Critical Appraisal: Buyer-Supplier Relationships and Power Dynamics

This essay provides a critical appraisal of Morsy's (2017) work on buyer-supplier relationships and power positions, emphasizing the importance of these dynamics for business competitiveness. The essay explores the context of supply chain management, highlighting the evolution from transactional to collaborative relationships, and the significance of trust, commitment, and communication. It analyzes the article's key arguments, including supplier base reduction and the impact of communication, while also critiquing the omission of supplier integration and value creation. The essay then discusses the practical applications of these concepts, such as measuring trust through serviceability and utilizing communication to manage tensions, and the role of a managed supplier base in controlling power. The conclusion underscores the critical role of buyer-supplier relationships in achieving competitive advantage, emphasizing the need for balanced power relations and mutual benefits.

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Critical Appraisal of Buyer-Supplier Relationships and Power Position
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Introduction
Business is about maximizing profits through exploiting every opportunity that exists.
Buyer-supplier relationships are technical since each party seeks to get the best outcome out of
the process. This calls for the need to balance between priorities of each party in the relationship
to achieve sustainable supply chains. Scholars have attempted to draw justification on both
transactional and collaborative relationships to attain interdependence, balanced power, shared
understanding and knowledge among the two parties. This essay seeks to review the work of
Morsy (2017) “buyer-supplier relationships and power position: interchanging” by carrying a
critical appraisal and suggesting how the content of the article can be applied to real-world
service operation.
Context
The article fits in the course module that talks about managing supply chain relationships
between the buyer and the supplier. Managing supply chains has been a core area of research
where scholars have tried to carry out research to analyze transactional and collaborative
relationships which can be distinguished through the degree of commitment, trust, relationship
duration and frequency of communication (Friedl & Wagner 2012, p. 3069; Powers & Reagan
2007, p. 1237 ). As time went on the need to improve inter-organizational relationships moved
research beyond exchanging of resources to the power of buyers and suppliers. Previous studies
have failed to analyze the buyer-supplier power relationship to determine how they can be used
to develop business advantage.
This study is concerned with analyzing buyer-supplier power relationships and
determining how they can be used for business competitiveness. Through determining the
attributes and how they affect the relationship, the study uses the gap of little research on the

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buyer-supplier relationships as the basis of this research and concludes that commitment and
trust is a critical attribute in the relationship that leads to continuity. However, the service offered
by the supplier determines the strength and existence of the process between the two.
Critical appraisal
The article presents attributes of supplier relationship that can be used for business
competitiveness. Many researchers have identified correlations between the impacts of
improving the process to increased business outcomes. It is agreed that these relationship leads to
organizational health since it balances power between the two (Morsy 2017, p. 48). Since the
buyer is more powerful, then developing a good relationship defined by the identified attributes
can lead to a mutually benefiting operation. Some scholars suggest that modern competition is
based on continuous improvement which means that buyer-supplier relationship needs to be
enhanced to improve performance and quality. Communication has been identified as an
important element in improving the relationship (Powers & Reagan 2007, p. 1239). This leads to
established norms that are used in business relationships to reduce power of one side in the
process. Since market position may lead to dominance of one arty, communication is used to
reduce such differences and develop a harmonious relationship for meeting the needs of each
side.
Supplier base reduction is also another way that the author proposes for managing the
relationship between the two. Brush,, et al., (2012, p. 1501) suggests that this approach is a
power determinant that minimizes the number of suppliers to strengthen the relationship of the
ones that have been chosen. As a result of this method the benefits of economies of scale can be
attained by the buyer and at the same time increase the act of ownership and domination of

