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International Journal of Information Management
j o ur na l ho me p ag e:w w w . e l s e v i e r . c o m / l o c a t e / i j i n f o m g t
Engaging suppliers in CRM: The role of justice in buyer–supplier relationships
Rachel Duffy
a, Andrew Fearne
a, Sue Hornibrook
a,∗, Karise Hutchinson
b, Andrea Reid
baCentreforValueChainResearch,KentBusinessSchool,UniversityofKent,CanterburyCT27PE,Kent,UnitedKingdom
bDepartmentofBusiness,Retail&FinancialServices,UlsterBusinessSchool,Coleraine,Co.LondonderryBT521SA,NorthernIreland,UnitedKingdom
a r t i c l e i n f o
Articlehistory:
Available online 17 May 2012
Keywords:
CRM Suppliers Fairness Loyaltycard Supermarkets
a b s t r a c t
Giventhecrucialroleofsuppliersincollaborativesupplychains,itissurprisingthatlittleattentionhas beenpaidtothenatureandmanagementofsupplierrelationshipsintheimplementationofaretailer’s CustomerRelationshipManagement(CRM)strategy.Toaddressthisgapintheextantliterature,thethe- oryoforganizationaljusticeisusedtoexploretheextenttowhichperceivedfairnessinbuyer–supplier relationshipssupportsorinhibitssupplierengagementwiththeCRMprocess.Therationaleisthatsup- plierswhofeelfairlytreatedbykeyretailcustomersaremorelikelytoinvestresourcesintheacquisition anduseofdatacentraltotheretailer’sCRMstrategy.Byempiricallytestingaconceptualmodellink- ingdownstreamCRMtoupstreamSRM,theresultsprovideevidencetoindicatethatcustomerdata useissignificantlyinfluencedbyperceptionsoffairness,particularlywithrespecttothedistributionof rewards,andthetransparencyofdecision-makingprocesses.AsakeycriticismofCRMcentersupon thefailureoforganizationstoexploitthefullpotentialofcustomerdata,theresultshighlighttheuse- fulnessofunderstandingtherelationallinkagesbetweenbuyersandsuppliersandtheconsequential behaviorofsuppliersintermsofengagementwithcustomerdatavitaltothesuccessofretailers’CRM strategies.
© 2012 Elsevier Ltd. All rights reserved.
1. Introduction
CustomerRelationshipManagement(CRM)suggeststhatfirms mustnotonlydevelopaknowledgebase,butalsodevelopcapa- bilitiesinknowledgemanagementtoallowmodifiedresponsesto customersonacontinualbasis(Campbell,2003;Garrido-Morreno
& Padilla-Meléndez, 2011). Customer loyalty data is one such sourceof customer-specificinsight, andifutilized,canresultin increased competitiveness,improved customersatisfaction and retention(Leenheer&Bijmolt,2007).Groceryretailers,inparticu- lar,collectandutilizecustomerloyaltycarddatatotailorproduct categoriesaccordingtocustomerwantsandneeds.However,this requirestheengagementofsuppliers,whoseknowledgeofdesign andmanufacturingshouldbeutilizedinordertofacilitatesuperior valueandcompetitivesupplychainadvantage(Barrett&Barrett, 2011;Tseng,2009).
Notwithstandingthis,littleisknownregardingtherolesuppli- ersplayintheCRMimplementationbyretailers,andspecifically theextenttowhichbuyer–supplierrelationshipssupportorinhibit
∗Correspondingauthorat:CentreforValueChainResearch,KentBusinessSchool, UniversityofKent,CanterburyCT27PE,Kent,UnitedKingdom.
Tel.:+441227827731.
E-mailaddress:[email protected](S.Hornibrook).
supplier engagement.In particular, there is a lack of empirical research(Chen&Huang,2007)intotheroleofsocialinteraction amongstindividualsinintra-firmknowledgemanagement,result- ingincallsforresearchtoutilizetheoreticalknowledgefromother fields,suchaspsychology,inordertounderstandthebehavioral aspectsofsupplierinnovativenesswithincollaborative relation- ships(Schiele,Veldman,&Huttinger,2011).Theprimarypurposeof thispaper,isthereforetoempiricallyinvestigatehowbehaviorby buyingorganizations,atboththeindividualandtheorganizational level,impactsupontheuseofCRMdatabysupplierswithinclose, collaborativerelationships.Themaincontributionofthisresearch isthefindingthatsuppliersaresignificantlyinfluencedintheiruse ofcustomerdatabyhowfairlytheyperceivetheyhavebeentreated bytheretailer.
