Hold Back or Held Back? The Roles of Constraint Mitigation and Exchange Diffusion on Power “Nonuse” in Buyer–Supplier Exchanges

• Author: Chad W. Autry,Christopher W. Craighead,T. Russell Crook
• DOI: http://doi.org/10.1111/jscm.12135
• Published date: 01 April 2017
• Date: 01 April 2017

HOLD BACK OR HELD BACK? THE ROLES OF

CONSTRAINT MITIGATION AND EXCHANGE DIFFUSION

ON POWER “NONUSE”IN BUYER–SUPPLIER

EXCHANGES

T. RUSSELL CROOK, CHRISTOPHER W. CRAIGHEAD, AND CHAD W. AUTRY

University of Tennessee

Research on the use of power in buyer–supplier exchanges often derives

insights from resource dependence theory to explain how power-advan-

taged firms leverage their strength. Yet, when power-advantaged firms

should not—or cannot—use their power is less understood. To explain

why firms should not use their power advantages, we put forth the con-

cept of constraint mitigation, whereby firms relinquish power in mutually

dependent contexts. To explain why firms cannot use their power advan-

tages, we draw on insights from resource orchestration theory to put forth

the concept of exchange diffusion. Exchange diffusion occurs when firms

have not effectively structured and bundled a resource—in this case

power. Thus, we theorize that exchange diffusion in power-advantaged

firms will limit their ability to use their power. Furthermore, and perhaps

less intuitively, we argue that diffusion in weaker firms will also limit the

ability of the stronger firm to use its power. In other words, we theorize

that exchange diffusion “disarms”the stronger firm—regardless of

whether self- or partner-inflicted. Our key contribution is to offer theoriz-

ing centered on power nonuse. We also advance a theory of exchange

diffusion, which could significantly augment our understanding of buyer–

supplier exchanges.

Keywords: exchange diffusion; constraint mitigation; power asymmetry; resource

dependence; resource orchestration; buyer–supplier exchanges

INTRODUCTION

Among the most studied concepts in organizational

sciences (Hillman, Withers & Collins, 2009), power

refers to the ability of one entity—whether a person

or organization—to influence another entity’s actions

(Emerson, 1962; French & Raven, 1959). Researchers

have often drawn on resource dependence theory

(RDT) to understand power’s role within buyer–sup-

plier exchanges (Pfeffer & Salancik, 1978). According

to RDT, firms need to acquire resources (e.g., physical

inputs) from their environments in order to survive;

yet this need also creates dependence on others (Pfef-

fer & Salancik, 1978). The relative need for resources

shapes firms’ power vis-

a-vis other firms (hereafter,

power asymmetry). For example, many consumers are

brand loyal to Heinz Ketchup but are less concerned

about the tomatoes and other ingredients used as

inputs. Although these inputs’ quality is important,

because purchasing the Heinz brand is more

important to consumers than the inputs, Heinz’s

resource position—and thus, power—is advantaged

relative to the firms from which it buys inputs.

Over the past few decades, researchers have often

claimed that because power is relational, buyers and

suppliers who exchange goods and/or services should

deploy their power to extract the best possible terms

and conditions (Cox, 2001).

1

Yet, despite research on

power use,such as articles focused on outsourcing

(Handley & Benton, 2012), triads (Bastl, Johnson &

Choi, 2013) and networks (Terpend & Ashenbaum,

2012), firms appear not to use their power advantages

at times. One possibility is when a more powerful

1

Power is a multidimensional construct (French & Raven, 1959).

Although beyond our theory’s scope, the more recent view is

that power tends to be either mediated (reward, coercive, or

legal-legitimate) or non-mediated (expert and referent) (Benton

& Maloni, 2005; Maloni & Benton, 2000). Our focus is on

mediated power.

Volume 53, Number 210

Journal of Supply Chain Management

2017, 53(2), 10–21

©2017 Wiley Periodicals, Inc.