Relationship development impacts on small suppliers and their larger customers in the Taiwanese electronics industry.

Abstract

This study sets out to investigate the relationship development impacts on small suppliers and their larger customers in the Taiwanese electronics industry. More precisely, this research's principal goal is to outline a framework for relationship development of small suppliers and their larger customers in the Taiwanese electronics network. Recent research has shown that small suppliers may face a range of problems in their relationship with larger customers (Blomqvist, 2002; Johnsen and Ford, 2002; Johnsen, 2005). This research examines the relationship development impacts of relationship characteristics of small suppliers and their larger customers on the process of development of these relationships in the Taiwanese electronics industry. The chosen study method involves a phenomenologicalapproach using case studiesof the relationships of small suppliers and their larger customers in the Taiwaneseelectronics industry. Individual in-depth interviews in both customer and supplier firms with directors or managers who have been closely involved in the relationship are employed to collect relevant primary data. Through the literature review, a classification of relationship characteristicsof small suppliers and larger customers is developed and a relationship development stage model identified (Ford, 1980). A conceptual model of the relationship development impacts of relationship characteristics of small suppliers and larger customers on their relationship developmentprocessis developed, and guidesthe empirical study. Five sets of small supplier and larger customer relationships are examined. From each supplier organisation five persons are interviewed e.g. president, managing director, and marketing manager. Also five individuals in each of the customer organisations are interviewed e. g. vice-managing director, purchasing managerand others involved in supplier relationships. In total, there are 50 participants in 49 interviews, (since Case B supplier side had two participants interviewed together). The researcher analyses the findings from these five sets of customer and supplier relationships through the use of analysis matrices. The premise of this research is to provide a better assessmentof the relationship development impacts on the relationship characteristics of small suppliers and their larger customers on the process of relationship development in the Taiwanese electronics industry. It is hoped that this study can benefit small suppliers by developing a set of managerial lessons from the study concerning relationship development with larger customers in the Taiwanese electronics market. Furthermore, the research provides indicators that different types of relationship development impacts on the relationship characteristics may influence the relationship development process between small suppliers and their larger customers at different stagesof relationship.