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Article history: Strategic buyer–supplier relationships are increasingly viewed in both the scholarly and practitioner
Received 20 November 2012 literatures as key drivers of sustainable competitive advantage. In particular, relationship specific
Accepted 7 January 2014 adaptations – the extent to which exchange members make tangible or intangible adaptations for a
Available online 27 January 2014
partner – are acknowledged as one of the central issues. Such adaptations need to be examined in
Keywords: context, taking into consideration the social ties that connect a firm and its suppliers. Using the lens of
Relationship-specific adaptation social capital, we examine the contingent effect of buyer and supplier relationship adaptations, and
Social capital theory structural and cognitive capital on the development of relational capital. A sample of 163 buyer–supplier
Supplier relationship management relationships within UK manufacturing firms is used to test a series of three-way moderated regressions.
The data indicate that the relationship between structural and cognitive forms of social capital and the
level of relational capital is moderated by the extent of the relationship adaptations made by each firm
and its supplier. Contrary to expectations, the relationship between cognitive capital and relational
capital was significantly negative when high levels of buyer adaptations and supplier adaptations were
present, indicating a substitution effect between cognitive capital and relationship adaptations.
Structural capital was found to be most strongly related to relational capital when adaptations were
reciprocated by both actors. However, unilateral adaptations by either actor resulted in significantly
lower levels of relational capital as structural capital increased. Implications for theory and managers are
discussed, relating to the impact of different combinations of relationship-specific adaptations on social
capital components in a buyer–supplier relationship.
& 2014 Elsevier B.V. All rights reserved.
0925-5273/$ - see front matter & 2014 Elsevier B.V. All rights reserved.
http://dx.doi.org/10.1016/j.ijpe.2014.01.008
90 S. Roden, B. Lawson / Int. J. Production Economics 151 (2014) 89–99
environmental factors over which managers have little influence. Brush, 2008; Poppo and Zenger, 2002), we provide evidence that
Our paper thus helps decision makers within the firm to address reciprocal adaptations can fulfil an assurance role (Rokkan et al.,
the important question of if, to what extent, and under what 2003). In doing so, we take a contrasting approach to studies
conditions, they should make relationship-specific investments in (Mukherji and Francis, 2008) that position adaptations as an
their strategic partner. To date, there has been limited testing of outcome of exchange, by adopting a process view of relationship
this in a supply chain context. adaptations. Our findings are relevant for practitioners as they
Specifically, there is a paucity of work considering the con- refine understandings of the interplay between social capital
tingent effect of adaptations made by the buyer and supplier on dimensions and relationship-specific adaptations, relevant for
the relationship between structural capital, cognitive capital and decisions related to safeguarding the relationship, effective
relational capital. Described as one of the most important dimen- resource allocation and supplier relationship development.
sions of buyer–supplier relationship performance (Williamson, The remainder of the paper proceeds as follows. The theoretical
1985), relationship adaptations are not made in a vacuum and rationale which informs this study is developed first, followed by
need to be examined in context, taking into consideration the the development of our hypotheses. An overview of the research
social ties that connect both actors, and the duration of the adopted is then provided, followed by the presentation of results.
relationship (Hwang, 2006). Some work has examined buyer In the final section, the managerial and theoretical implications of
adaptations and supplier adaptations as individual constructs, the study are discussed.
with different motivators and performance outcomes (Joshi and
Stump, 1999; Schmidt and Tyler, 2007). However, increasingly
both decision makers and academics are concerned with the
impact of joint or reciprocal adaptations, where both buyers and 2. Theoretical foundations
suppliers make idiosyncratic, non-transferable changes for the
other actor. 2.1. Social capital theory
We develop and test a theoretical model which examines these
constructs of interest. Closely tied, inter-organizational relation- SCT gained popularity in the 1990s by directing attention
ships are presented as infrastructure which is crucial for support- toward the role of a firm's social networks as a source of
ing resources (adaptations) contributed by both actors (Luo et al., competitive advantage (Baker, 1990; Burt, 1997). SCT also acknowl-
2009). Consistent with previous literature (Carey et al., 2011; edges that many economic transactions are embedded within a
Nahapiet and Ghoshal, 1998), cognitive capital and structural larger social, political and legal context (Granovetter, 1973, 1985).
