The findings of this study demonstrate that the reactions of suppliers to positive and negative inequity can vary depending on the nature of the structure of interdependence of the relationship and that positive and negative inequity differentially influence relationship performance.
Inequity continues to exist in buyer–supplier relationships even though it has been demonstrated to have significant negative consequences. Surprisingly, many studies continue to draw on equity theory as an implicit or explicit mediating (but unexamined) explanation for observed relationships, given the generally accepted notion that equity is more stable and preferable than inequity. This work examines this generally accepted notion, finding certain conditions under which equity theory does not hold true.
The data used for this study consist of a two-wave longitudinal mail survey of Japanese suppliers reporting on relationships with primary U.S. buyers. We used a six-month time lag to measure relationship performance, from a different key informant. The final sample consisted of 296 completed matched surveys. We also conducted supplemental study with 304 Japanese managers to examine the breadth of behavioral responses to inequity.
The results reveal that that behavioral responses (e.g., resource sharing) to different inequity positions are contingent on the magnitude of interdependence of the relationship as well as the supplier’s and the buyer’s relative dependence. Furthermore, the results demonstrate that different inequity positions can not only influence a supplier’s resource sharing with its buyer but also have a direct influence on the perceived performance of the relationship.
Our findings, drawn from the context of relationships between Japanese suppliers and U.S. buyers, demonstrates that not all business partners work to maintain equity in their relationships. To better understand relationship actions, not only do researchers need to investigate the magnitude of interdependence between partners, they also need to take a nuanced approach to both inequity and relative dependence to disentangle potentially different effects of positive and negative inequity and relative dependence of the supplier and buyer, respectively.
Questions for the Classroom
In which cases, or under what relationship conditions, does equity theory not hold to be true?
How do positive and negative positions of inequity directly and indirectly influence relationship performance?
How might a cultural orientation of competitive achievement influence behaviors in an interorganizational relationship?
David A. Griffith, Jessica J. Hoppner, Hannah S. Lee, and Tobias Schoenherr (2017), “The Influence of the Structure of Interdependence on the Response to Inequity in Buyer–Supplier Relationships,” Journal of Marketing Research, 54 (1), 124-137.
David A. Griffith is Iacocca Chair and Professor of Marketing, Lehigh University (e-mail: email@example.com).
Jessica J. Hoppner is Associate Professor of Marketing, George Mason University (e-mail: firstname.lastname@example.org).
Hannah S. Lee is Assistant Professor of Marketing, Farmer School of Business, Miami University (e-mail: email@example.com).
Tobias Schoenherr is Associate Professor of Supply Chain Management, Eli Broad College of Business, Michigan State University (e-mail: firstname.lastname@example.org).