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suppliers. Through reducing switching costs, the buyer can maximize their profit from a reduced
manageable base.
Despite the relationships that the author suggests, he forgets to look at integration of
suppliers into the organizational process, value creation and development of suppliers. The
impact of integrating suppliers into the operational process of the organization (Khalfan, et al.
2008, p. 341). Quality management is an element of business that is used to improve
competitiveness. Such processes will simplify, standardize and synchronize the operational
processes of the company to increase efficiency. Further, supplier development also ensures that
improvement opportunities and performance improvement is enhanced through inter-
organizational communication.
Application
The author’s arguments can be applied to different business situations within an
organization. This attribute is used in influencing the relationship between the two based on both
transactional and collaborative relationships. The degree of trust can be measured through
serviceability, quality assurance, production capabilities, sustainability, reliability and credibility
that are developed as the buyer and supplier engage in business (Azeem & Ahmed 2015, p. 5).
Since trust is an element of dependency relationships, then it forms the core of the relationship
between the two. Working on the defined characteristics can improve the relationship that the
two have thus leading better business outcomes. This attribute leads to increased commitment of
both parties thus better business processes.
Further, frequency of communication between the buyer and the supplier can be used to
cement the relationship and meet the needs of each party. Since the business environment keeps
changing, then communication can relieve existing tension and differences that may be bad for

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business (Childerhouse, et al. 2013, p. 130). Different types of communication are used to meet
the needs and improve defined relational norms. For example, collaborative relationships
become more stable due to frequency of communication between the parties in the business thus
creating a better environment and improved service delivery.
Lastly, managing supplier base can be used by business to control power in the
relationship thus leading to better business outcomes. Through switching costs a large base
increases buyer power which leads to better business benefits like reduced prices and improved
quality (Kahkonen & Lintukangas 2010, p. 62). When one arty fails to satisfy the needs of the
other, it becomes easy to switch rather than face the business consequences of the failed process.
Buyers can use this strategy to develop strategic benefits for their business.
Conclusion
It is evident that managing buyer-supplier relationship is critical to achieving business
competitiveness. Friedl & Wagner(2012, p. 3071) argue that the buyer needs to ensure that a
stable relationship build on trust, commitment and quality assurance is developed with the
supplier to develop business competitiveness. Through managing this relationship in a
collaboration way with improved communication, the buyer can achieve competitive advantage
from both economies of scale, reduced switching costs and efficiency in delivery. This means
that managing the buyer-supplier relationship is a business strategy that organizations can use for
competitive advantage. Therefore the nature of the relationship will be determined by the
distribution power between entities based on sustainable and balanced power relations with
mutual benefits for each party. Thus businesses cannot run away from the effects of the buyer-
supplier relationship that they have.

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References
Azeem, K. & Ahmed, H., 2015. A Study on the Role of Buyer-supplier Relationship on
Organizational Performance: Perspective of Beverage Industry. Scholedge International Journal
of Management & Development, 2(5), pp. 1-9.
Brush, T. H., Dangol, R. & O’brien, J. P., 2012. Customer Capabilities, Switching Costs, and
Bank Performance. Strategic Management Journal, 33(2), pp. 1499-1515.
Childerhouse, P. et al., 2013. Evolution of Inter-Firm Relationships: A Study of Supplier-
Logistical Services Provider-Customer Triads. International Journal of Industrial Engineering,
20(1), pp. 126-140.
Friedl, G. & Wagner, S. M., 2012. Supplier development or supplier switching?. International
Journal of Production Research, 50(11), pp. 3066-3079.
Kahkonen, A. K. & Lintukangas, K., 2010. Dyadic relationships and power within a supply
network context. Operations and Supply Chain Management, 3(2), pp. 59-69.
Khalfan, M. M. A. et al., 2008. The Integration of Suppliers and Manufacturers within
Construction Supply Chains Through Innovative Procurement Strategies. International Journal
of Value Chain Management, 2(3), pp. 358-370.
Morsy, H. M., 2017. Buyer-Supplier Relationships and Power Position: Interchaining.
International Journal of Supply and Operations Management, 4(1), pp. 43-62.
Powers, T. L. & Reagan, W. R., 2007. Factors influencing successful buyer-seller relations.
Journal of business research, 60(12), pp. 1234-1242.