Customer Bargaining Power, Strategic Fit, and Supplier Performance

Chang, Hsihui; Liu, Sheng; Mashruwala, Raj

doi:10.1111/poms.13627

Cited by 25 publications

(31 citation statements)

References 53 publications

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“…A reduction in costs would allow the supplier to offer lower purchase prices to the buyer (Farrell & Shapiro, 1990; Fee & Thomas, 2004). However, M&As may not always result in efficiency gains (King et al., 2004), and, even when M&As do result in efficiency gains, suppliers will likely pass along their cost reductions to buyers (i.e., focal firms) only if the buyers hold sufficient bargaining power (Chang et al., 2022). As supply base M&As change the relationship dynamics within supply chains and increase suppliers’ bargaining power, supply base M&As may not result in reduced costs for focal firms even when the M&As improve supplier operational efficiency.…”

Section: Theoretical Background and Hypotheses Developmentmentioning

confidence: 99%

Mergers and acquisitions in supply bases

Skowronski

Dong

et al. 2023

Production and Operations Management

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Mergers and acquisitions (M&As) by first-tier suppliers, referred to as the supply base, are dynamic and drastic changes in supply chain structure and relationships that affect focal firm performance. In particular, the impact of M&As in a supply base depends on the concentration and differentiation of the supply base, which affects powerdependence relationships in the supply chain. This study examines the effect of supply base M&As on focal firms' cost of goods sold (COGS). In addition, this study explores the role of power relationships by investigating the moderating effects of supply base concentration and differentiation. Using secondary panel data assembled from four different data sources, this study constructs econometric models and empirically examines the relationship between supply base M&As and focal firm cost efficiency. Our findings indicate that supply base M&As are positively associated with focal firm COGS. This result suggests that potential efficiency gains from M&As in supply bases may not translate to benefits for the focal firm because suppliers may also gain bargaining power from M&As. However, the effect of supply base M&As on focal firm COGS is attenuated when the supply base is less concentrated in terms of their transaction percentage with suppliers and more differentiated in terms of industry and business scopes. These are situations where suppliers less effectively obtain or employ bargaining power from M&As. These findings make important contributions to the operations management literature.

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Section: Theoretical Background and Hypotheses Developmentmentioning

confidence: 99%

Mergers and acquisitions in supply bases

Skowronski

Dong

et al. 2023

Production and Operations Management

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“…Firms with resources advantage possess stronger bargaining power, which may influence other dependent organizations' behavior (Hillman et al, 2009). In the literature, there is substantial research investigating the BSR from the power and dependence perspective, such as how dependence influences firms' financial performance (Chang et al, 2022;Kim and Henderson, 2015), how dependence influences innovation inputs and outputs (Kim and Zhu, 2018;Chen et al, 2022), whether power asymmetry reduces opportunistic behavior (Shou et al, 2022;Villena and Craighead, 2017), and whether dependence prompts or hinders supply chain integration (Zhao et al, 2008;Mora-Monge et al, 2019).…”

Section: Literature and Hypothesis Developmentmentioning

confidence: 99%

Toward suppliers' corporate social responsibility performance: the role of relationship dependence

Cao

Kim

Lin

et al. 2023

IJOPM

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PurposeThe growing focus on socially responsible supply chain management (SRSCM) has made it crucial to extend corporate social responsibility (CSR) to upstream suppliers. Drawing on resource dependence theory, this study aims to examine how supplier dependence upon socially responsible buyers impacts suppliers' CSR performance and how this relationship is moderated by network prominence and demand uncertainty.Design/methodology/approachThe proposed hypotheses are tested using regression analysis with Heckman's two-stage model and a dyadic supply chain dataset constructed based on publicly traded Chinese firms between 2008 and 2016. This time window is selected due to a one-year lag of the dependent variable and the change in evaluation methods of the database providing CSR performance in 2018.FindingsThe empirical results indicate that supplier dependence upon socially responsible buyers is positively associated with suppliers' CSR performance. However, this positive relationship is attenuated when suppliers occupy a prominent position in the network or when they face high demand uncertainty.Originality/valueThis study extends knowledge about the role of relationship dependence in implementing SRSCM by highlighting its positive impact on suppliers' CSR. Thus, this study contributes to the buyer–supplier relationship literature and the power and relationship dependence literature. This study further advances the understanding of the factors that influence suppliers' behavior by exploring the moderating roles of network prominence and demand uncertainty. The results have several practical implications for managers and policymakers.

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“…They compare campaigns that release updates with those that do not and discuss the use of CEM (using campaign characteristics such as financial goals and the number of images and videos) as a potential solution for the “omitted variable bias” (p. 1781) due to a lack of data on the intrinsic value of the organizer 13 . We only identified one recent study in POM that employs EB as a matching strategy (e.g., Chang et al., 2022) reported in a footnote in one sentence as a robustness check to PSM.…”

Section: Identification Strategies For Assessing Causality In Pom Emp...mentioning

confidence: 99%

On the causality and plausibility of treatment effects in operations management research

Mithas

Chen

Lin

et al. 2022

Production and Operations Management

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Empirical research in operations management (OM) has made rapid strides in the last 30 years, and increasingly, OM researchers are leveraging methods used in the econometrics and statistics literature to assess the causal effects of interventions. We discuss the two key challenges in assessing causality with observational data (i.e., baseline bias, differential treatment effect bias) and how dominant identification approaches such as matching, instrumental variables, regression discontinuity, difference‐in‐differences, and fixed effects deal with such challenges. We surface the key underlying assumptions of different causal estimation methods and discuss how OM scholars have used these methods in the last few years. We hope that reflecting on the plausibility and substantive meaning of underlying assumptions regarding different identification strategies in a particular context will lead to a better conceptualization, execution, evaluation, dissemination, and consumption of OM research. We conclude with a few thoughts that authors and reviewers may find helpful in their research as they engage in discourse related to causality.

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Customer Bargaining Power, Strategic Fit, and Supplier Performance

Cited by 25 publications

References 53 publications

Mergers and acquisitions in supply bases

Mergers and acquisitions in supply bases

Toward suppliers' corporate social responsibility performance: the role of relationship dependence

On the causality and plausibility of treatment effects in operations management research

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