Category Archives: Academic Publications

Managing supplier satisfaction: Social capital and resource dependence frameworks

05-2015

Published in Australasian Marketing Journal and authored by Holger Schiele, Scott. C. Ellis, Michael Eßig, John W. Henke Jr., and Thomas J. Kull

Recently, supplier satisfaction has gained more attention both in practice and in academic research. However, the knowledge accumulation process is still in an embryonic and explorative phase. Likewise, supplier satisfaction measuring in practice may still benefit from an impetus from academia to be more widely used. This paper aims at considerably expanding understanding of supplier satisfaction by proposing to apply a social capital and a resource dependence theory perspective. We expect an abundance of social capital in a relationship to relate positively to supplier satisfaction, whilst power disequilibrium and dependence from the buyer are expected to negatively relate to supplier satisfaction. It is worth highlighting that, according to research rooted in Hofstede’s cultural dimensions model, the perception and acceptance of power differences resulting from a situation of dependency is highly culture specific. We therefore further hypothesise that supplier satisfaction will be moderated by cultural differences and ask researchers to take the cultural dimension into account.

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Leveraging boundary spanning capabilities to encourage supplier investment: A comparative study

04-2015

Published in Industrial Marketing Management and authored by Chun Zhang, Fang Wu, and John W. Henke Jr.

Despite growing recognition of the importance of boundary spanners at managing inter-organizational relationships, the process by which capabilities residing in boundary spanning individuals are leveraged to encourage partner firm investment remains unclear. In addressing this gap, we find that a boundary spanner’s capabilities in strategic communication and job expertise enhance a customer firm’s communication with a supplier firm, which increases a supplier’s willingness to make future-oriented investment both directly as well as indirectly through increasing customer firm trustworthiness. Data collected from two samples of suppliers in the U.S. and other Western industrialized countries provide empirical support for our propositions. Furthermore, we found that the process of how boundary spanning capabilities influence supplier willingness to invest differs significantly between the two regions in ways that affect managerial decisions on resource allocation.

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Reciprocity between buyer cost sharing and supplier technology sharing

02-2015

Published in Int. J. Production Economics and authored by Chun Zhang, John W. Henke Jr., and Sridhar Viswanathan

Despite the increasing importance of integrating suppliers into buyer product development activities, the majority of the research on supplier integration focuses on the total cost reduction and benefits to the buyer rather than cost sharing between a buyer and its suppliers. Total cost reduction does not necessarily imply buyers share costs savings with suppliers, especially when buyers have a power advantage over suppliers. Also, little empirical evidence exists on what impact buyer cost-sharing has on supplier technology innovations. This paper examines the reciprocal relationships between buyer cost sharing and supplier willingness to share and invest in new technology using two-year data collected from Tier-1 suppliers in the North American automotive industry. Initial buyer cost sharing was found to stimulate supplier sharing one year later and does so more effectively than supplier involvement in the buyer’s product development activities. Moreover, supplier sharing was found to be reciprocated by the buyers. Furthermore, Japanese OEMs in the North American automotive industry reciprocate supplier sharing with higher levels of cost sharing than do domestic OEMs. The research substantiates buyer cost sharing as an important strategy to generate competitive advantage in managing supplier relations.

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Integrating global and local procurement for superior supplier working relations

06-2012

Integrating global and local procurement for superior supplier working relations

Globalization is forcing global organizations to focus on processes that will enable them to more effectively and efficiently integrate and coordinate their activities throughout their worldwide organization. as such, global sourcing is becoming a standard practice in many global organizations. Using a dataset of 1455 observations from the suppliers of a North American-based global manufacturer of high technology products, this research evaluates how a global company can utilize a globally integrated procurement organization to achieve global and local sourcing responsiveness and superior supplier working relations. The study found that if a global procurement organization aspires to achieve exceptional supplier working relations, it should be highly integrated across its geographic regions with knowledgeable global and local procurement personnel who effectively communicate with the firm’s suppliers, while working closely together in a coordinated manner to achieve a globally responsive supply chain.

Sengun Yeniyurt, John W. Henke Jr., Erin Cavusgil, “Integrating global and local procurement for superior supplier working relations,” International Business Review  (2012), http://dx.doi.org/10.1016/j.ibusrev.2012.06.004.


The boundary spanning capabilities of purchasing agents in buyer–supplier trust development

05-2011

The boundary spanning capabilities of purchasing agents in buyer–supplier trust development

This study examines how individual purchasing agents function as boundary spanners with suppliers to influence trust development in themselves and the buying firms that employ them. Building upon boundary theory and supply chain cooperation research, we identify three boundary spanning capabilities of purchasing agents and empirically test how these capabilities shape buyer–supplier trust development. Using two samples of data collected from suppliers in the automotive industry and food industry, we found that a purchasing agent’s effectiveness in strategic communication with suppliers affects a supplier’s trust in the buying firm, while an agent’s professional knowledge and ability to reach compromises with suppliers affect a supplier’s trust in the purchasing agent representing the firm. Trust in the purchasing agent in turn affects trust in the buying firm. Theoretical and managerial implications are discussed….

