Buyer-Supplier Relationships and the Resource- Advantage Perspective: An Illustrative Example of Relational and Transactional Drivers of Competitiveness

Abstract

The purpose of this paper is to illustrate how the so called resource-advantage perspective can be used to determine the importance of specific relational and transactional dimensions of buyer-supplier relationships in driving relationship competitiveness within a transnational company (TNC). The main objective of our research was to analyze which and how much specific relational and/or transactional dimensions of buyer-supplier relationships affect TNC buyer-supplier relationship competitiveness. Based on an illustrative empirical example, we tested a simple variance-based reflective Structural Equation Model (SEM) with main effects based on a sampleof 130 TNC buyer-supplier relationships. Our results show that buyer-supplier relationship competitiveness is mostly driven by interpersonal trust and joint problem solving (both relationaldeterminants), as well as by two kinds of transaction-specific investments (TSIs), namely investments into people and physical assets. In terms of theoretical implications, our results show thatthe resource-advantage theory of competition can link both the relationship marketing and the transaction cost economics perspective of buyer-supplier relationship management. We further provide some managerial recommendations for more effective management of TNC buyer-supplier relationships in terms of leveraging competitiveness