Who's Seeking Whom? Coalition Behavior of a Weaker Player in Buyer-Supplier Relationships

Book excerpt: Our intent with this research is to articulate propositions for coalition building behaviors involving the weaker player in a buyer-supplier relationship. The context of our study begins in dyads, but grows into triads as coalitions are formed. We consider coalition formation arising from power asymmetry in dyadic buyer-supplier relationships. However, when a weaker player pairs up with another player, the context of our study becomes triads (i.e., buyer-supplier-supplier or buyer-buyer-supplier). On the basis of coalition theory, we identify three archetypes and then formulate four coalition conditions under each archetype. Each coalition condition, framed in a supply network triad, constitutes a finding. For instance, we propose that a supplier in a weaker power position in a buyer-supplier-supplier triad would try to create a coalition with another supplier to gain leverage against a common buyer. According to coalition theory, it does not matter whether this new supplier has more or less power compared with the old supplier as long as their coalition collectively yields more power than the buyer. By the same token, two buyers would create a coalition to gain leverage against a common supplier if their coalition collectively yields more power than the supplier. Furthermore, the buyer would create a coalition with a second-tier supplier if the buyer is in a weaker power position compared with the first-tier supplier and their coalition would yield more power against the first-tier supplier. This study marks one of the first attempts at formally theorizing the weaker player in the buyer-supplier relationship. It also marks the first attempt at applying coalition theory to supply chain dynamics and it extends emerging work in supply network triads.