Thepaperbegins bylinkingtheliteratureonCRMand Sup- plierRelationshipManagement(SRM),andprovidingaconceptual frameworkusingthetheoryoforganizationaljusticetoexplainthe relationallinkagesbetweenbuyersandsuppliers,andtheconse- quentialbehaviorofsuppliersintermsofuseofloyaltycardand othercustomerdata.Thepaperthenpresentsempiricalevidence ofthelevelofknowledge andengagementexhibitedbysuppli- ersoftheCRMpoliciesofSupermarketA,andtheimportanceof SRMasa barrierorenablertosupplierengagementintheCRM process.Thereafter,adiscussionofthecontributionofthisstudy tothefieldofCRMispresentedintheconcludingsectionofthe paper.
0268-4012/$–seefrontmatter© 2012 Elsevier Ltd. All rights reserved.
http://dx.doi.org/10.1016/j.ijinfomgt.2012.04.005
2. LinkingCRMandSRM
Supplierrelationshipmanagementinvolvesthemanagement of upstreamand downstream relationshipstocreate enhanced value in the marketplace (Christopher, 1998; Rinehart, Eckert, Handfield,Page,&Atkin,2004).Theimportanceofexternallinkages betweendownstreamcustomersandupstreamsuppliersbyretail- ersishighlightedbyBarrettandBarrett(2011)whofoundthatif businessprocessesareintegratedandmanagedeffectivelyacross thesupplychain,retailerswillaccruebenefitssuchasimproved responsiveness,improvedplanningandreplenishmentcapabilities andimproveddecision-making.Specifically,SRMisdefinedas“the mirrorimageof CustomerRelationshipManagement” (Croxton, Garcia-Dastugue,Lambert,&Rogers,2001,p.24);wherebyCRM involvesthestructureforhowtherelationshipwiththecustomer isdevelopedand maintained,and SRMdefineshow acompany interactswithitssuppliers.
In examining the nature of buyer–supplier relationships, a well-established stream of literature identifies a continuum rangingfromdiscretetorelationalbehavior(Dwyeretal.,1987;
Siguaw,Simpson,&Baker,1998).However,firmsarestruggling todevelop andsustaincollaborativeinitiativestowardstheend oftherelationalcontinuum(Spekman&Carraway,2006)asmany buyerscontinue toabuse their position of powerand strangle supplierswithshortterm,cost-drivendecisions(Rossetti&Choi, 2005),particularlywithregardstoretailer–supplierrelationships (Corsten & Kumar, 2005). Ultimately Giunipero and Eltantawy (2004)warnthatthisisdetrimentaltolongtermcompetitiveness giventhatthefullcapabilitiesofasupplier,necessarytoeffectively implementCRM,willbeundermined.Therefore,effectivecollab- orationrequiresmorethanjustco-ordinationattheoperational level of the relationship, but intent on the part of boundary spanners in buyer organizations to build strong relationships, wherebyattitudessuchastrustandcommitmentcanexist.This positivebehavioralintentiscriticaltodevelopingandsustaining collaborativeinitiatives suchas CRM,asit encourages partners todedicateassetsonbehalfofothersinthechain,thuscreating economicvalue(Spekman&Davis,2004).
Oneimportantdimensionaffectinganindividual’sactionsand reactions is how fairly they perceive treatment by the other, oftenmorepowerful party.Thetheoryof organizationaljustice (or fairness) has been used extensively in the intra organiza- tionalliterature,wherethetraditionalfocushasbeenontherole of fairness in the workplace. The assumption is that employ- ees’perceptionsoffairnesswillimpactupontheirbehavior,and thereforeonorganizationaloutcomesandperformance(Colquitt, 2001;Konovsky,2000;Masterson,Lewis,Goldman,&Taylor,2000;
Thibaut&Walker,1975).Employeeswhoperceivetheyaretreated fairlycontributetoperformancethroughpositivebehaviors,such aslongtermcommitmentordiscretionarybehaviors.Likewise,for thoseemployeeswhofeeltheyarebeingtreatedunfairly,resultant damagingretaliatorybehaviorswillnegativelyimpactuponorga- nizationalperformance(LePine,Erez,&Johnson,2002;Podsakoff, MacKenzie,Paine,&Bachrach,2000).
Inthecontextofthisstudy,thetheoryoforganizationaljus- ticeisappliedtointer-organizationalrelationships.Itisproposed thattheconceptoffairness,orjustice,willinfluencethestrength ofbuyer–supplierrelationshipsandinparticular,supplierengage- mentwitha CRMstrategy.The conceptualframeworkassumes anunequalpowerrelationshipbetweenbuyersandsuppliers,and wethereforelocateourempiricalinvestigationinacontextthatis characterizedbyasmallnumberofmonopolistic,powerfulbuying organizations,andafragmentedsupplybaseconsistingofsmaller organizations,namelytheUKsupermarket industry.The litera- tureonpowerinsupplychainsisextensive,butinthisresearch, the integrated model of power is adopted (Meehan &Wright,
2011),whereby poweris acomplex synthesisof organizational context,individualpersonalcharacteristicsofbuyersandsellers, andrelationshipinteractions.Thetheoryoforganizationaljustice alsoaccommodatesanintegrated viewofpower,by examining fairnessatthecontextuallevel,attheindividuallevelandatthe relationshiplevel.Inparticular,wepositthatengagementofsup- pliersintheprocessofCRMimplementationiscontingentuponthe natureoftherelationshipbetweenthecustodianoftheCRMstrat- egy,inthiscase,SupermarketAandtheirsuppliers.Therationale isthatsupplierswhofeelfairlytreatedbySupermarketAaremore likelytoengageintheirCRMstrategyandinvestintheacquisition anduseoftheirloyaltycardandotherdatathanthosewhoperceive theirrelationshipwithSupermarketAtobeunfair.
