Supply Chain Power Configurations and their Relationship with Performance

Abstract

In order to lay the foundation for the study of supply chain power, we study power configurations at the level of interlocking power dyads (IPDs), viewing the simultaneous effect of upstream and downstream power. We build on four key constructs: dependence asymmetry (resource dependence theory), joint dependence (embeddedness perspective), power type differential (based on French and Raven, 1959) and power source asymmetry. We examine the research question of what the relationship is between IPDs and the focal firm's operational performance, developing hypotheses based on the dependence asymmetry, joint dependence, power type differential and power source asymmetry of theoretical IPDs. A survey of over 600 respondents in China was used to collect data on focal firm perceptions of upstream and downstream power, with cluster analysis yielding eight IPDs. Inferential analysis revealed the importance of joint dependence, dependence asymmetry, power type differential and power source asymmetry to the operational performance of the focal firm.