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

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5.3 Overall Conclusions This dissertation focuses on strategic supplier responsiveness, also known as B2B market orientation, idiosyncratic relational risk, cross-cultural comparisons, and subjective and objective performance measurement. The extant literature on business-to-business market orientation includes limited research focusing primarily on interesting questions such as whether market orientation cultures can be diffused across organizational boundaries (Siguaw et al., 1998). However, the B2B market orientation as a research domain has many more interesting questions that need to be answered. In line with market orientation from the intra-firm perspective, the mediators between the market orientation or responsiveness strategy and the buyer performance implications are one such avenue. Particularly, among the wide array of questions one could chose from, risk was a component that was enticing because of the macroeconomic factors that have made risk a key topic of interest and because market orientation is thought to exacerbate intraorganizational risk. Then, would it logically also apply in the inter-organizational context? Therefore, our primary research question investigated in Chapter 2 was: “Does it Make Relational and Financial Sense to be a Responsive Strategic Supplier?” Our primary research question examined whether the much-touted philosophy of market orientation mattered in B2B contexts. Our study led us to conclude that it does matter. Unlike the intra-firm contexts where market orientation is positively related to top management risk-taking, in strategic B2B contexts, we found that it is negatively related to IdRR. To buyers, any supplier maneuver matters that reduces their risk; as one manager remarked, “No buyer penalizes a supplier for making him safe unless he is completely irrational” (Tanoli, personal communication, 2012). Our results provide evidence that a strategic supplier market orientation reduced a specific type of relational risk, IdRR. The importance of the identification of this linkage is that, in the marketing literature, a lot of emphasis is placed on reducing overall relational risk but not IdRR, the risk component that matters the most because of its positive influence on intangible market-based supplier assets and buyer firm performance. Overall, the current chapter has, to an extent, provided evidence to indicate that supplier responsiveness has strong performance implications for the buyer and, in addition, implications for the supplier’s market-based assets. In Chapter 3, we deal with the question of whether supplier responsiveness mattered across national cultural barriers. We found that, even with relatively similar cultures, there are relatively significant changes. For example, in the United States, soft indicators such as customer satisfaction do not seem to matter much, whereas they do in the Netherlands. However, the core finding that remains consistent is that IdRR matters across borders. The conclusions of the second paper are far-reaching. Primarily, it is avoiding the familiarity trap. Even though markets may seem the same, peculiar cultural idiosyncrasies do exist. For a marketing manager sitting in Washington or Amsterdam, this could mean the difference between keeping a client account or losing it. On the other hand, this finding may seem simplistic to some scholars, but it matters because many mistakes that do have far reaching results are simplistic. Overall, Chapter 3 has 116
specifically highlighted the importance of national cultural barriers while employing a market orientation strategy. In Chapter 4, we investigate both subjective and objective indicators for evaluating the buyer’s performance as a result of the strategic supplier’s responsiveness. As most managers use perceptual judgments or evaluations when they face complex tasks (Cassidy, 2009), it is significant to understand whether such judgments reinforce each other. We find that they do not reinforce each other. This is important because there is a disconnect between what managers perceive to be important and what existing metrics measure. Firms need to streamline their performance measurement and ensure that existing metrics reinforce what managers with experience believe is important for the firm. On the other hand, firms can institute training programs to ensure that managers evaluate along those performance dimensions that matter to the firm. This could ensure that subjective and objective performance measurements reinforce each other. This is important because managers have to make day-to-day decisions, and if they make decisions against criteria that are not shared by the firm, then it will not show up during objective performance measurement. 5.4 Theoretical Implications Regarding market orientation theory, the emphasis is on the intra-organizational perspective and an IdRR reduction mechanism. These are new insights in the B2B literature. The market orientation literature has so far had two major limitations, in our opinion. The first is that the market orientation literature has focused solely on the intraorganizational perspective. The customer’s input is absent in the extant literature model testing (Kohli & Jaworski, 1990; Kohli et al., 1993; Narver & Slater, 1990; Slater & Narver, 1994). Second, the relationship between market orientation and relational risk has been overlooked by many studies (Langerak, 2001; Langerak et al., 2004; Langerak et al., 2007). Starting with the latter limitation, we have highlighted the concept of IdRR. Rather than focus on management predispositions and predictive perceptions, we cut to the chase and asked buying center managers to reflect upon their experiences with their strategic suppliers. Our results and contribution to this literature stream is that we have brought forth a hitherto latent relationship between market orientation and idiosyncratic relational risk. We have brought a counter-intuitive relationship to light. It is just a start, but we have identified a negative relationship that has been assumed to be positive so far. As a result, risk-taking companies were only thought to be more likely to be marketoriented. This has had far-reaching consequences, one of which has been to delay launching new products in times of enhanced risk, such as during recessions. However, truly market-oriented companies that understand the latent needs component of the market have been launched during recessions. Apple is at the top of the list of these companies. As one analyst remarked, “Apple is an industry, not a company” (Farzad, 2011, para10). Given the recent aversion to risk-taking because of the Wall Street scandals, philosophies such as market orientation have been described in some business circles as a bad philosophy. Our current contribution is a step in removing this stain from market orientation, and we believe that we have provided some supporting evidence. 117
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ISBN 978-90-8980-055-8 © M. Abrahi
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Examination Committee Supervisor: P
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2.3 DEVELOPMENT OF THE CONCEPTUAL M
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5.1 RESEARCH FINDINGS 114 5.2 OVERA
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List of Tables Table 2.1 Representa
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PREFACE Oscar Wilde once said, “I
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Chapter 1 Introduction to the Thesi
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Figure 1.1 Mckinsey Survey Results
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1.4 Scope PhD thesis This thesis fo
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Netherlands. We used the maximum li
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2.1 Introduction A central tenant o
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only provide an assessment of the s
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Table 2.1 highlights several promin
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other hand, they later argue that m
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Therefore, there is a convergence i
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usiness performance, firms need to
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means is that the more better a str
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Supplier responsiveness or market o
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Naryandas, 1995). Further, idiosync
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They might also include the ease wi
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they ask about intimate supplier in
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Table 2.2 Modified Items of the MAR
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Table 2.2 Modified Items of the MAR
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market intelligence, offering flexi
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We considered several scales before
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Table 2.7 Component Matrix Buyer Sa
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een monitored to make sure they gav
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satisfaction and strategic supplier
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2.5 Measurement Model For creating
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In the third step, we used maximum
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incremental fit index (IFI) is one
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