Management and Marketing - Theses
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ItemThe effects of mutual dependence and inter-firm dynamic capabilities in buyer-supplier relationship on supply performance: an empirical study from the Arabian Gulf countries( 2012)In a supply chain management context, the link between exchange partners is critical. Procurement is charged with the responsibility of ensuring that resource exchange is accomplished in an efficient and effective way. Yet, contemporary strategies such as outsourcing, just in time and supply base consolidation have increased interdependence between exchange partners. This creates a need for inter-firm dynamic capabilities facilitating mutual benefit. Based on this premise, this study provides a conceptual integration and focused synthesis of the literature on interdependence (i.e. mutual dependence and power asymmetry), and dynamic capabilities (i.e. boundary spanning and inter-firm absorptive capacity) in the context of supply performance. A primary objective of this thesis is to investigate the concept of interdependence in buyer-supplier relationships through an integrated lens of Resource Dependence Theory and the Dynamic Capability View, hence addressing the following research questions from a buying firm perspective: To what extent do mutual dependence in buyer-supplier relationships and inter-firm dynamic capabilities affect supply performance? How does power asymmetry moderate these relationships? A mixed methods research approach was utilized. Data was collected from organizations in the Arab Gulf Countries, including: Oman, UAE, Kuwait, Qatar, Saudi Arabia and Bahrain. In the first phase, 400 survey responses were gathered to test the hypothesized relationships using structural equation modelling. This was followed by a case study with an airline company to better understand the dynamics of interdependency and dynamic capability between exchange-partners. The study contributes to the body of knowledge by providing empirical evidence to support the conceptual statements in the literature regarding the impact of interdependency and dynamic capabilities on supply performance. The current thesis is valuable as it contends that mutual dependence would typically foster supply performance. Yet, mutual dependence is not always synonymous with good relationships, especially under conditions of high power asymmetry. Further, this study identifies from a buying firms perspective strategies that would typically foster supply performance under asymmetric power distribution. For example, under high power asymmetry the mediating effects of demand-side boundary spanning do not hold, whereas under low power asymmetry the mediating effects of supply side boundary spanning do not hold. On the other hand power asymmetry is not shown in this study to moderate the effects of inter-firm absorptive capacity. The motivation for this thesis is found in the following areas of contribution. First, integrating resource dependence theory and the dynamic capability view enhances the theoretical explanations of the examined phenomena. Second, following recent debate in the literature, this study distinguishes between mutual dependence and power asymmetry, which are assumed to be two faces of interdependence. Third, this research extends the concept of absorptive capacity to an inter-firm perspective and adds “boundary spanning” as a means of value recognition. Fourth, studies related to supply chain are mostly conducted in western economies. This study was conducted in the Arabian Gulf Countries providing the opportunity to view these relationships in an Arab cultural context. By examining well established theoretical perspectives (e.g. resource dependence and dynamic capability) in diffident economic, political and cultural settings provides interesting theoretical and empirical implications. In regard to practical contribution, this study should be of interest to managers who are considering developing realistic survival strategies to improve supply performance in their upstream supply chains.