An exploration of the ‘dark side’ associations of conflict, power and dependence in customer–supplier relationships

IMM-07292; No of Pages 20 Industrial Marketing Management xxx (2016) xxx–xxx

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Industrial Marketing Management

An exploration of the ‘dark side’ associations of conflict, power and dependence in customer–supplier relationships Rhona E. Johnsen a,⁎, Sylvie Lacoste b a b

ESC Rennes School of Business, 2 Rue Robert d'Arbrissel, 35065 Rennes cedex, France Leonard de Vinci, Pôle Universitaire, Business Lab, 12 Av. Leonard de Vinci, 92916 Paris La Defense cedex, France

a r t i c l e

i n f o

Article history: Received 1 December 2014 Received in revised form 28 October 2015 Accepted 25 November 2015 Available online xxxx Keywords: Conflict Power Dependence Customer Supplier Relationship Asymmetric relationships Relationship characteristics

a b s t r a c t The purpose of this paper is to present the findings from a critical literature review of the ‘dark side’ issues related to three constructs, namely conflict, power and dependence, in customer–supplier relationships. Previous research has focused on discrete characteristics that influence relationships, but there is a paucity of research that considers the intertwining of a set of characteristics that may create darker associations or consequences for relationships. The paper contributes to IMP literature through this investigation of darker associations of relationships as much of the previous literature on customer–supplier relationship development has been concerned with building trust, developing commitment or managing long-term goals and mutuality (IMP Group, 1982). The paper considers the research on conflict, power and dependence in relationships, tracing its development from January 1980 to the end of 2014, and assessing the dark side issues raised in previous research, placing particular emphasis on ‘asymmetric’ customer–supplier relationships. The contribution of the paper lies in its critique of this focused body of literature and in the development of a better understanding for future IMP researchers on the derivations, foundations and findings concomitant to the ‘dark side’ of conflict, power and dependence in customer–supplier relationships. The paper proposes themes and future avenues of research related to the dark side of conflict, power and dependence, placing emphasis on the ‘bi-polarity’ of each relationship characteristic, the dynamics of relational benefits, the consequences of their evolution on inter-organizational trust and its impact on the dark side of relationships. Hence, the paper contributes through the identification of potential research areas and propositions to guide future conceptual developments in the field. © 2016 Elsevier Inc. All rights reserved.

1. Introduction The purpose of this paper is to present a review and critique of the literature on the ‘dark side’ associations or consequences of conflict, power and dependence in customer–supplier relationships. Our intention is not to develop an all-encompassing review of the ‘dark side’ literature, but rather to review three constructs and to investigate their associations with the darker side of relationships through an in-depth examination of relevant literature from January 1980 to the end of 2014. Thus, the paper focuses particularly on conflict, power and dependence as important relationship characteristics that may influence the darker side of the atmosphere of customer–supplier relationships. Although other relationship characteristics may arguably have dark consequences too, we focus on these particular characteristics as they may potentially create problems or challenges in customer–supplier relationship development (Das & Kasturi, 2004; Lee & Johnsen, 2012). ⁎ Corresponding author. E-mail addresses: [email protected] (R.E. Johnsen), [email protected] (S. Lacoste).

These problems and challenges may range from a lack of beneficial outcomes, goal congruence or dysfunctional interaction through power– dependence asymmetries (Cowan, Paswan, & Van Steenburg, 2015; Marcos Cuevas, Julkunen, & Gabrielsson, 2015; McAlister, Bazerman, & Fader, 1986) to a lack of perceived fairness or interdependence which may spur conflict (Kumar, Scheer, & Steenkamp, 1995). Previous studies have not considered conflict, power and dependence as a set of intertwining relationship characteristics that may have darker associations or consequences for customer–supplier relationships. Our intention is therefore to address the need for an examination of how this particular set of three relationship characteristics may create dark side influences, through an in-depth examination of the literature. We therefore adopt the three constructs as key search terms for our literature review, these being the most common terms associated in previous papers with dark side issues. We use the three constructs to firstly systematically select relevant papers and then to undertake a nuanced narrative analysis to examine in what ways these constructs are linked to dark side issues. We place emphasis in our review on asymmetric customer–supplier relationships which have been found to be a setting in which conflict, power and dependence issues may thrive

http://dx.doi.org/10.1016/j.indmarman.2015.12.011 0019-8501/© 2016 Elsevier Inc. All rights reserved.

Please cite this article as: Johnsen, R.E., & Lacoste, S., An exploration of the ‘dark side’ associations of conflict, power and dependence in customer– supplier relationships, Industrial Marketing Management (2016), http://dx.doi.org/10.1016/j.indmarman.2015.12.011

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and predominate (Johnsen & Ford, 2008). Following Johnsen and Ford (2008) and Lee and Johnsen (2012), we define asymmetry in customer–supplier relationships as ‘an imbalance in the size and characteristics of a relationship’ (Lee & Johnsen, 2012, p.192), for instance one party may be smaller and have less power, but have more trust in the relationship than its larger counterpart. Previous research has often focused on characteristics of relationships that favor a ‘bright’ side or positive perspective. For example, much of the literature on customer–supplier relationship development has been concerned with building trust, developing commitment or managing long-term goals and mutuality (IMP Group, 1982). Positive consequences for customers and suppliers have been associated with, for example, suppliers' potential to develop specialized capabilities (Möller & Törrönen, 2003) or more balanced characteristics e.g. more trust and commitment to large customers or capabilities in specific technology or agility in product design. When the IMP group started to work on the interaction approach (IMP Group, 1982) they attempted to analyze and apply the concepts of power and dependence in industrial marketing, recognizing it was “relatively under-explored” (1982, p. 369), but their focus on networks and cooperation has led this group to neglect the role of power in business relationships (Olsen, Prenkert, Hoholm, & Harrison, 2014), which can be seen as a call to further investigate this construct. Furthermore, some IMP researchers have highlighted that dependence, power and conflict problems can complicate the development and direction of customer–supplier relationships making them more challenging to manage (Havila & Wilkinson, 2002; Lee & Johnsen, 2012; Munksgaard, Johnsen, & Patterson, 2015). Other authors indicate that high levels of dependence, limited power or frequent conflicts can confuse the direction of the relationship, limit a supplier's confidence and energy and its ability to forge new relationships (Havila & Wilkinson, 2002; Lee & Johnsen, 2012). It therefore appears important to develop a better understanding of the influences of conflict, power and dependence on the outcomes of relationships. In this paper we investigate the dark side issues associated with conflict, power and dependence and link this literature with that of asymmetric customer–supplier relationships, drawing on previous classifications of the characteristics of asymmetric relationships (Johnsen & Ford, 2008; Johnsen, Johnsen, & Lamming, 2008; Lee & Johnsen, 2012; Munksgaard et al., 2015). We posit that there is a paucity of research that builds conceptually on how conflict, power and dependence may link to the dark side of customer–supplier relationships. Furthermore, the potential for conflict, power and dependence to create damaging or negative associations in asymmetric customer–supplier relationships remains an under-investigated area. We aim to contribute to the business-to-business marketing field by examining the dark side issues related to conflict, power and dependence through a focused literature review which investigates their associations and consequences in customer–supplier relationships. In this paper we seek to find answers to the following two research questions: • What are the key themes in the literature on the dark side of conflict, power and dependence in customer–supplier relationships? • What are the avenues of research on the dark side of conflict, power and dependence in customer–supplier relationships that may guide future conceptual developments in the field? Our contribution in this paper lies in the analysis of this focused body of literature and in the development of a better understanding for future researchers on the derivations, foundations and findings concomitant to the ‘dark side’ of conflict, power and dependence in dyadic customer– supplier relationships. We further identify potential research areas, critiques and propositions to guide future conceptual developments; we also highlight how the three constructs belong to both the “bright” and “dark” sides of relationships, placing particular emphasis on the ‘bi-polarity’ of each relationship characteristic and the role played by the mutual quest for relational benefits. We suggest that following the

