Vendor Firm Characteristics and Buyers' Perceptions of Transaction Costs and Relationship Governance
Date of Award
4-17-2014
Degree Type
Dissertation
Degree Name
Doctor of Business Administration (DBA)
Department
Marketing
First Advisor
Dr. Brian N. Rutherford
Second Advisor
Dr. Alvin J. Williams
Third Advisor
Dr. Joseph F. Hair, Jr.
Abstract
The utilization of outsourced business services continues to grow as organizations focus on core competencies. Outsourced services span the gamut from financial services to information processing to engagement of third party logistic services by enterprise customers. When outsourcing business services, organizational buyers often have to select from a plethora of small, mid-sized, and large vendors that offer competing services at comparable prices. Given this choice conundrum, what factors influence buyers’ perceptions of vendors and their capacity to deliver expected value?
The current research integrates three distinct, yet related, theoretical streams including transaction cost, vendor selection, and buyer-seller relational exchange in studying how vendor firm attributes affect buyers’ perceptions of the vendor as well as their willingness-to-engage in a particular type of relationship exchange with the vendor. Two separate, but conceptually-related essays are offered to add some clarity to variables influencing vendor assessment and selection. Essay 1 introduces vendor firm attributes as antecedents to the opportunism and uncertainty constructs thereby extending the transaction cost research. Specifically, Essay 1 examines how vendor firm size and reputation influence organizational buyers’ a priori perceptions of vendor opportunism and uncertainty.
Essay 2 examines the influence of buyers’ opportunism and uncertainty perceptions on their relationship governance choices. Concomitantly, Essay 2 studies how opportunism and uncertainty perceptions on the part of the buyer mediate the relationship between vendor firm characteristics and buyers’ willingness-to-engage in contractual and relational exchange/governance with a given vendor.
A panel of IT buyers, across various industries, was surveyed to determine the impact of vendor attributes on buyers’ perceptions of opportunism and technological uncertainty associated with the vendor. In addition, the survey also tested the relationship between buyers’ perceptions of vendor opportunism and uncertainty and their willingness-to-engage in legal contracts/bonds and relational exchange with the vendor. Results support the linkages between vendor firm reputation and buyers’ perceptions of opportunism and technological uncertainty. Moreover, a direct linkage was found between vendor firm reputation and buyers’ relationship preferences. Implications are discussed along with limitations and areas of future research.