Skip to main content

Advertisement

We’d like to understand how you use our websites in order to improve them. Register your interest.

A research on the relationship between suppliers’ transaction-specific investments and perceived relational risks: The moderating roles of control mechanisms and relationship phases

Abstract

This study examines the dynamic nature of suppliers’ perceived relational risks arising from transaction-specific investments (TSIs) in their relationship with manufacturers, and the moderating effects of contracts and relational norms, during the developmental process of manufacturer-supplier relationship. An empirical study was conducted with data collected from 261 suppliers and manufacturers in the Chinese consumer electronic appliances sector. We found that suppliers’ TSIs have a positive effect on their perceived relational risks, and in different phases of a relationship effect varies significantly. Results of the research also show that both contracts and relational norms have negative moderating effects on the relationship between suppliers’ TSIs and their perceived relational risks, and moderating effects during are different across various phases of a relationship.

References

  1. Alan C (2002). The determinants of retailers’ margin related bargaining power: Evidence from the Irish food manufacturing industry. The International Review of Retail, Distribution and Consumer Research, 12(2): 165–189

    Article  Google Scholar 

  2. Alderson W (1965). Cooperation and conflict in marketing channels. In: Dynamic Marketing Behavior. Homewood, IL: Richard D. Irwin, Inc.

    Google Scholar 

  3. Anderson E, Weitz B (1992). The use of pledges to build and sustain commitment in distribution channels. Journal of Marketing Research, 19(1): 18–34

    Article  Google Scholar 

  4. Anderson J C (1995). Relationships in business markets: Exchange episodes, value creation, and their empirical assessment. Journal of the Academy of Marketing Science, 23(4): 346–350

    Article  Google Scholar 

  5. Banerjee P (2003). Resource dependence and core competence: Insights from Indian software firms. Technovation, 23(3): 251–262

    Article  Google Scholar 

  6. Bernard J J (1988). Toward a theory of marketing control: Environmental context, control types, and consequences. Journal of Marketing, 52(3): 23–39

    Article  Google Scholar 

  7. Bozarth C, Handfield R, Das A (1998). Stages of global sourcing strategy evolution: An exploratory study. Journal of Operations Management, 1998, 16(2–3): 241–255

    Article  Google Scholar 

  8. Bergen M, Shantaneau D, Orville W (1992). Agency relationships in marketing: A review of the implications and applications in agency related theories. Journal of Marketing, 56(7): 1–24

    Article  Google Scholar 

  9. Chiles T H, McMackin J F (1996). Integrating variable risk preferences, trust, and transaction cost economics. The Academy of Management Review, 21(1): 73–99

    Article  Google Scholar 

  10. Das T K, Teng, B S (1996). Risk types and the inter-firm alliance structures. Journal of Management Studies, 33(6): 827–843

    Article  Google Scholar 

  11. Das T K, Teng B S (1998). Between trust and control: Developing confidence in partner cooperation in alliances. Academy of Management Review, 23(3): 491–513

    Article  Google Scholar 

  12. Das T K, Teng B S (2001). A risk perception model of alliance structuring. Journal of International Management, 7: 1–29

    Article  Google Scholar 

  13. Dwyer R F, Paul H S, Sejo O (1987). Developing buyer-seller relationships. Journal of Marketing, 51(4): 11–27

    Article  Google Scholar 

  14. Dwyer R F, Sejo O (1988). A transaction-cost perspective on vertical contractual structure and interchannel competitive strategies. Journal of Marketing, 52(4): 21–34

    Article  Google Scholar 

  15. El-Ansary, Louis W S (1972). Power Measurement in the Distribution Channel. Journal of Marketing Research, 9(1): 47–52

    Article  Google Scholar 

  16. Etgar M (1979). Sources and types of intrachannel conflict. Journal of Retailing, 55(1): 61–78

    Google Scholar 

  17. Frazier G L (1983). Interorganizational Exchange Behavior in Marketing Channels: A Broadened Perspective. Journal of Marketing, 47(1): 68–78