3. Theoreticalframework
Thetheoreticalframeworkformeasuringthemanagementof supplierrelationshipsdrawsprimarilyfromtheworkofGreenberg (1993)andColquitt(2001)whoproposethatfairnesscanbecon- ceptualizedaccordingtofourdistinctcomponents:thefairnessof outcomedistributions(knownasDistributiveJustice),thefairness oftheprocessesthatledtosuchoutcomes(known asProcedu- ralJustice), thefairnessoftheinteractions betweenindividuals (knownasInterpersonalJustice),andthefairnessintheexposureof evidenceorreasoningfordecisionstaken(knownasInformational Justice).
Todate,researchoninter-organizationaljusticeremainslim- itedwithmoststudiescombiningdifferentjusticedimensionsinto asinglevariable(i.e.Kumar,Scheer,&Steenkamp,1995;Suh,2004;
Yilmaz,Sezen,&Kabaday,2004)orfocusingonlyontheconse- quencesofalimitednumberofjusticecomponents(Brown,Cobb,
&Lusch,2006;Griffith&Lusch,2000).Thereforeagapremains intheinter-organizationalliteratureforanempiricalstudythat specificallyinvestigatestheconsequencesofallfourdimensionsof justiceonbehavioralorperformancebasedoutcomes.
Of particularinterest to therole of fairnessin the manage- ment of supplier relationships, are the positive organizational outcomesofcommitmentandcitizenshipbehaviors.Inaninter- organizationalcontext,commitmentisthewillingnessofsuppliers to commit to the relationship in the long term, whereas cit- izenship behaviors are those actions that are over and above that which is formally expected within the terms of supply (Hornibrook,Fearne,&Lazzarin,2009).Onemanifestationofsuch positive behavioral outcomeswould be thewillingness of sup- pliers toinvest in theacquisition and useof customer datato informandsupportthedevelopmentofinnovativenewproducts that couldbeofferedtothe retailerin accordancewitha CRM strategy.
InthecaseofretailcustomerSupermarketA,whichisthelargest supermarketintheUKandthethirdlargestintheworld,down- streamdatatosupporttheirCRMstrategyiscollectedfromapanel of 14million UKsupermarket shoppers.At theupstreamlevel, suppliersmaypurchasethisdata.Suppliersarealsoabletofreely accessoperationaldataviatheSupermarketALink,awebbased informationportal.
Fig.1showstherelationshipbetweenthemanagementofsup- plierrelationshipsand consequentialsupplierengagementwith datacriticalforthesustainabledevelopmentofaretailer’sCRM strategy.
3.1. Componentsofinter-organizationaljustice
Distributivejusticereferstotheperceivedfairnessoftheout- comesreceived (Griffith, Harvey,& Lusch,2006; Kumar, 1996) andismostcommonlydefinedintermsoftheequityrule,which
Distribuve Jusce
Procedural Jusce
Interpersonal Jusce
Informaonal Jusce
Fairnessof SRM SupplierEngagement
withCRM
Supplier’s use ofcustomer
data
Fig.1. ConceptualmodelofSRMandCRMintegration.
dictates that rewards and outcomes received should be pro- portionaltorespectiveinputsandcontributions(Colquitt,2001;
Leventhal,1980).Inthecontextofbuyer–supplierrelationships, distributivejusticerelatestotheweakerparty’sperceptionsofthe fairnessofthe divisionof benefitsand burdensthat itreceives fromitsrelationshipwiththeother,morepowerful,partner(Brown etal.,2006;Scheer,Kumar,&Steenkamp,2003;Yilmazetal.,2004).
Kumar(1996)alsoreferstothisasthefairnessoftheeconomicprice oroutcomesactuallyachieved.Whentheoutcomeisdeemedfair andthedistributionofrewardsovertimeisacceptable,exchange partners viewtherelationshipas beneficial andreciprocate via additionalinputs(Griffithetal.,2006).Conversely,supplierswho feeltheyare beingtreated unfairly in terms ofthe actualout- comeorinput/outputratio mayattempttoredressthebalance bydecreasingoutputs,alteringoutcomesorwithdrawingfromthe relationship.
