ASYMMETRY IN BUYER-SUPPLIER RELATIONSHIPS

ASYMMETRY IN BUYER-SUPPLIER RELATIONSHIPS

Master thesis, MSc Supply Chain Management

University of Groningen, Faculty of Economics and Business March 12, 2018

ROB VAN LUIJK Student number: 2315920 e-mail: r.f.j.van.luijk@student.rug.nl

Supervisor/university J.T. van der Vaart Co-assessor/university

C. Xiao

ABSTRACT

The current discussion on the validity of survey research has stressed the importance of multiple-source research designs. Because of challenges in data collection, single-source research designs are still used. To understand the limitations of single-source research, this study has investigated the role of asymmetries between a buyer and its suppliers in buyer-supplier relationship classification. By means of a multiple-source survey study and a multiple-case study, the presence of and reasons for imbalance and perception differences in buyer-supplier relationships have been investigated. Results have confirmed the presence of these asymmetries in the underlying attributes of relational intensity and relational posture. Where perception differences in the attributes of relational posture were high and important, perception differences in the attributes of relational intensity were negligible. It is suggested that single-source research designs are applicable in the measurement of relational intensity, but they should not be used for the measurement of relational posture.

Key words: asymmetries, buyer-supplier relationship classification, multiple-source research,

ACKNOWLEDGEMENTS

The process of writing my master thesis was greatly supported by people who deserve special thanks. First, I would like to thank Taco van der Vaart for his supervision of the project. I was constantly challenged to improve my line of thought and to strengthen the research. Also, his flexibility and fast but thorough feedback is much appreciated. Second, I am thankful for the lectures of Dirk Pieter van Donk, that guided me to understand the requirements of master research and to follow a strict planning. Furthermore, I would also like to thank the

TABLE OF CONTENT

1.0 Introduction

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2.0 Theoretical background

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2.1 Background: buyer-supplier relationships

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2.2 Context: relationship asymmetries

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2.3 Classifying relationships

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2.4 Asymmetries in relational attributes

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2.4.1 Interaction frequency

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3.0 Methodology

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3.3 Data collection and analysis

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3.3.1 Survey study: data collection

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3.3.2 Survey study: data analysis

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3.3.3 Case study: data collection

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3.3.4 Case study: data analysis

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6.0 Conclusion

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6.1 Scientific and managerial implications

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6.2 Limitations

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References

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Appendices

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Appendix B.1 – Survey for the supplier

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Appendix B.2 – Survey for the buyer

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Appendix C – Interview protocol

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Appendix D – Interview coding scheme

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1.0 INTRODUCTION

Recently, there is much criticism in literature concerning the acceptability of survey research design (Ketchen, Craighead, & Cheng, 2018; Krause, Luzzini, & Lawson, 2018; Montabon, Daugherty, & Chen, 2018). As a result, editors of the Journal of Supply Chain Management published guidelines to improve rigor of survey research design (Flynn, Pagell, & Fugate, 2018). First of all, survey research needs multiple respondents to reduce the influence of random and systematic error (Flynn et al., 2018). Secondly, dyadic, triadic and network constructs need to be addressed by the proper respondents, which often entails collecting data across functional and/or organizational boundaries (Flynn et al., 2018). In the case of

understanding buyer-supplier relationships, data needs to be captured from both the buyer and the supplier to gain insight into how and why perceptions might differ (Ketchen et al., 2018).

In 2015, two researchers worked on the understanding and in particular the classification of buyer-supplier relationships (Kim and Choi, 2015). They showed the importance of not only scoring buyer-supplier relationships on their intensity but also on their motivational nature. Research had shown that having a close relationship is not the same as having a good relationship (Anderson & Jap, 2005; Grégoire & Fisher, 2008). Kim and Choi (2015) suggest that since closely tied relationships can be adversarial and arms-length relationships can be cooperative, relational intensity is orthogonal to relational posture (referred to as the two-dimensionality of supplier relationships). Previously the literature viewed buyer-supplier relationships on a continuum from transactional and adversarial interactions to cooperative and integrated relations (Autry & Golicic, 2010; Dong, Carter, & Dresner, 2001; Monczka, Petersen, Handfield, & Ragatz, 1998). Buyer-supplier relationship classification is one of many ways to segment suppliers. Supplier segmentation means “that a firm classifies its suppliers in different segments, which is essential for a buying firm that wants to deal with different suppliers in a systematic way” (Rezaei & Ortt, 2013, p. 75). When companies are able to strategically segment their suppliers and benefit both from arm’s length and

cooperative relationships, they will gain competitive advantages in their supply chain management (Dyer, Cho, Dong, & Chu, 1998). Because a broad range of criteria are discussed in literature to identify supplier segments, the practice can be seen as a multi-criteria problem (Rezaei & Ortt, 2013).

questionable if this study currently complies with the renewed guidelines of the journal in which it was published. Because of serious challenges in collecting multiple-source data of dyadic, triadic and network constructs (Montabon et al., 2018; Roh, Whipple, & Boyer, 2013), single-source research designs are often used despite their limitations. The presence of and reasons for asymmetry between multiple sources needs to be investigated, to understand the influence of these limitations. Structurally researching the importance of multiple-source research design is relevant, because many research questions in the field of Supply Chain Management explore the interaction of multiple actors in different functions or organizations (Flynn et al., 2018). In buyer-supplier relationships specifically, there clearly is an interaction between two actors, who most likely have diverging perceptions. Multiple-informant research designs study asymmetries and make it easier to investigate complex phenomena (Kaufmann & Saw, 2014). In this paper the collection of data across multiple organizations, is referred to as multiple-source data collection. The goal of this research is to investigate the role of asymmetries in buyer-supplier relationships. These asymmetries can concern perception differences towards (Oosterhuis, Molleman, & Van Der Vaart, 2013) or actual imbalance of (Villena & Craighead, 2017) relationship attributes. The following research question is being used:

What is the role of asymmetry in buyer-supplier relationship classification?

