Performance measurement in strategic buyer-supplier relationships: The mediating role of socialization mechanisms

Purpose - Close links between buyers and suppliers are increasingly cited as a critical differentiator of high and low performers in global supply chains. While the application of performance measures to manage supplier relationships has been well-identified and encouraged in the literature, comparatively little research exists on the inter-organizational socialization mechanisms that underlie the flow of learning and information within supply chains. The authors aim to develop a model positing that socialization mechanisms play an important role in mediating the relationship between supplier performance measures and performance outcomes. Design/methodology/approach - A structural equation model, using a sample of 142 manufacturing and service firms based in the UK, tests this hypothesised model. Findings - The theoretical framework was supported, with results indicating that socialization mechanisms fully mediate the effects of supplier performance measures (communication and operational-based) on firm performance. Practical implications - This study provides additional insights for purchasing managers seeking to improve the management of their strategic supplier relationships. The authors find that monitoring supplier performance is not of itself sufficient, rather, it is the process of socializing the buyer and supplier that is critical to success. Originality/value - As far as the authors are aware, no previous supply chain research has examined how supplier performance measurement systems, socialization mechanisms, and firm performance are related. The paper makes a significant contribution to this literature embedding an established theoretical construct (socialization) into the supply chain literature.