Giventhatthemorepowerfulpartytoabuyingfirmandsup- plyingfirmrelationshipis ina positiontodetermineandenact theproceduresandprocessesthroughwhichoutcomesaredeter- mined,supplyingfirmswillbeconcernedwithproceduraljustice (Griffithetal.,2006;Kumaretal.,1995)whichfocusesonper- ceptionsaboutthefairnessofformalproceduresgoverninghow decisions areimplemented (Boydet al.,2007; Leventhal,1980, Mastersonetal.,2000;Thibaut&Walker,1975).
Inparticular,proceduraljusticeisconcernedwiththestructural elementsofthedecision-makingprocess,definedbyThibautand Walker(1975)asprocesscontrol(i.e.abilitytovoiceone’sviews andargumentsduringaprocedure)anddecisioncontrol(i.e.abil- itytoinfluencetheactualoutcome).Thesestructural elements, encompassingboththedirectionalityofcommunicationtogether withopportunityforvoiceleadtogreaterperceptionsoffairnessas channelmembershaveadegreeofcontroloverthedevelopment andadministrationofchannelpolicies,andareabletoprotecttheir interestswithintherelationship(Boydetal.,2007;Griffith&Lusch, 2000;Kumaretal.,1995).
Thisisimportantincollaborativestrategicsupplychainpart- nerships,astheactionsofonepartyinfluencetheabilityofthe othertocompeteeffectively.Assuchthereisanincreasingneedfor jointinvolvementinsettinggoals,longtermplanningandjointly managingexpectationsandresponsibility(Claro,Hagelaar,&Omta, 2003;Mohr&Spekman,1994)tohelpensureamutuallysatisfying solutionmaybereachedforeverycontingency(Claroetal.,2003;
Rokkan&Haugland,2002).Specifically,Brownetal.(2006)state thatperceptionsofproceduraljusticecanhelpmitigatedistributive
disappointmentandcanplayanimportantroleincommitmentto thechannelrelationship.
Interpersonaljusticeisconceptualizedasthedegreetowhich individuals are treated with politeness, dignity, courtesy and respectbythoseinvolvedinexecutingproceduresordetermin- ingoutcomes(Colquitt,2001).Thisisanimportantcomponentof fairnessasinterpersonaltreatmentreceivedduringtheenactment ofdecisionproceduresimpactsuponanindividual’sreactionsto decisionoutcomes(Bies&Moag,1986).Inparticular,Greenberg (1993) suggeststhat interpersonalaspects ofjusticealter reac- tionstodecisionoutcomes,asthemannerin whichpeopleare treatedcouldmakethemfeelbetterorworseaboutunfavorable outcomes.
Thisaspectofjusticeisparticularlyrelevanttothemanage- mentofbuyer–supplierrelationships,asrelationshipsincorporate manysocialelementsthatmayaffectattitudinalandbehavioral responses(Bendoly,Donohue,&Schultz,2006;Cousins,Lawson,&
Squire,2008;Cousins&Menguc,2006;Lawson,Tyler,&Cousins, 2008;Yee,Yeung,&Cheng,2008),particularlywhereretailbuyers areinapositionofpower,assomebuyersusepowerwell,while othersbehave‘outrageously’(Duffy,Fearne,&Hornibrook,2003;
Ramsay&Wagner,2009).
Informationaljusticealsoimpactsuponreactionstodecisions andprocedures(Greenberg,1990,1993)andisconcernedwithper- ceptionsofexplanationadequacy(Konovsky,2000).Itistherefore conceptualizedasprovidingexplanationsoraccountsfordecisions made,withdecisionsor proceduresdeemedfairifthebasisfor thedecisioncanbeexplainedandjustifiedinacandidandtruth- ful way (Bies &Moag, 1986; Colquitt,2001).In thecontext of buyer–supplierrelationships,informationaljusticewouldbeseen toexistifthemorepowerfulpartnerisabletoprovideacoher- entrationaleforitschanneldecisionsandpolicies,asdecisionsare morelikelytobeviewedasfairifthelogicbehindthemisrevealed (Duffyetal.,2003;Kumar,1996).
Insummary,perceptionsoffairtreatmentatboththeorgani- zationalandindividuallevel ofinteractionareposited toresult inincreasedpositivebehavioraloutcomes.InthecontextofCRM implementation,itisarguedthatasupplier,whoperceivesunfair- ness at the organizational level in terms of the distributionof benefits and the fairness of procedures for making decisions that concern them, will beless likely to investin the acquisi- tionofloyaltycarddataandtheresourcesnecessarytoanalyze it, let alone to act on it in support of Supermarket A’s CRM strategy.Atthesocial level,theperceivedlackofinter-personal
justiceandlackofexplanationsinthedecision-makingprocesses regardingmarketing, merchandising and newproductdevelop- ment (informational justice) could also deter some suppliers from engaging with CRM and the activities designed to sup- port it, includingthe acquisition,analysis and useof customer data.
