Leadership and Relationship Commitment: A Focus on the Supplier–Buyer–User Linkage
Introduction
In many organizations, purchasing is a continuing concern in that the organization has to ensure that its constituent parts act in accordance with overall purchasing policy while receiving the value-added service of the purchasing function. The specialization of worldwide units, which allows an organization to undertake country and region-specific tasks, requires an equally developed purchasing system which integrates and binds these diverse units into an operational whole. Besides the differentiation stemming from specialization, the organization is subject to divisive tendencies in divisional and departmental interests, competing functional goals, and differential demands from the environment that lead divisions and departments to pursue their own purchasing strategies. To overcome these divisive forces, the corporate buyers must maintain a purchasing system of integration and commitment, a system that reduces overlap and conflict among its varied users while allowing them the necessary flexibility to adapt to their particular environments. At the same time, the suppliers also work to maintain such a commitment in their various relationships with the corporations' purchasing organization.
The objective of this study is to test the effects of transformational and transactional leadership behaviors on relationship commitment in the supply chain. Commitment to the purchasing relationship entails a “desire to develop a stable relationship, a willingness to make short-term sacrifices to maintain the relationship, and a confidence in the stability of the relationship” [1]. Specifically, this study focuses on the effects of leadership behaviors in the supply chain relationships between (1) corporate buyers and an organization's internal strategic business unit (SBU) users and (2) corporate buyers and an organization's external suppliers. The processes that define the relationships between the internal users, corporate buyers, and external suppliers in the supply chain are becoming more complex in scope. As such, the supply chain represents an ideal area where optimizing activities, implemented by strong leadership, can yield considerable synergy and competitive advantage [2]. As such, we adopt the perspective that advantage in marketplace is derived from being involved in a long-linked chain of interrelated relationships between the internal users, corporate buyers, and external suppliers. First, a discussion of transactional and transformational leadership behaviors and their influence on relationship commitment is presented. Second, the data collection and the study measures are discussed. Next, the analysis and results are reported, followed by concluding comments.
Section snippets
Hypotheses development
Within the marketing and management literatures, a distinction is made between two forms of leadership styles: transactional and transformational leadership. While transactional leadership has been researched for a long time, foundation principles for transformational leadership appear in the work by Weber [3] on charismatic leadership and Downton [4] on rebel leadership. However, Burns [5] was the first scholar to distinguish between the two forms of leadership. Transactional leaders attempt
Research Samples
Two different samples representing both sides of the internal supply chain dyad are used to test H1 to H3: (1) a user sample consisting of 346 SBU users (i.e., internal customers) of a Fortune 500 multinational corporation and (2) a buyer sample consisting of the corporate buyers of 200 corporations selected from the membership directory of the National Association of Purchasing Management (NAPM). Both the users and the buyers were asked to assess the leadership behaviors and activities
Leadership in the System
Simple descriptive statistics suggest that both transactional and transformational leadership as well as relationship commitment were present in both the user and buyer samples. Scale means and standard deviations are presented in Table 1. The Appendix includes the means and standard deviations for each scale item.
The mean level of transactional leadership was 4.53 (SD = 1.10) and 5.68 (SD = .87) in the user and buyer samples, respectively, on a seven-point Likert scale. In both cases, the
Discussion
Successfully carrying out the purchasing process requires leadership committed to providing a value-added element within the supply chain process. This means that the involvement of suppliers, corporate buyers, and internal users are requisites for supply chain success. In this study, we argue that leadership has to be present at both the buyer level and the supplier level within the process. The buyers need to take leadership of the process in their dyadic relationship with internal users
Acknowledgements
This study was funded by the Federal Express Corporation, the FedEx Center for Cycle Time Research, and the FSU College of Business, and supported by the National Association of Purchasing Management (NAPM).
G. TOMAS M. HULT is Director of International Business and Assistant Professor of Marketing and International Business, College of Business, Florida State University, Tallahassee, Florida.
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G. TOMAS M. HULT is Director of International Business and Assistant Professor of Marketing and International Business, College of Business, Florida State University, Tallahassee, Florida.
O.C. FERRELL is Professor of Marketing at Colorado State University, Fort Collins, Colorado.
ROBERT F. HURLEY is Associate Professor of Marketing in the Graduate School of Business at Fordham University, New York, New York.
LARRY C. GIUNIPERO is the National Association of Purchasing Management (NAPM) Professor of Purchasing and Marketing and the immediate past chair of the marketing department at Florida State University.