Supply Chain Mgt

Topics: Supply chain management, Management, Supply chain Pages: 2 (584 words) Published: November 29, 2010
1. Introduction
How and why are the concepts of power and surplus value relevant to an understanding of buyer-supplier exchange relationship? The relationship between buyer and supplier is a business to business relationship. In supply chain management, the exchange relationship is an indispensable element. Understanding the question, and then know what are power and surplus value. First to understanding how definite the buyer-supplier power relations in exchange process. Power relationship of buyer-supplier is determined depend on how the surplus value is carved up within four generic power categories (buyer dominance, buyer-supplier interdependence, buyer-supplier independence and buyer dependence). Power, Gallie argued in 1955, is an “essentially contested concept”1(1Watson, G. and Lonsdale, C. (eds.) (2003) Managing the Supply Base within Business Networks, chapters 2), the concept means which it can not be exacted definition within business networks. The working definition of the power is “the ability of one actor to affect the behaviour of another actor in a manner contrary to the second actor’s interests”(Steven Lukes ).At all the exchange process, the relationship between buyer and supplier are both cooperation as well as competition. Therefore the power and value surplus is likely to analysis under collaboration and competition. On the other hand, the power resources of buyer-supplier are relevant to power relations. Pre-contractual and post-contractual buyer-supplier power relation is able to affect the profit of buyer-supplier. A right collaboration relationship of buyer-supplier can increase the surplus value in an exchange. (Watson, G. and Lonsdale, C.2003) Usually buyer-supplier relationship can be adversarial collaboration or non-adversarial collaboration. Surplus value is the gap between the supplier costs and the buyer’s utility (the value of goods or service). In fact any buyer-supplier exchange is not the same, because buyer and supplier are...
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