A cross‐cultural study of interfirm power structure and commitment: the effect of collectivism

Purpose – This study seeks to introduce the concept of collectivism, and to assess its impact on interfirm commitment in both high and low collectivist countries. Design/methodology/approach – In evaluating the effects of bilateral power structures on commitment, the paper utilizes polynomial regression and the response surface approach. Findings – Collectivism influenced a manufacturer's commitment to the relationship with its supplier only in Korea, but collectivism did not influence a manufacturer's commitment to the relationship with its supplier in the USA. On the other hand, for the USA sample, significant main effects of manufacturer power and supplier power, as well as a significant interaction between manufacturer power and supplier power on interfirm commitment were detected. Research limitations/implications – The results demonstrate that the bilateral power magnitude between a manufacturer and its supplier was germane to the manufacturer's commitment. An increase in the supplier's power contributes to manufacturer's commitment, particularly under high bilateral power conditions. Under low bilateral power conditions, manufacturers were shown to become less committed to a relationship. Practical implications – It is important for global companies to understand the prevailing national culture. US companies operating in Eastern countries, such as Korea, should consider these cultural differences and manage their interfirm relationships on the basis of their long‐term perspectives. Originality/value – This study facilitates a greater understanding of the influence of national culture on inter‐organizational commitment. Specifically, it evaluates the relative influences of collectivism and interfirm power structures on interfirm commitment in both high and low collectivistic cultures.