Therefore,weproposethatperceptionsofjusticecapturethe natureofsupplierrelationshipmanagementinpracticeandthus hypothesizeasfollows.
H1. Supplier’s perceptions of fairness will positively influ- encesupplierengagementwithCRMinitiativesasdemonstrated throughtheuseandperceivedusefulnessofcustomerdata.
4. Methodology
4.1. Sampleanddatacollection
Data was collected during the summer of 2011 via a sur- vey of Supermarket A’s suppliers participating in a series of regionalsupplierworkshops conductedin England (York,Cam- bridge,Manchester), Scotland (Edinburgh), Wales (Cardiff) and NorthernIreland(Belfast).Seniormembersofstafffrom250sup- pliersattended(ownermanagersinthecaseofsmallersuppliers, andmarketingoraccountmanagersforthelargersuppliers),rep- resentingartisanalmanufacturersofnichespecialityproductswith limiteddistribution,tolargemanufacturersofmainstreamnation- allydistributedproducts.
Allthesuppliersmarketedand merchandisedsomeor allof theirproductsundertheSupermarket A‘Local’ bannerand the majority(93%)ofrespondentsregardedthesupermarketasakey customer.Atotalof73questionnaireswerecompleted,represent- ingaresponserateof29%.Theprofileofrespondents(seeAppendix A)wasnotsignificantlydifferentfromnon-respondents,interms oftheirsize(numberofemployees,turnover)sector(freshmeat andvegetables,dairy,ambientgroceryorbeverages)oryearstrad- ingwithSupermarketA.Thereforethesampleisrepresentativeof allbutthelargestbrandedmanufacturerswhosupplytheretailer intheUK.
4.2. Measurementofvariables
Toensurecontentvalidity,allconstructsweremeasuredfollow- ingrecommendationsfromChurchill(1979),inthatallconstructs aremeasuredusingmultipleitem scalesand scaleitemsgener- ated tocapture thedomain of theconstruct as conceptualised and defined in the study. Distributive justice was measured using4itemsdesigned tocapturethefairnessoftheoutcomes receivedand the division of benefitsand burdens in the rela- tionshipascapturedbytheequity rulecentraltodefinitions of distributive justice(Kumar, 1996).Procedural justicewasmea- sured using 3 items capturing the structural elements of the decision-makingprocessidentifiedbyColquitt(2001)asprocess control (i.e. ability to voice one’s views and arguments dur- ing a procedure) and decision control (i.e. ability to influence the actual outcome). Informational justicewas operationalized using3itemstocapturethewillingnessandextenttowhichthe customerprovidesvalidand truthfulexplanationsfor decisions and enactment of procedures (Colquitt,2001; Griffith &Lusch, 2000).
Theseitemsweredevelopedbydrawingoninter-organizational studies that have focused on explanation as a key component of procedural justice (i.e.Griffith & Lusch,2000; Yilmaz et al., 2004). Interpersonal justice was measured using 3 items that capturehowasupplieristreatedduringtheenactmentofproce- duresconcerningissuesofrespect,dignity,politenessandcourtesy
Table1
Reliabilitymeasures.
Constructmeasure Cronbachalpha
Distributivejustice 0.823
Proceduraljustice 0.850
Informationaljustice 0.907
Inter-personaljustice 0.940
Engagementwithcustomerdata 0.788
drawingprimarilyonscaleitemsfromColquitt(2001).Finally,sup- plier’sengagementwithCRMwasmeasuredusing4itemsthat capturedthesuppliers’useofcustomerinformation essentialto SupermarketA’s CRMstrategy,namelySupermarket A’sloyalty carddata,andoperationaldataviaSupermarketALink,aswellas theirviewsontheusefulnessofbothformsofcustomerinformation (AppendixB).
4.3. Validationandreliabilityofmeasures
After data collection all measures were purified and tested fortheirreliabilityandvalidityinlinewithrecommendationsby Churchill(1979).Asthemultipleitemscalesinthisstudywerenot drawnintheirentiretyfrompreviousstudies,exploratoryfactor analysiswasusedtoassessthevalidityofthemeasurementscales intermsoftheirconvergentanddiscriminantvalidityandtocon- firmtheconceptualisationoftheconstructs(Caniels&Gelderman, 2007;Churchill,1979;Holden&O’Toole,2004).Scalereliability wasassessedintermsofitsinternalconsistencyusingCronbach’s alpha(Churchill,1979).
Factoranalysis1wasconductedontheindependentvariables usingtheprincipalcomponentsmethodwiththeinitialextrac- tionoffactorsdeterminedbythelatentrootcriteria.Factorswere interpretedfromtherotatedcomponentmatrixfollowingaVari- maxrotation.Thisresultedintheidentificationoffourindependent variablesasconceptualised.Table1illustratesthatthescalesmea- suringeachfactorhadalphavaluesrangingfrom0.788to0.940.