consolidation of research themes provided by our literature review that further research could investigate the dynamics of relational benefits, the consequences of their evolution on inter-organizational trust and its impact on the dark side of relationships. In the following section we present a background to our investigation of the dark side of conflict, power and dependence in customer– supplier relationships, relating partly to IMP-related research, before proceeding to a discussion of the research methodology of the study. We then present our findings from the literature review. In the final sections of the paper we draw conclusions and identify future avenues of research and propositions to guide future conceptual developments in the field, with particular relevance for IMP research. 2. Background to the ‘dark side’ characteristics of customer–supplier relationships As indicated in the introduction, the literature on customer–supplier relationships may be considered to have both a ‘lighter’ and a ‘darker’ side. It has been found that close relationships do not necessarily equate with ‘good’ relationships (Anderson & Jap, 2005). Value creation in relationships can be damaged by either too little or too much ‘social capital’ (Villena, Revilla, & Choi, 2011). As parties draw closer together and relationships become more stable during the relationship development process, conflicts and inconsistencies may come to the fore (Grayson & Ambler, 1999) and tensions may destabilize relationship development potential (Fang, Chang, & Peng, 2011). In trying to guard against opportunism in relationships (John, 1984) by choosing to work with already close partners, firms may find that opportunism is actually aggravated. This can be because of the very proximity and intimacy the firm sought out in relationships, as closer partners may feel more justified in confronting their partners with hurtful truths about their relationship, creating damage that proves difficult to repair (Wuyts & Geyskens, 2005). Suppliers may benefit from the positive advantages of working in trusting and committed long-term relationships where they can rely on developmental support, focused application of their capabilities or a regular income stream (Goffin, Lemke, & Szwejczewski, 2006). However, imbalanced customer–supplier relationships can be considered problematic to function within and to manage, as smaller suppliers work to achieve the strategic goals of their larger customers foregoing their own goals (Johnsen et al., 2008). Asymmetric relationships, where a difference in size exists between the parties (Johnsen & Ford, 2008), have been considered as fraught with difficulties because of imbalances in the characteristics of the relationship or because of the negative consequences associated with the process of developing and investing in relationships longer-term with a single dominating customer (Lee & Johnsen, 2012; Munksgaard et al., 2015). The characteristics of customer–supplier relationships are also linked to the Industrial Marketing and Purchasing Group's (IMP) interaction model (IMP Group, 1982). The model presented dyadic relationships as frequently long-term, often becoming institutionalized, and viewed through variables describing the participants in the interaction process, the elements and process of interaction, the atmosphere affecting and influencing the interaction and the environment within which interaction takes place. The atmosphere of a relationship is described in terms of the power–dependence relationship between the parties, the level of conflict and/or co-operation, overall closeness or distance and mutual expectations (IMP Group, 1982). Relationships between two parties are rarely equal, therefore there will be issues of power balance, control and dependency to resolve or cope with for each party. The relative position of power, and the extent to which this power extends, may influence the level of co-operation or conflict between parties and create an atmosphere of closeness or distance and the development of expectations or requirements relating to the outcome of the interaction process. The atmosphere is an outcome of the relationship between parties and advantages and disadvantages may be evident in

Please cite this article as: Johnsen, R.E., & Lacoste, S., An exploration of the ‘dark side’ associations of conflict, power and dependence in customer– supplier relationships, Industrial Marketing Management (2016), http://dx.doi.org/10.1016/j.indmarman.2015.12.011

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close or distant relationships. Firms may wish to develop close relationships to reduce transaction costs (Williamson, 1975), or share resources, information and capabilities to improve efficiency and gain competitive advantage. Close bonds may also permit a company to exert its influence over the development of the other party for individual or mutual benefit and to reduce uncertainty by improving its control over the environment in which it operates. Thus, a picture evolved in the interaction model of relationships and long-term bonding within them, various forms of adaptation, and the development of characteristics such as power, dependence, trust and mutuality. Since the development of the interaction model (IMP Group, 1982) changes have impacted on the complex business environment surrounding customer–supplier relationships (Leek, Naudé, & Turnbull, 2003). External shifts include the changing nature of industry, developments in information technology, globalization and changing customer expectations, while internal changes within firms have seen the blurring of boundaries between various functions. Interaction takes place in a dynamic external environment, where fluctuations in the industry in which companies operate, and in the wider environmental context, influence the structure and strategy of organizations and the complexity of their relationships (Ford & Håkansson, 2002). It has become more important for customers and suppliers to understand the dynamics of their relationships and to develop methods for managing in relationships which may be complex, unstable and imbalanced in terms of, for example, power, dependence and conflict. An understanding of the structure and dynamics of customer– supplier relationships is critical for firms in enabling them to have a clearer view of their current and potential positions. Structural characteristics of relationships were identified by Håkansson and Snehota (1995) as continuity and stability, informality, complexity and symmetry. The study of symmetry and asymmetry in customer– supplier relationships has been developing since the late 1980s (e.g. Harrigan, 1988) as researchers began to consider not simply interaction in generic relationships, but also how imbalances between a customer and supplier could affect and influence interaction. In IMP research it has been suggested that symmetry is reflected in customer–supplier relationships in the ways in which the parties balance their sets of resources and capabilities (Håkansson & Snehota, 1995). Research on customer–supplier interaction has found that relationships tend to develop more smoothly if the capabilities, resources and characteristics of the relationship are a good strategic fit (Tu, 2010). Power and dependence have been considered as important characteristics that may influence asymmetry in relationships, but more recently other relationship characteristics have been examined alongside power and dependence to understand how a wider set of characteristics may play a part in determining how asymmetric relationships are developed and managed (Johnsen & Ford, 2008). For example, a number of authors have attempted to understand how single relationship characteristics such as power, commitment, dependence or knowledge may be associated with asymmetry in relationships (Gundlach, Achrol, & Mentzer, 1995; Holmlund & Kock, 1996; Söllner, 1998), but few researchers have attempted to examine the influences and intertwining of sets of characteristics on customer–supplier relationships (Johnsen & Ford, 2008). Recent research indicates that it may be necessary to go beyond an examination of discrete characteristics and examine fuller sets of characteristics to better understand their complex influences on asymmetric relationships (Munksgaard et al., 2015). Hence, it may be important to consider the set of conflict, power and dependence as characteristics that influence customer–supplier relationships.

