Essays on supplier responsiveness and buyer firm value - Nyenrode ...

Using the findings of our current studies, firms could be motivated to implements
programs that bring managers' perceptions more in line with accounting performance
data. One positive outcome of such a maneuver is that it could improve the buyersupplier
relationships since it would make their expectations of each other more realistic.
4.7.4 Managerial Implications
The findings of this study that the model in Chapter 2 is not validated when objective
data are used for buyer-firm value causes us some concern. We decided to collect some
managerial opinions about subjective and objective assessments. We conducted informal
discussions with four current or former managers in B2B and B2C firms. The
respondents were from mid-management with experience in channel and relationship
management. On average, the managers had more than one decade of experience in a
managerial capacity. We now synthesize the responses to the two key questions asked
during the interviews: (1) From your experience, do managers' subjective assessments
(e.g., estimating risk or profit by a guess or experience) differ substantially from actual
accounting or performance data? If so, why? (2) Does the impact of a managerial model
diminish if it only supports perceptual data and not objective data?
Our interviews revealed that managers do find variations in subjective and accounting
data. A main reason for this was the lack of substitutability of both measures. Another
important issue was that many targets do not have objective measures. Furthermore, most
assessments are time-bound. It normally is quicker to conduct a subjective assessment
compared to an objective assessment. Managers believed that objective indicators are
most effective when used in tandem with subjective indicators. Likewise, they argued
that many objective indicators were too broad and not firm-specific, so they considered
them difficult to comprehend and not suitable at times. But perceptions of the usefulness
of subjective and objective indicators also varied by functional department. The
proponents of both subjective and objective indicators were managers from marketing,
whereas, the primary opponents were from accounting. The consensus of the managers
was that objective and subjective measures were not used solely based on their reliability,
but rather depending upon the top managements' inclination toward certain categories of
metrics. This was especially the case with marketing within the creative industries.
Another issue was that perceptual metrics allowed firms to measure their own
idiosyncratic processes that gave them a competitive edge in the marketplace. As long as
a model focused on firm-level idiosyncrasies, a perceptual model would be fine.
However, if they were to measure more widespread and general performance aspects,
then a model that works with objective indicators might be required.
In summation, the implications of the answers of our two questions for the model
in Chapter 2 are: i) subjective assessment and objective assessment do matter; ii) one
metric is only better than the other depending upon the situation in which the metric is
used; iii) subjective metrics are more versatile than objective metrics; iv) firms often do
not expect subjective and objective metrics to reinforce each other; and v) models that
measure idiosyncratic process can use perceptual metrics because objective metrics
normally are not specific enough. Therefore, despite its lack of verification by objective
indicators, the perceptual performance-based model by Chapter 2 would matter to
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