capital are positioned as the infrastructure, or building blocks, of Relationships are viewed as a valuable resource for the conduct of
strategic buyer–supplier relationships. We then examine the social affairs and social capital helps to characterize an organiza-
contingent effect of relationship-specific adaptations made by tion's complete set of relationships, whilst its focus on the flow of
the firm and its supplier on the relationship between these resources between organizations enables the explanation of per-
building blocks, and the development of relational capital. Pre- formance differences within and between organizations (Koka and
vious work has indicated that cognitive capital and structural Prescott, 2002). The supply chain management literature has
capital are antecedent factors in the development of relational extensively applied SCT, particularly in examining the character-
capital (Carey et al., 2011; Tsai and Ghoshal, 1998). This study istics of buyer–supplier relationships and impact on performance
develops this research further by examining the contingent effect (Matthews and Marzec, 2012).
of relationship-specific adaptions made by the buyer and the Nahapiet and Ghoshal (1998) define social capital in relation to
supplier on the relationships between cognitive capital, and three dimensions: relational, cognitive, and structural. Relational
structural capital, and the development of relational capital. Rather capital refers to the “trust, obligation, and identification present
than creating a perceived lock-in situation, we argue that adapta- between actors in a relationship” (Nahapiet and Ghoshal, 1998,
tions made by buyer and supplier act as a joint signal of commit- p. 251). Trust in this context refers to the expectation that both
ment and perceived relationship longevity, reinforcing the positive actors will behave in a mutually acceptable manner, including an
effect of frequent and diverse social interaction ties (structural expectation that neither party will exploit the other's vulnerabil-
capital) and shared vision, norms and values (cognitive capital). A ities (Sako and Helper, 1998, p. 388). Identification is “the process
series of three-way interaction hypotheses are tested which posit whereby individuals see themselves as one with another person or
that relationship-specific adaptations made by buyer and supplier group of people” (Nahapiet and Ghoshal, 1998, p. 256), whilst
act to complement cognitive capital and structural capital, thereby obligation represents a commitment or duty to undertake some
increasing the level of relational capital in the relationship. activity in the future. As a store of ‘goodwill between actors’ (Burt,
This paper makes a number of contributions to the literature. 2000; Dyer and Singh, 1998), relational capital addresses the role
First, where previous research has typically assumed that the of direct links between individuals and the relational outcomes of
relationships between SCT dimensions are direct (cf. Villena et al., interactions (Inkpen and Tsang, 2005).
2011), we add a contingent view by examining the role of relation- Cognitive capital represents the shared goals, norms, vision and
ship adaptations on relational capital development. The literature values between actors (Tsai and Ghoshal, 1998) and can thus be
has also viewed relationship-specific adaptations made by buyer or aligned with Cai and Yang's (2008) interpretation of cooperative
supplier (Artz, 1999), or the combination of both (Poppo et al., norms. Symbolic of the commonality across the relationship,
2008). Our paper provides a more nuanced view of the relationship cognitive capital helps actors to make sense of, and perceptually
by examining, via three-way moderated regressions, the effect on classify new information and knowledge (Grant, 1996; Nonaka,
relational capital of buyer adaptations, supplier adaptations, and 1994). It facilitates the development of common understandings
cognitive or structural capital. Thus, whilst our regression controls and collective ideologies, outlining appropriate ways for buyers
for all combinations of two-way interactions in our analysis, our and suppliers to coordinate their exchange, and share each other's
interest is in gaining a more detailed understanding of the thinking processes (Caniëls and Gelderman, 2010; De Carolis and
dynamics around relationship-specific investments and social Saparito, 2006). The characteristics of cognitive capital have been
capital. Second, in contrast to previous studies highlighting the linked to positive and cooperative behaviours due to the develop-
need to safeguard against opportunism in the presence of ment of a positive psychological environment (Kostova and Roth,
relationship-specific adaptations (Lonsdale, 2001; Mesquita and 2003; Ring and Van De Ven, 1992; Zaheer et al., 1998).
