Carrot or Stick? Examination of the Role of Buyers’ Coercive and Reward Power on Suppliers Job Satisfaction and Turnover Intention
The relationship between a buyer and a supplier in a global sourcing setting can be discussed in terms of influence and control. Buyers make demands of suppliers and suppliers comply. The power influence of foreign buyers on the suppliers’ job satisfaction and turnover intention has been examined quantitatively for the first time in this study. Buyers use different types of reward power, such as future order promise or best supplier award nomination, or coercive power, such as order cancellation, chargebacks, or air shipments at factory’s cost, to make suppliers follow their wish. In this study, buyers’ reward power seemed less prevalent than coercive power, coercive power had a strong influence on suppliers’ negative job satisfaction and their high turnover intention. This is a unique finding that has practical relevance to the real textile and apparel industry scenario.