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Exploring Transactions between Supply Chain Entities: A Psychological study of buyer-supplier relationships

Research Context. Project:

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Exploring Transactions between Supply Chain Entities: A Psychological study of buyer-supplier relationships

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    1. Exploring Transactions between Supply Chain Entities: A Psychological study of buyer-supplier relationships (A PhD presentation) Samir S. Dani Wolfson School of Mechanical and Manufacturing Loughborough University

    2. Research Context Project: “Developing a Systemic Framework for Supply Chain Alignment. Liverpool- Physical / operational issues of alignment Loughborough- Relationship/ behavioural issues of alignment.

    3. Some quotes which influenced the research "It's another example of the multiple CEO’s showing great sympathy for the farmers' plight, yet purchasing executives further down the supermarket teams seem to be making their own rules." (Anonymous, 2003) “It really doesn't matter if an OE needs cost cuts immediately. he asserts. Because the arbitrary approach is a gaming approach and suppliers will learn to play faster than the OE. There are more suppliers to gang up on automakers and the program will become adversarial. Then everybody loses.” (Kobe, 2001) “The power of the multiples, and especially of young (c.25/28) buyers, without experience, is frightening. [They have] the power to dictate prices and margins, display or not, allocate space and threaten covertly. It’s why we would never allow more than 15 per cent of turnover to be supplied to multiples.”

    4. Review of the concepts

    5. Research Objectives Objective 1: To explore the nature of buyer- supplier transactions and the dynamics associated with these transactions particularly from the perspective of behaviours, and attitudes depicted by the transacting entities. Objective 2: To explore the experience of buyer- supplier relationships from the perspectives of buyer and supplier representatives involved.

    6. Phase I of the research Research Method---- Qualitative- Phenomenological inquiry. Sampling- Purposeful- critical Incidents technique. Phenomenological Interviews done with purchasing and sales personnel from industry. Literature cases.

    7. Results of Phase I Deriving Themes from the data; Verification of previously studied concepts: Power, Exit/ Voice, Unethical behaviour, Trust, Situational strength, Opportunistic behaviour. New Themes to study further: a) game-like behaviour, b) discretion, humans have in the relationship.

    8. Additional concepts studied Transactional analysis Situational strength

    9. Research Questions- Phase II Are transactions between individuals strongly influenced by the situational context and the power relations in the organizations? Where the manipulation of power in the organization is realized as games, is TA a valid representation of these games? If the games arise from the individual or the organization, is this contingent upon the strength of the situation?

    13. Research objectives- revisited Phase I Objective 1: To explore the nature of buyer- supplier transactions and the dynamics associated with these transactions particularly from the perspective of behaviours, and attitudes depicted by the transacting entities. Objective 2: To explore the experience of buyer- supplier relationships from the perspectives of buyer and supplier representatives involved. Phase II Are transactions between individuals strongly influenced by the situational context and the power relations in the organizations? Where the manipulation of power in the organization is realized as games, is TA a valid representation of these games? If the games arise from the individual or the organization, is this contingent upon the strength of the situation?

    14. Limitations of the Research Due to sensitive nature of the information, data collection has not been vast and comprehensive. Validation of the framework has been possible only through retrospective validation of a few case studies from data collected in the Phase I of the research.

    15. Research Contribution and New Knowledge generated The research has been successful at providing a new insight into the study of buyer-supplier relationships by considering the perspective of humans involved in the relationship. The relationship framework and the Transaction Analysis Framework provide a useful method to gauge how the relationship is progressing and analyse the transactions causing changes in the relationship. The novelty of the research is in transferring knowledge and concepts from the field of psychology- viz. Transactional Analysis and situational strength in studying buyer- supplier transactions.

    16. Future Work Creating a wider library of game-like behaviours and matching them with the respective quadrant movements. To convert the Frameworks into a tangible tool that can be used by representatives in the supply chain to study their relationships and transactions. To validate the frameworks using a live case-study. Using the structural modelling capabilities of Transactional Analysis for depicting buyer-supplier transactions, as an input for information modelling and knowledge management of supply chains.

    17. Thank You

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