The moderating influence of supplier culture on the relationship between buyer power and supplier shirking

Globalization has added a layer of complexity to the challenge of mitigating opportunism in buyer-supplier relationships. When engaging with suppliers in different countries, buyers must manage relationships across various cultures. Prior empirical research has shown that inter-firm power affects opportunism in exchange relationships, and conceptual studies suggest that national culture is a location characteristic that could influence inter-firm power. However, no research has empirically examined the efficacy of inter-firm power in controlling opportunism, or other exchange outcomes, across different cultural contexts. To study this relevant issue, we investigate how a supplier's national culture influences the effectiveness of two bases of inter-firm power, coercive and expert power, on a form of opportunism that has been anecdotally observed in practice-supplier shirking. We utilize primary dyadic data on 109 outsourcing relationships and secondary data of supply chain location characteristics to examine this phenomenon. We find that the effects of inter-firm power on shirking vary across suppliers in different cultures and that, in certain cultures, coercive power may reduce the effectiveness of expert power. Our results show that manufacturers must explicitly consider suppliers' national culture when managing a globally dispersed supply base or risk encountering supplier shirking.

Automated summary

Globalization has made it more challenging to mitigate opportunism in buyer-supplier relationships, especially when managing relationships across different cultures. This study investigates the influence of a supplier's national culture on the effectiveness of inter-firm power in controlling opportunism. The findings reveal differences in the effects of inter-firm power on opportunism across suppliers in different cultures and suggest that coercive power may weaken the effectiveness of expert power in certain cultural contexts.