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in their relationship with a large customer, or to focus on the stages of relationship development to identify how to build, establish and maintain their position with a large customer as the relationship begins, develops and matures (Ford, 1980; Johnsen & Ford, 2006; Lee & Johnsen, 2012). However, there is a need to explore more deeply the problematic associations of asymmetric relationships through a clearer understanding of the characteristics associated with negative relationship experiences. Previous research has indicated that asymmetric relationships may be dysfunctional because of unbalanced power and dependence (Gundlach & Cadotte, 1994; McAlister et al., 1986). There may be harmful or undesirable consequences for smaller suppliers arising from the characteristics of their customer relationships. For example, Lee and Johnsen (2012) cite tensions between larger customers and smaller suppliers caused by imbalances around power and conflict, which may limit the potential for relationships. More recently, Sutton-Brady, Kamvounias, and Taylor (2015) observed that “increased dominance of large supermarket chains has led to greater levels of power asymmetry with the potential for these players to exert this power for their own benefit. Indeed Schellhase, Hardock, and Ohlwein (2000) go so far as to say that “retailers have gained the upper hand in the sales channel.” (2015, p. 2). These authors further highlight the need for understanding how problem areas in asymmetric relationship characteristics may be overcome and how to make those relationships “workable”. Dependent suppliers may continue to work in ‘exploitative relationships’ by virtue of necessity or desperation, self-preservation or promises of exclusivity by powerful customers who exert coercive power (Cowan et al., 2015). However, some research indicates that smaller firms can thrive in asymmetric relationships with counterparts holding significant power as asymmetries may be reduced through the development of trust and commitment over time, and that the negative associations of asymmetric relationships can be overcome provided the smaller firm perceives the larger party as being fair in its interactions (Das & Kasturi, 2004; Kumar et al., 1995). Similarly, conflict encountered in asymmetric relationships may be counteracted by the development of stronger interdependencies (Kumar et al., 1995) However, further õresearch is needed to identify the ways in which in conflict, power and dependence can create negative associations or consequences in asymmetric customer–supplier relationships and to investigate how these negative associations or consequences may be overcome. Our study draws on the framework comprising the multiple relationship characteristics of mutuality, particularity, cooperation, conflict, intensity, interpersonal inconsistency, power, dependence and trust in asymmetric relationships developed by Johnsen and Ford (2008) and built upon by Lee and Johnsen (2012). This framework offers a first step in identifying the characteristics of power, dependence and conflict as being those most associated with negative or problematic situations for smaller suppliers in relationships with larger customers. Having reviewed the set of relationship characteristics to assess those that would be appropriate to include in an analysis of the ‘dark side’ of customer–supplier relationships via the Johnsen and Ford (2008) framework, we now turn to a discussion of conflict, power, and dependence that are central to the analysis conducted for this paper. Table 1 sets out the characteristics, their definitions and possible ‘dark side’ manifestations. In the following section we introduce conflict, power and dependence to set the scene for our study of the dark side associations of these relationship characteristics prior to discussing our methodological approach. 4. Defining ‘conflict’, ‘power’ and ‘dependence’ as three constructs associated with the dark side of customer–supplier relationships

3. Identifying ‘dark side’ asymmetric relationship characteristics 4.1. Conflict Some existing research has identified how smaller suppliers can focus on developing sets of characteristics of their asymmetric relationships to compensate for their smaller size, for example through developing mutuality or particularity to become a more valued contributor

Conflict has been defined in IMP literature as a measure of differences between the parties over the direction of the relationship or over their respective contributions and benefits (Ford et al., 1986).

Please cite this article as: Johnsen, R.E., & Lacoste, S., An exploration of the ‘dark side’ associations of conflict, power and dependence in customer– supplier relationships, Industrial Marketing Management (2016), http://dx.doi.org/10.1016/j.indmarman.2015.12.011

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Table 1 Manifestations of ‘dark side’ characteristics in asymmetric customer–supplier relationships. Source: adapted from Johnsen and Ford (2008). Relationship characteristics

Definition

Possible ‘dark side’ manifestations

Conflict

A measure of differences between the parties over the direction of the relationship or over their respective contributions and benefits (Ford, Håkansson, & Johanson, 1986).

High levels of conflict for both parties. Smaller party has difficulty in coping with contentious interaction with larger counterpart and feels bound to accept unilaterally developed solutions to conflict. Conflict resolved unilaterally by larger party. High levels of power and low levels of dependence for larger party and corresponding low levels of power and high levels of dependence for smaller party. Unilateral control and freedom to interact. Larger party may control development of relationship and portfolio of relationships held by smaller counterpart. Larger firm may limit smaller firm's freedom to act independently and interact with counterparts of its own choosing. Larger firm's domain of power extends to indirect relationships, wider network and smaller counterpart's operations and strategy.

Power–dependence Power is the ability to get another person to do something that he/she would not otherwise have done (Dahl, 1961). Dependence is the obverse of power (Emerson, 1981).

Conflict may be perceived more positively or negatively in relationships depending on the party under scrutiny, whether its position is relatively stronger or weaker (Skarmeas, 2006; Zhou, Zhuang, & Yip, 2007) and in terms of whether the conflict is perceived as functional or dysfunctional (Massey & Dawes, 2007). Conflict may be aggravated when one party in a relationship wishes to operate on a higher level of mutuality than the other (Lee & Trim, 2012). In such cases, conflict may take the form of arguments over short-term rather than long-term gains. Alternatively, a firm may wish to take advantage of short-term rewards rather than long-term interest and so attempt to reduce the extent of mutuality in its relationships (Lee & Johnsen, 2012). A certain degree of conflict between parties in a relationship may maintain the competitive driving force and creativity of that relationship (Bengtsson & Kock, 2000) or intensify value-creation efforts (Mele, 2011; Möller & Törrönen, 2003). Conflict may arise from the differing expectations, goals and cultural norms of one organization clashing with those of another and the aim of influencing relationships in the direction of one's own goals and requirements may underlie any customer–supplier relationship (Araujo & Mouzas, 1997; Munksgaard et al., 2015). Conflict has been viewed by some authors as a dynamic process rather than a single state (Duarte & Davies, 2003; Lusch, 1976; Pondy, 1967). This suggests that conflict is composed of a sequence of episodes where each builds upon the previous one, identified as latent, perceived, felt, manifest conflict and conflict aftermath (Pondy, 1967). However, there are problems associated with such a ‘stages’ view of conflict as it does not take adequate account of the unique dynamics of interaction within relationships and the impact of other characteristics of the relationship upon interaction. In addressing this issue, Vaaland and Håkansson (2003) indicate that in a relationship and network view, an individual episode involving conflict must be seen as embedded in the larger picture of interaction between two firms. Thus, any partial assessment of stages of conflict will not present a clear picture. Research has highlighted that all relationships are characterized by a mixture of conflict and co-operation and that there are no clear boundaries between relationships that are conflicting and those that are co-operative (Araujo & Mouzas, 1997; Bengtsson & Kock, 2000). 4.2. Power and dependence Power has been defined as an ability to get another person to do something that he or she would not otherwise have done (Dahl, 1961), or as a “general capacity for action” (Barnes, 1988, p. 23). Power and dependence in relationships are often considered as two opposing sides of the same coin (Emerson, 1962, 1981) and both have been a significant consideration for business-to-business marketing researchers over several decades (Barnes, 2005). Ford, Gadde, Håkansson,

