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Working Paper No. 21082 This paper examines the importance of buyer-supplier relationships, geography and the structure of the production network in firm performance. We develop a simple model where firms can outsource tasks and search for suppliers in different locations. Low search and outsourcing costs lead firms to search more and find better suppliers. This in turn drives down the firm's marginal production costs. We test the theory by exploiting the opening of a high-speed (Shinkansen) train line in Japan which lowered the cost of passenger travel but left shipping costs unchanged. Using an exhaustive dataset on firms' buyer-seller linkages, we find significant improvements in firm performance as well as creation of new buyer-seller links, consistent with the model.

Marketing scholars have long acknowledged that buyer–supplier relationships (BSRs) evolve over time. Nevertheless, truly dynamic considerations tend to be confined to the “future research” sections of papers. Performing dynamic BSR research is difficult, not only because of the requirements of data collection and analysis, but also due to the somewhat fragmented understanding of the available studies on BSR dynamics and how an overarching understanding of their findings can refine static relationship models. We conduct a systematic literature review to organize the available research on BSR dynamics. The review process reveals four overarching themes: (1) relationship continuity, (2) relationship learning, (3) relationship stages and trajectories, and (4) relationship fluctuations. We discuss each theme, describe how the themes can be applied as a dynamic lens to research questions involving BSRs, and outline research directions that might stimulate further work on relationship dynamics.

This paper examines the importance of buyer-supplier relationships for firm performance. We develop a model in which firms outsource tasks and search for suppliers. Lower search and outsourcing costs lead firms to search more and find better suppliers, which in turn drives down marginal costs. We test the theory by exploiting the opening of a high-speed train line in Japan, which lowered the cost of passenger travel but left shipping costs unchanged. Using an exhaustive data set on firms’ buyer-seller linkages, we find significant improvements in firm performance as well as creation of buyer-seller links, consistent with the model.

Understanding supply chain resilience and robustness is increasingly important for supply chain managers. This is due to the growing complexity of contemporary supply chains and the subsequent increased probability of experiencing a disruption. Few studies within the risk management literature have empirically disentangled the concepts of resilience and robustness or explored their antecedents. This study utilizes a contingent resource‐based view perspective to understand the relationship between specific resources (information sharing and connectivity), capabilities (visibility), and performance in terms of supply chain resilience and robustness. In addition, it utilizes supply base complexity as a moderating factor. Survey data collected from 264 UK manufacturing plants suggest that supply chain connectivity and information sharing resources lead to a supply chain visibility capability which enhances resilience and robustness. Of the four dimensions of complexity, only scale is found to have a strong moderating effect on this relationship, while geographic dispersion, differentiation, and delivery complexity do not have contingent effects. This study highlights theoretical and managerial implications for approaches to resilience and robustness.

Most ambidexterity theories deal with managing exploration–exploitation trade-offs among business units within firms or between alliance partners, but these theories remain yet to be extended to the buyer-supplier relationship level. Through an in-depth case study of the Toyota Motor Corporation, we illustrate how buying firms can simultaneously achieve short-term and long-term benefits with their long-standing suppliers. Taking two inherently different activities as a starting point—mass production with its focus on exploitation and product development with its focus on exploration—we show that the deliberate use of ambiguity and explicitness can function as a countervailing mechanism against overemphasizing either exploration or exploitation. We also show that structural separation and structural integration are two organizational systems that can be used by buying firms to help suppliers realize ambidexterity in their operations. Finally, we argue that “requisite security” can help to motivate suppliers to address the paradoxical tensions deliberately created by buying firms.

Despite the high relevance of corporate social responsibility (CSR) in current business practice and the considerable research on CSR outcomes in consumer markets, investigations of its influence on organizational business relationships are scarce. Relying on instrumental stakeholder theory, the authors develop and empirically test a framework of the influence of a supplier's CSR engagement on organizational customer outcomes. Findings from an examination of 200 cross-industry supplier-customer dyads reveal positive effects of two facets of a supplier's CSR efforts on customer loyalty through distinct mechanisms. Business practice CSR fosters customers' trust, whereas philanthropic CSR strengthens customer-company identification. The authors distinguish a supplier's actual CSR engagement and customers' perception of these CSR activities. In addition, they consider central contingency factors reflecting uncertainty and dependence in business-to-business relationships that determine the effectiveness of CSR.

When a product is difficult to specify in a contract and requires specialized investments for a market exchange, the buyer and seller can find themselves locked into a mutually dependent relationship in which both win-win and lose-lose outcomes are possible. This paper presents a theory of such complex contracting in the public sector and identifies the conditions that increase the likelihood of win-win outcomes for the buyer and the seller. Rules that allow parties to incentivize cooperative behavior increase the chances of a winning outcome. Relationships can promote cooperation if structured to incorporate repeated play and external reputations. Finally, contract success is contingent on mutual understanding between the two parties. Both the buyer and the seller need to understand the rules and the relationship in the same way in order for the exchange to deliver a win-win.

As online shopping evolves from being primarily transactional to being more relational, sellers aim to form online relationships. This article investigates online relationship formation, identifies the performance payoffs that result from forming different types of online relationships (unilateral vs. reciprocal), and tests the most effective relationshipbuilding strategies. Study 1, based on a longitudinal buyer-level analysis of an online shopping community, reveals that buyers use community-, seller-, and buyer-generated signals to identify suitable relationship partners and reduce online shopping risk. These signals generally diminish in importance as buyers gain experience but become more important when buyers are forming reciprocal relationships. Study 2 evaluates the dynamic payoffs of online relationship formation (seller-level analysis) on sales; the effect on sales of reciprocal relationships is three times greater and lasts seven times longer than that of seller-initiated, unilateral relationships. Study 3 is a field experiment testing managerially actionable strategies for leveraging relationships to grow online sales. Tenets arising from differences between online and offline relationships, together with the results from the three studies, inform an emerging theory of online relationships.

Supplier selection is one of the key activities of purchase management in supply chain. Supplier selection is a multifaceted problem relating qualitative and quantitative multi-criteria. This paper deals with a supplier selection problem in an Indian automobile company. The work presents selection of headlamp supplier using integrated fuzzy multi-criteria decision-making approaches: analytical hierarchy process (AHP) and technique for order of preference by similarity to ideal solution (TOPSIS). The selection process starts with identifying the criteria based on literature review and interviewing industry experts. Weights to criteria are assigned using AHP, and suppliers are ranked using AHP and TOPSIS. Consistency tests are carried out to check the quality of expert’s inputs. Also, sensitivity analysis is done to check the robustness of the approach. The results address that fuzzy approaches could be effective and more accurate than the existing approaches for supplier selection problems.

Competing suppliers that collaborate to serve downstream original equipment manufacturer customers often encounter partners with overlapping and compatible knowledge bases. Such knowledge base compatibility provides supplier partners the opportunity to exchange knowledge efficiently, leading to greater knowledge sharing. However, the ease of misappropriation of the shared knowledge can offset this beneficial effect. This research proposes that the effect of knowledge base compatibility on supplier partners' knowledge sharing is moderated by the customer's participation in the collaborative effort and by the customer value such effort creates. The results of two empirical studies show that when levels of both customer participation and customer value are high, knowledge base compatibility between supplier partners leads to greater knowledge sharing. In contrast, when customer participation is high but customer value is low, knowledge base compatibility leads to lower levels of supplier knowledge sharing. This investigation validates the importance of key factors related to supplier partners' opportunity and motivation to share knowledge in coopetitive partnerships.