Managing appropriately in power regimes: relationship and performance management in 12 supply chain cases

Abstract

This paper reports the findings of a two-year EPSRC funded research project into relationship and performance strategies in power regimes. The findings from 12 very different industrial and service sector cases studies demonstrate that there is a correlation between the ability to improve the performance of suppliers and the power circumstances that exist between the buyers and suppliers. Buyers appear to be able to achieve improved performance from suppliers in situations of buyer dominance or interdependence. The research also demonstrates that whatever the objective power circumstance managers often subjectively misperceive the appropriate sourcing choices available to them. As a result business relationships can be aligned, but they are often misaligned. Furthermore, misaligned relationships may be "remediable" but they may not.

Power in distribution channels — Supplier assortment strategy for balancing power

“…In a situation of buyer or supplier dominance, either party has control over a larger share of the available resources compared with their counterpart. Non-adversarial collaboration between the buyer and the supplier most likely occurs in an interdependent power situation (Cox et al, 2004). …”

“…Cox et al, 2000;Cox, 2007). A stronger power position is seen to enable a firm to appropriate more of the available value in a business relationship (Cox et al, 2004). The power position is consequently expected to be related to firm performance (e.g.…”

“…It also uses the power-regime framework to reason about resource dependency (cf. Cox et al, 2003b;Cox et al, 2004) in the context of a market with commodity-type products when suppliers have difficulty increasing buyer dependence based on differentiating product utility. In this study we are looking at a situation where the supplier takes more responsibility over assortment management, and consequently how this changes the relative power between the actors.…”

“…Few theories on power and dependence in buyer-supplier relationships address the question of how dependence can be used to change the relative power between two actors (some exeptions are Cox et al, 2003b;Cox et al, 2004;Chicksand, 2009). This paper extends the work on power regimes of Cox et al (2000), with a particular focus on the movement from buyer dominance toward interdependence between buyer and supplier (cf.…”

“…This paper extends the work on power regimes of Cox et al (2000), with a particular focus on the movement from buyer dominance toward interdependence between buyer and supplier (cf. the power-regime framework defined by Cox et al, 2004). Explorations of power balance and its consequences for supplier-retailer relationships often describe power balance or imbalance at a certain point in time (e.g.…”