and Snehota (2003) noted that power in a relationship is not necessarily the monopoly of a single company, nor is it uni-dimensional. A problem linked to power and dependence in relationships is that it is seldom symmetrical (Håkansson & Gadde, 1992). If a relationship is of greater significance to one firm than its relationship counterpart there may be difficulties for both firms in handling and managing their relationship (Ford et al., 2003). The position of a less powerful party and the dependence incurred by this position may be a worthwhile cost for certain firms for the ensuing benefits of working with a powerful counterpart (Easton, 2002). The more dependence a firm has on its counterpart the less flexibility it may have within its core relationship and in developing other relationships (Emerson, 1981; Ford, 1980). Dependence is defined as the obverse of power (Emerson, 1981), as power is resident implicitly in another party's dependence (Emerson, 1962). Dependence is often the price that a firm has to pay for the advantages bestowed upon it by its relationships (Easton, 2002). Firms may consent to a dependent position as a trade-off for the benefits associated with working with a strong relationship actor. If firms are mutually dependent, they may have problems managing in other relationships, but could manage well in their core relationship (Ford et al., 2003). However, if asymmetric power and dependence are present in a relationship it may prove to be not only difficult to manage but also the goals of the more dependent firm will be difficult to achieve (Easton, 2002; Munksgaard et al., 2015). 5. Methodology for the study In discussing the background to the study and the scope of the paper in the preceding sections, we have adopted an IMP perspective, as this is our background as researchers. This has enabled us to identify research within IMP on conflict, power and dependence and the influence of these characteristics in understanding asymmetric customer–supplier relationships. It is our intention that the outcome of the literature review will contribute to understanding the dark sides of conflict, power and dependence in customer supplier relationships within the IMP school of thought. However, in undertaking the review we have sought influences and themes beyond the IMP tradition from across the broader base of business and management research. A literature review based purely on IMP research was considered to be too narrow a focus, would limit the creative potential of the conclusions and would potentially provide too few avenues for future research. In developing our conclusions and future avenues of research we aim to contribute to the academic literature on conflict, power and dependence, in a broad perspective, but we also hope to influence future IMP research themes related to the dark side of conflict, power and dependence in customer–supplier relationships.

Please cite this article as: Johnsen, R.E., & Lacoste, S., An exploration of the ‘dark side’ associations of conflict, power and dependence in customer– supplier relationships, Industrial Marketing Management (2016), http://dx.doi.org/10.1016/j.indmarman.2015.12.011

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5.1. The choice of a narrative approach In a seminal paper, Tranfield, Denyer, and Smart (2003) commented that the literature review has been a key method in management research for investigating and organizing the diversity of knowledge for particular issues under inquiry. The goal of conducting a literature review is to give researchers a vehicle to investigate the scope of the ‘territory’ of the subject area and to aid the identification of research questions that may further develop the extent of knowledge in the subject area. Literature reviews are commonly focused on a narrative and may be critiqued for being overly descriptive and not sufficiently analytical. The selectivity and subjectivity implicit in the process of developing a literature review has also been critiqued (Hart, 1998). Laroche and Soulez (2012), referring to Bass (1995), stress that there are several possible approaches when researchers want to develop an empirical generalization, such as traditional literature review and meta-analysis. Meta-analysis is “the statistical analysis of a large collection of analysis results from individual studies for the purpose of integrating the findings” (Glass, 1976). It is therefore a methodological approach that can be used to combine the results of individual studies on the same subject in order to produce a quantified and reproducible synthesis.” (2012, p. 80). Metaanalysis is a relatively new methodological tool, which has first been used in the medical field before moving to business studies, where it is undergoing interesting developments, but it is the object of recognized limitations, such as requiring large numbers to mixing results from research of different qualities (Wachter, 1998), the so-called “garbage in–garbage out” issue, or mixing studies using different methodologies, called the “apples and oranges” problem (Wachter, 1998). To overturn this problem and to work on papers integrating the same variables, some scholars drastically reduce the number of papers examined: in their meta-analysis of service interaction, Ranjan, Sugathan, and Rossmann (2015), from a first selection of 331 papers, finally studied only 28 relevant papers. We checked the methodology that researchers had used for each final article we selected (see infra). For the construct of ‘conflict’, 81% of the articles were based on a quantitative methodology, this figure comes down to 73% for ‘dependence’ and only 48% for ‘power’, which means that between 13% to 52% of the selected articles were conceptual or based on qualitative research. Given this diversity of methodological approaches found (see Fig. 1) in our field of research on dark side characteristics of relationships, we decided that meta-analysis would not be the optimal methodology for our study and we instead decided to opt for narrative research focusing on an interpretative rather than an aggregative approach (Paterson, Thorne, Canam, & Jillings, 2001). Hence, our paper aims to present a thorough narrative analysis and critique of the state of play in the field of conflict, power and dependence in customer–supplier relationships to elicit the dark side issues associated with these three constructs. Boell and Cecez-Kecmanovic (2014, p. 273) state, “There is no recipe for developing a high quality literature review”, while recognizing that stand-alone literature reviews make an important contribution to research. They propose a hermeneutic framework for the literature review, which describes two major hermeneutic circles: the search and acquisition circles and the wider analysis and interpretation circle that are mutually intertwined. Most articles presenting a qualitative and in-depth literature review follow a protocol, which is derived from these two hermeneutic circles (see Coombes & Nicholson, 2013; Mortensen, 2012; Seppänen, Blomqvist, & Sundqvist, 2007; Spina, Caniato, Luzzini, & Ronchi, 2013). 5.2. Presentation of the literature review protocol Hence, within those two hermeneutic circles, the detailed protocol we followed is close to the one chosen by Mainela, Puhakka, and Servais (2014), especially the first criteria described in their Table 2

Fig. 1. Used methodologies for the articles on ‘power’, ‘conflict’ and ‘dependence’.

(2014, p. 110.) Although Mainela's et al.’s research deals with international entrepreneurship and ours with business relationships, which implies two different academic fields, when it comes to reviewing academic articles to identify and analyze them when dealing with similar constructs, the same process and criteria can apply whatever the field. We now outline the steps and criteria we followed in identifying and analyzing the relevant literature for the review in the ‘search and acquisition’ phase: 5.2.1. Time period Our search included business and management journals from January 1980 to the end of 2014. We chose a starting point of 1980 to correspond with the early period of development of the IMP group and its focus on interaction and relationship development research, as well as the time when major buyer–seller relationship seminal articles were Table 2 Search terms and numbers of papers (initial stage).

Power Dependence Conflict

Customer relations*

Suppl* relations*

317 initial search 64 initial search 161 initial search

338 initial search 113 initial search 199 initial search

Please cite this article as: Johnsen, R.E., & Lacoste, S., An exploration of the ‘dark side’ associations of conflict, power and dependence in customer– supplier relationships, Industrial Marketing Management (2016), http://dx.doi.org/10.1016/j.indmarman.2015.12.011

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written (Anderson & Narus, 1984; Dwyer, 1980, 1984; Dwyer, Schurr, & Oh, 1987; Frazier, Gill, & Kale, 1989).

In the following section we highlight the process involved in the analysis and interpretation phase of the study.

5.2.2. Publications in peer-reviewed academic journals We chose to search only for published peer-reviewed journal papers, and thus did not extend the review to books or book chapters. This choice may be arguable, but books do not go through the peer-review process and we wanted to maintain some homogeneous academic quality. As a first stage, we chose to search in all business and management journals over the search time period to seek papers of relevance to the search terms outlined in Table 2.