S. Roden, B. Lawson / Int. J. Production Economics 151 (2014) 89–99 91
Structural capital is the configuration of linkages between viewed as assets that have little value outside a specific relation-
people and units (Nahapiet and Ghoshal, 1998, p. 244) and has ship and can therefore be considered increased risky (Williamson,
been operationalized at a number of levels, including the network 1985). Dyer and Singh (1998) assert that firms can realize
(Ahuja, 2000; Burt, 2000; Zaheer and Bell, 2005); informational/ advantage or ‘relational rents’ through the unique combination
knowledge sharing (Koka and Prescott, 2002; Lawson et al., 2008); of idiosyncratic firm linkages, highlighting that a firm's critical
and as socialisation (Krause et al., 2007; Oh et al., 2004; Yli-Renko resources often span firm boundaries, embedded in inter-firm
et al., 2001). We operationalize structural capital as social inter- routines and processes. As manufacturing firms increasingly seek
action ties existing between buyer and supplier (Carey et al., 2011; to rationalise their supply base, many business products, ranging
Tsai and Ghoshal, 1998). Social interaction ties refer to the extent from industrial coatings to machine tools, the skills acquired are
of social processes and activities implemented between a buyer customised to the needs of a particular organization. Defined as
and supplier to coordinate and structurally embed the relationship adaptations made to modify processes, product technologies, or
(Larson, 1992; Nahapiet and Ghoshal, 1998; Yli-Renko et al., 2001). procedures to the specific needs or capabilities of a partner (Hallén
Examples include organised social events, regularly planned team et al., 1991), relationship-specific adaptations can also include
building exercises, joint problem solving workshops and the investments in research, new manufacturing technologies, or
establishment of cross-functional teams. Lawson et al. (2008) distribution systems.
report that the managerial and technical communication sharing Reciprocated adaptations are made when two or more organi-
embodied in these social ties helps to directly leverage operational zations adapt to specific organizational needs by modifying
performance improvements for the buying firm. Building on the products and production to suit the requirements of the other
logic of the ‘relational view’ (Dyer and Singh, 1998), social inter- actor (Hallén et al., 1991). Described as self-enforcing agreements,
action ties are similar to knowledge sharing routines in that they these adaptations represent credible commitments (Heide, 1994),
promote a close, regular pattern of interaction between buyer and indicating strength and durability in the relationship (Anderson
supplier using formal and informal methods, during which spe- and Weitz, 1992; Morgan and Hunt, 1994) and a desire for the
cialised partner specific knowledge is shared (Cousins and Lawson, continuance of the relationship (Anderson and Narus, 1990;
2007). Siguaw et al., 2003). If both parties are respectively engaged in
making specific adjustments, they can consolidate, strengthen
2.2. Relationship-specific adaptations (Joshi and Stump, 1999), and enhance the stability of their
relationship (Kang et al., 2009). The commitment of specific
From a transaction cost economics perspective, relationship- adaptations by both buyer and supplier creates an endogenous
specific adaptations have been described as a ‘hostage’ for future safeguard, which may attenuate the need for other forms of
dealings (Heide and John, 1990; Williamson, 1975; Williamson, governance (Joshi and Stump, 1999). As a source of relational
1983), contributing to the creation of risk and accentuating the quasi-rent, the importance of both actors making adaptations is
exchange hazards (Wever et al., 2012; Williamson, 1985). However, linked to the performance gains that result from their existence
a growing stream of literature has adopted a more positive (Hagberg-Andersson, 2006; Williamson, 1985).
perspective on the effect of adaptations made in close buyer–
supplier relationships (Bensaou and Anderson, 1999; Jap and
Ganesan, 2000; Joshi and Stump, 1999; Madhok and Tallman,
1998; Nair et al., 2011). Amit and Schoemaker's (1993) assertion
that the specialisation of assets is a necessary condition for rent 3. Hypotheses development
implies that in a buyer–supplier relationship, organizations should
do something specialised or unique to develop a competitive We develop and test two three-way interaction hypotheses for
advantage. As a form of specific investment, relationship-specific the relationship between buyer adaptations (BRSA), supplier
adaptations engender inter-firm dependence and obligation (Dyer adaptations (SRSA), cognitive capital, and structural capital on
and Singh, 1998), which by their very nature are idiosyncratic to a the level of relational capital within a strategic buyer–supplier
relationship and would have minimal value outside it (Heide and relationship (as outlined in Fig. 1). First, we hypothesize a relation-
Miner, 1992). Over time, these adaptations have the potential to ship between cognitive capital, buyer adaptation and supplier
transform an economic exchange into a socially embedded rela- adaption in the development of relational capital. Second, we
tionship (Granovetter, 1985; Ring and Van De Ven, 1994), reducing examine the relationship between structural capital, buyer adap-
the risk of opportunistic behaviour (Caniëls and Gelderman, 2010). tation and supplier adaption in relational capital development.
