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

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intra-organizational impact of market orientation on firm performance. Few studies such as Kohli and Jaworski (1990) and Jaworski and Kohli (1993) examine the impact of risk aversion on market orientation. But what is not covered is the inter-organizational impact of supplier market orientation on relational risk and buyer firm performance. This is an important oversight as one of the motives for selecting a supplier’s brand is their ability to reduce the buyer’s risk in business to business contexts Kotler and Pfoertsch (2006). Neither have the previous studies explicitly modeled buyer satisfaction as a mediator in the inter-organizational supplier market orientation and buyer firm value setting. This is important as many previous studies and marketing texts mention buyer satisfaction as a desired outcome of market orientation. Moreover, to the best of our knowledge buyer satisfaction has not been empirically tested in most studies from an inter-organizational perspective. Nor have previous studies covered the mediating role of a supplier’s brand plays in the supplier market orientation and buyer firm value. This is an important oversight as a marketing philosophy or market orientation is pointless unless it creates some market based assets such as brand value to store the value created for the supplier. In addition, the supplier’s market orientation must result in benefits for the buyer such as improved cash flows in order for the relationship to continue. Therefore, at a global level our core research question for this dissertation is: “What is the impact of supplier market orientation through idiosyncratic relational risk, buyer satisfaction, and supplier brand value on buyer firm performance?” Chapter 1 presents an introduction to the research topics of supplier market orientation and also presents the motivation for this dissertation. Further, this chapter presents research questions, research methodology, an overview of the remaining chapters and the research’s limitations. Chapter 2 of this thesis examines the influence of supplier responsiveness on buyer firm performance based on a sample of 164 business–to-business (B2B) firms in the United States. In this study, it is emphasized that supplier responsiveness creates dyadic value by reducing idiosyncratic relational risk (IdRR). IdRR is risk that exists because of entering into a specific relationship with another company. IdRR reduction is the mechanism by which market-based assets are created for the supplier. On the other hand, soft indicators such as satisfaction have shown no link to dyadic value or buyer firm profits alone. This study challenges the long-held assumption that market orientation and risk are positively related and, at least in strategic B2B contexts, we find evidence to the contrary. Chapter 3 looks at differences between the application of the model presented in the Chapter 2 in different cultural contexts. The research sample included 92 firms from the Netherlands and the original 164 from the U.S. The core emphasis of this study was determining whether the mediators of the strategic supplier responsiveness and buyer firm performance were the same across national cultural boundaries. Using the Hofstede index as the driving logic behind the comparison of the two samples, our model showed significant differences. In the United States, soft indicators did not present a link to buyer firm performance, whereas they did in The Netherlands. The implication for management 122
is that, when developing marketing strategy, they have to adopt periscopic perspectives beyond their own cultural spheres. Chapter 4 is motivated by the need to examine whether different performance measures would reinforce each other in the model outlined in Chapter 2. Managers habitually trust their heuristic judgments. The extant literature on the accuracy of such judgments is mixed. Such judgments are often formed as a result of cumulative background information, both objective and subjective. We anticipated that, since strategic relationships involve a great degree of cooperation, a manager’s assessment would be aligned with objective performance measures. However, we found that subjective and objective performance measures did not provide similar results. Chapter 5 is our final chapter of this dissertation and commences by presenting a short synopsis of the three studies in the dissertation. In the following section there is a discussion of the general conclusions derived from this research. And next the theoretical implications of the studies are discussed, and the chapter ends with concluding remarks. Theoretical Contributions In chapter 2 we shed new light on the market orientation and risk relationship and build a comprehensive model that enunciates the relationship between supplier responsiveness, IdRR, and buyer firm value. Our findings challenge the status quo belief that market orientation is an inherently risky endeavor by providing evidence that supplier responsiveness negatively influences IdRR. Moreover, we contribute to the marketing domain by extending the scope of the current market orientation models, which to date have mostly focused on the intra-organizational perspective. Furthermore, the extant literature has not addressed the issue of incorporating the customer’s perspective and the customer’s firm value in market orientation and performance models and we contribute to the literature by incorporating these perspectives. Second, we introduce IdRR as a new construct in the literature and an important mediator of the supplier responsiveness and buyer firm value. Using IdRR, academics and businesses will be able to estimate whether market orientation increases or reduces the relational risk between a supplier and buyer. Furthermore, at a time when there is an increased need for accountability within firms, IdRR as a measure allows managers to communicate some of the value that the relationship has accrued due to market orientation. Hence, by using IdRR to explain the benefits of market orientation, it adds clarity to the returns on investment from market orientation. Third, we provide evidence that market orientation is a single unified general construct and not three separate general factors. The market orientation construct has lacked discriminant validity in some important studies, but scholars still continue to model it as sub-components rather than a general factor (Kohli et al., 1993; Narver & Slater, 1990). In the current study, we revisited it as a general factor and we have found that market orientation or supplier responsiveness is a single factor rather than three distinct components. Fourth, we find that buyer satisfaction is not related to a buyer’s firm value in the U.S. In the extant literature, scholars so far have focused on the buyer satisfaction and supplier business performance relationship (Gyskens et al., 1999). Despite this focus, scholars have 123
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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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ange of 100-150 (Hair et al., 2006,
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indicator that has a link to custom
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and strengths and their stock marke
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Page 137 and 138: Businessweek. (2012). S&P/BusinessW
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