SUPPLIER COMMITMENT IN RELATIONAL CONTRACT EXCHANGES WITH BUYERS: A STUDY OF INTERORGANIZATIONAL DEPENDENCE AND EXERCISED POWER*

Abstract

ABSTRACT This study is an examination of the relationship between dependence and power in vertical interorganizational relations. Using data collected from a US national sample of office systems/furniture dealers, power‐dependence ties in low commitment supplier‐buyer dyads were compared with relational contracting dyads characterized by high levels of long‐term supplier commitment. When commitment was not considered, the exercised power of primary suppliers over dealer decisions was found to be related to dealer dependence on its primary supplier in ways that could be readily explained by social exchange views of power. In contrast, the relationship between exercised power and dependence was significantly different when the primary supplier ‐dependent buyer tie was characterized by the high supplier commitment of a relational contract.