While traditionally buyer–supplier relationships were charac- Given our interest in understanding the dynamics between both
terized as arms-length, adversarial exchanges (Dyer, 1997), more supplier and buyer adaptations, and social capital components, we
recent studies have explored how closer, more integrated supplier do not hypothesize any two-way interactions, though these lower-
relationships with a long-term focus can leverage competitive order effects are controlled for in the regression analysis.
advantage (Artz, 1999). The transfer of complementary skills and
knowledge between actors, bilateral sharing of information and
sharing of risk are now considered representative of ‘best-practice’
in buyer–supplier relationships. The extent to which buyers and
suppliers make adaptations for each other is also acknowledged as
a defining component of successful relationships (Dyer and Singh,
1998).
The extent to which buyers and suppliers make adaptations for
each other is acknowledged as a defining component of these
more collaborative, integrated relationships (Dyer and Singh,
1998). Relationship-specific adaptations are characteristic of an
evolutionary process whereby buyers and suppliers connect with
one another in an effort to make their relationship more enduring
and productive (Sambasivan et al., 2013). Such adaptations are Fig. 1. Theoretical framework.
92 S. Roden, B. Lawson / Int. J. Production Economics 151 (2014) 89–99
3.1. Cognitive capital and relationship adaptations changes made in the relationship, are operating effectively (Dyer
and Chu, 2000). For example, the installation of highly specialised
Cognitive capital, as shared understandings and representa- inventory ordering systems between organizations will require
tions, is essentially a product of the past (Coleman, 1990). It that both buyers and suppliers meet at a variety of levels to ensure
signifies a degree of solidarity built up over time as actors resist the system is tailored to fit its purpose and meets the needs of the
short-term benefits and self-interested behaviour. In a study of relationship. Smith and Aldrich (1991) also found that increasing
intra-organizational entrepreneurial behaviour, Simsek et al. levels of relationship-specific adaptations, facilitated the develop-
(2003) argue that cognitive embeddedness between two actors ment of trust through the information exchange encouraged. In a
is positively associated with relational embeddedness, in that comparative study of automotive relationships in the USA and
alignment between beliefs, assumptions and expectations rein- Japan, Dyer (1997) found that relationship-specific adaptations, in
forces norms of reciprocity. We build on this in asserting that the form of co-location, meant that both parties were able to
when adaptations are made by both buyer and supplier, they serve discover new ways to enhance performance through increased
to reinforce and update norms, shared systems of meaning and ad-hoc interaction and communication, developing the trust in the
terminologies. relationship.
Adaptations represent purposeful actions or measures taken by Structural capital (as operationalized as social interaction ties)
actors (buyers and suppliers in this case) to guide joint activities in enables both parties to influence the nature of the adaptations,
pursuit of joint payoff (Luo et al., 2009). When applied in a and thus manage their applicability to the relationship and needs
relational environment in which values and ambitions are shared of both organizations. The transparency facilitated through social
between actors, such adaptations act as a mechanism for improv- interaction ties also ensures the equitable sharing of relational
ing the positive effect of shared systems of belief on the level of rents or benefits, reduced risk of deceit, and minimises the need to
trust. Put another way, when buyers and suppliers both adapt monitor and safeguard information and assets. Adaptations made
their products, processes, or schedules, it indicates a degree of by both buyer and supplier, when supported by structural capital,
reciprocity that supercharges the positive impact of common reduce the risk identified by Edelman et al. (2004) that structural
vision and ambition (cognitive capital) for an efficacious relation- capital could result in asymmetric information distribution and
ship, on relational capital development. Rokkan et al. (2003), in a disincentive. The associated information exchange makes it
study of matched buyer–supplier dyads, also found support for the difficult for either party to take advantage of the benefits as
bonding effect of specific adaptations, when the relationship is both parties have symmetrical information and have made
characterized by shared norms. Further, they suggest that adapta- relationship-specific adaptations. Thus, adaptations to the rela-
tions made by either party alone under conditions of low norms tionship, when made by both parties, serve to strengthen the
were perceived as risky and vulnerable to opportunism (Rokkan effect that structural capital has on the development of relational
et al., 2003). Similarly, Zajac and Olsen (1993) find that norms capital.
