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This paper highlights the dark side of power imbalance regarding its consequences in agri-food supplier–buyer relationships. We report on findings from two studies. The first study is based on a sample of 105 key informants, while study 2 is based on a sample of 444 key informants, all from the cocoa agri-food supply market of Ghana. While the first study focuses on the antecedents of power imbalance and its consequences, the second study explores the role of cooperatives/collective action in minimizing supplier exploitation. Data from these studies were analysed using the partial least squares technique (SmartPLS). Analysis of these findings shows switching costs’ impact on power imbalance to be curvilinear, while power imbalance has a curvilinear relationship with opportunism. The negative consequences of power imbalance are further exacerbated by dependency and the lack of joint action. Furthermore, we found the negative impact of power imbalance on financial performance to be stronger for non-cooperative members than for cooperative members, while, counterintuitively, we found the positive impact of economic satisfaction on financial performance to be stronger for non-cooperative members than for cooperative members.

•CSR is more effective under communal (vs. exchange) relationship norms.•CSR is ineffective if consumers perceive company CSR motives as self-serving.•CSR enhances customer satisfaction and loyalty intentions in communal relationships via consumer inferences of a company's warmth.•CSR can be framed to signal competence for effectiveness in exchange relationships, but at a cost to warmth in communal relationships.•CSR can help companies to recover customers when service failure occurs. The researchers investigate how corporate social responsibility (CSR) affects customer response following service failure within the context of buyer–seller relationships. A series of three experiments demonstrate that CSR is more effective under communal (vs. exchange) relationship norms, consistent with the alignment of CSR with the communal norm of concern for the needs of others. The effectiveness of CSR is also shown to vary as a function of company motives and CSR framing, serving as theoretically and managerially relevant boundary conditions. Together, these findings increase our understanding of how and when CSR will have a positive impact on consumers and, in turn, companies via customer satisfaction and loyalty.

Prior empirical studies suggest repeated exchange develops increasing value in buyer–supplier relationships. A first order implication of this finding is that buyers will concentrate exchange among a relatively small number of suppliers to generate maximum value in relationships. However, buyers are equally concerned with value capture. By distributing rather than concentrating exchange, buyers may position themselves to capture more of the value created, leaving buyers potentially conflicted concerning the choice. We label this dynamic the second paradox of embeddedness, distinguishing it from Uzzi’s [Uzzi B (1997) Social structure and competition in inter-firmnetworks: The paradox of embeddedness. Admin. Sci. Quart. 42(1):35–67.] paradox driven by technological uncertainty. By examining the procurement activities of a large, diversified manufacturing company, we then test for supplier and buyer behavior consistent with the conditions that give rise to the second paradox and behaviors that result from it.

The revolution in information availability and the advances in novel interaction technologies have ushered in two major shifts that call into question the traditional assumptions of buyer–seller interactions. First, buyer–seller information asymmetry has greatly decreased in many interactions. Second, face-to-face communication is no longer the main format of buyer–seller interactions. In this article, the authors review empirical research on how these shifts have changed buyer–seller negotiations, an important type of buyer–seller interactions. Several insights arise from this review. First, the shifts have caused fundamental changes in buyers’ and sellers’ roles, power, and aspirations and information processing. Second, the shifts and these fundamental changes together cause major changes in buyer–seller interactional processes and outcomes, including (1) change in buyers’ attitude and behavior, (2) change in sellers’ effectiveness in interacting with buyers, and (3) change in buyer–seller interactional processes. Based on these insights, the authors develop a research agenda to guide the reexamination of existing theories and the development of new theories of buyer–seller interactions.

The cooperative–adversarial dichotomy has served as the prevailing buyer–supplier relationship typology in the literature. Cooperative buyer–supplier relationships have been associated with closely tied relationships, while adversarial relationships have been equated to arms‐length relationships. We propose, however, that this perspective is overly simplified; a cooperative relationship is orthogonal to a closely tied relationship and an adversarial relationship to an arms‐length relationship. That is, there can be a closely tied yet adversarial relationship and an arms‐length yet cooperative relationship. We theorize the buyer–supplier relationship in two orthogonal aspects—(1) relational posture, that is, how two firms regard each other (as cooperative partners or as adversaries) and (2) relational intensity, that is, how much two firms’ operations are interlinked (closely tied or arms‐length). By considering the two aspects concurrently, this article proposes an expanded typology of buyer–supplier relationships. We label a closely tied and cooperative buyer–supplier type as “deep”; a closely tied but adversarial type as “sticky”; an arms‐length and adversarial type as “transient”; and an arms‐length but cooperative type as “gracious.” We then present an analysis that supports the orthogonality of the two relational dimensions. This analysis suggests that the expanded relationship types are associated with different relational outcome trade‐offs. The data are collected from a global, large Japanese automaker and 163 of its suppliers in North America. Overall, the results provide empirical support for the expanded buyer–supplier relationship typology.