Withreliabilitymeasuresabove0.7usedasthecommonstandard allscalesexhibitgoodscalereliability(Golicic&Mentzer,2006;
Hairetal.,1998).Ananalysisoftheloadingsandcrossloadings ofthefactoranalysis(AppendixC)indicatesthatallscalesshow adequatelevelsofconvergentvalidity.
4.4. Controlandcontextmeasures
Aseriesofcontrolandcontextmeasureswereincludedtosee ifdifferencesinsupplierengagementwithdatasuppliedbySuper- marketAcouldbeattributabletofactorsotherthanthoseinthe framework.Atthefirmlevel,datawascollectedregardingnum- berofemployeestogiveameasureoffirmsize.Attherelationship level,informationwascollectedregardingnumberofyearstrading withSupermarketA.Potentialbarrierstouseofdata,suchascostof accessandITcapabilitiesofstaff,werealsoinvestigated.However, noneofthesefactorshadanysignificantinfluenceondatauseat the5%levelofsignificance.
5. Results
Given the relatively small sample size, the hypothesis was testedusingmultipleregression, asusedinsimilarrecentstud- ies(Claroetal.,2003;Corsten&Kumar,2005;Nevins&Money, 2008; Rokkan & Haugland, 2002). The regression model was
1ScaleitemsandloadingsareshowninAppendixC.
Table2
TotalvarianceinCRMengagementaccountedforbySRM.
Model Variablesenteredintomodel Rsquare AdjustedR
square
Standarderror oftheestimate
Fstatistic Sig.
1 Distributivejustice,Procedural justice,Informationaljustice, Inter-personaljustice
0.217 0.156 0.97260 3.593 0.012*
*Sig.at0.05.
Table3
ImpactonsupplierengagementwithCRMdataofSRM.
Model Variablesenteredinto model
Standardized Tstatistic Sig.
Constant 5.117 0.000**
1 Distributivejustice 0.529 3.376 0.001**
Proceduraljustice −0.413 −2.718 0.009**
Informationaljustice 0.041 0.242 0.810
Inter-personaljustice 0.024 0.160 0.874
**Sig.at0.01
estimated using the four components of justice identified in Figure1.Table2illustratesthatthemodelissignificantinexplain- ingsomeofthevarianceinsupplierengagementindataessentialto SupermarketA’sCRMstrategy.AlthoughthereportedR2isquite low,theresultsarecomparablewithrecentpublishedresearch, whereadjustedR2’sbetween0.04and0.42arereported(i.e.Claro etal.,2003;Leuthesser&Kohli,1995;Nevins&Money,2008;Wang, Siu,&Barnes,2008).Therefore,theresultsprovidesomesignifi- cantsupportfortheassertionthatjusticeperceptionsoftheSRM processhaveabearingonengagementwithdataessentialtoCRM implementationandprovidesupportforH1.
Table 3 demonstrates that of the four justice components enteredintothemodel, itis distributivejusticeand procedural justicethataresignificantpredictorswhenthevariablesarecon- sideredsimultaneously.
Thesignificantpositiverelationshipbetweendistributivejus- tice and engagement withCRM data supports the theory that SupermarketA’ssupplierswhofeeltheyarebeingadequatelyand fairlyrewardedintermsoftheirinputintotherelationshipare more likely tobeengaged withtheircustomer’sCRM strategy.
Howeverthenegativerelationshipbetweenproceduraljusticeand engagementwithCRMdataiscounterintuitiveandrunscontrary toassertionsfromtheliteratureasitsuggeststhatsupplierswho feelthattheyhavelittleinfluence,inputorcontroloverthesuper- market’sdecision-makingproceduresaremorelikelytouseretailer data,thanthosewhodohaveinputintodecisionstakenregarding therelationship.Possibleexplanationsforthisfindingarediscussed inthenextsections.
6. Discussion
ItiswidelyrecognizedthatSupermarketAhasastrong,ifnot unassailable,leadintheirknowledgeofshopperbehavior,through theinsightsthattheloyaltycarddataprovide.However,giventhat thebuyingteamsdonothavedirectaccesstotheloyaltycarddata, theirCRMstrategyisfundamentallydependentonthewillingness andabilityofsupplierstoaccessandexploittheconsumerinsight thatthedataprovides.Theresultsofthisstudyindicatethatsup- pliersaremoreengagedwithaccessingtheoperationaldataand focusingondaytodayactivities,ratherthanusingtheloyaltycard datatosupportthesuccessfulimplementationofSupermarketA’s CRMstrategy.
