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RESEARCH PRODUCT

The effect of buyer specific-monitoring procedures on buyer control in dynamic supply chain links

subject

description

Based on transaction cost analysis (TCA), resource dependency theory (RDT), and supply chain management literature, this study explores the effect of buyer-specific monitoring procedures on buyer control in industrial buyer-seller transactions, particularly in relation to how environmental uncertainty affects the buying firm's ability to exercise control over the supplier firm. The research design is based on primary data from a survey of 168 industrial buyer-seller relationships which map a broad set of dimensions of the economic transactions and structures in these business-to-business relationships. The empirical findings provide support for the hypotheses, and demonstrate that the effect of the buyer-specific monitoring procedures is positively associated with buyer control arrangements under conditions with rather modest external disturbances. This governance pattern is completely changed when business relationships face substantial environmental uncertainty. Under such conditions, the effect of buyer specific monitoring procedures on buyer control is significantly attenuated.