A model of buyer-supplier relationships in a transnational company: the role of the business network context

Abstract

The paradigmatic shift in marketing from the beginning of the 1990’s has transformed the study of economic exchange, towards addressing more the relational aspects of these exchanges, where relationship specificity has replaced transaction specificity. This is particularly true in transnational supply exchanges, where specialization and outsourcing have increased the importance of effective and efficient management of buyer-supplier relationships, and their corresponding networks in which they are embedded in. The purpose of this paper is to analyze the impact of selected dimensions of buyer-supplier relationships within a specific TNC business-to-business (B2B) setting on supply relationship performance from the suppliers’ perspective. The paper analyzes the impact of the functional aspect of the business network context on selected elements of buyer-supplier relationships, particular in terms of the impact on business performance. This is analyzed within a confirmatory testing of a reflective structural equation model. A unique feature of the model is its focus on the business network, which is operationalized through 2 dimensions, which are related to (a) network-based information and (b) network spillover effects, as key determinants of the “traditional” elements of buyer-supplier relationships (i.e. transaction-specific investments, trust, flexibility, and joint actions). The dataset includes a sample of 157 suppliers of the focal TNC world-wide (47.9 response rate on a web-based survey). In the end, the paper provides a series of managerial implications to be considered, focusing on the so called network management perspective and the role of a wider business network context.

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