Power Asymmetry, Adaptation and Collaboration in Dyadic Relationships Involving a Powerful Partner

Abstract

Buyer–supplier relationships involve dyadic interactions, but there is a dearth of empirical dyadic analysis of these relationships. While relationships with a power balance between partners do exist, relationships typically occur in the context of power asymmetry. This study examines how perceptions of power use and prevailing relationship quality in dyadic relationships characterized by substantial power asymmetry affect behavioral and operational outcomes. Hierarchical regression is used to analyze data from a dyadic survey of relationships of a brand‐name buying organization and its suppliers. Results indicate that power use affects partner behavior and operational performance, but the nature of the relationship dictates which power sources are most appropriate. In addition, the mediation effect of power imbalance shows that both relational and transactional factors can play an important role in supply chain exchanges.

Piggy in the Middle: How Direct Customer Power Affects First-Tier Suppliers’ Adoption of Socially Responsible Procurement Practices and Performance

“…In contrast to process-based socially responsible procurement practices, when mediated power is used to achieve innovative or strategic practices, researchers consistently find a negative effect. For example, in the power literature, Nyaga et al (2013) find that mediated power use negatively affects both collaborative behavior and the supplier's willingness to adapt products or processes to suit the buyer. Benton and Maloni (2005) find that coercive buyer power has a detrimental impact on relationships in the automotive industry and Jones and Pollitt (1998) suggest that opportunistic or abusive use of power leads to not only a reduction in the quality of products but also a parallel lack of investment and innovation by suppliers.…”

“…Supply chain researchers have concluded that power is antecedent to the supplier's willingness to make adaptations for its buyers (Nyaga et al 2013), with research showing that non-mediated power use has a positive impact on relationships (Benton and Maloni 2005;Zhao et al 2008).…”

“…The concept of power is used extensively in supply chain management literature to explain the performance of supply chain relationships in terms of trust (Kumar et al 1995;Maloni and Benton 2000), cooperation (Frazier and Rody 1991;Maloni and Benton 2000), commitment (Kumar et al 1995;Maloni and Benton 2000;Zhao et al 2008), adaptation (Hallen et al 1991;Nyaga et al 2013) or satisfaction (Benton and Maloni 2005;Frazier and Summers 1986;Maloni and Benton 2000). Power is a key variable in supply chain relationships as it directly relates to the control and influence of one party over another (Maloni and Benton 2000;Nyaga et al 2013). For example, power asymmetry arises in supply chain relationships if the buyer purchases a large share of a supplier's outputs, thus creating dependence; if one party has unique expertise; or if one party has developed a contract structure which makes finding another partner very difficult (Belaya et al 2009).…”

“…Moreover, the use of non-mediated power is much more likely to induce the supplier to adapt to a buyer's wishes (Nyaga et al 2013). This is reinforced by evidence that the relationship and association with the buyer drives supplier satisfaction and perceptions of performance (Benton and Maloni 2005).…”

Wearables and Wellness for the Young Elderly - Transforming Everyday Lives?

“…It analyses the relationship that develops in an economic exchange when an individual (the principal) concedes authority to another (the agent) to act in his or her name (Cuevas-Rodríguez, Gomez-Mejia, & Wiseman, 2012). The exercise of coercive and legal power has a strong negative effect on collaborative behaviour, while rewards have a positive effect (Nyaga, Lynch, Marshall, & Ambrose, 2013). The central goal of agency theory is to stop opportunistic behaviour in a situation where parties have different goals and the information supply is incomplete (i.e.…”