This research extends scientific literature by contributing to the current discussion on survey research validity. It enriches our understanding of the importance of multiple-source survey research and also makes a clear distinction of asymmetries in buyer-supplier relationships. The research also contributes to the work of Kim and Choi (2015) since it explores the presence of and reasons for asymmetry in the constructs they used to classify relationships. Practical implications of this research are related to managerial awareness of diverging views in dyadic relationships of buyers with their suppliers.

The rest of this paper is structured as follows. The next section will start with a literature review on buyer-supplier relationships, with a focus on relational asymmetries. Subsequently, the methodology behind this research is being discussed in the third section. After which the results can be found in the fourth section. These results will be interpreted and compared to the literature in the fifth section. And the last section of this paper, discusses final

2.0 THEORETICAL BACKGROUND

It is important to note that the focus of this research is on buyer-supplier relationships, which is defined as “the set of practices and routines that support economic exchanges between the two firms“ (Kotabe, Martin, & Domoto, 2003, p. 294). In order to answer the research

question, prior work on buyer-supplier relationships and possible asymmetries regarding them need to be discussed. Because of the plausibility of asymmetries in dyadic relationships, the buyer-supplier relationship typology of Kim and Choi (2015) is used to explore these asymmetries. Section 2.1 elaborates on buyer-supplier relationships after which section 2.2 discusses asymmetries. Section 2.3 explains the relationship classification typology of Kim and Choi (2015) followed by section 2.4 that focusses on a selection of nine relational attributes and the asymmetries that are expected while measuring them.

2.1 Background: buyer-supplier relationships

order to have a balanced supplier portfolio, the buyer needs to understand the advantages and disadvantages of different relationship types and should strategically develop relationships accordingly (Kim & Choi, 2015). Both the buying and supplying company should be studied in relationship classification to incorporate the perceptual differences and relational dynamics (Kaufmann & Saw, 2014).

2.2 Context: relationship asymmetries

Much research has discussed significant asymmetries in buyer-supplier relationships

(Ambrose, Marshall, & Lynch, 2010; Anderson, Zerrillo, & Wang, 2006; Kaufmann & Saw, 2014; Korsgaard, Brower, & Lester, 2015; Tomlinson, Dineen, & Lewicki, 2009; Villena & Craighead, 2017). While assessing buyer-supplier relationships, which entail dyadic

constructs (constructs that are determined by the interaction of two entities), we cannot assume that a single source would provide a complete and valid evaluation (Ketchen et al., 2018). Diverging perceptions create imbalanced relationships, often referred to as relationship asymmetry. Relationship asymmetry is defined as “a lack of perceived dyadic balance or proportionality of relationship attributes and/or behaviors” (Thomas & Esper, 2010, p. 476). An important distinction has to be made between perceptual differences towards attributes and real imbalance of attributes when discussing relationship asymmetries. In literature perception differences and relational construct imbalance are frequently mentioned

interchangeably (Ketchen et al., 2018; Nyaga, Lynch, Marshall, & Ambrose, 2013; Svensson, 2006; Villena & Craighead, 2017). Oosterhuis et al. (2013) argue that the firms that constitute a buyer-supplier relationship will have diverging perceptions regarding the relationship and that perception differences can only be measured if the same attribute is being compared. To illustrate, while investigating trust in a relationship, a researcher should not only measure if A trusts B and if B trusts A, but also if A thinks it is trusted by B and if B thinks it is trusted by A. If A thinks it is trusted by B but this isn’t the case, a perception difference has been found. If A trusts B, but B does not trust A there is an imbalance of trust in the relationship.

relationships result in opportunistic behavior, dissatisfaction in the relationship, low

performance evaluation, and instability (Thomas & Esper, 2010). When congruency is high in buyer-supplier relationships it is more likely that parties will share mental models and the actors are more predictable (Korsgaard et al., 2015). Given the fact that few studies

empirically showed how single-source research designs lead to false conclusions (Roh et al., 2013) especially in the field of relational capital (Villena & Craighead, 2017), the aim of this research is to explore the role of asymmetries in buyer-supplier relationships. In a structured manner, the presence of and reasons for different kinds of asymmetries in a selection of relational attributes will be investigated. By performing multiple-source research, which means that data is gathered from both parties that constitute the relationship, false conclusions from single-source perspectives will come to light.

2.3 Classifying relationships

As mentioned before, Kim and Choi (2015) suggested the classification of buyer-supplier relationships based on relational intensity and relational posture. After conducting a survey among 163 suppliers of a large Japanese automaker and analyzing the results, Kim and Choi (2015) came up with an expanded buyer-supplier relationship typology. Relational posture “addresses the affective aspect—how the buyer and supplier regard and behave toward each other, either as a cooperative partner or an adversary” and relational intensity “captures the operational aspect—how interlinked two parties are in their daily transactions—either closely tied or arms-length” (Kim & Choi, 2015, p. 63). Relational posture has been used as a

combination of multiple attributes, namely trust, commitment, relational norms, information sharing and conflict resolution. Relational intensity was a combination of interaction

relationship data of a single buyer from the automotive industry. As a result, additional empirical research is required to generalize these findings. Because only when similar results are obtained in a broad range of contexts, the renewed relationship classification approach can be widely accepted and used. Furthermore, as aforementioned the research is primarily based on single-source (supplier oriented) surveys which neglects the perception of the buyer and contradicts the renewed guidelines for Supply Chain Management research. In the next

section, expected asymmetries in the relationship attributes used by Kim and Choi (2015) will be discussed.

