Supplier Initiating Risk Management Behaviour and Supply-Side Resilience : The Effects of Interpersonal Relationships and Dependence Asymmetry in Buyer-Supplier Relationships

Fan, Yiyi and Stevenson, Mark and Li, Fang (2020) Supplier Initiating Risk Management Behaviour and Supply-Side Resilience : The Effects of Interpersonal Relationships and Dependence Asymmetry in Buyer-Supplier Relationships. International Journal of Operations and Production Management, 40 (7/8). pp. 971-995. ISSN 0144-3577

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Abstract

Purpose The aim of the study is to explore how two dimensions of interpersonal relationships (i.e. size and range of relationships) affect supplier-initiating risk management behaviours (SIRMB) and supply-side resilience. Further, the study aims to explore the moderating role of dependence asymmetry. Design/methodology/approach Nine hypotheses are tested based on a moderated mediation analysis of survey data from 247 manufacturing firms in China. The data are validated using a subset of 57 attentive secondary respondents and archival data. Findings SIRMB positively relates to supply-side resilience. Further, SIRMB mediates the positive relationship between range and supply-side resilience, and this relationship is stronger at lower levels of dependence asymmetry. Yet, although dependence asymmetry positively moderates the relationship between range and SIRMB, it negatively moderates the relationship between size and SIRMB. We did not, however, find evidence that size has a conditional indirect effect on supply-side resilience through SIRMB. Practical implications Managers in buying firms can incentivise SIRMB to enhance supply-side resilience by developing a diverse rather than a large set of interpersonal relationships with a supplier. This might include allocating particular employees with a wide range of contacts within a supplier to that relationship, while it may be necessary to adopt different networking strategies for different supplier relationships. Firms in a highly asymmetrical relationship may seek to raise supplier expectations about the necessity to initiate risk management behaviour or look to change the dynamic of the relationship by managing contracts for fairness. Originality/value New knowledge on SIRMB as a mediating variable underpinning the relationship between interpersonal relationships and supply-side resilience is provided; and empirical evidence on the opposing moderation effect of dependence asymmetry is presented.