Journal of Economics and Management (Jan 2015)
Power of Companies in Supply Chains and Their Effect on Network Development
Abstract
A general supply chain functions as a closed cluster and consists of at least three companies: supplier, producer and buyer. In an optimal case the companies within a supply chain are well integrated, partnership rests on trust which results in common strategic decisions. Business practices show that there is a stronger company within the chain that uses its power position to influence network development. The objective of the research is to measure how and what kind of power position is needed to influence the supply chain. The hypothesis states, that power and network development are opposite effects in a supply chain. Statistical examination of data gained from 221 companies state that the company with power position has advantages if the supply chain extends. SPSS analysis proves that the hypothesis is false and opens a new direction of research. Companies within the supply chain have to cope with power structures while cooperating with each other. They tend to look for solutions to ease dependency. Using or misusing power has several factors; mainly they are inherited from the strongest link of the supply chain. This is usually a problem but the results of the statistical analysis show that still a win-win situation is needed for the companies in order to deepen the cooperation. To conclude this research the data shows that the goal is to be more competitive as a chain, not just as a company.
