The effectiveness of power-dependence management in retailing

Purpose – The purpose of this paper is to investigate retailers’ power-dependence management through the lens of supply chain diversification, and explore how it is linked to their logistic arrangements in managing suppliers and their retail performance. Design/methodology/approach – Hypotheses are tested using a structural equation modelling based on survey data from 186 merchandising division heads at Japanese retail companies. Findings – The results reveal that quick-response inventory replenishment is positively related to retailers’ use of power-dependence management. This management practice leads to enhanced retail competitiveness and, thus, higher sales growth in supply chain relationships. Originality/value – This study contributes to understanding how retailers’ logistic arrangements work by modelling power relations within supply chains, drawing on power-dependence theory. The authors propose an alternative view of logistics systems to that of the widely adopted transaction cost theory. The authors find that supplier investments in quick-response inventory management may not be a relationship-specific asset.