Ourresultsshowthatsupplierswhofeeltheyarebeingade- quately and fairly rewarded in terms of their input into the relationship (distributive justice) are more likely to use data essential totheimplementationof Supermarket A’sCRMstrat- egy.Thisindicatesthatsupplierswhoarefairlytreatedinterms ofdistributionoffinancialand non-monetarybenefitsaremore likely to invest in the relationship, reinforcing the view that successfulimplementationof aCRMstrategydependsupon the nature of the relationship with suppliers. On the other hand, suppliers who feel they have not been adequately rewarded appear less likelytoinvestresources inusing retailerdataand maybemore likelytoengagein retaliatoryor negativebehav- iors, such as taking technology innovations, enhanced service models, or new product designs, to other competing retail- ers.
A surprising finding wasthe negative relationship between procedural justiceand theuse and perceivedusefulness of the customerdata.Whilethismayseemcounterintuitive,itmaybe explainedinpartbythehigherengagementwiththedatabysup- pliersthathavelessinputandcontroloverthedecision-making process.Thesesuppliersmayviewthedataasanopportunityto gainasourceofcounter-veilingpowerinanindustrywherepower liesfirmlyin thehands ofthesupermarkets.Therefore, suppli- ersmayseethedataasanopportunity toincrease thelevelof interdependenceintherelationshipandthusgainmorecontrol overthedecision-making process,assuperiorproductandmar- ketknowledgeisasourceofvaluethatisdifficultforotherfirms toimitate(Batt&Purchase,2004;Fearne&Hughes,1999;Ulaga
&Eggert,2006).Alternatively,thenegativerelationshipcouldbe explainedbythefactthatsuppliersmayhavebecomeaccustomed orimmunetoalackofinvolvementandparticipationindecisions orthattheyfeelthatthefairnessofthedistributionofbenefits and rewardsmorethan compensatesfor theirlackofinfluence onthedecisionstakenbySupermarketAandsodonotviewthis asareasonnottoinvestintheacquisitionanduseofcustomer data.
Iftheseinterpretationsarecorrect,thishasimportantimplica- tionsforSupermarketA,theimplementationoftheirCRMstrategy, andtheengagementofsuppliers.Supplierswhofeeltheyarefairly rewardedaremorelikelytocommittoacollaborativerelationship throughinvestingandusingretailerdata.Equally,supplierswho arefrustratedwiththeirlackofinfluenceoverthedecision-making proceduresinvolvingtheirbusinessmayconsiderusingtheloyalty carddataasadefensemechanism.Aworryinginterpretationofthis findingforSupermarketAwouldbethatsuchsuppliersareengag- ingandinvestinginthedatanotbecausetheyarecommittedto developingtheirrelationshipwiththesupermarketandtheircus- tomers,butarepossiblycontemplatingmorenegative,retaliatory actions,suchasusingtheknowledgegainedfromtheloyaltycard dataasabargainingtooltoreducetheirrelativedependenceon SupermarketA.Thiscouldincludeforexample,buildingrelation- shipswithalternativeretailers.ThiswoulddiminishSupermarket A’sabilitytouseCRMasakeydifferentiatorandstrategicweapon, leavingthemincreasinglyreliantonpromotionalactivitytodefend theirmarketshare.
7. Conclusions
Withreferencetothemainobjectiveofthis study,itmaybe concludedthatthereisarelationshipbetweenhowfairlysuppliers feeltheyhavebeentreated,andtheirwillingnesstoengagewith theimplementationoftheircustomers’CRMstrategy.Whilesup- pliersarerecognizedasanimportantsourceofinnovation,they needtobemotivatedtoinvestintheircustomers’requirement fornewproductandprojectdevelopments.Supplierswillbemore likelytoinvestinsuchactivitiesifbuyingorganizationsbothunder- standandoffervalue,asperceivedbysuppliers(Ramsay&Wagner, 2009).Thisreinforcestheviewthatbuyersneedtomakethem- selvesattractivetosuppliers,byofferingvaluetosuppliersnotjust intermsoffinancialbenefits,butalsointermsofstrategicallysig- nificantnon-monetaryrewardssuchasknowledge,competencies (Smals&Smits,2012)andreputation(Schieleetal.,2011).Buy- ersalsoneedtounderstandthesourcesofsuchvaluetosuppliers, definedasvariousbuyerbehaviorsandcharacteristicsthatsuppli- ersregardasbeneficialordesirable,andwhichmaybespecificto individualsuppliers(Ramsay&Wagner,2009).Thisstudyconfirms thatonesuchsourceofvalueishowfairlysuppliersfeeltheyare treated.
Thisfindingthereforehasanumberofimplications.Forprac- titioners, a number of initiatives could contribute to positive collaborative organizational outcomes, for example recruiting, training and rewarding individual buyers and other functional managerstoensuresuppliersaretreatedfairlybothattheorganiza- tionallevelandindividualpersonalrelationshiplevel.Jointtraining
withkeyown brandsuppliersinmarketing,merchandisingand newproductdevelopmentcouldalsosupportsupplierengagement withtheimplementationofabuyingorganization’sCRMstrategy.
