Manufacturers’ Acquiescence to Buyers’ Sourcing Requests in Industrial Markets

Abstract

ABSTRACT Purpose This study examines a three-level interdependent hierarchical supply chain and explores the antecedents and consequences of a manufacturer’s acquiescence to a buyer’s request to source a component from a designated component supplier. Methodology This research collected survey data from 212 Chinese mining companies and analyzed the data using structural equation models. Findings First, a manufacturer’s acquiescence is negatively associated with its industrial knowledge and technological capability as perceived by the buyer, but positively correlated with the relational ties between the buyer and the designated component supplier. Second, the detailing efforts strengthen the impact of perceived industrial knowledge but weaken that of relational ties on acquiescence. Third, the manufacturer’s acquiescence ensures the buyer’s power maintenance and procurement outcome certainty, and improves the manufacturer’s customer loyalty and control of sourcing information. Research implications The research highlights the significance of understanding acquiescence within an interdependent supply chain network and indicates that acquiescence will not necessarily lead to the acquiescing firm’s dependence disadvantage. Practical implications The research suggests that firms can use acquiescence to preserve interdependent supply chain relationships. When deciding whether to acquiesce or not, firms should consider not only the market perceptions of their resources and capabilities but also the supply chain networks. Detailing can be an effective method to reduce the pressure for acquiescence. Originality In the context of a manufacturer’s sourcing decisions, the research provides fresh insights into acquiescence in a three-level hierarchical supply chain relationship.