Power, dependence, adaptations and trust in leverage and strategic supplier categories

Abstract

The purpose of this study is to find out the variance of the relationship specific features of power, dependence, adaptations and trust between leverage and strategic supplier categories and to explain what kind of factors affect the variance between them. In line with the objectives the theoretical framework leans strongly on interaction approach which is utilized to discuss and explain the development and interdependencies of relationship specific features. The second theoretical inspiration for this study is the portfolio model which is considered as the main tool for managing the supplier relationships.

The empirical part is a qualitative single case study which uses eight individual supplier relationships as the basis of analysis. The empirical data is based on face to face interviews with purchasing professionals from different organizational levels of Wärtsilä Corporation. Semi-structured questionnaires were used as basis for the interviews. According to the empirical findings there were substantial differences between the supplier relationships in leverage and strategic supplier categories. The power and dependence settings were different depending on the supplier category. Also the type of adaptations varied between the categories. The level of trust was based on goodwill and competence trust in both categories but the way how these occurred in each category were highly different. Concerning some dimensions of each of the relationship specific features the relationships in both categories were however surprisingly similar. The portfolio position of the supplier seems to be highly dependent on the type of expertise the supplier represents. Among the most important managerial implications gained from this study was that the application of portfolio models should be carefully done considering the context in which the product is purchased but also considering the context of the relationship. Additionally to these results also multiple ideas for future research were gained.