The dark sides of becoming key supplier

What is it about?

Supplier attempts to ascend the supplier pyramid of buying firms are ubiquitous. Yet, it is unclear whether these attempts might entail undesirable consequences. To address this gap, this research theoretically and empirically examines the effect of preferred supplier status on excessive buyer requests.

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Photo by takaharu SAWA on Unsplash

Photo by takaharu SAWA on Unsplash

Why is it important?

The results show that preferred supplier status indeed entails so far unaccounted relationship costs as it enhances excessive buyer requests. Alarmingly, this effect is subject to increasing rates as preferred supplier status grows. The results show as well, however, that suppliers can reverse this relationship if they are willing to adhere to relational norms in terms of voluntarily participating in the buyer's supplier development program. This means that initial status gains enhance excessive requests, but at a certain point suppliers can reduce excessive requests through increasing their status when they adhere to relational norms. These results offer new directions both for researchers and practitioners.