Figure 2.1: Expanded Buyer-Supplier Relationship Typology

2.4 Asymmetries in relational attributes

In this section, the attributes of relational intensity and relational posture are discussed. The focus will be on understanding the attributes, their possible imbalance and perception differences while measuring them.

2.4.1 Interaction frequency

(Van Bruggen, Lilien, & Kacker, 2002) which makes single-source research design more reliable for these measures (Blindenbach-Driessen, Van Dalen, & Van Den Ende, 2010). Interaction frequency is measured by Kim and Choi (2015) in the form of communication frequency (face-to-face, telephone and written) and delivery frequency. The term interaction indicates involvement of both parties of the dyad. Consequently, imbalance of interaction frequency is impossible. Imbalance could exist in the initiation of the interaction, but that concerns another measurement. Because parties have the same access to information to assess interaction frequency and they are not favorably biased towards this attribute (Oosterhuis et al., 2013), perception differences towards interaction frequency are not expected.

2.4.2 Operational interdependency

A party is considered interdependent on another party when it does not completely control the requirements to achieve and action or reap the desired outcomes from the action (Gulati & Sytch, 2007). Also, a firm is dependent on another firm if it needs the other firm to achieve its goals (Frazier, 1983) or if the other firm is irreplaceable (J. B. Heide & John, 1988).

Literature makes a clear distinction between the consequences of symmetric and asymmetric interdependence (Lawler & Bacharach, 1987). The theory of bilateral deterrence states that asymmetric interdependence results in aggression and conflict by both parties (Kumar, Scheer, & Steenkamp, 1995). The more powerful party is less motivated to avoid conflict since retaliation of the other party is not very likely and not very damaging. The less powerful party (and more dependent party) will be inclined to start a conflict, because it expects to be exploited (Lawler, Ford, & Blegen, 1988). When interdependency in a relationship is not only symmetric but also high, the dyadic relationship is positioned in an environment that

stimulates trust and commitment (Kumar et al., 1995). Kumar et al. (1995) expect partners over time to more accurately perceive interdependency in the relationship, since perceptions affect actions. Faulty perceptions will be adjusted once the other party reacts to the resulting action. As a result, less perception differences towards the other party’s interdependency are expected once the relationship matures.

2.4.3 Asset specificity

to secure commitment of the other party (Nyaga et al., 2013), or to signal intend for continuity of the relationship towards the other party (Feldman, 1998). Sometimes specific investments are forced upon the other by the more powerful party in the relationship, increasing power asymmetry (and often opportunistic behavior) even more (Lonsdale, 2001). To conclude, it is quite obvious that imbalance of asset specificity often exists in dyads. Given the fact that these investments not only concern physical but also human dedicated assets (Williamson, 1985) which are often invisible (Shen Chiou & Chi Shen, 2006), it is expected that a party cannot always reliably asses asset specificity of another party.

2.4.4 Multiplexity

Multiplexity refers to “the number of different interaction domains between firms” (Kim & Choi, 2015, p.64). In other words, actors can be linked by multiple contexts (e.g. exchange partners but also participants of the same trade event), which allows resources of a

relationship to be used between them. In case of high multiplexity, parties that experience problems in context X can sometimes invoke the obligations of a partner of context Y to resolve the problem of context X (Coleman, 1988). According to Granovetter (1973)

multiplexity is one of the attributes determining the strength of a relational tie. The number of interaction domains is clearly something that is shared among two parties, making imbalanced multiplexity impossible. It is also assumed that both parties of a dyad are aware of the number of shared interaction domains, so also perception differences should not exist.

2.4.5 Trust

Especially in the early phases of a relationship, imbalance of trust is rather a norm than a possibility (H. Wang, Peverelli, & Bossink, 2015). Diverging levels of trust can be the result of differences in context, past experiences, the other party’s trustworthiness, perception and one’s propensity to trust (Brower, Lester, Korsgaard, & Dineen, 2009). Essentially, the development of dyadic trust resides from elementary properties such as behavior, affect and individual cognition (Kozlowski & Klein, 2000). Dependence and power asymmetry have been identified as antecedents of trust asymmetry (Graebner, 2009; Stoel & Muhanna, 2012). Trust asymmetry causes the party with a higher level of trust to experience a different

Tan (2000) trust cannot be measured objectively. They state that trust resides within an individual and it is only possible to measure resulting behavior. They also suggest that trust should be measured from the point of view of the trustor, since the trustee can only assess whether or not it is trusted based on perception not on actuality (Brower et al., 2000). In conclusion, trust imbalance is expected in the beginning phases of a relationship and perception differences are expected because a party is better able to assess own amount of trust than trust of another.

2.4.6 Commitment

Commitment is key in maintaining long-term relationships (Barnes, Naudé, & Michell, 2005). Because of its reciprocal nature, commitment by one party increases commitment by the other, which creates alignment of structures and increases confidence in each other

(Daugherty, Myers, & Richey, 2002). Commitment in the relationship needs to be present in order for firms to make relation specific investments and contribute resources in general (Williamson, 1996). Moorman, Zaltman, and Deshpande (1992, p. 316) define commitment as “an enduring desire to maintain a valued relationship”. This definition shows that it is important to know the perception of the buyer and suppler regarding the value gained from the relationship, in order to assess mutual commitment. In case of mutual commitment, the relationship is considered a success and can continue (Narayandas & Rangan, 2004). Imbalance in commitment, on the other hand, makes the party that is more committed

vulnerable to opportunism of the less committed party. Reciprocity of the sacrifices made by the more committed party will be low (Anderson & Weitz, 1992). Furthermore, commitment asymmetry can be the result of the natural evolution of the relationship or can result from strategic initiatives aimed at gaining comparative advantage (Gundlach, Achrol, & Mentzer, 1995). Because people are inclined to have a more favorable and benevolent view towards themselves (Deutsch, 1969), it is expected that parties will overestimate their own level of commitment in the relationship. On the other hand, since commitment is central to the relationship, it is expected that actors should be able to accurately assess the other parties level of commitment based on the experienced behavior of the other party, especially in long-term strategic relationships (Ross, Anderson, & Weitz, 1997).

