Buyer/Supplier Perspectives on Supply Chain Relationships

Abstract

Purpose: The paper aims to employ transaction cost theory and social exchange theory to compare how buyers and suppliers perceive relationship mechanisms. The paper also explains the antecedents and dynamics of relationship performance by comparing buyer and supplier perceptions of the same relationships. The paper specifically focuses on the issue of relationship success and test the hypothesis that the antecedents of perceived relationship success for buyers differ from those of suppliers within supply chain relationships. Design/methodology/approach: The paper is based on a study of the supply chain relationships of a major ICT company where matched pairs of buyers and suppliers were surveyed on the nature of their relationships. The survey instrument drew from previously published constructs on key relationship dimensions such as trust, commitment, power, communication, uncertainty and performance. A series of nested measurement models were then developed and tested for the two groups – buyers and suppliers. Findings: The study found that buyers and suppliers have significantly different perceptions of their relationships across a range of dimensions. In addition, the antecedents of relationship success for both groups bear little similarity, thus supporting our hypotheses. Originality/value: The paper directly compares transaction cost theory and social exchange theory and finds that both are useful in explaining success in buyer‐supplier relationships. Methodologically, the paper is unique due to the combination of over 100 matched buyer‐supplier dyads with a comprehensive survey of relationship constructs. Given the use of both transaction cost and social exchange theory, the breadth of the dimensions studied, the unique access to practitioners gained and the nature of the matched‐pair data, this paper is an important contribution to the literature on relationship management. Furthermore, the findings indicate a rich seam of potential future research topics