The role of attraction and control boundaries in value creation: Dyadic exploration of strategic buyer-supplier relationships

The development of strategic buyer-supplier relationships (BSR) has attracted considerable interest. In a strategic BSR, the buyer and the supplier both aim to utilise the relationship to gain a competitive advantage. This thesis suggests that a better understanding of non-contractual, reciprocal value creation, as proposed in social exchange theory (SET), would help us to understand how to realise the potential of the strategic relationship. The aim of the thesis is to increase the understanding of the role of attraction and control boundaries in value creation in strategic BSRs. Three research questions are addressed: (1) How do the social mechanisms affect value creation in strategic BSRs as proposed by SET? (2) How does attraction affect value creation in strategic BSRs? (3) What explains the control boundaries of a firm in strategic BSRs? The thesis consists of five individual studies, and the in-depth data from six dyadic case studies are applied to answer these questions. This research makes a major effort to clarify the basic assumptions and scope of useful concepts and theoretical constructs of SET in the context of BSRs. This thesis recognises structural power as an explanation and source of value creation. Structural power, meaning power asymmetry and interdependence, explains the distribution and total amount of value creation in BSRs. Thus, understanding how different sources of dependency affect structural power is vital, and by affecting one or more of these sources of dependency, a company can change the structural power, which then influences value creation over the course of the relationship. In this thesis, buyer-supplier attraction is suggested to precede the reciprocal, voluntary effort. The thesis contributes by adding understanding of the role of attraction in strategic BSRs, as the vast body of literature discusses the role of attraction in the initiation phase of relationships and in gaining preferred customer status. The dyadic approach to attraction is a cornerstone of this thesis, and the results of the thesis propose that mutual attraction is a prerequisite for the strategic success of BSRs. In a strategic BSR, a company can no longer only control its own resources, and this thesis recognises that understanding control boundaries is important when aiming to influence the other party.