Differentiated Relational Strategies in Major Supplier Networks: A Blessing or a Curse in Collectivist Cultures?

Extant literature highlights the positive performance outcomes of a differentiated supplier management strategy. However, this research presents counterintuitive findings in major supplier networks in a collectivist culture like China. In such contexts, differentiated supplier management strategies may violate the equality principle expected by major suppliers, hindering their collective value creation process and ultimately undermining the buyers' financial performance. Using a combination of survey data, secondary archival data from Chinese manufacturing firms and their major supplier networks, and qualitative triangulation, this research reveals that a buyer's differentiated relational strategy (DRS) in major supplier networks negatively affects its financial performance. The negative effects of a DRS intensify under demand uncertainty but lessen under technological uncertainty. This research reveals a contextualized perspective on differentiated supplier management strategies and enriches the literature on the effects of collectivist cultures in supply chain management.