The Impact of Retailer-Supplier Cooperation and Decision-Making Uncertainty on Supply Chain Performance
Buyer-supplier relationships have been increasingly considered a critical part ofcontemporary supply chain management. In response to dynamic and unpredictable marketchanges, buyers and suppliers enter into cooperative relationships to pursue individualgoals and joint goals for better economic and non-economic performance of the supplychain. On the other hand, cooperation between channel members is surrounded byuncertainty, which can create a detrimental impact on the performance of a supply chain.Previous research has focused on various aspects of uncertainty that could affect supplychain member behaviour. The present research contends that relationship behaviouralfactors play an important role in increasing or mitigating channel members’ perceiveduncertainty in their supply or purchase decision-making. Specifically, the purpose of thisresearch is to investigate the impact of retailer-supplier cooperation and retailer/supplier’sdecision-making uncertainty (DMU) on retail supply chain performance from theperspectives of both the retailer and the supplier. A holistic model was developed as thetheoretical framework for this conceptualisation. A sample of 202 retailers and 64 suppliersin the sporting goods retail business in Taiwan was used to separately test a number ofhypothesised relationships by using structural equation modelling (SEM).The findings indicate that both cooperation and DMU are the key determinants of retailsupply chain performance, including financial performance and non-financial performance(i.e., supply flexibility and customer service). Financial performance is positively affectedby retailer-supplier cooperation and negatively affected by DMU in both the retailer modeland the supplier model. The five dimensions of retailer-supplier cooperation (i.e. trust,guanxi, dependence, coercive power and non-coercive power) have significant effects oncooperation. However, apart from guanxi with the retailer/supplier, neither otherrelationship dimensions nor retailer-supplier cooperation have any influence on retailer’sDMU or supplier’s DMU. The results also indicate that differences and similarities existacross retailers and suppliers with respect to the effects of several relationship dimensionson cooperation and uncertainty.2The holistic empirical model developed for this research contributes further tounderstanding the links, which have been lacking in the extant channel relationshipliterature and supply chain management literature, between buyer-supplier relationships,DMU, and supply chain performance. The findings that a retailer/supplier’s DMU canerode the performance of a supply chain in various aspects highlight the need forimprovement in some areas of supply chain efficiency and effectiveness, throughcooperation-enhancing actions between the retailer and the supplier. From a managerialperspective, the performance improvement in the supply chain, in turn, will motivate morereciprocal commitment and efforts from the retailer and the supplier to maintain theirworking relationship. As such, mutual trust and enriched guanxi, dependence andnon-coercive power help both the retailer and the supplier to have less uncertainty in theirpurchase/supply decision-making process. It creates a win-win position for both parties inthe supply chain.
Year of publication: |
2006
|
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Authors: | Hsiao, Ju-Miao Melody |
Publisher: |
University of Sydney. / Faculty of Economics and Business |
Subject: | supply chain management | buyer-supplier relationship | cooperation |
Saved in:
freely available
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