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The Effects of Psychological Contracts and Breaches on the Preferred Customer Status in a Buyer-Supplier Relationship: A Dyadic Case Study at Company X and Three of its Suppliers

Kuhnke, Jan (2021) The Effects of Psychological Contracts and Breaches on the Preferred Customer Status in a Buyer-Supplier Relationship: A Dyadic Case Study at Company X and Three of its Suppliers.

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Abstract:Recently, the notion of the preferred customer status (PCS) has received increased interest among scholars. Being a prioritized customer leads to beneficial treatment and ultimately to a competitive edge, as suppliers are more satisfied with the focal relationship than with available alternatives. As each buyer-supplier relationship is constituted by written or unwritten contracts, they can be differently interpreted by each party in the relation. Especially unwritten agreements involve the danger to be perceived differently about the terms and conditions by each side. These differing views in the reciprocal exchange linkage constitute a psychological contract (PC). Many types of PCs exist and they can have various effects on the partnership when breached (PCB). This dyadic case study scrutinized three B2B relationships in the construction materials industry. Antecedents and benefits revealed in practice strengthen the components recognized in the literature. Additionally, novel benefits were pinpointed as well. Further, reliability was identified as prime and not second-tier antecedent of supplier satisfaction. Moreover, this paper analyzed the effects of PCs and PCBs on the PCS. Relational PCs were revealed as underlying bonding effects in the relation between Company X and its suppliers. Thereby, communication serves as a mechanism to strengthen the partnership by aligning to the reciprocal implicit and explicit expectations. In case of breach, the PCS mediates the relation between the supplier’s perceived PCB and the focal customer’s preferential treatment. However, the PCS is thereby affected by the external market mechanisms surrounding Firm X and the relational components found to fortify each of X’s relationships.
Item Type:Essay (Bachelor)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:International Business Administration BSc (50952)
Link to this item:http://purl.utwente.nl/essays/86719
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