    Article  Google Scholar 

  18. Ford D (1980). The development of buyer-seller relationships in industrial markets. European Journal of Marketing, 14(5/6): 339–354

    Article  Google Scholar 

  19. Forker L B (1997). Factors affecting supplier quality performance. Journal of Operations Management, 15(4): 243–269

    Article  Google Scholar 

  20. Ganesan S (1994). Determinants of long-term orientation in buyer-seller relationships. Journal of Marketing, 58(2): 1–19

    Article  Google Scholar 

  21. Gulati R (1995). Does familiarity breed trust? The implication of repeated ties for contractual choice in alliances. Academy of Management Journal, 38(1): 85–112

    Article  Google Scholar 

  22. Gundlach G T, Ravi S A, John T M (1995). The structure of commitment in exchange. Journal of Marketing, 59(1): 78–92

    Article  Google Scholar 

  23. Heide J B (1994). Inter organizational governance in marketing channels. Journal of Marketing, 58: 71–85

    Article  Google Scholar 

  24. Heide J B, George J (1992). Do norms matter in marketing relationships? Journal of Marketing, 56(4): 32–44

    Article  Google Scholar 

  25. Helper S, Levine D I (1992). Long-term supplier relations and product-market structure. Journal of Law, Economics & Organization, 8(3): 561–582

    Google Scholar 

  26. Hollander S C (1964). Who does the work of retailing? Journal of Marketing, 28(7): 18–22

    Article  Google Scholar 

  27. Jap S D, Erin A (2003). Safeguarding interorganization performance and continuity under ex post opportunism. Management Science, 49(18): 1684–1701

    Article  Google Scholar 

  28. Jap S D, Ganesan S (2000). Control mechanisms and the relationship life cycle: Implications for safeguarding specific investments and developing commitment. Journal of Marketing Research, 37(2): 227–245

    Article  Google Scholar 

  29. Keith G P, Steven J S (1989). Interorganizational dependence and control as predictors of opportunism in dealer-supplier relations. Academy of Management Journal, 32(1): 202–212

    Article  Google Scholar 

  30. Kumar N, Louis W S, Ravi S A (1992). Assessing reseller performance from the perspective of the supplier. Journal of Marketing Research, 29(5): 238–253

    Article  Google Scholar 

  31. Lambe C J, Spekman R E, Hunt S D (2002). Alliance competence, resources, and alliance success: Conceptualization, measurement, and initial test. Journal of the Academy of Marketing Science, 30(2): 141–158

    Article  Google Scholar 

  32. Lewis Michael A (2003). Cause, consequence and control: Towards a theoretical and practical model of operational risk. Journal of Operations Management, 21(2): 205–224

    Article  Google Scholar 

  33. Lohtia R, Krapfel R E (1994). The impact of transaction-specific investments on buyer-seller relationships. The Journal of Business & Industrial Marketing, 9(1): 6–16

    Article  Google Scholar 

  34. Miller K D. A framework for integrated risk management in international business. Journal of International Business Studies, 1992, 23(2): 311–331

    Article  Google Scholar 

  35. Nielson C C (1996). An empirical examination of switching cost investments in business-to-business marketing relationships. The Journal of Business & Industrial Marketing, 11(6): 38–60

    Article  Google Scholar 

  36. Noordewier T G, George J, John R N (1990). Performance outcomes of purchasing arrangements in industrial buyer-vendor relationships. Journal of Marketing, 54(10): 80–93

    Article  Google Scholar 

  37. Parkhe A (1993). Strategic alliance structuring: A game theory and transaction cost examination of inter-firm cooperation. Academy of Management Journal, 36(4): 794–829

    Article  Google Scholar 

  38. Palmer A (1995). Measuring and managing buyer-seller relationship life cycles. Management Research News, 18(12): 25–31

    Google Scholar 

  39. Palmer A, Bejou D (1994). Buyer-seller relationships: A conceptual model and empirical investigation. Journal of Marketing Management, 10(6): 495–512

