The dilemma of inter-organizational relationships

Abstract

Purpose Power is central to inter-organizational relationships. The literature distinguishes between structural power (i.e. dependence) and behavioral power (i.e. use of power), yet few studies considered them simultaneously. Opportunism is generally linked to use of power, but it remains unclear whether use of power deters or invites opportunism. In this study, the authors treat dependence as a driver of use of power and opportunism as its outcome, and empirically test relationships among dependence, power, and opportunism from both buyer and supplier perspectives. The paper aims to discuss these issues. Design/methodology/approach This study examines how buyer and supplier dependence influence the other’s and their own use of coercive and non-coercive power, which lead to opportunism of two parties, based on data from 240 companies in China on their perceived relationships with major suppliers. Findings Results show that buyer/supplier dependence is positively related to supplier’s/buyer’s use of coercive and non-coercive power. Buyer’s and supplier’s use of coercive power also positively influences their opportunism. Buyer’s use of non-coercive power is negatively related to both partners’ opportunism, whereas supplier’s use of non-coercive power is not significantly related to either partner’s opportunism. Originality/value This study contributes to literature in two ways. First, the authors distinguish the structural aspect of power from its behavioral aspect and demonstrate that dependence, which represents structural power, generates different patterns of influence on use of coercive and non-coercive power when considered from buyer’s and supplier’s perspectives. Second, the authors reexamine relationships between use of power and opportunism and show that buyers and suppliers react differently to use of different types of power.

Influence of Organisational Culture on Supply Chain Resilience: A Power and Situational Strength Conceptual Perspective

“…Maloni and Benton (2000) discuss supply chain relationships from the aspect of power types as introduced by French and Raven (1959): reward, coercion, expert, referent and legitimate power. Huo et al (2019) explain that these power types can be separated into two categories, coercive (reward and coercive) and non-coercive (expert, referent and legitimate). Coercive power is defined as "one party's explicit attempts to exert control over partners through negative (both carrot and stick) actions", whilst non-coercive power is defined "one party's attempt to promote desired behaviour in its partners through positive actions such as providing assistance or supportive activities" (Huo et al 2019, p. 4).…”

“…Restricting the amount of information, resources and capabilities shared with a supplier can benefit buyers who wish to have more control over their suppliers (Sanfiel-Fumero et al 2012). However, organisations which have the ability to enforce coercive power over their suppliers, but choose not to, are found to have better relationships with these partners (Huo et al 2019) and achieve higher levels of supply chain performance (He et al 2013). Cai et al (2013) explain while sharing knowledge with suppliers can prove positive for a buying firm, they must be cautious of suppliers acquiring knowledge which they can use as a bargaining tool within their relationship.…”

“…The two main types of power which have been categorised in the literature are coercive and non-coercive (Huo et al 2019). The use of coercive power within supplier relationships implies that a focal organisation is much more controlling of the other, uses stringent rules and regulations to enforce this control, and is reluctant to work collaboratively with suppliers (Liu et al 2010b).…”

“…The next steps for future research with regards to this framework are to evaluate the relationships in the framework empirically to determine the role which situational strength and power play in linking organisational culture to SCRES. Researchers can utilize the Organisational Culture Assessment Index (Cameron and Quinn 2011) to evaluate organisational culture, the Situational Strength at Work questionnaire developed by Meyer et al (2014) to measure different characteristics of situational strength and the work of Huo et al (2019) to measure both coercive and non-coercive power. This framework could be applied to other areas of supply chain management, such as strategy, performance and green supply chain management.…”

Prerequisites For Collective Opportunism At Corporate Enterprises

“…Among the diverse opportunistic patterns common for any corporate enterprise, much focus is made to the opportunism of managers (Ali & Hirshleifer, 2017;Ghouma, 2017;Ntim et al, 2019), opportunistic behaviors of freelancers (Shevchuk & Strebkov, 2018), the theft of innovative ideas by employees (Pandher et al, 2017), as well as opportunism in intercompany relations (Chai et al, 2019;Huo et al, 2019;Yang et al, 2018). The methods used to evaluate and measure opportunistic behaviors at corporate enterprises for labor relations are discussed in detail in Popov and Ersh (2016); Pletnev and Kozlova (2020b).…”