(cognitive capital) ease the negative effects of adaptations, allow-
ing buyers and suppliers to act in a relationship that is more Hypothesis 2. Structural capital has the strongest, most positive
certain and trusting (indicative of relational capital). Sambasivan relationship with relational capital when buyer adaptations and
et al. (2013) fail to find support for the direct effect of adaptations supplier adaptations are both high.
on relational capital development which lends support for our
assertion that a moderating effect rather than a straightforward
direct effect, exists. Building on these studies, we propose that 4. Method
joint adaptations made in a relationship help to develop ‘social
solidarity’ between actors, and an environment of generalised Data were collected via a survey of 1600 medium-to-large UK-
reciprocity (Sandefur and Laumann, 1998). We expect that the based manufacturing organizations, sampled from a database
highest level of relational capital will be formed where actors' held by the Chartered Institute of Purchasing and Supply, UK
share common norms, values and ambition for the relationship, (a professional education and qualification body for professionals
and have each made high levels of adaptation to the relationship. in purchasing and supply). After accounting for 15 surveys
Any other combination is likely to be suboptimal. Thus, we returned due to company policy and 20 incomplete surveys, a
propose the following: total of 163 valid responses were received (10.3% response rate).
The unit of analysis is the industrial relationship between buyer
Hypothesis 1. Cognitive capital has the strongest, most positive and a supplier considered strategic to the performance of their
relationship with relational capital when buyer adaptations and business unit. We examine relationships that are strategic to the
supplier adaptations are both high. firm as they are more likely to exhibit characteristics of interest in
this study. A strategic supplier is defined as one that provides the
3.2. Structural capital and relationship adaptations firm with a critical material or component. Data were collected
primarily from senior buyers and purchasing/supply chain man-
Building on previous studies (Anderson and Weitz, 1992; agers as they are found to be the individuals who make decisions
Rokkan et al., 2003), it is proposed that, as a signal of credible pertaining to supplier investment strategies. Sample characteris-
commitment and long-term relational orientation, reciprocal tics are provided in Table 1. The knowledge of respondents was
adaptations will increase the effectiveness of structural capital in validated through post-hoc survey items which showed that
developing relational capital between buyers and suppliers. The respondents evaluated their knowledge of the supplier relation-
contribution of adaptations as joint action emphasize these ship as 5.8 out of seven.
embedded social ties that firms can use to develop the resources The questionnaire was pilot tested and validated through semi-
necessary for creating a productive partnership and in the process structured interviews with thirteen purchasing executives and six
fostering relational capital. Adaptations increase information shar- academic experts in supply chain management. Following the total
ing as buyers and suppliers interact on a formal and informal basis. design method (Dillman, 2000) the initial postal mailing involved
When both buyers and suppliers make adaptations in a relation- distributing hard copies of the cover letter, survey and return
ship, they tend to interact more frequently, utilising joint work- envelope. A reminder email was sent two weeks after the first
shops and social events, in order to ensure that the adaptations, or mailing, with a second reminder two weeks later.
S. Roden, B. Lawson / Int. J. Production Economics 151 (2014) 89–99 93
Table 2
Reliability analysis of formative indicators.
Supplier Relationship-specific Adaptations (SRSA) This supplier re-trained its personnel .56
This supplier changed its inventory and distribution channels .71
This supplier changed their information technology systems .52
This supplier changed their storage and transportation equipment .70
This supplier changed their production facilities .74
This supplier changed their operating equipment and tools .74
This supplier invested in quality improvement programmes .63
a
ITTC – Item-to-Total Correlation.
Table 4
Correlation matrix and descriptive statistics.
Variable 1 2 3 4 5 6 7 8 9 10 11
n
Significant at .10 (two-tailed) n¼ 163.
nn
Signifcant at .05 (two-tailed).
Table 5
Results of regression analysis for three-way interactions (relational capital as dependent variable).
Step and independent variables Step 1 β Step 2 β Step 3anβ Step 3bnβ Step 4anβ Step 4bnβ
n
p o.05.
nn
p o .01.
nnn
p o .001.
Table 6
Relational capital and cognitive capital for combinations of high and low buyer and supplier adaptations.
t p value
Table 7
Relational capital and structural capital for combinations of high and low buyer and supplier adaptations.
t p-value
previous work identified the risks of opportunism in the presence social events or team-working activities, but recurring exchanges
of specific relationship investments (Mesquita and Brush, 2008; that are supported by specific changes or investments made in line
Poppo and Zenger, 2002). However, we provide evidence that joint with the requirements of the relationship.