2.4.7 Relational norms

relationship”. Stability in relationships is to a large extent the result of shared relational norms (Blois & Ivens, 2006). These norms concern relational rules that after much interaction arise and become part of habitual behavior (Gundlach & Achrol, 1993). Blois and Ivens (2006) discuss a selection of norms that are important in exchange relationships. Parties expect from past experience proper and adequate behavior towards each other (role integrity). Parties receive fair compensations for what they put into the relationship (reciprocity). The planning element is larger is in relational exchanges. Exchanges occur within ordered fashion, where each party makes his contribution (solidarity). There is room for adaptations of agreements (restitution). There is confidence in the fulfillment of (sometime informal) promises

(reliance). There exists flexibility in the negotiation of obligations. And finally, conflicts are resolved informally and without the use of legal means (Blois & Ivens, 2006). Because of the broad selection of norms on which parties can score differently, imbalance of relational norms can be expected. Furthermore, since relational norms most likely influence the affective view towards a party, they are strongly related to the identity of the party (Oosterhuis et al., 2013). Consequently, perception differences are expected in the sense that a party will overestimate its own relational norms.

2.4.8 Information sharing

Information exchange is critical in supply chains. Distributors want information from suppliers regarding demand of the market, competition in the market and regulation of the environment, but also want information about products and services that are supplied. Suppliers require information regarding the local market of the buyer and its end-customers (Tong & Crosno, 2016). Trust seems to be a significant determinant of the degree and quality of information sharing (Wang, Ye, & Tan, 2014). Literature speaks of information asymmetry when one of the two parties in a relationship has more information concerning aspects of the exchange than the other (Jan B. Heide, 2003). Information sharing asymmetry and

opportunism go hand in hand (Williamson, 1985), but in some contexts it can also increase performance (Nayyar, 1993). Too much information sharing, for example, can enable partners in a dyad to take advantage of the (sensitive) information (Tong & Crosno, 2016). The way in which buyers and suppliers prefer to receive information also differs. Where suppliers prefer information in a timely manner, to enable them to quickly start their planning process, buyers prefer information to be most accurately, because buyers frequently adjust their decisions based on supplier information (Whipple, Frankel, & Daugherty, 2002). As a result of

Furthermore, it can be expected that both parties are able to assess the amount of information that is being transferred because of its measurable nature.

2.4.9 Conflict resolution

Because of interdependency in buyer-supplier relationships, the existence of conflict is inevitable (Mohr & Spekman, 1994). Conflict can be the result of differences in information, belief, interests, desires or values. It can also arise from scarcity of resources or from rivalry of one of the parties (Deutsch, 1969). Success and continuity of the dyadic relationship is directly influenced by the way in which conflicts are being resolved (Monczka et al., 1998). Deutsch (1969, p.14) states that “the perception of any act is determined both by our

perception of the act itself and by our perception of the context in which the act occurs”. Because the parties of a dyad experience the past and present situation differently, it should not come as a surprise that conflict is perceived differently (Deutsch, 1969). When there are diverging views towards the conflict itself, we can also expect perception differences in the way conflict is being resolved by a party.

3.0 METHODOLOGY

3.1 Research method

The goal of this research is to investigate the role of asymmetries in buyer-supplier relationship classification and consequently the importance of multiple-source research design. By means of a field research, that is able to study a phenomenon in its natural setting (Benbasat, Goldstein, & Mead, 1987), this research attempts to reach that goal. It consists of both a quantitative and qualitative part to increase the confidence in the outcomes (Singhal & Singhal, 2012). Because buyer-supplier relationships are also influenced by market, firm and product characteristics (Adams et al., 2012; Terpend, Tyler, Krause, & Handfield, 2008), data was gathered at a single buying firm concerning their supplier base and the strategic

relationships within it. Firstly, in the form of informal and unstructured interviews with multiple employees of the buying firm, understanding of the supplier base was created. Subsequently, based on ERP system data, a spend analysis and sales analysis have been performed to find the important suppliers and to understand the (core) business of the firm. Next, by means of a validated survey the important suppliers have been scored on the relational attributes of Kim and Choi (2015) and have been classified on their

two-dimensional matrix. Since the survey has been filled in by both the buyer and the supplier, imbalance of and perception differences towards the relational attributes could be

investigated. The final and most extensive part of this research was a multiple-case study that was used to confirm the asymmetries found in the survey research and to gain a deeper insight into why these asymmetries are present. The unstructured interviews have also been used to find the employees that have knowledge of supplier relationships and access to the required information (the key informants) to increase the validity of the findings (Montabon et al., 2018). These key informants (four employees of the focal company) participated in semi-structured interviews discussing the multiple cases. For each buyer-supplier relationship a survey was filled in by one representative of the supplier and one senior purchaser of the focal company.

