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An Empirical Study of the Effects of a Customer's Power on a Supplier's Customer Integration and Operational Performance Improvement
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 Title & Authors
An Empirical Study of the Effects of a Customer's Power on a Supplier's Customer Integration and Operational Performance Improvement
Hur, Daesik; Kim, Hyojin; Ahn, Kyungseon;
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Customer firms exercise various sources of power to influence their suppliers' behaviors or decisions. In this study we aim to examine the effects of customers' sources of power on their supplier's performance improvement. This study posits that a customer's expert, referent, and reward power positively influence a supplier's performance directly as well as indirectly through increased supplier-customer integration. On the contrary, the customer's coercive power is expected to worsen the supplier's operational performance because of increasing distrust, dissatisfaction, and conflict with the customer. Data collected from 1,229 firms from Korea, China, Hong Kong, Taiwan, and the U.S. are used to test the hypotheses. Expert power proves to be the most effective source of customer power in improving a supplier's inventory cost, delivery, and flexibility performance. In contrast, coercive power deteriorates significantly all supplier performance variables. Academic and managerial implications are presented and future research directions are also discussed.
Supply Management;Customer's Sources of Power;Supply Chain Integration;Supplier's Operational Performance;
 Cited by
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