Elsevier

Business Horizons

Volume 58, Issue 5, September–October 2015, Pages 517-525
Business Horizons

Supply chain friends: The good, the bad, and the ugly

https://doi.org/10.1016/j.bushor.2015.05.005Get rights and content

Abstract

The importance of firms developing close relationships with suppliers has been well recognized by supply chain managers. However, business relationships ultimately progress due to individuals within firms interacting over time. Our results from in-depth interviews with supply chain managers revealed that decisions made by managers within the supply chain can’t be accurately explained or fully understood without accounting for the important influence of the friendships managers across firms develop with each other. This is of significant importance for senior managers since supply chain costs typically account for 60% to 90% of a company's total costs. In this article, we seek to shed some light on the implications of developing personal relationships with counterparts within the supply chain. We conclude by providing guidelines that upper management can follow to enhance the potential positive benefits associated with the inherent development of personal relationships/friendships and, equally important, mitigate the potential negative impact of such relationships.

Section snippets

Supply chain relationships: Friend or frenemy

The importance of firms developing close relationships with suppliers has been well recognized by supply chain managers. Similarly, the supply chain management literature highlights the key role and impact of positive buyer-supplier relationships (Autry and Golicic, 2010, Daugherty, 2011). Closer buyer-supplier relationships have been found to result in a variety of benefits for the parties involved, including superior levels of customer service (Vickery, Jayaram, Droge, & Calantone, 2003),

Gender

In our study, six of the 26 respondents were females. According to several relatively recent accounts, women make up as little as 11% to 25% of the supply chain industry (Ostby, 2013). Due to the lack of availability of women colleagues and connections, it is not surprising that many of the friendships found in the supply chain are between men. Even so, men seek out other men to form work-related friendships regardless of the availability of women; women, however, seek relationships with men

Assess and monitor

Firms should assess and be cognizant of the nature of the relationships their employees form with other managers in the supply chain. Upper management should encourage supply chain managers to disclose if they have formed friendships with their supply chain counterparts. Importantly, this should not be done in a threatening way because friendships, as shown herein, can have positive outcomes for the parties involved. Some respondents indicated that personal relationships are occasionally

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