Thisalsohasimplicationsatthepolicylevel,inparticularinmar- ketswherethereisapowerimbalance.Theadoptionofarigorous conceptualframeworkthatmeasuresfairnessfromthesupplier perspective,andisadministeredbyanindependentparty,would helpinformbothindustryandpolicymakers.Thestudyhasalso contributedtotheorybyadapting,testingandapplyingaconcep- tualmodel whichdraws fromdisciplinesotherthaneconomics toincludebehavioraldimensionsatboththeorganizationaland individuallevelwithincollaborativebuyersupplierrelationships.
Inaddition,itexplorestherelationshipfromtheunderexplored perspectiveofthesupplier.
Althoughthestudyidentifiestheroleoffairnessincollabora- tivesupplychainrelationships,thereareanumberoflimitationsto theresearch.TheresearchisrestrictedtoSupermarketAandtheir relationshipwithasmallnumberofregionalsuppliers,therefore generalizabilitytoothercontextsislimited.Additionally,thedata resultsareweakenedduetothesmallsamplesize,thereforefurther researchmayincludeadditionaldatacollectionfromotherregional supplierstoSupermarketA.Furtherresearchcouldconsiderthe relationshipsbetweenothersupermarketsandtheirsuppliers,or othersectorswhereCRMiskeytostrategicsuccess.Theconceptual modelopensupanumberofrichresearchavenues,includingthe applicationtoothercontexts;identifyingotherpositiveandnega- tiveorganisationaloutcomes,andexploringtheroleofindividual dimensionsofjusticeonperformanceoutcomesincollaborative buyer–supplierrelationships.
AppendixA. Sampleprofile
No.ofemployees Sector No.ofyearstradingwithSupermarketA
Category %ofrespondents Category %ofrespondents Category %ofrespondents
Lessthan20 33% Freshmeat 1% Lessthan1 4%
20–50 11% Freshfruitandvegetables 8% 1–2 4%
50–100 12% Freshfish 3% 2–3 7%
Over100 44% Dairy 8% 3–5 20%
Beverages 6% 5–10 13%
Ambientgrocery 18% Over10 51%
Processedmeats 4%
Other 52%
AppendixB. Scaleitemsformeasuringsupplier’suseofcustomerdata
Scaleitems Cronbach’salphaif
itemdeleted 1.HowoftendoyoumakeuseofthecommercialandoperationalinformationthatisavailablethroughSupermarketAlink? 0.734
2.Howusefulhaveyoufoundthisinformationinthepast? 0.704
3.Howoftendoyoumakeuseoftheinformationaboutyourconsumers(SupermarketAshoppers)andtheirpurchasingbehavior, availablethrough(thesystemsprovider)orthe(Referencesremoved)?
0.778
4.Howusefulhaveyoufoundthisinformationinthepast? 0.726
AppendixC. Rotatedcomponentmatrixfor inter-organisationaljustice
Scaleitems Factor1 Factor2 Factor3 Factor4
Distributivejustice
1.SupermarketAstaffneveruse threatstosecurebettertermsof trade
0.774 0.170 0.021 0.129
2.SupermarketAstaffrecognise thatbothpartiesneedtobenefit fromourrelationshipwiththem
0.797 0.053 0.355 0.235
3.Therewardswereceivefrom ourrelationshipwith
SupermarketAarefairgivenour contribution
0.783 0.078 0.192 0.270
4.Anyinvestmentrequiredto improvetheperformanceofour operationswithSupermarketA isfairlydistributedbetween ourselvesandSupermarketA
0.724 0.254 0.307 0.056
Proceduraljustice
1.Wearegivenopportunitiesto expressourviewsandoffer inputtodecisionsthataffectour relationshipwithSupermarketA
0.386 0.120 0.742 0.269
2.Wehavesomeinfluenceover theoutcomeofdecisionstaken bySupermarketAthataffectour relationshipwiththem
0.145 0.112 0.854 0.198
3.SupermarketAstaffwill occasionallyaltertheirdecisions inresponsetooursuggestionsor concerns
0.197 0.243 0.846 0.050
Informationaljustice 1.StaffatSupermarketAare willingtodiscussthereasons behindtheirdecisionsand actions
0.199 0.288 0.309 0.804
2.StaffatSupermarketAalways presentvalidreasonsforany changestheymaketodecisions orproceduresthataffectour business
0.167 0.250 0.089 0.856
3.StaffatSupermarketAare openandhonestwhen explainingthereasonsbehind theirdecisionandactions
0.319 0.333 0.176 0.768
Inter-personaljustice
1.StaffatSupermarketAtreatus withdignity
0.122 0.910 0.117 0.249
2.StaffatSupermarketAtreatus withrespect
0.105 0.914 0.093 0.264
3.StaffatSupermarketArefrain frommakingimproperremarks orinsensitivecommentswhen dealingwithus
0.150 0.880 0.001 0.209
Eigenvalues 2.247 6.063 1.172 1.019
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