    Article  Google Scholar 

  40. Ring P S, Van D V, Andrew H (1992). Structuring Cooperative Relationship between Organizations. Strategic Management Journal, 13(7): 483–498

    Article  Google Scholar 

  41. Ring P S, Van D V, Andrew H (1994). Developmental processes of cooperative inter organizational relationships. Academy of Management Review, 12(3): 546–557

    Google Scholar 

  42. Rokkan A I, Heide J B, Wathne K H (2003). Specific investments in marketing relationships: Expropriation and bonding effects. Journal of Marketing Research, 40(2): 210–224

    Article  Google Scholar 

  43. Spekman R E, Strauss D (1986). An exploratory investigation of a buyers concern for factors affecting co-operative buyer-seller relationships. Industrial Marketing & Purchasing, 1(3): 26–43

    Google Scholar 

  44. Stern L W, Gorman R H (1969). Conflict in distribution channels: An exploration. In: L.W. Stern, ed. Distribution Channels: Behavioral Dimensions. Boston: Houghton Mifflin Company

    Google Scholar 

  45. Stern L W, Heskett J L (1969). Conflict management in interorganization relations: a conceptual framework. In: L.W. Stern, ed. Distribution Channels: Behavioral Dimensions. Boston: Houghton Mifflin Company

    Google Scholar 

  46. Thomas K (1967). Conflict and Conflict Management. Handbook of Industrial and Organizational Psychology

  47. Thomas R, Wilkinson I F, Wesley J J (2002). Measuring network competence: Some international evidence. The Journal of Business & Industrial Marketing, 17(2/3): 119–138

    Article  Google Scholar 

  48. Thompson J D (1967). Organizations in Action. New York: McGraw-Hill

    Google Scholar 

  49. Wackman D B, Salmoan C T, Salmon C C (1987). Developing an advertising agency-client relationship. Journal of Advertising Research, 26(6): 21–28

    Google Scholar 

  50. Weitz Barton A, Jap S D (1995). Relationship marketing and distribution channels. Journal of the Academy of Marketing Science, 23(4): 305–320

    Article  Google Scholar 

  51. Williamson O E (1975). Markets and Hierarchies: Analysis and Antitrust Implications. New York: Free Press

    Google Scholar 

  52. Williamson O E (1979). Transaction cost economics: The governance of contractual relations. Journal of Law and Economics, 22(2): 233–262

    Article  Google Scholar 

  53. Williamson O E (1983). Credible commitments: Using hostages to support exchange. American Economic Review, 73(4): 519–540

    Google Scholar 

  54. Williamson O E (1985). The Economic Institutions of Capitalism. New York: Free Press

    Google Scholar 

  55. Williamson O E (1991). Comparative economic organization: The analysis of discrete structural alternatives. Administrative Science Quarterly, 36(7): 269–296

    Article  Google Scholar 

  56. Wilson D T (1995). An integrated model of buyer-seller relationships. Journal of the Academy of Marketing Science, 23(4): 335–345

    Article  Google Scholar 

  57. Zajac E, Cyrus O (1993). From transaction cost to transaction value analysis: Implications for the study of interorganizational relations. Journal of Management Studies, 30(1): 131–145

    Article  Google Scholar 

Download references

Author information

Affiliations

Authors

Corresponding author

Correspondence to Yi Liu.

Additional information

Translated from Zhongguo Guanli Kexue 中国管理科学 (Chinese Management Science), 2006, 14(1): 30–36

Rights and permissions

Reprints and Permissions

About this article

Cite this article

Liu, Y., Qian, L. & Yin, J. A research on the relationship between suppliers’ transaction-specific investments and perceived relational risks: The moderating roles of control mechanisms and relationship phases. Front. Bus. Res. China 1, 167–192 (2007). https://doi.org/10.1007/s11782-007-0011-2

Download citation

Keywords

  • suppliers’ transaction-specific investments
  • relational risks
  • phases of a relationship
  • control mechanisms