Balancing power and dependency in buyer-supplier relationships
Attainment of supply chain integration is a major challenge for organisations, given the power and dependency that exists between suppliers and customers. This research explored the extent to which New Zealand organisations are integrated with their suppliers, via development of a purchasing portfolio model and consideration of 141 supplier-buyer relationships in six dissimilar organisations. The stepwise procedure enables the managers to analyse their supplier portfolio and to identify their most appropriate supplier relationship strategy based on considerations of power and dependency. The research indicates that: 1. New Zealand organisations are weakly integrated with their suppliers; 2. They frequently do not comprehend, and thus mismanage, their supplier relationships; 3. Power and dependency ultimately limit the level of achievable integration. This study is of interest to researchers because it contributes to theory by uniquely measuring power and dependency in buyer supplier relationships, and it provides a practical tool for practising managers.