3.2 Research setting

was selected operates in the industry of systems integration and managed services of video delivery. Its supplier base was considered appropriate, because of the presence of long- and short-term relationships, high- and low-intensity relationships and both service and goods suppliers. Their main goal is to reliably deliver video content to their customers in a business-to-business context. To meet customer demand, technical solutions from a lot of suppliers need to be configured and sometimes co-created to be combined into an integrated solution. This solution often contains a combination of products from hardware and software providers, who differ greatly in relational intensity. The current focus of the focal company is to be an independent systems integrator, that brings the best solutions to their customers. Its

headquarters is located in the Netherlands, it is founded in 1997, employs 50 people and has a revenue around €15 million. Because of the small size of this company and its purchasing department, the number of key informants concerning buyer-supplier relationships was limited. Possibly, more insights could have been gained if a buyer with a larger supplier base was used to collect data. Unfortunately, such a buyer that was also willing to cooperate with this research could not be found. From now on this company will be referred to as the buyer.

3.3 Data collection and analysis

The surveys originate from the one developed by Kim and Choi (2015). Because they only provided a survey that needs to be filled in by the supplier, a mirrored questionnaire for the buyer-side was needed. Fortunately, a mirrored questionnaire of this exact survey was already created by Saaltink et al. (2017), as a result of a feedback project with six researchers.

Saaltink et al. (2017) also added two new questions to the multiplexity attribute (and statistically tested validity and reliability of them), because one of the two questions of multiplexity was context specific. To account for contextual factors of individual suppliers, also demographic information was requested from the supplier. Information regarding the location of the supplier, their industry, their size (revenue and number of employees) and the years of collaboration was collected. The complete surveys for the buyer and the supplier can be found in Appendix B.

was sent. Despite the persistence in follow up calls, only 9 suppliers completed the survey (see table 3.1).

Table 3.1: Suppliers that took part in the survey

To quickly collect the data and reduce the chance of missing data, the questionnaires were filled in electronically. Furthermore, to increase reliability of the data (Chomeya, 2010) all relational attributes were measured on a 6-point Likert scale. Also, both the buyer-side and supplier-side survey have been tested at another company and their suppliers since this

company was not willing to participate in a qualitative research. Because some suppliers were reluctant to share the annual revenue of their company, it turned out that it was better to make this question not mandatory in the electronic questionnaire. After one week of sending out the survey a reminder in the form of an e-mail was sent to the suppliers who had not completed it yet. One week later the suppliers were reminded again in the form of a telephone call. The last follow up was again in the form of an email. At this point the survey was sent out four weeks ago.

3.3.2 Survey study: data analysis

Because the questions concerning the relational attributes had a 6 point-Likert scale, their scores could be averaged to calculate a final score of each supplier on each relational

research is on the presence of and reasons for asymmetry in buyer supplier responses and not on the degree of intensity and posture, this limitation had a limited influence.

In order to actually interpret diverging attribute scores, the kind of asymmetries that could be found in the survey results had to be analyzed. To illustrate, the attribute

commitment was measured by five questions. Two of them considered own commitment, one asked for the commitment of the other party and two measured commitment generally in the relationship. Own commitment from the point of view of the buyer compared to own

commitment from the point of view of the supplier measures a possible imbalance in

commitment. Own commitment from the point of view of the buyer compared to commitment of the other from the point of view of the supplier measures a possible perception difference in the commitment of the buyer. Table 3.2 shows for each attribute which questions measure which asymmetry. For each attribute, the score of the buyer was deducted from the score of the supplier, resulting in the absolute differences on single-case level. As aforementioned, because of the small number of buyer-supplier relationships it could not be statistically proven if the scores significantly differ and if the asymmetries are present. Asymmetry was considered high when the score of the supplier minus the score of the buyer (that both are on a scale of 1 to 6) was higher than or equal to 2 or lower than or equal to -2. Asymmetry was considered medium when the difference was higher than -2 but lower than or equal to -1 and when the difference was lower than 2 but higher than or equal to 1.

Table 3.2: Measurement of attributes (the question codes match the codes in Appendix B)

3.3.3 Case study: data collection

have different characteristics. They differ in size, relationship duration, origin, industry (see table 3.1) and spend value. In this way, literal replication is applied (Karlsson, 2009) to increase external validity (Bendapudi & Berry, 1997). When the survey results show an asymmetry (high or medium) that is confirmed in the case study not only on its presence but also on its direction, the presence of the asymmetry in this relationship is assumed.

Furthermore, the interviews were used as a rich and dynamic data collection method to understand the causes of the asymmetries in buyer-supplier relationships. In total, six semi-structured interviews have been conducted with key informants of the buying company. Unfortunately, it was not possible to perform interviews with representatives of the supplier. As a result, only the quantitative part of this research had a multiple-source research design. Outcomes concerning the reasons for asymmetry might be limited in the sense that they are only investigated from the perspective of the buyer. Four of the interviews were face-to-face and two were in the form of a video call. All four key informants (senior purchaser, partner manager, service manager and chief innovation officer) took part in these interviews and accepted to be recorded. Each interview took around 60 minutes, because of the large number of cases and attributes. Since, two informants did not have the time for an interview of an hour, their interviews were partitioned into two smaller interviews (+- 30 minutes). The complete interview protocol can be found in Appendix C.

