The effect of power use on specific investments: the moderating role of interdependence structure

2022 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Min Tian ◽  
Baofeng Huo ◽  
Yu Tian
Keyword(s):  
Specific Power ◽  
Coercive Power ◽  
Supplier Relationships ◽  
Content Type ◽  
Specific Investments ◽  
Dependence Asymmetry ◽  
Different Types ◽  
Single Construct ◽  
Perceived Relationships

PurposePower use widely exists in buyer–supplier relationships (BSRs). Different directions of power use (i.e. buyer's power use and supplier's power use) intertwining with different types of power (i.e. coercive and noncoercive power) make it insufficient to regard power use as a single construct when examining its effect on a firm's following response. Besides, interdependence structure characterized by joint dependence and dependence asymmetry may influence the effect of a specific power use by shaping the firm's interpretation and cognition toward the relationship. Specifically, this study examines how four types of power use a buyer facing and an interdependence structure with its supplier affect its specific investments to the supplier.Design/methodology/approachThis study tests the proposed relationships using regression analysis, based on data from 240 manufacturing firms in China on their perceived relationships with their major suppliers.FindingsResults show that buyer's coercive power use (BCP) negatively affects buyer's specific investments while noncoercive power use (BNP) does not play a significant role. Both supplier's coercive power use (SCP) and noncoercive power use (SNP) are positively related to buyer's specific investments. Joint dependence positively moderates the effect of BNP and dependence asymmetry negatively moderates the effects of BCP and SNP on buyer's specific investments.Originality/valueThis study contributes to the literature on power use by identifying different types of power use and their different roles in influencing buyer's specific investments. The study also contributes to the literature on interdependence structure by demonstrating the different roles of joint dependence and dependence asymmetry.

scholarly journals The role of social media in managing supplier attractiveness

2019 ◽  
Vol 40 (5) ◽  
pp. 625-646 ◽  
Author(s):  
Zsófia Tóth ◽  
Martin Liu ◽  
Jun Luo ◽  
Christos Braziotis
Keyword(s):  
Social Media ◽  
Business Environment ◽  
The Body ◽  
Strategic Decision ◽  
Senior Managers ◽  
Supplier Relationships ◽  
Content Type ◽  
Specific Investments ◽  
Depth Interviews

Purpose Managing attractiveness is a constant challenge to mobilize relationship-specific investments, especially in a business environment increasingly enhanced by social media (SM) activities. There is limited knowledge on how SM activities contribute to supplier attractiveness, so decisions about strategizing with SM and consequent resource allocations become highly uncertain. The purpose of this paper is to examine how suppliers’ SM activities influence supplier attractiveness. Design/methodology/approach Altogether, 57 senior managers were interviewed: 32 semi-structured in-depth interviews were conducted with senior managers in strategic decision-making roles regarding SM on the supplier side, along with 20 senior managers responsible for purchasing or looking after supplier development; one-to-one interviews were complemented by a focus group with 5 senior managers on the buyer side. Findings The study reveals an inverse U-shaped relationship between the intensity of the supplier’s SM activity and its attractiveness and offers a set of propositions about the influence of SM on supplier attractiveness, with special regard to the perceived risks of increased transparency and becoming “too social” on SM. Practical implications The study highlights SM management results for supplier attractiveness and their impact areas on business growth and supply chain development. Originality/value This paper provides in-depth insights into the role of SM in managing supplier attractiveness. Various effects of SM activities are identified that aim to contribute to the body of literature on supplier attractiveness as well as SM management in buyer–supplier relationships.

The dilemma of inter-organizational relationships

2019 ◽  
Vol 39 (1) ◽  
pp. 2-23 ◽  
Author(s):  
Baofeng Huo ◽  
Min Tian ◽  
Yu Tian ◽  
Qiyuan Zhang
Keyword(s):  
Design Methodology ◽  
Structural Aspect ◽  
Coercive Power ◽  
Organizational Relationships ◽  
Structural Power ◽  
Content Type ◽  
Behavioral Aspect ◽  
Different Types ◽  
Perceived Relationships

Purpose Power is central to inter-organizational relationships. The literature distinguishes between structural power (i.e. dependence) and behavioral power (i.e. use of power), yet few studies considered them simultaneously. Opportunism is generally linked to use of power, but it remains unclear whether use of power deters or invites opportunism. In this study, the authors treat dependence as a driver of use of power and opportunism as its outcome, and empirically test relationships among dependence, power, and opportunism from both buyer and supplier perspectives. The paper aims to discuss these issues. Design/methodology/approach This study examines how buyer and supplier dependence influence the other’s and their own use of coercive and non-coercive power, which lead to opportunism of two parties, based on data from 240 companies in China on their perceived relationships with major suppliers. Findings Results show that buyer/supplier dependence is positively related to supplier’s/buyer’s use of coercive and non-coercive power. Buyer’s and supplier’s use of coercive power also positively influences their opportunism. Buyer’s use of non-coercive power is negatively related to both partners’ opportunism, whereas supplier’s use of non-coercive power is not significantly related to either partner’s opportunism. Originality/value This study contributes to literature in two ways. First, the authors distinguish the structural aspect of power from its behavioral aspect and demonstrate that dependence, which represents structural power, generates different patterns of influence on use of coercive and non-coercive power when considered from buyer’s and supplier’s perspectives. Second, the authors reexamine relationships between use of power and opportunism and show that buyers and suppliers react differently to use of different types of power.

