Buyer-supplier relationship and supply chain accountability in pursuit of value creation

Abstract

Buyer-supplier relationships are becoming increasingly important within an emerging market context. However, with this level of importance and increasing formation, trust, collaboration and accountability and how these constructs foresee the value within BSRs, have to be considered. Within the context of African emerging markets, there is a notion amongst people that suppliers cannot perform. However, this study aims to prove that this is not the case as the majority of buyers and suppliers are performing in the way that they ought to. Twelve in-depth, semi-structured interviews were conducted in the process of data collection, of which half were from a buying side of MNE and the other from supply within the South African local first-tier supplier. Transaction cost theory was used to highlight the portion of cost implications that the relationship may incur. The study highlights the importance of accountability in relation to both trust and collaboration efforts and in doing so ultimately provided value creation for both parties. To form a successful BSR, there is a requirement for the level of high accountability from both sides to improve the overall operations of a firm within a developing market. The research explores the dynamics within a buyer-supplier relationship (BSR) and looks at how multinational enterprises (MNEs) perform within their first-tier suppliers by associating their relationship with the elements of trust, collaboration and accountability, with the overall aim of creating value that benefits both parties now and, in the future, thus creating a sustainable supply chain.