Determinants of Source Loyalty in Buyer‐Seller Relationships

Abstract

A significant change is occurring in the way a growing number of organizations manage their input acquisition strategy. Some purchasing managers are being asked by their organizations to shift from the more traditional “arms‐length” relationships with their suppliers to a newer, closer, “relationship‐building” approach. While both practitioners and academicians are interested in this new focus on buyer‐seller relationships, as evidenced from their writings in the trade and professional journals, much of the early work has been descriptive and conceptual. Empirical evidence appears to be limited concerning some of the characteristics of this new type of relationship—for instance, the factors that contribute to source loyalty or the association between relationship length and loyalty. This article develops hypotheses about these and other issues relating to these close relationships and tests them in two different settings. The results provide useful insights into the changing nature of buyer‐seller relationships.