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

3.3 Discussion
The main objective of this study was to understand whether the model developed in
Chapter 2 would be robust and hold across nations. To that end we were interested in
finding whether IdRR is an important mediator as stated in Chapter 2 and whether
buyer satisfaction (relational indicator) is linked to buyer profits.
We first tested a full replica of the model in Chapter 2. Model 1 did not was
too large for our small sample size; therefore, we decided to split the model into two
smaller models (the satisfaction mediator route and the IdRR and Supplier brand
value mediator route) and rerun the analysis.
As reflected by Table 3.4, Model 2 has better fit statistics on four indices
namely, GFI (0.945), CFI (0.987), TLI (0.981) and RMSEA (0.040), than the model
in Chapter 2. Whereas, model 3 is only better on GFI (0.95) than the model in Chapter
2. This is probably because there are fewer items and more data points to estimate
those items, which results in a better fit. The effects for hypotheses 1 and 4 are
stronger in model 2 than in the model in Chapter 2. For hypothesis 5 the effects are
stronger in the Chapter 2 model. For hypothesis 1 we conjecture that as The
Netherlands is culturally homogeneous, it is easier for suppliers to reduce their IdRR,
as they better understand each other’s needs. As Hofstede (2003) states,
heterogeneous societies can have great variations along their cultural dimensions. On
the other hand, the US managers tend to score higher in uncertainty avoidance than
Dutch managers do on the Hofstede index (Figure 3.1). But as The Netherlands is
relatively ethnically homogeneous, we understand that managers believe that their
strategic suppliers are more attuned to their needs because of cultural understanding.
This results in the effect of supplier responsiveness of IdRR being slightly stronger in
The Netherlands. An alternative explanation could be that, in essence, reducing IdRR
involves creating an idiosyncratic response and that does not have much application
to other customers of the strategic supplier. As the United States is highly masculine
and oriented towards achieving maximum profits, it is possible that suppliers are
willing to create an idiosyncratic response to a degree, and when diminishing returns
start setting in they stop further investments in such responses. On the other hand, in
The Netherlands, with its greater focus on relationships because of its feminine
culture, no attention is paid to this point of diminishing returns. For hypotheses 4 we
find that the effect of IdRR on supplier brand value is marginally stronger in The
Netherlands than the model Chapter 2.
There is not much in the extant literature on this hypothesis for comparison in
B2B contexts. However, risk reduction has been identified as an important function of
B2B brands (Sanzo et al., 2003). What makes our finding unique is that we have
proposed risk reduction as an antecedent to purchasing B2B brands in The
Netherlands and the United States. This is similar to findings from consumer research
where risk reduction is a motivating factor for consumer to purchase a brand (Kotler,
& Pfoertsch, 2006). This direct experience ensures that customer IdRR will be
reduced, and hence, our findings are pertinent as they provide evidence that B2B
buyers are also motivated by risk reduction factors. Hypothesis 5 provides evidence
that being associated with a strategic supplier’s brand increases the buyer firm’s
value. This could be because of one of two mechanisms. One could be because of the
benefits of ingredient branding. And the other reason could be because of a networked
effect that signals to external customers that the buyer’s firm produces high quality
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