5.2.3. Analysis of filtered articles In a fourth stage, following the identification of 185 relevant papers, an in-depth analysis of full papers and the identification of key themes within them was conducted using NVivo software. With the NVivo software we ran a word search through the selected articles. The objective was not to run a full content analysis, but to find out how the key words ‘power’, ‘dependence’ and ‘conflict’ were used. We ruled out the extracts in which those concepts had a positive meaning, except when it helped to understand or to stress the negative meaning (e.g. Chakrabarty et al. (2010) highlight two opposite salespeople behavior, when facing dependent customers, either cooperation, when salespeople are benevolent or exploitation, when they are opportunistic). Our key themes emerged either as a description of the dark side of the relationship (e.g. one key theme was based on extracts showing how dependence holds one party as “hostage” of the other), and antecedents “power asymmetry”, or consequences “power to damage collaboration”. Table 5 shows the key themes that had the most references (sentences or paragraphs that refer to that theme). The key themes match our first level of coding or open coding, if we refer to Glaser (2002), those are our core categories. We moved then to selective coding, which was finding the properties of and the linkage between our core categories. We decided to draw a heuristic map to visualize the outcome of the coding process for each characteristic (see Figs. 2, 5 and 7). We attached to each category an example of one or several articles from which the category emerged, following the methodological approach used by Guesalaga and Johnston (2010), who content analyzed 90 articles, but only quoted article examples while describing the major topics issuing from their analysis. In the following section we discuss the findings from the coding process of the chosen full papers. In this discussion we draw primarily on the papers themselves, but also include some references to antecedents mentioned in the chosen papers.

5.2.2.1. First stage of selection: filtering for ‘relevance’ by title and keywords.. Using the EBSCO advanced search tool, we launched a search for the characteristic that had to be included in the article abstract (e.g. power). In addition, the search was combined with the following ‘truncated’ search terms: “Customer relations*” (to include relations, relationships, etc.) OR “Suppl* relations*” (to include supply, supplier, relations, relationships). Again, the second criteria had to be included in the article abstract. We linked each of the three characteristics to either customer relations(hips) or supplier relations(hips). We then removed the duplicate articles (which contained both the search terms customer relations(ships) and suppl* relation(ships)). The initial stage of the search resulted in the higher figures identified in Table 2. The process of selection involved both researchers independently reviewing the title and keywords of each article for relevance and then discussing the selection of articles to make the choice of those that would be carried through to the next stage of filtering for ‘quality’. 5.2.2.2. Second stage of selection: filtering for ‘quality’ with the ABS journal ranking list. In a second stage, we cross-checked the initial papers chosen against the ABS journal list and excluded any from journals that did not appear on the 2015 ABS ranking. The journals included in the analysis were English language journals, more specifically European and North American business and management journals. The aim of this selective targeting of journals was to produce an analysis that was as rigorous as possible with regard to the quality of the research reviewed for this paper. We also excluded one paper which was tagged with a plagiarism warning. Table 3 shows the list of journals included in the final filtered selection. Of this full journal list, some journals seem to be more ‘attractive’ for research on the three studied constructs (see Fig. 2); this is the case for journals specialized in business or industrial marketing (Industrial Marketing Management (IMM) and to a lesser degree Journal of Businessto-Business Marketing, Journal of Business and Industrial Marketing), but Journal of Business Research also scores highly on the construct of power, perhaps because this concept has not only been studied in an industrial setting, but is commonly found in articles in the domain of distribution channels. The final review incorporates a total of 185 journal articles. Of the total filtered papers chosen by relevance (according to our selection by title and keywords – see supra) 75 focused on power, 75 on dependence and 35 on conflict, as shown in Table 4. In a third stage, there followed an analysis of the abstracts for the chosen filtered papers. Using summary tables developed around each construct, articles were classified in chronological order. In our analysis of the abstracts we examined a number of categories. These included the title of each paper, the publication, the authors, the methodological approach and the main contributions of each paper. Furthermore, we sought to make an initial qualitative determination of ‘dark-side’ associations or consequences in dyadic customer–supplier relationships through this analysis. To give a precise overview of our selection of articles (185), a link is provided to access the three complete tables created to develop the analysis of abstracts.

6. Findings from the literature review As indicated in the preceding sections, the purpose of our study was not to offer statistical data and correlations between diverse methodological studies, but to investigate, from an exploratory perspective, how researchers have linked ‘conflict’, ‘power’ and ‘dependence’ to the dark side of relationships. We analyzed the articles to find the themes and constructs that were related to the three relationship constructs – conflict, power and dependence – that we were investigating. Through our NVivo analysis, we highlighted the themes that brought the greatest number of sources (articles) as in Table 4, but we also mapped the theme properties that were related to conflict, power and dependence, based on our selective coding. 6.1. The specific role of conflict in the dark side of relationships Our NVivo analysis helped us to map three major domains in which to categorize our findings (see Fig. 3). Firstly, the situations spurring conflict, with two sub-themes: the major reasons for conflict related to asymmetric relationships and opportunism, highlighted in red (comprising the greatest number of articles as viewed in Table 4); secondly, other reasons, not as widespread in the literature, together with the different types of conflict (e.g. cultural differences, lack of role clarity, etc. highlighted in orange); thirdly, the “positive” side of conflict (highlighted in yellow), which shows the ambiguous role of conflict in a relationship that can pertain to both the “bright” and the “dark” side of relationships (this paradox is brought forward in Fig. 3 by constructs highlighted in red and orange versus the ones highlighted in yellow): conflict can be seen as both positive or detrimental to relationships.

Please cite this article as: Johnsen, R.E., & Lacoste, S., An exploration of the ‘dark side’ associations of conflict, power and dependence in customer– supplier relationships, Industrial Marketing Management (2016), http://dx.doi.org/10.1016/j.indmarman.2015.12.011

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Table 3 Journal ranking list for filtered article selection—ABS, 2015.

This situation introduces the concept of “bi-polarity”, as conflict can play a role in two opposite dimensions of relationships – it can help to tighten the relationship as well as being an element contributing to the termination of the relationship. We organized the findings of our literature review around the major issues deriving from our analysis. First, the “bi-polarity” of the concept of conflict and hence the lack of consensus within the research community, and second the role played by power imbalance in the negative aspects of conflict (focus on constructs highlighted in red and orange). Firstly, conflict can be perceived as inevitable (Dwyer et al., 1987; Lam & Chin, 2005), especially if we relate it to distributive bargaining, when two firms try to maximize value appropriation from their business relationship (Håkansson & Gadde, 1992), or in the case of international business relationships (Leonidou, Talias, & Leonidou, 2008), whereby conflict may arise due to cultural misunderstandings or differences in business practices (LaBahn & Harich, 1997). Kozan, Nazli Wasti, and Kuman (2006) also state that conflict can reflect some ‘inconsistencies’ and ‘gaps’ in a supplier's performance which does not reach

the customer's expected standards (Kim et al., 1997; Parasuraman, Zeitham, & Berry, 1985). Secondly, there is no consensus within the academic community on conflict mechanisms: Kumar et al. (1995) highlight that some researchers (Brown, Lusch, & Muehling, 1983; Frazier et al., 1989) relate dependence asymmetry to a risk of increasing conflict through the use of coercive power, whereas other researchers find the opposite effect (Frazier & Rody, 1991). 6.1.1. Conflict as a positive/negative construct in business relationships As stated by Leonidou et al. (2008, p. 95), “some conflict can be productive (or functional), especially when new solutions to problems are found and any disputes are resolved amicably (Morgan & Hunt, 1994)” and “some conflict is essential to making the relationship more lively, reliable, and interesting” Leonidou et al. (2008, p. 100). Matsuo (2006) even sees conflict as essential to group creativity and innovation and names it “creative conflict”, whereas Doz and Hamel (1998) find that conflict can improve learning in the specific case of alliances.

