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Introduction
Power imbalance between buyers and suppliers is one of the defining characteristics of any supply network (Bastl et al., 2013). Existing studies have focused mainly on more powerful actors that control and influence behaviours and exchanges in buyer-supplier relationships. These have investigated the role of trust and power (Benton and Maloni, 2005), the role of bargaining power (Crook and Combs, 2007), relationship commitment and power (Zhao et al., 2008) and how a buying company exerts power to influence the relationship between suppliers (Wu et al., 2010).
Here we draw attention to the dilemma of the weaker actor in a buyer-supplier relationship in how to respond to the power dominance of the stronger actor. Firms in supply chains seek to control each other, mostly over the possession and access to critical resources (Pfeffer and Salancik, 1978). The dominance of one actor over another is a function of relative dependence – i.e. the difference between a firm’s dependence on its partner and its partner’s dependence on the firm (Anderson and Narus, 1990). The primary consequence of relative dependence is indicated as power (Caniels and Gelderman, 2007). Dominant firms in supply chains are not only able to create dependent suppliers (Cox, 1999), but they will actually seek to attain a dominant position (Cox, 2001). This need for dominance and tendency to control exists in all tiers of supply chains and it is an issue that requires firms’ constant attention in order to effectively manage inter-firm relationships.
Nevertheless power imbalance in buyer-supplier relationship does not automatically imply difficulties between the weaker and stronger actor. Power can provide an effective coordination of exchange relationships as the distribution of power becomes legitimate over time (Maloni and Benton, 2000). In these buyer-supplier relationships both actors invest in developing strong long-term partnerships based on their individual and/or joint motivations (e.g. entering new markets (Akpinar and Zettinig, 2008) or developing new products based on joint research (Anderson et al., 1994). However, the issues arise when the stronger actor misuses and exploits its power position in a way that it goes against the weaker actor’s business objectives (Caniels and Gelderman, 2007). This can lead to unproductive relationships (Bobot, 2010) resulting in the erosion of any benefit that the weaker actor...