The outsourcing of Information Technology (IT) services is a practice generally regulated by contracts. Since contracts are inevitably incomplete, buyer-supplier relationships are usually managed by additional mechanisms of incentives and governance, which results in a variety of success levels. Buyer perceived volatility and ambiguity of the future relationship are argued to be keys in definin...

The literature offers little empiric evidence on the role of management accounting in inter-firm relationships. So, in the following research, we examined the effect of the use of a set of new management accounting practices namely the ABC, the balanced scorecard and the financial and accounting benchmarking as well as the effect of the investment in information and communication technologies (...

Focusing on long-term buyer–supplier relationships, this article addresses two questions: (1) What are the antecedents that lead to the adoption of formal control, social control, or both? (2)What is the nature of the relationship between formal control and social control are they substitutes or complements?We develop amodel to investigate the impact of the length of cooperation and institution...

This paper investigates how the formation of larger buyers affects a supplier’s profits and, by doing so, his incentives to undertake non-contractible activities. We first identify two channels of buyer power, which allows larger buyers to obtain discounts. We subsequently examine the effects of buyer power on the supplier’s incentives and on social welfare. Contrary to some informal claims in ...

This study investigates the relationships between U.S. buying firms’ supplier development efforts, commitment, social capital accumulation with key suppliers, and buying firm performance. We identify linkages between supply chain management research on supplier development and organization theory research on social capital to consider how buying firm commitment to a long-term relationship, cogn...

We develop a new theory of supplier diversification based on buyer risk. When suppliers are subject to the risk of buyer default, buyers may take costly action to signal creditworthiness so as to obtain more favorable terms. But once signaling costs are sunk, buyers sourcing from a single supplier become vulnerable to future holdup. Although ex ante supply base diversification can be effective ...

The theory of incomplete contracts has been used to study the relationship between buyers and suppliers following the deployment of modern information technology to facilitate coordination between them. Previous research has sought to explain anecdotal evidence from some industries on the recent reduction in the number of suppliers selected to do business with buyers, by appealing to relationsh...

Considering the growing externalisation of strategic activities, the problem of the control of buyersupplier relationships is crucial. Therefore, researchers usually propose modes of control that are adapted to various environments. However, the organisations are often considered as “black boxes” whose goals are unspecified. This paper examines buyer-supplier control configurations that take in...

Reserve prices are commonly used in procurement auctions, and the logic is simple: They help the buyer avoid paying too much for the contract. The reserve price is set by the buyer before the auction based on the buyer’s knowledge about suppliers’ costs. In practice, buyers can refine their knowledge about suppliers’ costs through activities known in industry as cost modeling. In this paper we ...

Recent years have witnessed the pervasive supply disruptions and their impacts on supply chain performance. In this paper, we investigate the optimal procurement design with supply disruptions and heterogeneous beliefs between the buyer and the supplier. We examine the impact of information asymmetry on the supplier’s belief, the control right of the backup production, and the verifiability of ...