The effect of multiple sourcing and bilateral dependency on buyer control in industrial buyer-seller relationships
by Arnt Buvik; Otto Andersen
International Journal of Procurement Management (IJPM), Vol. 8, No. 4, 2015

Abstract: Single and multiple sourcing represent different strategies for organising buyer-seller relationships. This paper explores the effect of sourcing strategy and employment of specific assets on buyer influence (buyer control) in supplier-manufacturer relationships. The research design is based on primary data from 159 industrial buyer-seller relationships and maps a broad set of economic and organisational dimensions in business-to-business relationships. The empirical analysis supports the proposed research hypotheses, and demonstrates that when the supplier firm is a sole supplier of a specific product, there is a strong and positive association between asset specificity and buyer control due to the prospect of opportunism and subsequent need for safeguarding. This effect is significantly diminished when the manufacturing firms use multiple sourcing, and indicates that a multiple sourcing strategy attenuates the problem of information asymmetry and the perceived performance ambiguity, and hence acts as a supportive safeguarding mechanism that mitigates possible opportunism and the subsequent need for formalised monitoring and buyer control.

Online publication date: Thu, 23-Jul-2015

The full text of this article is only available to individual subscribers or to users at subscribing institutions.

 
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.

Pay per view:
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.

Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Procurement Management (IJPM):
Login with your Inderscience username and password:

Username:        Password:          Forgotten your password?

Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.

If you still need assistance, please email subs@inderscience.com