that are relatively easy to measure (e.g., ownership structure, boards of directors, and executive compensation) and (ii) the role that governance arrangements play in mitigating agency costs. This paper takes an evolutionary perspective to corporate governance in which the concept of corporate agility, i.e., the ease with which firms adapt to changes in their respective environments, plays a prominent role. I argue that decentralization, which is understudied in the literature, promotes agility and predict that it is directly related to corporate performance and survival during periods of rapidly changing environments. The paper also discusses how some governance features that often are viewed through the lens of either mitigating or exacerbating agency costs are cast in a different light when their effects on corporate agility are considered.     

Trust in the Board: A Strategic Imperative in Times of Uncertainty

ABSTRACT

In turbulent environments, investors seek to minimize risk. Many public/nonprofit organizations evoke a sense of trust in their members by maintaining boards of directors. This study examined faculty member attitudes about the public/nonprofit institutions and boards who manage their retirement funds (n = 240). A structural model revealed that investors developed trust in the board when they view the organization positively through reliable communication, a sense of shared values and retirement funds that perform soundly. As a mediator of attitude toward the organization trust in the board also diminished investor perceptions of risk, and partially explained whether members cooperated and continued with the organization. The findings support trust as a key intervening factor in member-organization relationships and suggest building trust in board governance as an effective way to reduce uncertainty.     

Trust Promoting Seals in Electronic Markets

Abstract

In order to promote web sales, companies conducting electronic commerce are constantly seeking viable and efficient ways to increase web traffic. One approach is to build consumers' trust, and ultimately to increase web sales. Many business-to-consumer online merchants follow this approach and display trust-promoting seals on their websites. However, whether these seals really fulfill the tasks they have promised has remained unexplored. This study empirically examines the influence of trust-promoting seals on consumers' online purchasing decisions. The results show that the trust-promoting seals are generally effective in promoting web sales, and some seals enhance promotion better than others.     

Determinants of Merchandising Proposals by Vendors: Influence of the Recognition of Transaction Costs

ABSTRACT

This study discusses customized merchandising proposals in retailer-vendor relationships, based on transaction cost theory. The theoretical model suggests that trust relationships and the centralization of merchandising authority promote the activeness of customized merchandising proposals. The results from structural equation modeling analysis reveal that customized merchandising proposals by a vendor are actively executed when (a) a trust relationship between a retailer and a vendor becomes long term and stable and (b) the merchandising authority of a retailer's merchandising division becomes centralized.     

Creating a Sustainable Supply Chain Network by Adopting Relationship Management Strategies

ABSTRACT

Purpose: This paper develops a conceptual framework to analyze the impact of a supply chain network (SCN) structure on relationship management strategies (RMS) that focal firms apply to manage sustainability issues within the SCN.

Design/methodology/approach: This paper is based on a comprehensive review and analysis of the industrial marketing and purchasing (IMP), sustainable supply chain management (SSCM), and SCN literature.

Findings: The conceptual framework expands the network perspective in the SSCM context by considering the important role of the SCN structure in the firm’s decision-making process. Four factors (dependency, distance, power, and transparency) were found that are useful in conceptualizing the SCN structure. The conceptual framework also categorizes various sustainability practices into four RMS (noncompliance, transactional, dictatorial, and collaborative), which are needed to make an SCN more sustainable. In addition, 16 propositions are developed based on how firms may identify the most effective RMS to implement appropriate sustainability practices through examining their SCN structure.

Research limitations/implications: The conceptual framework, developed as a result of a comprehensive review of the literature, led to the development of 16 propositions, which can assist in furthering a research agenda on RMS to diffuse various sustainability practices within SCN structures.

Originality/value: The relationship between SCN structure and RMS in the sustainability context remains an under-researched but emerging area of interest. This paper leverages existing research to develop a conceptual framework suitable for empirical testing.