Performance measurement in strategic buyer‐supplier relationships

Paul D. Cousins · Benn Lawson · Brian C Squire

212 citations0/0 files storedInternational Journal of Operations & Production Management

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Quality and Supply Management Sustainable Supply Chain Management Outsourcing and Supply Chain Management

Abstract

Purpose Close links between buyers and suppliers are increasingly cited as a critical differentiator of high and low performers in global supply chains. While the application of performance measures to manage supplier relationships has been well‐identified and encouraged in the literature, comparatively little research exists on the inter‐organizational socialization mechanisms that underlie the flow of learning and information within supply chains. The authors aim to develop a model positing that socialization mechanisms play an important role in mediating the relationship between supplier performance measures and performance outcomes. Design/methodology/approach A structural equation model, using a sample of 142 manufacturing and service firms based in the UK, tests this hypothesised model. Findings The theoretical framework was supported, with results indicating that socialization mechanisms fully mediate the effects of supplier performance measures (communication and operational‐based) on firm performance. Practical implications This study provides additional insights for purchasing managers seeking to improve the management of their strategic supplier relationships. The authors find that monitoring supplier performance is not of itself sufficient, rather, it is the process of socializing the buyer and supplier that is critical to success. Originality/value As far as the authors are aware, no previous supply chain research has examined how supplier performance measurement systems, socialization mechanisms, and firm performance are related. The paper makes a significant contribution to this literature embedding an established theoretical construct (socialization) into the supply chain literature.

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References

1981Evaluating Structural Equation Models with Unobservable Variables and Measurement Error 1999Cutoff criteria for fit indexes in covariance structure analysis: Conventional criteria versus new alternatives 1991Firm Resources and Sustained Competitive Advantage 1988Structural equation modeling in practice: A review and recommended two-step approach.2004Firm resources and sustained competitive advantage 1985Economic Action and Social Structure: The Problem of Embeddedness 1988On the Evaluation of Structural Equation Models 1989Structural Equations with Latent Variables

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