Please cite this article as: Johnsen, R.E., & Lacoste, S., An exploration of the ‘dark side’ associations of conflict, power and dependence in customer– supplier relationships, Industrial Marketing Management (2016), http://dx.doi.org/10.1016/j.indmarman.2015.12.011

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R.E. Johnsen, S. Lacoste / Industrial Marketing Management xxx (2016) xxx–xxx Table 5 Key themes that emerged from the NVivo analysis. Key themes Power Asymmetric power relationships Coercive power and unethical behavior Bargaining power Dependence Impact of dependence on relationships Dependence on a strategic customer Dependence versus trust Conflict Conflict in association to relationships Conflict due to supplier opportunism Conflict resolution

Number of sources (articles)

Number of references (sentences or paragraphs)

21 20

30 30

11

20

13

14

10

20

9

14

14

16

10

19

7

16

a challenge, with the potential to strengthen the relationship longerterm. For some researchers, conflict should be seen on a continuum, starting from a low degree to a high degree of conflict; conflict becomes negative when it “gets out of hand and becomes pathological (dysfunctional)” (Leonidou, Barnes, & Talias, 2006, p. 584). Conflict becomes negative when there is no efficient resolution mechanism; Tjosvold and Wong (1994) even posit that trust and communication are built by successfully managing conflict, which means that when conflict cannot be solved in a satisfactory manner for both parties, trust and open communication become impossible. As early as 1976, Lusch stated that dysfunctional conflict leads to direct confrontation and hostility. Since then, other scholars have demonstrated the correlation between conflict and relationship termination (Halinen & Tahtinen, 2002; Landeros, Reck, & Plank, 1995; Plank, Reid, & Newell, 2007). Conflict, and in its final form, the dissolution of the relationship, often take place in a context of asymmetric relationships.

Fig. 2. Major journals in which articles on ‘power’, ‘conflict’ and ‘dependence’ are published.

Nevertheless, most researchers on conflict recognize some duality in the concept. Nordin (2006, p. 118) takes that position by stating that “conflict has both good and bad sides and that some conflicts should be eliminated while others should not be.” Ford et al. (2003) also suggest that ‘high involvement’ relationships generally comprise more conflict than those considered to be ‘low-involvement’, or ‘arm's length’ relationships. In lower-involvement relationships there often appear to be less reasons for conflicts to arise as the relationship may be less important. Some firms may regard conflict as an expression of lack of mutuality on the part of a counterpart, whereas others may interpret conflict as

Table 4 Search terms and numbers of papers (final stage). Customer relations* Suppl* relations* Power 317 initial search Dependence 64 initial search Conflict 161 initial search

Total filtered for relevance and quality

338 initial search 75 113 initial search 75 199 initial search 35

6.1.2. Asymmetric relationships spur conflict Kumar et al. (1995) posit that asymmetric relationships are an invitation to engage in conflict with few reasons for restraint by the weaker party. Furthermore, Xie, Yu, and Kwon (2010) attempt to find a causal link leading to conflict: they demonstrate that, for instance, asymmetric ‘specific asset investment (SAI)’ implies a lower reciprocal engagement in the development of the relationship, which diminishes trust in the relationship and increases the risk of conflict. In the context of distribution channels, Zhou et al. (2007) provide evidence that the asymmetry may lie in the perception of business goals within the channel dyad and that differing perceptions may be the source of channel conflict. Beyond asymmetry, the quality and density of the relationship is directly connected to the risk of conflict. Liu, Li, and Zhang (2010) suggest that when the quality of an exchange is deemed to be at a low level, the partners' mutual trust and commitment are very limited and the threat of potential opportunism by both parties is very real (Caniëls, Gelderman, & Ulijn, 2010). Once discovered, opportunistic behaviors spur retaliation and conflict. In this context of power asymmetry, other specific factors may lead to inter-firm conflict, such as high technological uncertainty, under which a small supplier will hesitate to fully cooperate with a powerful customer (Fink & Edelman, 2006; Kim, Park, Ryoo, & Park, 2010) or relationship uncertainty, with less joint decision-making (Leonidou et al., 2006; Rosson & Ford, 1980) and the lack of role clarity (Katsikeas, 1992). To conclude, we need to relate coercive power, which is often exercised in an asymmetric relationship, to conflict as the former is often the cause of conflict: Leonidou et al. (2008, p. 93) remind us that “many studies (Frazier & Rody, 1991; Frazier et al., 1989; Gaski, 1984;

Please cite this article as: Johnsen, R.E., & Lacoste, S., An exploration of the ‘dark side’ associations of conflict, power and dependence in customer– supplier relationships, Industrial Marketing Management (2016), http://dx.doi.org/10.1016/j.indmarman.2015.12.011

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Fig. 3. The heuristic map of “conflict” in the dark side of relationships (derived from NVivo analysis).

Gaski & Nevin, 1985; Lee, 2001; Lusch, 1976; Rawwas, Vitell, & Barnes, 1997; Schul & Babakus, 1988) have empirically shown that the exercise of coercive power (…) increases conflict” to a point where it can be unhealthy and destructive for the relationship. Thus, the interconnections between conflict and power and their dark side associations are strongly entwined. 6.1.3. Critique and concluding remarks on “conflict” and avenues for further research The findings from the literature review have highlighted a number of gaps and limitations in the literature. The reasons as to why conflict arises and how it evolves or escalates appear to require further investigation. Specifically, the literature identifies that conflict may emerge via goal incongruences, diverging interests or cultural tensions, but it remains unclear in which situations or settings that these aggravating factors may occur. In addition, the impact of certain other relationship characteristics such as trust or commitment on how conflict evolves requires examination as there may be relevant alleviating effects on conflict through the existence of other characteristics evident in a customer–supplier relationship. Different types of relationship settings such as close relationships or arm's length relationships may mitigate the radical effects of serious conflicts in a relationship, hence different relationship settings could be more clearly linked to different types of conflict and ways of coping with conflict. Power, and in particular coercive power, appears strongly linked to conflict, but other more subtle uses of power may too have a role to play in the way in which conflict evolves and is resolved in relationships. As the literature has also raised power–conflict associations in asymmetric relationships, the particularities of this link in relationships between smaller and larger parties require further evidence. If conflict is often defined as synonymous to disagreements, tension and frustration in inter-firm relationships, ‘conflict resolution’ is also a key concept requiring further attention. We did not focus on this issue in detail as that would have implied a move away from our core field of research, but this is the concept that can turn conflict from the ‘dark’ side of relationships into the ‘bright’ one as it will determine if

