Abstract
Fostering and maintaining buyer–supplier relationships is a fundamental premise of many channel initiatives. Indeed, these relationships may culminate in significant performance enhancements and competitive advantage. Yet these relationships may also result in competitively harmful events such as partner opportunism. Despite this potential competitive erosion, there is a lack of studies examining the interplay between the drivers and deterrents of opportunism. By building on transaction cost economics and social capital theory, we examine, via a sample of 400 manufacturing firms in China, how the interplay between drivers (relationship-specific investments and behavioral uncertainty) and deterrents (inter-firm social capital) of opportunism affect partner opportunism in buyer–supplier exchanges. The significance of this interplay between the drivers and deterrents sheds new light on how a firm can leverage social capital to curb the harmful effects of opportunism.
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Acknowledgments
The authors would like to thank Editor-in-Chief Tomas Hult and four anonymous reviewers for their guidance and constructive comments on earlier versions. The work described in this paper was fully supported by a grant from the Research Grants Council of the Hong Kong Special Administrative Region, China (Project No. CityU 146910). The authors gratefully acknowledge the helpful comments and suggestions of seminar participants at the 2011 Winter American Marketing Association (AMA) Conference, Austin, TX; the 2010 The Bi-Annual Institute for the Study of Business Markets (ISBM) Academic Conference, Harvard University, Boston, Massachusetts; and the Marketing groups at the Pennsylvania State University, the City University of Hong Kong, and the University of Oklahoma.
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Appendix: Measurement items and validity assessment
Appendix: Measurement items and validity assessment
Constructs | Factor Loadings |
Partner opportunism (Adapted from Rokkan et al. (2003); 7-Likert Scale: “strongly disagree/strongly agree”) | |
1. On occasion, this supplier lies about certain things in order to protect their interests. | 0.69 |
2. This supplier sometimes promises to do things without actually doing them later. | 0.74 |
3. This supplier does not always act in accordance with our contract(s). | 0.79 |
4. This supplier sometimes tries to breach informal agreements between our companies to maximize their own benefit. | 0.90 |
5. This supplier will try to take advantage of “holes” in our contract to further their own interests. | 0.89 |
6. This supplier sometimes uses unexpected events to extract concessions from our firm. | 0.87 |
| |
Social interactions (Adapated from Lusch and Brown (1996); 7-Likert Scale: “strongly disagree/strongly agree”) | |
1. Our company and this supplier often visit each other. | 0.78 |
2. Our company and this supplier often have activities that are purely social such as after work get-togethers. | 0.77 |
3. Our company and this supplier often offer gifts/favor to each other. | 0.85 |
| |
Identification-based trust (Adapted from Lewicki et al. (1998); 7-Likert Scale: “strongly disagree/strongly agree”) | |
1. Both parties would let the other make decisions because we both think like one another. | 0.79 |
2. Both parties can effectively act for the other because both share the same understanding of what matters. | 0.86 |
3. Both parties are confident that their interests will be fully valued and protected. | 0.90 |
Shared values (Adapted from Heide and John (1992); 7-Likert Scale: “strongly disagree/strongly agree”) | |
1. Problems that arise in the course of this relationship are treated by my firm and this supplier as joint rather than individual responsibilities. | 0.70 |
2. Both parties are committed to improvements that may benefit the relationship as a whole, and not only the individual parties. | 0.83 |
3. In most aspects of the relationship the parties are jointly responsible for getting things done | 0.73 |
| |
Focal firm’s relationship-specific investments (Adapted from Cannon and Perreault (1999) and Jap and Ganesan (2000); 7-Likert Scale: “strongly disagree/strongly agree”) | |
You may have made investments in time, energy, and/or money specifically to accommodate this supplier and its products. These investment would be lost if your firm switched to another supplier. Please indicate the extent to which your firm has made investments or changes specifically to accommodate this supplier (1 = none, 7 = a great deal) | 0.81 |
1. Product features | 0.86 |
2. Sales personnel | 0.90 |
3. Inventory and distribution procedures | 0.91 |
4. Retailing strategy | 0.87 |
5. Capital equipment and tools | |
Evaluation of partners’ performance (7-Likert Scale: “Very poor/Excellent”) | |
Please rate Supplier X’s performance in comparison with all other suppliers delivering similar products | |
1. Product quality | 0.83 |
2. Timeliness of Delivery. | 0.83 |
3. Sales, service, and/or technical support. | 0.86 |
4. Cost control (compared with expected purchase price) | 0.77 |
5. Total value received | 0.80 |
Behavioral uncertainty (Adapted from Heide (2003); 7-Likert Scale: “strongly disagree/strongly agree”) | |
1. It is difficult to measure the collective performance of this supplier | 0.88 |
2. Evaluating the performance of this supplier requires extensive incoming inspection | 0.84 |
3. It is difficult to evaluate if this supplier follows our recommended operating procedures | 0.88 |
| |
Transaction costs (Adapted from Dahlstrom and Nygaard (1999); 7-Likert Scale: “strongly disagree/strongly agree”) | |
1. Bargaining costs | |
1) negotiations of financial adjustments to the contract are typically difficult and lengthy | 0.85 |
2) when unexpected changes arise, at least one party was dissatisfied with negotiated outcomes | 0.80 |
3) Our negotiations with this supplier are usually difficult. | 0.84 |
4) Neither party is willing to yield to the demand of the other party in negotiations. | 0.82 |
2. Monitoring costs | |
1) We spend a lot of time to control quality and quantities of delivers from this supplier. | 0.88 |
2) We use too much time to make sure the on-time deliveries from this supplier. | 0.91 |
3) We spend too much time on monitoring the operation procedure of this supplier. | 0.88 |
3. Maladaption costs | |
1) The information from this supplier is often poorly formulated and difficult to understand. | 0.93 |
2) Important information from this supplier seldom comes at the right time. | 0.88 |
3) The information from this supplier is either incomplete or too voluminous to understand. | 0.89 |
| |
Buyer dependence (7-Likert Scale: “strongly disagree/strongly agree”) | |
1. We are dependent on this supplier | 0.76 |
2. It would be difficult to replace this supplier. | 0.84 |
3. It would be costly to lose this supplier | 0.84 |
| |
Competitive intensity (7-Likert Scale: “strongly disagree/strongly agree”) | |
1. Price competition is a hallmark of our industry. | 0.76 |
2. There are many “promotion wars” in our industry. | 0.73 |
3. There are many competitors in our industry. | 0.76 |
Note: For the survey questions above, respondents were asked to respond to all scales with respect to one of their major suppliers. End points for the scales were 1 = “strongly disagree” to 7 = “strongly agree.” |
Focal firm’s total income |
Your company’s income in last year (in RMB amount): ___________ |
Transactional frequency |
How frequently do your company place order from this supplier : _ (1 = more than 2 times a day; 2 = once a day; 3 = 1–5 times a week; 4 = 2–3 times a month; 5 = once a month; 6 = 5–10 times a year; 7 = 2–4 times a year;8 = once a year) |
Age of the firm |
What year was your company established? __________ |
Size of the firm |
How many employees are there in your company? ___________ |
Length of the business relationship |
How many years your company has been doing business with this particular supplier? __________ |
Note: For the questions above, respondents were asked to respond to all scales with respect to one major supplier they identified earlier. |
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Wang, Q., Li, J.J., Ross, W.T. et al. The interplay of drivers and deterrents of opportunism in buyer–supplier relationships. J. of the Acad. Mark. Sci. 41, 111–131 (2013). https://doi.org/10.1007/s11747-012-0310-9
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DOI: https://doi.org/10.1007/s11747-012-0310-9