Interesting topic, Sidney. This sounds like Agency Theory. I really like this link to Agency Theory, as it cites the seminal papers.
Starting off, everything is great. They negotiate a low price and high quality to establish your business. After the honeymoon is over, they will incrementally go up on price, down on quality, or both. Eventually like with Economies of Scale, the supplier will get close to the marginal utility (or barrier to exit), and either lose your business, or reign things back in.
Seeing the stuff they make their vendors do, I guess Wal-Mart can objectively demonstrate sovereign reign over their outsourced processes!
Sidney, I am probably not even close to your initial query. I see this more on the operational level of the strength of the Supply Chain relationships, and the level of control the agent has. As with E-Technology (Harland et al, 2007), implementation of E-technologies in SME's is largely dictated by customer pressure. The greater the agent strength, the more control (to the point of satisfying internal quality requirements) will be exercised.
The level of compliance by outside vendors reminds me of the many addressing NADCAP and it's implementation. If they can afford it, suppliers told Boeing to take a leap. If Boeing needed them, they had to overlook it. If the vendor needed Boeing's contracts, they complied and implemented it.
Starting off, everything is great. They negotiate a low price and high quality to establish your business. After the honeymoon is over, they will incrementally go up on price, down on quality, or both. Eventually like with Economies of Scale, the supplier will get close to the marginal utility (or barrier to exit), and either lose your business, or reign things back in.
Seeing the stuff they make their vendors do, I guess Wal-Mart can objectively demonstrate sovereign reign over their outsourced processes!
Sidney, I am probably not even close to your initial query. I see this more on the operational level of the strength of the Supply Chain relationships, and the level of control the agent has. As with E-Technology (Harland et al, 2007), implementation of E-technologies in SME's is largely dictated by customer pressure. The greater the agent strength, the more control (to the point of satisfying internal quality requirements) will be exercised.
The level of compliance by outside vendors reminds me of the many addressing NADCAP and it's implementation. If they can afford it, suppliers told Boeing to take a leap. If Boeing needed them, they had to overlook it. If the vendor needed Boeing's contracts, they complied and implemented it.
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Brad
Brad
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