Buyer-Supplier Relationship in Supply Network: Implications of Tier-II Supplier Management Practices

This paper examines how governance practices such as contract formalization, collaboration and network leadership affect supplier performance across supply networks that differ from one another in terms of product complexity and duration of product life cycle. It compares four distinct supply networks involving a focal OEM, four of its tier-I suppliers and the corresponding tier-II suppliers in the motorbike industry. It is noted that the efficacy of formalization, collaboration and network leadership significantly differ across the networks. The usefulness of the above three governance practices is affected by specific contingencies like product complexity and availability of alternatives.