From arms‐length to collaborative relationships in the supply chain

James Hoyt (Sorrell College of Business, Troy State University, Alabama, USA, and)
Faizul Huq (College of Business Administration, The University of Texas at Arlington, Texas, USA)

International Journal of Physical Distribution & Logistics Management

ISSN: 0960-0035

Publication date: 1 November 2000


Buyer‐supplier relationships play an important role in an organization’s ability to respond to dynamic and unpredictable change. If the relationship is too restrictive, flexibility will be difficult to achieve and, if it is too lenient the risk of opportunism will be present. This paper provides a framework for understanding how buyer‐supplier relationships have evolved over the past two decades from transaction processes based on arms‐length agreements to collaborative processes based on trust and information sharing. To achieve this objective, buyer‐supplier relationships are reviewed from the perspectives of transaction cost theory, strategy‐structure theory and resource‐based theory of the firm. Findings from early supply chain research are contrasted with the findings of more current research to provide a better understanding of how these relationships have changed. Current theory is extended by offering two proposals that test the influence of trust and information sharing and a third proposal that rejects the notion that supply chain alliances lead to monopolistic practices.



James Hoyt and Faizul Huq (2000) "From arms‐length to collaborative relationships in the supply chain", International Journal of Physical Distribution & Logistics Management, Vol. 30 No. 9, pp. 750-764

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Copyright © 2000, MCB UP Limited

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