adaptations, operating in isolation, can substitute for cognitive
capital in an assurance role in buyer–supplier relationships
(Rokkan et al., 2003). For all other configurations of relationship- 7. Limitations and future research
specific adaptations, consistent with other literatures such as
Caniëls and Gelderman (2010), we find cognitive capital has a While considerable attention has been paid to ensure the validity
positive effect on relational capital. Edelman et al. (2004), in the and reliability of this research, there are limitations that should be
exploratory work on the ‘pitfalls’ of social capital, also provide an recognized when interpreting the results. First, a cross-sectional study
alternative explanation. In an intra-organizational context, they limits the understanding that can be applied to a concept as complex
proposed that strong ties that bind also act as barriers to new as social capital, as relational behaviours between actors develop over
knowledge and ideas. Thus whilst, cognitive capital may enable time. The framework we developed was static and hypotheses focused
organizational sense-making and develop cohesiveness, it can also on the associations among variables of interest. This cross-sectional
act as a barrier to new information which may eventually impact approach also impedes the assumption of causality as it restricts the
the relationship effectiveness and ability to further generate examination of relationships between variables at one point in time.
relational capital. The use of longitudinal data would help shed light on the interplay
among these variables. A longitudinal approach would also enable
6.2. Implications for managers exploration of any broader spillover effects from different combina-
tions of adaptations made, such as capability development or learning
Several implications for managers are apparent from our by either actor in the relationship. This would contribute to the on-
results. First, we show high levels of reciprocal relationship- going area of interest around the performance effects of adaptations
specific adaptations act as substitutes with cognitive capital. (Artz, 1999; Heide and Stump, 1995; Kang et al., 2009). From a
Where both parties have low levels of understanding of the other's methodological point of view, there are alternative approaches that
vision, values and goals, managers on either side can use adapta- we could have taken which might have further addressed any
tions in operating procedures, personnel, production facilities or concerns related to common methods bias. The inclusion of an ideal
information systems, as a tangible and direct signal of commit- marker variable (a variable which is theoretically unrelated to the
ment to build trust, identification and a sense of shared obligation. main variables in the model illustrated by an expected correlation with
By contrast, as the level of cognitive capital increases, the relation- these variables of 0), for example, would have strengthened our results
ship to relational capital is strongest where relationship-specific in this regard (Richardson et al., 2009). Also, we acknowledge the
adaptations are low or asymmetric. Indeed, the highest level of increasing concern directed towards existing approaches to testing
relational capital is shown under conditions of high cognitive non-response bias and appreciate that the collection of objective firm
capital, high buyer adaptations and low supplier adaptation. This level data which would have allowed us to test non-response in
infers that for buyers wishing to build relational capital, invest- alternative ways.
ment in cognitive capital, combined with unilateral adaptations, Another limitation relates to the examination of contingent factors
will achieve the highest return, at least in terms of building trust on the formation of social capital and its links to performance in
and understanding with the supplier. This finding points towards buyer–supplier relationships. Little theoretical guidance for identifying
the importance of working with a strategic supplier to gain relevant contingency factors exists, and future research could build on
complementarity of operating vision and business values. this study, and other similar studies in supply chain management, to
Second, whilst many firms have rationalised their supply bases develop a more comprehensive understanding of SCT in buyer–
and are moving towards supplier collaboration in order to support supplier relationships. We also used a formative measure to examine
the development of their most important supplier relationships, the range of adaptations that can be made in a buyer–supplier
firms need to also pay attention to how, and how often, they relationship. It would be interesting to examine if there are differential
interact socially. The evidence suggests that organizations can effects related to the type of adaptation (such as technical, logistical,
benefit by encouraging the development of structural capital (as knowledge, financial and administrative (Johanson and Mattson,
social interaction ties) with their suppliers, at both informal and 1987), or between formal and informal approaches as suggested by
formal levels. Firms should consider how to leverage the social Luo et al. (2009)).
environment surrounding the exchange (Jap, 1999). The allocation Finally, the research targeted only companies in the UK, which
of resources to facilitating social events, cross-functional team potentially limits the generalizability of findings of this research to
working, and joint workshops, can improve the behavioural health companies in other countries. Other studies have examined the
of buyer–supplier relationships. When buyer and suppliers make influence of cultural factors on the tendency of firms to make
adaptations within a relationship, characterized by a high degree resource investments, and the resultant performance gains lever-
of social interaction, they increase the effectiveness of this social aged (Kang et al., 2009; Luo et al., 2009). Extending the research
interaction. Moreover, managers who wish to develop trusting context in this paper to explore the effect of cultural and institu-
relations with their key suppliers should support not only one-off tional factors could also have yielded interesting results.
98 S. Roden, B. Lawson / Int. J. Production Economics 151 (2014) 89–99
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