3.3.4 Case study: data analysis

4.0 RESULTS

After calculating the average scores on relational intensity and relational posture, each buyer-supplier relationship of the focal company was plotted twice in figure 4.1. The left side of this figure shows the outcomes of the survey filled in by the supplier and the right side shows the outcomes of the buyer-side survey. Comparing the perception of the buyer with the one of the supplier, shows much variety on both axes of the graph. Where the outcomes of the supplier-side survey only show deep relationship types, the outcomes of the buyer-supplier-side also classify some relationships as being gracious, suggesting diverging views towards relational intensity. Looking at the individual relationships, especially supplier 3, 7, 8 and 9 clearly show different total perceptions regarding the relationship. The difference in relational posture was highest for supplier 9. But given the fact that the underlying attributes of relational intensity and relational posture had various measurement directions and had different possible asymmetry types (see table 3.2), the total perception of the supplier towards intensity or posture should not be compared to the total perception of the buyer towards these overarching constructs. To illustrate, asset specificity has only been measured as a party’s own asset specificity. When the supplier has made more specific investments in the relationship than the buyer, difference in the total score of relational intensity was the result of an imbalance and not of a perception difference toward general asset specificity in the relationship. In conclusion, it is important to analyze the relational attributes separately to understand which asymmetries are present.

Because we are only interested in the differences between the scores of the supplier and the buyer, Appendix E shows for each relationship of the focal company the score of the supplier minus the score of the buyer on each attribute. Measurement direction of the attributes is clearly indicated. To demonstrate the extent to which the asymmetries were found, table 4.1 shows per attribute the number of cases with high and medium asymmetry. Table 4.1 also shows the number of cases with high/medium asymmetry of which the asymmetry was confirmed in the case study.

Table 4.1: Asymmetry results

It can be concluded that much asymmetry has been found in operational interdependency (of the other), (own) asset specificity, multiplexity (in general), commitment (own, of the buyer and of the supplier) and conflict resolution (of the other). Especially in operational

interdependency and asset specificity, imbalance between the buyer and the supplier was often found. The presence of perception differences in commitment was highest, because of both the number of instances and their degree. As can be seen, confirmation in the case study of the asymmetries was often high. To illustrate how the direction of asymmetry can be interpreted from the figures in Appendix E, the figure regarding operational

interdependency (see figure 4.2) is

explained. Because supplier 7 scored on average a 5 on the questions concerning operational interdependency of the buyer and the buyer scored on average a 1 on operational

interdependency of supplier 7, the difference on operational dependency is +4. These results show that the buyer is more dependent on supplier 7 than supplier 7 is on the buyer. The opposite is (to a lesser extend) true for supplier 1, 4 and 5. The outcomes of both the surveys and the case study for each relational attribute will be discussed next.

4.1 Interaction frequency

Of the total number of 9 suppliers, only two cases showed (medium) asymmetry on interaction frequency in the relationship. The balance of interaction frequency of the other cases was (according to the interviews) often the result of the duration of the relationship. The longer the relationship, the higher the awareness of interaction between parties. The

perception difference towards the amount of interaction in the dyad, was according to the interviews mainly the result of the difficulty in assessing communication of colleagues. Even though the best informant of the buying company was selected to fill in the surveys, it was sometimes hard for him (according to his colleagues) to assess business developmental and technical interaction frequency of partner managers and architects with the suppliers.

4.2 Operational interdependency

All cases showed asymmetry (7 medium / 2 high) on operational interdependency. In 6 instances the buyer was more dependent on the supplier and in three instances it was the other way around. With both high asymmetry cases, the buyer was much more dependent on the supplier. Supplier 3 has exclusive rights to sell a product the buyer needs and to supplier 7 transport was (almost fully) outsourced. In general, the dependency between the buyer and the supplier was dependent on the availability of alternative suppliers in the same product

4.3 Asset specificity

As was the case with operational interdependency, this attribute was measured in such a way only imbalance between the buyer and supplier could be concluded. 4 cases showed high asymmetry on asset specificity and 1 case showed medium asymmetry. Except for one case, asset specificity of the supplier was higher than asset specificity of the buyer. To supplier 1 and supplier 7 distribution has been fully outsourced that required specific investments on their part. In general, suppliers turned out to be willing to invest time and effort to help fulfill the demand of the focal company’s customers, “to get the deal”. Furthermore, the focal company often has many technical questions for their suppliers that require time to answer. The senior purchaser told that “If suppliers want to sell, they have to show what they have to offer, they may work for it”.

4.4 Multiplexity

As aforementioned, joint activities outside the regular business exchange are shared among the parties in a relationship. Consequently, asymmetries found can only concern perceptual differences. 2 cases showed high asymmetry and 4 cases showed medium asymmetry. After asking for confirmation of the asymmetries that were found, it turned out that the suppliers and the buyer probably did not answer the questions correctly. Instead of objectively scoring current joint activities, intention towards these activities was also incorporated. According to the informants of the buying company, much potential is seen by them in the relationship with supplier 2 and supplier 3, which made them expect much interaction outside the regular business exchange in the future. Supplier 6 is reluctant towards any activities besides the transaction. Furthermore, the informant was not aware about the explorative activities of the focal company’s partner manager with supplier 8 and supplier 9 to find new business

opportunities. As a result, multiplexity with these suppliers was underestimated by the senior purchaser.

4.5 Trust

of these suppliers is of strategic nature and is aimed at the longer term. In general, trust of the suppliers in the buyer scored a bit lower than 6 in general because they know the buyer constantly looks for alternative suppliers to stay independent. Trust of the buyer in the suppliers was around the same level because the propensity of the buyer to trust their

suppliers is generally low. In the past, suppliers of the focal company often went to the focal company’s customers directly. Trust of the buyer in supplier 9 was much lower than the other way around, because this supplier lacks the willingness to collaboratively develop business opportunities with the buyer. Also, the perception of supplier 9 towards trust in the buyer and trust in itself was higher than the perception of the buyer. Across all cases, few perception differences were found. The asymmetries that were found were the result of experienced difficulty in assessing trust of the other, because of its subjective nature. Finally, supplier 6 underestimated the amount of trust in them because they thought the buyer was less interested in their products. But the buyer simply had a lower purchase value of products in that

category the last two years.