Executing strategy through comprehensive performance measurement systems

2017 ◽  
Vol 37 (4) ◽  
pp. 423-443 ◽  
Author(s):  
Pietro Micheli ◽  
Matteo Mura
Keyword(s):  
Performance Measurement ◽  
Performance Indicators ◽  
Company Performance ◽  
Content Type ◽  
Cost Leadership ◽  
Measurement Systems ◽  
Comprehensive Performance ◽  
Different Types ◽  
Performance Measurement Systems

Purpose The purpose of this paper is to investigate the mediating role of comprehensive performance measurement systems (PMS) – i.e. measurement systems that comprise financial and non-financial indicators, and which also consist of indicators related to different aspects of an organisation’s operations – in the relationship between strategy and company performance. Design/methodology/approach Survey data of top managers of large European companies were collected and analysed by means of exploratory factor analyses and hierarchical regressions in order to validate the proposed hypotheses. Findings This research shows that different strategies lead to the use of different types of performance indicators. Also, it finds that the utilisation of a comprehensive PMS enables the implementation of both differentiation and cost-leadership strategies. Specifically, a comprehensive PMS positively mediates the effect of differentiation strategy on organisational and innovative performance, and of cost-leadership strategy on organisational performance. Research limitations/implications Further research could be undertaken in other contexts and consider additional factors, such as the structure, maturity and different uses of PMS, and the cost of measuring performance. Qualitative studies could examine the role of PMS in dynamic environments, as well as the evolution of PMS during strategic transitions. Practical implications Greater consideration should be given to the utilisation of different types of performance indicators when implementing and re-formulating strategy. Originality/value This study clarifies the links between strategy and performance measurement, and it is the first to identify the mediating effect of comprehensive PMS between strategy and company performance.

Purchasing behaviour and supplier base evolution – a longitudinal case study

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Anna Dubois ◽  
Lars-Erik Gadde ◽  
Lars-Gunnar Mattsson
Keyword(s):  
Design Methodology ◽  
Longitudinal Case Study ◽  
Short Term ◽  
Supplier Relationships ◽  
Content Type ◽  
Research Findings ◽  
Purchasing Behaviour ◽  
Time Periods

Purpose The purpose of the paper is to describe and analyse the evolution of the supplier base of a buying firm and the reasons behind these changes. Design/methodology/approach The paper is based on a case study of the changes over 52 years in a sub-set of the supplier base of a firm manufacturing fork-lifts. Findings The study shows that some relationships feature substantial longevity. However, the duration of one-third of the total relationships is shorter than five years. There was considerable variation over time in the dynamics of the supplier base in terms of entries and exits of suppliers. Owing to this variation, research findings and conclusions in short-term studies are heavily dependent on the specific conditions at the time of the study. Finally, no less than one-fourth of the terminated supplier relationships were reactivated later. Research limitations/implications The study was designed in a time when purchasing was considered entirely from the perspective of the buying firm. Further studies, therefore, must increasingly emphasise the role of suppliers and the interaction in the buyer–supplier relationships, as well as the embeddedness in networks. Originality/value The findings of the study are unique in two ways. First, they are based on systematic observations over more than 50 years. Second, the study involves the purchases of 11 components representing different technical and economic features. The (few) previous studies are based on much shorter time periods and involves fewer suppliers/components. Moreover, the findings regarding re-activation of terminated relationships represent unique contributions.

scholarly journals Supplier-initiating risk management behaviour and supply-side resilience: the effects of interpersonal relationships and dependence asymmetry in buyer-supplier relationships

2020 ◽  
Vol 40 (7/8) ◽  
pp. 971-995
Author(s):  
Yiyi Fan ◽  
Mark Stevenson ◽  
Fang Li
Keyword(s):  
Risk Management ◽  
Interpersonal Relationships ◽  
Supply Side ◽  
Large Set ◽  
Supplier Relationships ◽  
Content Type ◽  
Management Behaviour ◽  
Wide Range ◽  
Dependence Asymmetry ◽  
The Relationship