Chun Zhang, Sridhar Viswanathan, John W. Henke Jr., “The boundary spanning capabilities of purchasing agents in buyer–supplier trust development,” Journal of Operations Management 29 (2011) 318–328.


Increasing Supplier-Driven Innovation

01-2010

Increasing Supplier-Driven Innovation

MORE THAN 50 YEARS AGO, management guru Peter Drucker identified innoation as one of the basic aways in which a business builds and maintains a competitive position in the marketplace. It wasn’t until recently, however, that companies not only established internal environments conducive to innovation but also began identifying, cutlivating and taking advantage of a wide variety of external sources for innovation….

John W. Henke Jr., Chun Zhang, “Increasing Supplier-Driven Innovation,” MITSloan Management Review, Winter 2010 Vol. 51 No. 2.


Do buyer cooperative actions matter under relational stress? Evidence from Japanese and U.S. assemblers in the U.S. automotive industry

11-2009

Do buyer cooperative actions matter under relational stress? Evidence from Japanese and U.S. assemblers in the U.S. automotive industry

Buyers can create relational stress even as they work cooperatively with suppliers. This study investigates the moderating effects of relational stress on the ability of buyer initiated cooperative actions to influence a supplier’s willingness to invest in technology that will be of benefit to the buyer. Data on 2012 buying situations were collected from Tier 1 suppliers to three U.S. domestic automotive assemblers (Chrysler, Ford, and General Motors) and three Japanese transplant automotive assemblers (Honda, Nissan, and Toyota) over three consecutive years (2003–2005). The results indicate that (1) buyer-initiated cooperative actions of communication, assistance, and supplier involvement increase a supplier’s willingness to invest in technology, (2) the relationship-enhancing effect of buyer assistance increases under high relational stress, while the effectiveness of buyer communication decreases, and (3) that the effect of supplier involvement is not significantly influenced by relational stress levels. Furthermore, we found that supplier relations with Japanese transplant assemblers are characterized by higher levels of cooperative actions, lower levels of relational stress, and higher levels of supplier willingness to invest in technology when compared to those of U.S. domestic assemblers….

Chun Zhang, John W. Henke Jr., David A. Griffith, “Do buyer cooperative actions matter under relational stress? Evidence from Japanese and U.S. assemblers in the U.S. automotive industry,” Journal of Operations Management 27 (2009) 479–494.


Manufacturer price reduction pressure and supplier relations

11-2008

Manufacturer price reduction pressure and supplier relations

Purpose – Manufacturer price reduction pressure on suppliers is an important contributor to helping a manufacturer maintain a strong competitive position by keeping costs low. The benefits of trusting supplier working relations also help strengthen a manufacturer’s competitive position. The purpose of this paper is to determine if manufacturer price reduction pressure and trusting working relations with the pressured suppliers, typically considered to be mutually exclusive, can co-exist. Design/methodology/approach – A structural equation modeling approach was used to analyze data covering 946 production buying situations involving 279 suppliers and six NA automotive OEMs. Findings – Manufacturer price reduction pressure and trusting working relations with the pressured suppliers, are not mutually exclusive, they can coexist. Research limitations/implications – The research found that it is not the pressure that impacts the manufacturer – supplier relations, but rather it is the manner by which the manufacturer goes about pressuring its suppliers that impacts its supplier working relations. The research, however, does not directly address how a manufacturer can achieve both ends simultaneously. Practical implications – Manufacturers no longer have to choose between exerting price reduction pressures on suppliers or working to achieve trusting relations with suppliers. They can successfully do both. At the same time, suppliers must recognize that these conditions may occur and when applied simultaneously ultimately benefit both parties. Originality/value – This research adds to the critically under-researched B2B pricing processes and pricing impact areas, while helping to influence managerial actions, an area in which academic B2B research is considered to be lacking.

John W. Henke Jr, Ravi Parameswaran, R. Mohan Pisharodi, “Manufacturer price reduction pressure and supplier relations,” Journal of Business & Industrial Marketing, 23/5 (2008) 287–300, www.emeraldinsight.com/0885-8624.htm.


Supplier price concessions: A longitudinal empirical study

05-2008

Supplier price concessions: A longitudinal empirical study

The competitive nature of today’s business-to-business markets requires companies to continually look for ways to reduce costs; one of the easiest of which is to demand price reductions from suppliers. In this research, price reduction demands and the corresponding concessions given by 238 suppliers to the six major North American Automotive original equipment manufacturers during 2001–2007 are analyzed utilizing a simultaneous equation model. The three stage least squares estimates indicate that suppliers are willing to give higher price concessions when buyers align specific interfacing characteristics and processes with their suppliers so that the suppliers perceive greater opportunities for future business and profit. These results provide, for the first time, an understanding of the dynamic nature of the impact of buyer–supplier relational components on supplier price concessions….

John W. Henke Jr., Sengun Yeniyurt, Chun Zhang, “Supplier price concessions: A longitudinal empirical study,” Market Lett (2009) 20:61–74.