the relationship will keep on or be dissolved (Halinen & Tahtinen, 2002; Landeros et al., 1995). For Leonidou (2003, p. 584) “although some degree of conflict is useful in making the relationship more active, innovative, and reliable, it can be disastrous if it gets out of hand and becomes pathological. For this reason, it is important to set up a conflict resolution mechanism between the interacting parties that will resolve problems in a quick, amicable, and mutually beneficial way” (Anderson & Narus, 1990). Hence, conflict resolution is a critical issue in research on conflict in relationships that may assuage the severity of the impacts of conflict on customers and suppliers. Mohr and Spekman (1994) rank conflict resolution techniques into three categories. First, the most constructive resolution techniques include joint problem solving and persuasion and are defined as “internal” resolution techniques. Second, resolution techniques that require some “external” help, such as outside arbitration — this may be fine for one single conflict episode but will stop working in the case of recurrent conflicts, highlighting more serious issues with the relationship. Third, ignoring or avoiding the issue at the root of the conflict, which may help to gain time before the last and destructive techniques – domination and harsh words – that may lead to the termination of the relationship. Hence research on the most constructive techniques requiring a mutual involvement and commitment to the relationship, highlighted by Frazier and Rody (1991), is a particularly important contribution to research on conflict reflecting the extent to which one party feels it is beneficial to move forward in the relationship with its counterpart. The ‘bad’ side of conflict simply reflects the fact that one party is retracting from the relationship, whereas the ‘good’ side of conflict shows that both parties equally value and appreciate the benefits they derive from the relationship and are both keen to positively resolve the conflict. While the “bad’ side of conflict and its antecedents have been quite heavily investigated by academic researchers (see our findings), other contributions have posit that conflict can be “positive” (Doz & Hamel, 1998) and “creative” (Matsuo, 2006). Thus, a critical issue in future streams of research on conflicts appears to center on how mutually

Please cite this article as: Johnsen, R.E., & Lacoste, S., An exploration of the ‘dark side’ associations of conflict, power and dependence in customer– supplier relationships, Industrial Marketing Management (2016), http://dx.doi.org/10.1016/j.indmarman.2015.12.011

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“committed” relationships turn into relationships in which one party wants to retract. We are not aware of a wide range of research investigating the different conditions and reasons why conflict resolution mechanisms that used to work because of mutual commitment would no longer be effective and conflict would become detrimental to a long-term relationship. Indeed, there is limited investigation of this “bi-polar” approach to conflict in the academic literature - the extant literature serves mostly to acknowledge its existence (Leonidou et al., 2008). However, the point of the relational continuum (see Fig. 4) at which conflict moves from being latent (Frazier & Rody, 1991) to “functional” (Skarmeas, 2006) or “positive” (Doz & Hamel, 1998), to “dysfunctional” (Leonidou et al., 2006) remains under-investigated. Thus, the point at which conflict resolution mechanisms no longer work should be a strong avenue for future research, as understanding this turning point should help companies to have a clear signal about when their relationships are turning sour and when they are reaching the limit to resolving conflict before it escalates towards the termination phase of the relationship. 6.2. The specific role of power in the dark side of customer–supplier relationships Our NVivo analysis helped us to map two major domains in which to categorize our findings (see Fig. 5): first, the situations when power is detrimental to inter-firm relationships (which are all highlighted in red). Most academic articles on power in vertical relationships (see infra) focus on the consequences of power when it is unbalanced, especially when the customer is powerful and suppliers are ‘subordinated’ to such powerful customers. Such ‘selfish’ customers kill both trust and relationship development. We focused our findings on such issues – specifically the damage caused by coercive power – but, in a similar vein to conflict, our findings also cast a light on power bi-polarity in the sense that some forms of power are coercive and negative (highlighted in yellow), whereas other forms of power can be present without being explicitly used by the powerful party (highlighted in green) and may have a positive impact on the relationship. Although not representative of the mainstream results, we show that the powerful party could also be the supplier (highlighted in pink). Some authors claim that power is detrimental to interfirm relationships (Ireland & Webb, 2007; McDonald, 1999), mostly from the perspective of developing a long-term sustainable relationship (Naudé & Buttle, 2000). Kähkönen (2014) posits that if power is used to willingly dominate and control the other party, the outcome will be that trust will diminish between both parties and collaboration will be weak, a proposition that can be related to the work of Kumar et al. (1995), who present power as a negative and the opposite concept to trust in interorganizational relationships. Trust is considered as necessary to engage in “cooperative and efficiency-seeking activities” (Cäker, 2008, p. 234) whereas within a power-based relationship, the dominated party (often the supplier) will understand that the customer is only looking to pressurize costs and make short-term gains, and the relationship

will remain at “arm's length”. Along this line of thinking, some researchers describe power as a “relationship killer” (Golicic & Mentzer, 2005). Indeed, power appears most detrimental to interfirm relationships when it is unbalanced and asymmetric. 6.2.1. The negative role of power in asymmetric relationships Anderson and Weitz (1989) were among the first scholars to successfully test the hypothesis that when power is unbalanced and one firm uses its power over another, the relationship would be less cooperative. Since then, other scholars have confirmed this hypothesis: Maloni and Benton (2000) highlight that power can lead to opportunism and destroy the relational elements required to build a strong collaborative relationship; He, Ghobadian, and Gallear (2013) stress that unbalanced power often results in a greater availability of choices (for the dominant party) and thus, a lower level of cooperation. In fact, power imbalance has a detrimental effect on the sharing of relationship benefits, as the dominant party will try to capture most of the created value (Duffy & Fearne, 2004). The negative effect of power asymmetry has been largely studied in the context of distribution channel relationships. Some authors highlight that increasingly large retailers and ever larger store formats (Inderst & Wey, 2011) concentrate power over their manufacturing suppliers, shifting bargaining power from suppliers and creating relationship instability and higher risk of termination (Frazier, Maltz, Antia, & Rindfleisch, 2009; Kumar et al., 1995). Suppliers are forced to comply with their customers' higher demands and closer relationships (Anderson & Jap, 2005) may simply mean that customers are in a position to place greater demands via increased monitoring of their suppliers' activities. This situation is also to be found within some industries, in which small industrial suppliers are vulnerable because they do not possess adequately strong brands and market access and hence, also lack bargaining power compared to their large and international customers (Jean, Sinkovics, & Kim, 2010; Subramani & Venkatraman, 2003). Chang and Gotcher (2007) even stress how those small suppliers are frequently asked to make customer-specific investment before they start working with their strategic customers, making them totally dependent on their future orders. The outcome for small or weak suppliers, who are subject to the power of major customers, is that they may lose financially as their profitability is impaired (Gosman & Kohlbeck, 2009). Nevertheless, some recent research shows that “a supplier might accept a customer's power over it so long as the supplier believes that: it is being treated no less badly than any other firms with which it compares itself (…); and, it cannot see: a) any other way of obtaining the same benefits for less sacrifice; or, b) ways of obtaining greater benefits for the same sacrifice.” (Homburg, Wilczek, & Hahn, 2014, p. 70). These recent findings lead us to ‘nuance’ the negative role of power, as, from the supplier's perspective, it will depend on whether power is exercised or not. Frazier and Antia (1995) and Hausman and Johnston (2010) highlight that power may be used either coercively or cooperatively in relationships.

Fig. 4. The bi-polar approach to conflict and conflict resolution.

Please cite this article as: Johnsen, R.E., & Lacoste, S., An exploration of the ‘dark side’ associations of conflict, power and dependence in customer– supplier relationships, Industrial Marketing Management (2016), http://dx.doi.org/10.1016/j.indmarman.2015.12.011

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Fig. 5. The heuristic map of “power” in the dark side of relationships (derived from NVivo analysis). (For interpretation of the references to color in this figure, the reader is referred to the web version of this article.)

