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Paper info: Does Power Matter? The Role of Power in Supplier Relationship Management


Does Power Matter? The Role of Power in Supplier Relationship Management


Anni-Kaisa Kahkonen and Katrina Lintukangas

Place of Publication

The paper was published at the 27th IMP-conference in Glasgow, Scotland in 2011.



Purpose of the paper and literature addressed:
The study focuses on power relations between buyers and suppliers and discusses the role of
power relations in the firmís supplier relationship management (SRM). The nature of the
buyer-supplier relationship and the ways how these relationships are handled vary due to the
different influencing factors. In several studies it is argued that power balance and power
relation between buyer and supplier influence strongly to the nature of the relationship and
moreover, to the supply strategies used. Thus, the study aims to analyze how power
influences supplier relationship management.
Research method:
The possible influence of power on firmís supplier relationship management is empirically
analyzed by using a case study with three cases and 23 interviews. The case companies are
Finnish companies representing different size companies from three different industries.
Thus, the role of power in the firmís supplier relationship management is discussed in three
different empirical contexts. Moreover, the case companies are having different kind of
power relations towards their suppliers which offers various viewpoints to the research topic.
Research findings:
Two of the cases are on high level concerning the maturity of the supply management. The
power positions of case companies when compared to their suppliers are mainly dominant.
All cases have some critical supplier relationships which require special attention, however,
SRM as a conscious process is not fully implemented in any case company. Two cases use
power as an influencing factor in their business negotiations where possible. One case
company seeks equal partners as it requires that their suppliers are powerful and can provide
the best competences and create value. The main finding is that supplier relationship
management differs in different power situations. When the power relation between the buyer
and supplier is in balance there is a good basis for a collaborative relationship and for the
adoption of strategies based on collaboration. Balanced power does not inhibit but rather
encourages the use of a collaborative strategy, whereas inequality in terms of power and
imbalance in the relation may prevent it. If the buyer firm is more powerful than the supplier,
the buyer may not be willing to adopt a strategy based on collaboration and may prefer to
sustain its power position.
Main contribution:
The literature review revealed that there is a research gap in studies of power and SRM
because the relation between those has not been discussed extensively enough. Therefore, this
study contributes by discussing the role of power relation in supplier relationship
management and by analyzing how SRM and supply strategies are affected by power.
Keywords: supplier relationships, supplier relationship management, power, power relation