How COVID-19 pandemic has shaped buyer-supplier relationships in engineering companies with ethical perception considerations: A multi-methodological study

Abstract

In business-to-business (B2B) operations, prior studies have mainly explored transaction-based relationships with both buyers and suppliers opportunistic behaviors, driven largely by their intent to maximize their own benefits. These studies have also found that dependency on partners increases when supply materials are scarce. However, research is scant on how this relationship changes in the face of exogenous forces such as the COVID-19 pandemic, keeping in mind the ethical perception considerations. This study aims to bridge this gap in the literature by studying how buyers and sellers leverage collaboration and resource-sharing to tide over pandemic-like situations similar to the current COVID-19 pandemic while considering their ethical perceptions. We conduct a multi-methodological study consisting of an industrial survey and an interview-based thematic analysis. In the first phase, we collect primary data using a structured questionnaire and conduct a covariance-based structural equation modeling (CB-SEM) analysis. In the second phase, we conduct a post-hoc test. We find that non-regular suppliers will share strategic resources with buyers during uncertain times (e.g. COVID-19 pandemic) if they have a high ethical perception of the buying firm and share a candid relationship despite being their irregular customers. Our findings propose that B2B firms should maintain healthy relationships with alternative suppliers to build trust and avoid supply crises in times of disruptions.