PurposeThe aim of the study is to explore how two dimensions of interpersonal relationships (i.e. size and range of relationships) affect supplier-initiating risk management behaviours (SIRMB) and supply-side resilience. Further, the study aims to explore the moderating role of dependence asymmetry.Design/methodology/approachNine hypotheses are tested based on a moderated mediation analysis of survey data from 247 manufacturing firms in China. The data are validated using a subset of 57 attentive secondary respondents and archival data.FindingsSIRMB positively relates to supply-side resilience. Further, SIRMB mediates the positive relationship between range and supply-side resilience, and this relationship is stronger at lower levels of dependence asymmetry. Yet, although dependence asymmetry positively moderates the relationship between range and SIRMB, it negatively moderates the relationship between size and SIRMB. We did not, however, find evidence that size has a conditional indirect effect on supply-side resilience through SIRMB.Practical implicationsManagers in buying firms can incentivise SIRMB to enhance supply-side resilience by developing a diverse rather than a large set of interpersonal relationships with a supplier. This might include allocating particular employees with a wide range of contacts within a supplier to that relationship, while it may be necessary to adopt different networking strategies for different supplier relationships. Firms in a highly asymmetrical relationship may seek to raise supplier expectations about the necessity to initiate risk management behaviour or look to change the dynamic of the relationship by managing contracts for fairness.Originality/valueNew knowledge on SIRMB as a mediating variable underpinning the relationship between interpersonal relationships and supply-side resilience is provided; and empirical evidence on the opposing moderation effect of dependence asymmetry is presented.

How specific investments influence NPD performance: exploring the roles of supplier involvement and IT implementation

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Aihua Wu
Keyword(s):  
New Product Development ◽  
Content Type ◽  
Moderated Mediation Model ◽  
Specific Investments ◽  
It Implementation ◽  
Supplier Involvement ◽  
Mediator Role ◽  
The Impact ◽  
Npd Performance

PurposeThe impact of specific investments to performance has mixed arguments. This paper aims to clarify how and under what conditions specific investments made by manufacturer tailored to supplier affect the new product development (NPD) performance of the manufacturer itself.Design/methodology/approachThis study develops a moderated mediation model, testing the roles of supplier involvement and information technology (IT) implementation by regression and bootstrap analyses from 378 NPD projects.FindingsThe results show both physical and human specific investments positively affect NPD performance. IT implementation strengthens the mediated role of supplier involvement, i.e. the mediator role of supplier involvement between specific investments and NPD performance link is significantly weaker while IT implementation is lower.Originality/valueThe findings contribute to identify IT implementation and supplier involvement as two important constructs, together demonstrating how and when specific investments affect NPD performance.

Guanxi orientation, value creation and value capture in buyer-supplier relationships: a dyadic perspective

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Lucy Sojung Lee ◽  
Weiguo Zhong
Keyword(s):  
Value Creation ◽  
Design Methodology ◽  
The Other ◽  
Matched Sample ◽  
Value Capture ◽  
Supplier Relationships ◽  
Content Type ◽  
Specific Investments ◽  
The Relationship ◽  
Positive Effect

Purpose This paper aims to investigate the importance and prevalence of Guanxi in business interactions in network-based societies such as China, few studies have the phenomenon from a dyadic view. In a business dyad, one partner may not value Guanxi and take it as a template for actions as the other does. Design/methodology/approach The authors propose that such collective and asymmetric Guanxi orientation influence both the creation and distribution of relational rent in a Guanxi dyad. Furthermore, relationship-specific investments (RSIs) moderate the relationship between dyadic Guanxi orientation and relational rent creation and distribution. Findings Based on a matched sample of supplier-buyer dyads in China, the authors find that joint Guanxi orientation is positively related to joint pie creation, whereas Guanxi orientation imbalance has a positive effect on the pie distribution imbalance. Originality/value These results contribute to the literature by revealing how dyadic Guanxi dynamics and practices affect dyadic performance and providing managers with meaningful implications for dyadic Guanxi management.

Behind the length of contract during market transitions

2020 ◽  
Vol 35 (11) ◽  
pp. 1801-1815
Author(s):  
Xin Chen ◽  
En Xie ◽  
Mike W. Peng ◽  
Brian C. Pinkham
Keyword(s):  
Emerging Economies ◽  
Transaction Cost Economics ◽  
Institutional Environment ◽  
Research Question ◽  
Empirical Method ◽  
Supplier Relationships ◽  
Content Type ◽  
Specific Investments ◽  
Market Transitions ◽  
Practical Implications

