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Power, shared goals and supplier flexibility: a study of the HUB-and-spoke supply chain

Gordon Liu (Business School, The Open University, Milton Keynes, UK)
Lukman Aroean (Norwich Business School, University of East Anglia, Norwich, UK)
Wai Wai Ko (Reader in Strategic Entrepreneurship, Brunel Business School, Brunel University, Uxbridge, UK)

International Journal of Operations & Production Management

ISSN: 0144-3577

Article publication date: 3 January 2022

Issue publication date: 4 February 2022

347

Abstract

Purpose

Supplier flexibility reflects a supplier's operations-related decisions in responsively providing the necessary inputs to the focal firm. Drawing on resource-dependency theory and transaction cost economics, this study develops a conceptual framework to explain the differential effects of a focal firm's power over supplier flexibility in the context of the hub-and-spoke supply chain (SC). This study also considers the goals shared between the focal firm and its suppliers as an important contingency factor within the framework.

Design/methodology/approach

This study tests the proposed conceptual framework using dyadic survey data from a hub-and-spoke SC consisting of a large construction contractor and its 100 suppliers in Indonesia.

Findings

The findings show that coercive power has an inverted U-shaped effect on supplier flexibility, while legal-legitimate power has a U-shaped effect. Furthermore, shared goals positively moderate the U-shaped effect between legal-legitimate power and supplier flexibility.

Originality/value

This study differentiates between the impacts of coercive power and legal-legitimate power on supplier flexibility in the hub-and-spoke SC. It also demonstrates that shared goals play a moderating role in affecting the impacts of legal-legitimate power on supplier flexibility. These findings also have important implications with regard to integrating resource-dependency theory and transaction cost economics to explain these associations.

Keywords

Citation

Liu, G., Aroean, L. and Ko, W.W. (2022), "Power, shared goals and supplier flexibility: a study of the HUB-and-spoke supply chain", International Journal of Operations & Production Management, Vol. 42 No. 2, pp. 182-205. https://doi.org/10.1108/IJOPM-08-2021-0538

Publisher

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Emerald Publishing Limited

Copyright © 2021, Emerald Publishing Limited

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