How does justice matter in achieving buyer–supplier relationship performance?

Abstract

a b s t r a c tThis study presents an analysis exploring how four types of justice (distributive, procedural, interpersonal, and informational) influence dyadic relationship performance in the buyer-supplier context. Underpinned by loose coupling theory, we build a mediating framework in which we propose that a high level of justice (or fairness) as mutually perceived by both parties drives buyer-supplier relationship performance through bolstered coupling links in mutual knowledge sharing, continuous commitment, and relationship investment. Our survey of 216 paired manufacturers (suppliers) and distributors (buyers) in China generally supports this argument, leading to a conclusion that justice is not a direct determinant of buyer-supplier performance but a critical conduit that nourishes mid-range coupling behaviors, which in turn promotes a successful relationship. Based on findings from this study, firms are encouraged to endorse all four kinds of justice in managing supply chain relationships. However, when constrained by resources, the recommendation for managers is to focus on achieving a high level of perceptual convergence on procedural justice and informational justice with the exchange partner, because mutual perceptions of procedural and informational justice have the strongest effects on coupling behaviors and buyer-supplier relationship performance.

Do supplier perceptions of buyer fairness lead to supplier sales growth?

“…Table 1 provides an overview of existing seminal studies using justice theory in an inter-organizational setting. In line with Suh (2005) and Liu et al (2012), our research will focus on organizational justice perceptions from the supplier's perspective rather than that of the buyer. Table 1 around here…”

“…Fairness theory is related to complaint management (Yi & Gong, 2008), equity theory, and service recovery research (Patterson et al, 2006;Smith et al, 1999). However, in recent years it has emerged as critical in some relationship marketing models (Brown et al, 2006;Liu et al, 2012;Samaha et al, 2011;Yilmaz et al, 2004).…”

“…One major gap is that with the exception of a few studies (e.g. Liu et al, 2012;Suh, 2005) fairness perceptions in the business marketing literature are typically approached from a buyers' point of view (see Table 1). Most of the existing studies on relationship fairness have tried to model the buyer's perception of a seller's fairness, and thus inevitably, resulting outcomes (e.g.…”

The Contingency Effect of Relational Competency on the Relationship between Information Technology Competency and Firm Performance

“…Under the context of supply chain, however, firms increasingly engage in interorganizational communication (IOC) to leverage each other's information and knowledge for achieving mutual goals (Liu et al 2010;Liu et al 2012;Lyer et al 2009). In this view, RBV only stresses the internal resources the firm possesses, which have been criticized for its failure to consider the linkages with external supply chain partners (Priem et al 2001; Sirmon et al 2007).…”

The synergistic and complementary effects of supply chain justice and integration practices on supply chain performance: A conceptual framework and research propositions

“…Recently, justice has been examined in the context of supply chain relationships (Griffith, Harvey & Lusch, 2006;Liu, Huang, Luo & Zhao, 2012), and it has been recognised that perceptions of justice are of particular importance in long-term relationships, because two parties need to collaborate to some extent in order to leverage each other's capabilities and resources to achieve mutual goals. A failure to develop perceptions of justice may result in harm to, or termination of, the relationship (Liu et al, 2012).…”