Purpose The purpose of this paper is to examine an important yet underexplored research question in the literature: What determines the length of contract governing buyer–supplier relationships during market transitions? The length of contract is a solid indicator of the comprehensiveness of a contract. By integrating transaction costs economics, the embeddedness perspective and the institution-based view, the paper develops a model that incorporates specific investments and perceived opportunism, strategies to select suppliers and buyer firms’ confidence in the institutional environment. It further posits how buyer firms’ dependence on suppliers moderates these relationships. Design/methodology/approach Data were collected nationwide via face-to-face interviews with 328 executives in 164 Chinese firms who shared information pertaining to 774 buyer–supplier contracts. A fine-grained mixed-empirical method was designed to test the proposed hypotheses, to confirm the reliability and to generalize the research findings. Findings All the proposed factors significantly influence the length of the contract. Results obtained through a moderated mediating model suggest that buyers with supplier-specific investments and that choose market-based selection relative to a relationship-based tend to perceive more opportunism in buyer–supplier relationships, which will lead to shortening the length of the contract. However, the buyer’s perception of opportunism will decrease when buyers perceive higher levels of confidence in their legal institutions. Practical implications The study discusses several practical implications for B2B managers who typically involve in interfirm exchanges as well as for emerging economies’ institutions. Originality/value Leveraging theoretical insights from transaction cost economics, the institution-based view and buyer–supplier relationships literature, this empirical study adds unique contributions to B2B research in general and emerging economies’ institutional literature in particular.

The influence of unilateral supplier transaction-specific investments on international buyer opportunism: empirical findings from local suppliers in China

2020 ◽  
Vol 37 (2) ◽  
pp. 213-239 ◽  
Author(s):  
Lei Wang ◽  
Chun Zhang ◽  
Jun Li ◽  
Dong Huo ◽  
Xing Fan
Keyword(s):  
Emerging Market ◽  
Multiple Informants ◽  
Supplier Relationships ◽  
Content Type ◽  
Relationship Length ◽  
Cross Border ◽  
Specific Investments ◽  
Using Data ◽  
The Relationship

PurposeThis study examines how unilateral supplier transaction-specific investments (TSIs), directly and indirectly, influence international buyer opportunism and the extent to which detailed contracts enable suppliers to safeguard against international buyer opportunism. The study also examines whether relationship length affects the efficacy of detailed contracts in cross-border outsourcing relationships.Design/methodology/approachThe hypotheses are tested by using data collected from multiple informants working for 229 manufacturing suppliers in China. Multiple regression with a three-way interaction is used to test the hypotheses.FindingsUnilateral supplier TSIs encourage international buyer opportunism through increased supplier dependence. Contract specificity negatively moderates the effect of supplier dependence on international buyer opportunism. This moderating effect is stronger in long-term cross-border buyer–supplier relationships than in short-term ones.Originality/valueThe current study extends the cross-border outsourcing literature by examining how emerging-market suppliers in a weak power position can proactively safeguard against international buyer opportunism by using detailed contracts. Our findings show that supplier dependence mediates the relationship between unilateral supplier TSIs and international buyer opportunism; detailed contracts, however, can help dependent suppliers safeguard against international buyer opportunism. In particular, the findings highlight the importance of long-term buyer–supplier relationships that enhance the efficacy of detailed contracts.

scholarly journals Improving retail supply flexibility using buyer-supplier relational capabilities

2017 ◽  
Vol 37 (3) ◽  
pp. 343-362 ◽  
Author(s):  
Raymond Obayi ◽  
S.C. Koh ◽  
David Oglethorpe ◽  
Seyed M. Ebrahimi
Keyword(s):  
Supply Chain ◽  
Supplier Relationships ◽  
Chain Flexibility ◽  
Content Type ◽  
Mediating Role ◽  
Supply Chain Flexibility ◽  
And Performance ◽  
Relational Capabilities ◽  
Practical Implications

Purpose The purpose of this paper is to investigate the mediating role of three important relational capabilities – absorptive capacity (AC), transactive memory systems (TMS), and organisational interoperability (OI); on the flexibility of buyer-supplier relationships and performance in retail supply chains. Drawing on the relational view of strategic management, the impact of relational capabilities on two forms of supply chain flexibility is examined – configuration flexibility (CF) for switching suppliers with minimal penalties, and planning and control flexibility (PCF) for altering supply schedules, quality, and delivery lead-time. Design/methodology/approach Strategic- and tactical-level managers from 211 retail stores in the UK were surveyed. The authors validated a measurement model with structural equation modelling and tested four hypotheses on the mediating role of relational capabilities on supply chain flexibility and retail performance, controlling for size, duration of relationship, and market segment. Findings Results showed that the three relational capabilities partially mediated the positive effect of CF and PCF on operational performance in big middle and niche retailers. Examining the interaction effect of the forms of flexibility on the relational capabilities and performance, the authors found positive interaction effects on TMS and OI but a non-significant effect on AC. Practical implications In addition to providing novel theoretical insights on supply chain flexibility, the findings have practical implications for supplier selection and buyer-supplier relationship management. Originality/value Overall, the study highlights the impacts of relational capabilities on adopted operational strategies such as flexibility, buyer-supplier relationships, and retail performance.

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