4.6 Commitment

The imbalance of commitment was measured in two ways, own commitment and

commitment of the other. Where imbalance is high in the results of the former (4 times high asymmetry and 4 times medium asymmetry) imbalance is low in the results of the latter (1 high, 2 medium). The case study revealed that suppliers are eager to share their commitment and the buyer is sometimes more reluctant to show his commitment. Where the supplier is interested in generating business, the buyer does not want to show how dependent he is on the supplier. When commitment between parties is measured by asking for the commitment of the other, the imbalance is more objectively being scored. This finding is also confirmed by the measurements of perception difference in commitment. Commitment of the buyer generally was scored higher by the suppliers compared with the score of the buyer and commitment of the supplier was also scored higher by the suppliers than by the buyer. The case study also suggested that buyers are better able to assess the commitment of the supplier and the other way around, because in this way commitment can be compared with other suppliers or buyers.

cooperation. The commitment of the supplier is also determined by the level of satisfaction of the supplier concerning negotiations in the past.

4.7 Relational norms

With this attribute, asymmetry was only measured in the form of imbalance. The results of the survey show 4 cases with asymmetry (all medium). Relational norms of the buyer compared to those of supplier 4 were lower because of the increasing number of alternative suppliers in the same product category (low criticality of the relationship). Imbalance between the buyer and supplier 7 was the result of the nature of the relationship. Almost all transport is

completely outsourced to this supplier and the buyer does not want to be busy with this relationship. Possibly this supplier feels like they have to do too much work compared to the corresponding compensation. Finally, supplier 4 also turned out to be not happy with the value gained from the relationship. But this supplier was not aware of the fact that the buyer sometimes could not reciprocate a favor. Increasingly the customers of the buyer do not want a supplier like supplier 4, because they are simply too small.

4.8 Information sharing

Both imbalance of and perception differences towards information sharing have been

measured. To a limited extent both types of asymmetries have been found in the survey. The suppliers and the buyer had few diverging perceptions of information sharing because there were clear agreements with the suppliers regarding (proprietary) information sharing, sometimes the complexity of the purchasing process was low and there was much

4.9 Conflict resolution

The imbalance of conflict resolution in the relationship was supported by 6 cases (2 high asymmetry and 4 medium asymmetry). Because most of the differences between the buyer and supplier are negative, it looks like the suppliers in this sample were better at resolving conflict than the buyer. Since there was not much confirmation in the case study regarding the asymmetries that were found, higher conflict resolution of the suppliers cannot be concluded. Most interviewees could not recall much presence of conflict with most suppliers. Possibly the awareness of conflict is low at the focal company because suppliers scored conflict resolution of the buyer lower than the other way around. Supplier 3 (who scored 2,5 lower than the buyer) had according to the interviewees put a lot of time and effort into the

5.0 DISCUSSION

After relational intensity and relational posture had been measured of buyer-supplier

relationships, many diverging scores on these overarching relational constructs were found. In the relational attributes underlying these constructs, both imbalance and perception

differences were present. Sometimes confirming literature and sometimes contradicting literature. But most importantly, giving new insights. A discussion follows.

Following the literature discussion, few if any perception differences in the attributes of relational intensity were expected because of their structural and measurable nature (John & Reve, 1982; Van Bruggen et al., 2002). It was suggested that single-source research designs should be more reliable for these measures (Blindenbach-Driessen et al., 2010). The findings of this study do not contradict this. First of all, the perception towards the amount of

interaction in the relationship was equal in most cases. Awareness from both sides of this interaction seems to be a result of the duration of the relationship. Deviations in perception came from the inability of the informant that filled in the questionnaires for the buying company to assess business developmental and technical interaction frequency. Furthermore, the validated surveys that were used for this study, unfortunately, only measured imbalance in operational interdependency and asset specificity and did not measure perception differences. The presence of imbalance on these attributes, as expected by literature (Ebers & Semrau, 2015; Gulati & Sytch, 2007), was found. Interesting influencers of imbalanced operational interdependency (as suggested by the case study) besides the availability of alternative suppliers and the share of supplier’s revenue, were the capability and comparability of the supplier but also the fairness of the supplier in scoring the dependency of the buyer. Asset specificity was at nearly all cases higher on the part of the supplier. Most likely, because the focal company tries to be an independent systems integrator and the suppliers are expected to do most of the work. Finally, quite some differences in the scores of multiplexity were found in the survey. But during the interviews it became clear that the respondents of the survey not only scored the amount of joint activities outside the regular exchange, but also their intention towards these activities. Also, the amount of joint activities that actually took place in two cases was underestimated by the buying company’s informant that filled in the surveys, because of the lack of awareness of activities performed by his colleagues.

expected that trust imbalance would be high in the early phases of a relationship (H. Wang et al., 2015). Interestingly, the cases concerning a relationship with a duration shorter than 2 years (2 out of 9), showed complete balance of trust in the results of the survey. According to the interviewees these cases were in balance because they were, despite their duration, strategically oriented and there had been much interaction. The outcomes of this study do confirm the findings of Brower et al. (2000), who state that it is hard for a party to assess the amount of trust the other party has. An example from the case study showed that a supplier misinterpreted the amount of trust the buyer had in them. The supplier reacted to an action but was unaware of the intentions of the buyer. For the second attribute of posture (commitment), it was expected that actors in long-term relationships should accurately be able to assess the other party’s level of commitment (Ross et al., 1997). Because people often hold a favorable and benevolent view towards themselves (Deutsch, 1969), it was expected that respondents would exaggerate their own commitment. The survey and the case study have shown confirming results of both expectations. In conclusion, measurement of commitment of the other seems more reliable than measuring one’s own commitment. Furthermore, because of the broad selection of relational norms on which parties can score differently (Blois & Ivens, 2006), imbalance of these norms was expected. The presence of imbalance was on average medium. New insights into the causes of asymmetry in relational norms were limited. Relational norms of the buyer were sometimes purposely lower than those of the supplier (low criticality of the relationship), but sometimes the buyer was simply not able to

reciprocate a favor. Next, because buyers and suppliers have diverging needs for information (Tong & Crosno, 2016), imbalance in information sharing should not come as a surprise. The results of the present study show that there was actually much balance in the amount of information being shared between parties and there were not many perception differences. Little perception differences were the result of information sharing agreements, low complexity of the purchasing process and awareness of the required information.

