Effects of channel members’ customer-centric structures on supplier performance

The authors examine the upstream impact of a firm’s customer-centric organizational structure on its supplier, including both positive effects of greater revenue and negative effects of demanding services that raise the supplier’s costs. These countervailing effects on supplier profit are moderated...

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Bibliographic Details
Published in:Journal of the Academy of Marketing Science 2019-01, Vol.47 (1), p.56-75
Main Authors: Crecelius, Andrew T., Lawrence, Justin M., Lee, Ju-Yeon, Lam, Son K., Scheer, Lisa K.
Format: Article
Language:English
Subjects:
Analysis
Business and Management
Costs
Distribution channels
Economic aspects
Financial performance
Industrial suppliers
Marketing
Methods
Organizational structure
Original Empirical Research
Product management
Social Sciences
Studies
Suppliers
Vendor relations
Vendor supplier relations
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Summary:The authors examine the upstream impact of a firm’s customer-centric organizational structure on its supplier, including both positive effects of greater revenue and negative effects of demanding services that raise the supplier’s costs. These countervailing effects on supplier profit are moderated by characteristics of the firm’s buying center and the firm–supplier relationship, in accordance with the value capture literature. Study 1 examines the proposed firm-level financial effects of the dual processes, using surveys of industrial firms matched with secondary data from their supplier. Study 2 assesses the supplier-level net impact of the dual processes, using publicly available data to shed light on the upstream financial impact of firms’ customer-centric structures across a broad sample of Fortune 500 suppliers. Findings highlight the need for a supplier to proactively assess the structure of each buyer-firm, as a supplier can take steps to mitigate cost effects and enhance revenue effects.
ISSN:0092-0703
1552-7824
DOI:10.1007/s11747-018-0606-5