Customer Categorization, Relational Justice and SME Performance in Supermarket Supply Chains

Abstract

Supply Chain Management: an International Journal 1 Customer Categorization, Relational Justice and SME Performance in Supermarket Supply Chains Abstract Purpose -The purpose of this research is to examine the impact of perceived relational justice on the relationship between key customer categorization and performance of small food and drink producers in supermarket supply chains.Design/methodology/approach -Survey data is derived from a sample of (small-scale) suppliers of local and regional food to a large British supermarket. Partial least squares regression analysis was used to test a conceptual framework, which positions relational justice as a mediator in the relationship between key customer categorization and supplier performance, moderated by the length of the relationship.Findings -Findings reveal that small suppliers who perceive their treatment by their key customers as fair tend to achieve higher business performance, which supports the hypothesized mediating role of relational justice on supplier performance. However, this research found no evidence to support the hypothesis that this role is moderated by the length of the relationship between the supplier and the buyer.Originality/value -This paper makes a novel empirical contribution, focusing on performance outcomes for small-scale suppliers in a highly competitive environment (fast-moving consumer goods) with customers (supermarkets) who have significant market power. Accordingly, the paper shows that the way supermarket buyers treat their suppliers matters more for the performance of their suppliers than the very fact that they are key customers.

Getting Ratees to Accept Performance Feedback: A Relational Approach

“…First, some researchers believe justice is an innate relational concept, as it is arguably linked to an individual’s moral goodness (Wielsch, 2013 ). Hence, there exists the need for virtue in all aspects of justice, including distributional, procedural, informational, and interpersonal (Malagueño et al, 2019 ). Second, some scholars separate the distribution of resources and benefits to the target from the quality of interaction with the target.…”