Interestingly, the buyer was unable to explain information sharing imbalance with a supplier that scored 3 points higher on the attribute. Finally, as was the case with relational norms, conflict resolution was only measured on imbalance. Consequently, it was not possible to investigate the expected perception differences. Imbalance of conflict resolution was found in the survey, but the interviews did not result in interesting new insights.

investigated the role of asymmetries in the classification of buyer-supplier relationships. The goal was to get a better insight in the true limitations of single-source buyer-supplier

relationship research. All in all, the findings have demonstrated that when relational attributes are measured from two sides of the dyad, asymmetries in the form of imbalance and

perception differences are found. The outcomes of the present study suggest that

measurement of relational intensity can be done from the perspective of one of the two parties of a dyad. But because it is hard for individuals to, for example, evaluate interaction of

6.0 CONCLUSION

This study is motivated by the recent discussion on survey research design. Because of the renewed guidelines of the Journal of Supply Chain Management, validity of much prior survey research is called into question. Especially research that is aimed at dyadic, triadic or network structures, like buyer-supplier relationship research, can be strongly influenced by diverging perceptions of actors. In line with the recent work on the classification of buyer-supplier relationships, the influence of asymmetries has been investigated. Literature has been reviewed on the role of asymmetries in these relationships and by means of a survey and case study, the presence and causes of these asymmetries have been explored. Because this

research has shown that a thorough classification cannot validly be performed by a single party of the dyad, the importance of multiple-source research design has been confirmed.

6.1 Scientific and managerial implications

Researchers in the field of buyer-supplier relationship classification should, first of all, take away from this study that multiple-source research designs are strongly recommended when possible. When single-source research is being performed, its limitations, especially in the measurement of sentimental attributes, should be clearly noted. Also, questionnaires should carefully be constructed. To be able to measure perception differences in attribute scores, questions should be asked in a bi-directional manner whenever applicable. For example, while measuring operational interdependency, a supplier should not only be asked for the

dependency of the buyer on the supplier but should also be asked for own dependency on the buyer. Furthermore, this paper has shown the need for a universally accepted terminology on the different kinds of asymmetries. The terms imbalance of and perception differences

towards have been used out of necessity, but more semantically correct terms can probably be developed. Finally, from the literature discussion and the case study, it became clear that sometimes attributes of relational intensity seem to strengthen attributes of relational posture and the other way around. For example, higher (symmetric) dependency is suggested to increase trust, relational norms and commitment. Furthermore, commitment is suggested to result in more specific investments and more specific investments would increase relational norms. As a result, true orthogonality of relational intensity and relational posture as

accounts for these reinforcing factors in comparable typologies. Also, the relative importance of the individual attributes should be carefully investigated.

Looking at the practical implications for management, first of all, it appears to be

important to create awareness of the interactions of the complete buying (or selling) unit with other firms. The results of this study have shown that it is hard for individuals to assess interfirm interaction frequency of colleagues. To be able to accurately classify intensity of relationships, a common understanding of interaction frequency has to be created.

Furthermore, buyers should be aware of misleading reactions of suppliers while classifying the relationships with them. It is in the best interest of the supplier to look good, and so, they will try. Next, managers should know which party to choose for the collection of data. As shown by this research, trust in the buyer can only validly be measured from the point of view of the supplier and commitment is validly measured if a party assesses the commitment of the other. Finally, managers should keep in mind that they will never be fully aware of the

intentions in a relationship unless these intentions are measured from both perspectives in a qualitative manner.

6.2 Limitations

The limitations of this research are important to note. First of all, the exploration of

asymmetries was performed on a selection of 9 attributes. Additional relational attributes, and their diverging scores, should be analyzed to completely understand asymmetries in buyer-supplier relationships. Furthermore, because of the small sample of relationships, statistical analysis of differences could not be performed. Also, because these cases were actually embedded cases from a single case (the buyer), generalization towards buyer-supplier relationships in general is limited. Furthermore, this study was inhibited by the restriction to perform interviews at the supplier-side of the dyad, which made it impossible to measure their intentions behind their scores on the survey. Evaluating the scores of the survey in the form of semi-structured interviews at the focal company turned out to be very insightful. Next,

6.3 Future research

The scientific implications and limitations of this study lead to recommendations for future research. Firstly, to completely understand asymmetries between buyers and suppliers in a relationship, more relational attributes should be explored and, among them, imbalance and perception differences should be investigated. Secondly, the validated survey that was used for this research sometimes lacked questions to measure attributes bi-directionally. As a result, additional questions are required and should be tested on their reliability and validity. Furthermore, because of the fact that this research was restricted to collect qualitative data from the supplier-side, future research should account for the supplier’s interpretation of attribute scores, to confirm asymmetries and understand their intention. Next, just like the research of Kim & Choi (2015), this study is industry- and firm-specific. Future research should investigate the role of asymmetries and generally buyer-supplier relationship

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