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The effects of supplier awards on the relationship of buyer and supplier : a multiple case study of winners and non-winners

Iding, Paul (2017) The effects of supplier awards on the relationship of buyer and supplier : a multiple case study of winners and non-winners.

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Abstract:Due to their amount of applications in practice, supplier recognition programs seem to be an important mechanism used by buyers to reward their suppliers. However, research about supplier awards is still in its beginnings and little is known about the effects that stems from these awards. Motivation theory and the emerging body empirical literature suggests that awards can significantly affect motivation and in turn corporate performance, though not always in the intended direction (Gallus & Frey, 2016). Awards can also destroy value for both, winners and non-winners, due to unintended motivational effects (Deci et al. 1999) as well as social comparison costs (Larkin et al., 2012). Since all these papers focus on awards on an employee level, further investigation needs to be made whether these findings are also valid on a corporate level for supplier awards. Moreover, it remains unclear how motivation is expressed in such a context and when and under which conditions it occurs. In addition, it has been investigated whether awards might be used to stimulate preferential resource allocation (Schiele, 2012) through the concept of reciprocity (Falk & Fischbacher 2006). In order to explore the effects of supplier awards on the buyer-supplier relationship, a multiple case study of winners and non-winners of supplier awards has been conducted. In total, seven cases have been studied including four winners, two non-winners and one award issuing firm. Findings suggest that supplier awards tend to stimulate recipient’s motivation on different dimensions, but stronger in the post-award period. Interestingly, supplier awards can also result in negative outcomes. Evidence shows, that it can occur that a supplier decreases in performance after winning an award, possibly due to unintended motivational effects. Moreover, the status of the issuing firm seems to matter, even though a comparison between high and low status awards has not been realized. Preferential resource allocation plays an important factor in the context of supplier awards, whereas preferential treatment takes place in the pre-award period and the award compensates for it (reciprocity). Finally, there is weak evidence for an opportunistic use of the award due to higher supplier dependency. The research contributes to the literature by showing the effects of supplier awards. From a practical view, it contributes by explaining managerial implications from a buyer’s as well as supplier’s perspective. In the end, limitations and suggestions for future research are mentioned.
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Business Administration MSc (60644)
Link to this item:http://purl.utwente.nl/essays/73500
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