The antecedents of buying firms' efforts to improve suppliers

Abstract

This study examined the factors that precede buying firms' time and resource investments in supplier development. Supplier development is any effort by a buying firm with a supplier to improve the supplier's performance and/or capabilities and to meet the buying firm's short and/or long term supply needs. The purposes of the study were to identify important factors that influence a firm's involvement in supplier development, develop reliable and valid measures of these factors, and test hypotheses regarding how the factors interrelate. We tested the hypotheses that the buying firm's environment and top management's recognition of purchasing's importance, influence the buying firm to adopt a strategic perspective toward supplier performance. We further hypothesized that the firm's strategic perspective toward supplier performance influences supplier commitment to the buying firm. The primary dependent factor is the buying firm's involvement in supplier development activities. The antecedents to this factor include supplier commitment, expectation of relationship continuity and effective buyer–supplier communication. Multiple‐item scales were used to measure the factors. A structural model that postulates the relationships among these factors was tested using data gathered from a cross‐industry sample of high‐level U.S. purchasing executives.