The marketing channel literature has paid limited attention to institutional environments that constrain buyer–supplier exchanges, though such institutions are fundamental determinants of transaction costs, and thus of the occurrence of opportunism in the buyer–supplier dyads. Drawing on transaction cost economics and institutional theory, this study uncovers the critical influence of formal and informal institutions (i.e., legal effectiveness and networking expenditure) on the use of governance in deterring opportunism, as well as the moderating role of government support on the efficacy of governance mechanism. The findings from a buyer–supplier dyadic survey and 2 secondary datasets reveal that legal effectiveness mitigates opportunism through increased use of both contractual and relational governance; in contrast, networking expenditure reduces opportunism through relational governance, yet increases opportunism via lowering contractual governance. In addition, contractual governance is more efficient in constraining opportunism when government support is high, whereas relational governance deters opportunism more when government support is low. These findings offer important implications for academic research and managerial practice.

This study takes a conceptual theory building approach to develop a framework for managing supplier sustainability risk—the adverse impact on a buying organization from a supplier's social or environmental misconduct. Using anecdotal evidence and the literature, we present four distinct risk management strategies that supply managers adopt: risk avoidance, monitoring‐based risk mitigation, collaboration‐based risk mitigation, and risk acceptance. Drawing on agency and resource dependence theories, we study how the interactions of two key risk management predictors—that is, the supply managers’ perceived risk and the buyer–supplier dependence structure—affect supply managers’ strategy choice. Specifically, we propose that a collaborative‐based mitigation strategy, involving direct interaction and solution development with the suppliers, is selected by supply managers in a high perceived risk‐buyer dominant context. In a low perceived risk‐buyer dominant context, however, a monitoring‐based mitigation strategy is preferred. When the buyer and the supplier are not dependent on each other and there is a low perceived risk, the supply managers accept the risk by taking no actions, whereas in a high perceived risk‐independent context the supply managers would avoid the risk by terminating the relationship with the supplier. We conclude the study by describing the theoretical contributions and managerial implications of the study as well as the avenues for future research.

Research summary: Acquiring knowledge on a partner's pre-existing resources plays an important yet ambiguous role in collaborative relationships. We formally model how contracts trade off productive and destructive uses of knowledge in a buyer-supplier relationship. We show that, when the buyer's pre-existing resources are vulnerable to the revelation of sensitive knowledge, the supplier overinvests in knowledge acquisition as it expects to use the knowledge as a threat in price negotiations. A non-renegotiable closed-price contract prevents such overinvestment and reduces the supplier's ability to expropriate the buyer ex post. Our results extend to the cases of renegotiable closed-price contracts, repeated interactions between a buyer and a supplier, and the use of nondisclosure policies. We draw theoretical, empirical, and managerial implications from our model. Managerial summary: This study yields new insights regarding the use of contract design in protecting pre-existing, nonrelationship specific assets in buyer-supplier arrangements. Anecdotal examples illustrate the \"dark side\" of these arrangements where opportunistic suppliers exploit knowledge of buyers' pre-existing resources to seek rent and appropriate value. When a supplier is likely to act harmfully, a closed-price contract that specifies the price of the supplier's component upfront may reduce the supplier's incentives to overinvest in acquiring and exploiting knowledge of the buyer's pre-existing resources. As such, when a buyer's pre-existing resources are highly valuable, and thus more vulnerable to use by the supplier outside of the arrangement, a non-renegotiable closed-price contract is more efficient. Additionally, limited disclosure policies and informal agreements based on repeated interactions complement indirect governance via price contracts.

The value‐based approach to strategy argues that a firm's ability to capture value depends on the extent of its added value. In this paper, I empirically test the link between added value and value capture using a longitudinal dataset of United Kingdom law firm performance, capabilities, and client relationships. In this setting, competitors relevant for defining a firm's added value are those that share a client with the firm. Further, within a client relationship, value creation, and hence added value, can be decomposed in two parts: product‐line capability and client‐specific scope economies. I find that added value, measured at the level of each buyer‐supplier relationship, is a driver of relationship stability and supplier profitability. This suggests that suppliers with similar capabilities might enjoy different economic returns depending on the composition of their set of relevant competitors. These findings shed light on the conditions under which firms can appropriate returns from their capabilities. They indicate that concepts from cooperative games can be fruitfully applied to empirical studies of firm performance and to the elaboration of insights from the resource‐based view of the firm. Copyright © 2010 John Wiley & Sons, Ltd.

Despite the significant contribution of buyer-driven knowledge transfer activities (BDKTAs) to innovation and operational performance, studies that analyze social sustainability in manufacturing (suppliers) firms are still scarce. This paper examines the mediation relationship of knowledge acquisition and investment in environmental management between BDKTAs and social performance improvements (SPIs). The paper contributes to the understanding of buyer knowledge transfer activities, with a focus on the knowledge acquisition capabilities and investments in environmental management, and the effect on SPIs. The hypotheses were examined with partial least squares structural equation modeling (PLS-SEM) with data collected from 239 firms. Buyer knowledge transfer activities are likely to increase the willingness of suppliers to make specific environmental investments into operations in waste reduction procedures, the recycling of materials, and pollution prevention training of employees. We proposed that buyer knowledge transfer activities are necessary to survive and grow and thus there is a need to acquire knowledge resources to achieve organizational sustainability. Buyer knowledge transfer activities are necessary to make investment decisions in environmental management programs. Firms that focus on buyer knowledge transfer activities and internal investments into environmental management can attain sustainability objectives.