6.2.2. Having power versus using power Based on the previous work from French and Raven (1959) and Maloni and Benton (2000); Zhao et al. (2008, p. 370) define two types of power: non-mediated power (Expert, Referent and Legitimate power) and mediated power (Reward and Coercive power). Reward and coercive power are considered mediated because their use is controlled by the customer, which can reward a manufacturer (supplier) by creating positive consequences, such as placing customer orders or coercing it through negative consequences, such as canceling an order. The customer, as the source of the power, decides whether, when and how to use its power to influence the manufacturer's behavior. In contrast, expert, referent and legitimate power are considered non-mediated, because the manufacturer, itself, decides whether and how much it will be influenced by a customer (Zhao et al., 2008, p. 370). The non-mediated forms of power are implicit forms of power, related to the status of the customer and based on a form of recognition by the supplier of such bases of power: the customer is recognized as being powerful, but does not explicitly enforce power on the supplier. Non-coercive (non-mediated) power enhances a firm's willingness to cooperate and limits conflict in relationships (Hausman & Johnston, 2010). Reward power has positive consequences, but coercive power is the most negative form of power. Molm (1997 p. 120) defines coercive power as concerning actors' “control of negative outcomes relative to each other with the intention of gaining rewards from a partner either through punishment or threatened sanctions”. The use of coercive power is risky as it engenders the possibilities of retaliation and decreased rewards for all partners (Molm, 1997; Rokkan & Haugland, 2002). Zhao et al. (2008) highlight that the use of coercive power in vertical relationships will damage the level of cooperation and weaken the strength of the relationship. The use of coercive power also leaves the supplier more vulnerable and more likely to end the relationship (Knoppen & Christiaanse, 2007) or prone to indulge in opportunistic and non-ethical behaviors (Handley & Benton, 2012). Coercive power is frequently found in low-involvement or adversarial relationships where strong dependencies may exist between the

relatively powerless and the more powerful party (Dwyer, 1980; Ford et al., 2003; Wilkinson, 1981). A strategy based on coercive power is assumed to have the opposite effect, creating increased levels of conflict and limiting opportunities to cooperate (Vaaland & Håkansson, 2003). As stated by Kähkönen (2014, p. 25), “neither the source nor the possession of power solely defines the nature of the relationship: it is rather the willingness to use it and to exploit one's position of power that is a significant determinant” and which will determine the nature and the quality of the customer–supplier relationship, as some partners are not motivated towards collaboration. 6.2.3. Power or the praise for selfishness Not using power may be seen as both parties' willingness to collaborate, but some firms are not motivated by collaboration (Hingley, 2005), and are mostly driven by selfishness (Cox, 1999). This counterintuitive approach is backed up by Palmer (2000, 2002), who draws a parallel with Darwinian principles of evolution to argue that selfishness may produce greater economic welfare than collaboration — at least for the dominant party, which may explain why coercive power is used by large and powerful customers. Last but not least, our discussion has highlighted the most common case of the customer-dominant position over suppliers, but some studies have also highlighted the case of customers confronted by powerful suppliers. 6.2.4. Power and the “captive customer” Ulstrup Hoejmose, Grosvold, and Millington (2013) have brought forward some contrasting results, which emphasized supplier power, the outcome of which being that customers were unable to shape their practices according to their own processes. Such a situation is to be found when the customer only represents a small share of the supplier's sales turnover and when the contract is not particularly attractive (Cox, 2004). If the buyer has no alternative supplier, he becomes “captive” and has to abide by the supplier's demands, until the power balance changes. In conclusion, the balance of power between customers and suppliers is a major concept that explains who “wins” or “loses” in a vertical

Please cite this article as: Johnsen, R.E., & Lacoste, S., An exploration of the ‘dark side’ associations of conflict, power and dependence in customer– supplier relationships, Industrial Marketing Management (2016), http://dx.doi.org/10.1016/j.indmarman.2015.12.011

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relationship: the “win–win” situation is the sunny side of the relationship, some “win–lose” situations may be accepted by the weaker party if mediated forms of power are used, but if coercive forms of power are used in an asymmetric relationship, the dark side of the relationship is at play. 6.2.5. Critique and concluding remarks on “power” and avenues for further research The findings on power have raised some limitations in the existing literature. Power from the ‘other side of the coin’ – the supplier's perspective - is an under-investigated area, compared to the customer's one and requires further research. Indeed, there is a paucity of research that uncovers the small and medium-sized firm view on power and experiences on power in relationships. Many studies focus on a key supplier and a key customer. There is some evidence that smaller suppliers can impose their will on powerful customers, by for example, creating brands, searching for opportunities external to their traditional domain of supply or using trust to mediate against power. But, the conditions under which this may occur require further investigation, including the impact of new indirect relationships on the established customer– supplier relationship, especially how power is established at the birth of the relationships. The research on asymmetric relationships has gone some way in identifying the way in which asymmetry is managed in customer– supplier relationships, but there is a need for understanding how different types of power impact on the development and management of asymmetric customer–supplier relationships and indeed by going beyond research conducted in single western business settings through quantitative methodological approaches. Another critique of the present literature is the lack of research on the combination of power and trust. Both constructs are mostly studied separately, whereas few studies analyze the optimal level of both trust and power and how they interrelate. Relationship instability and the risk of termination have been found to be aggravated under the influence of a powerful customer or supplier. Vulnerability and opportunism may be outcomes of relationship instability, but it remains unclear how coercive and non-coercive power shape the way in which instability and the relationship termination process is manifested. To use or not to use power has been a question in some previous studies but it is not yet well-defined under which circumstances a powerful party will choose to exert the power that it is capable of exerting or not, nor how self-interests or mutual interests of the parties shape the way in which power dynamics are played out in the relationship development and termination stages. The literature has documented how the use of coercive power can be destructive to a relationship. However, Blois and Hopkinson (2013) have recently stressed that the major dichotomy to be found in the academic literature between coercive and non-coercive power (Hunt & Navin, 1974) or mediated and non-mediated power sources, was based on French and Raven's seminal paper (1959), and that its application to organizational studies of power is questionable (2013, p. 1143). These authors argue that other theoretical perspectives should be deployed. Hence, an alternative theoretical perspective could be to study power from the perspective of the actor's willingness to use or not to use power, as stated by Kähkönen (2014, p. 25), “it is rather the willingness to use and to exploit one's position of power that is a significant determinant”. Some scholars recognize that the presence of power imbalance does not necessarily mean that it is always explicitly exercised in supply chain relationships (Cox, Lonsdale, Watson, & Wu, 2005; Hingley, 2005). For instance, Brito et al. (2014, p. 957) contend that restraint in the use of power can only occur when one of the parties has potentially more power than the other. They quote the example of the packaging industry whereby customers, consumer goods companies, are frequently large multinational organizations, controlling large volumes and

possessing bargaining power. Packaging manufacturers are frequently medium-sized companies. There is an asymmetry in both size and power, but in most cases, referent and legitimate power will be in action allowing both parties to work on cooperative relationships, symbolized by the development of sustainable packaging. As indicated above, this leads to a research question, which does not seem to have been tackled so far: what leads powerful parties to exercise or not to exercise their power? As some authors have demonstrated that non-coercive (non-mediated) power enhances cooperation, another contribution to further research would be to correlate power to the relationship continuum (see Fig. 6): can we correlate coercive power to transactional exchange and non-coercive power to cooperation? Hence, within the relationship paradigm, can we demonstrate the bi-polar approach of the use of power and when and why does the powerful party move from one part of the continuum to the other (as in Fig. 6). 6.3. The specific role of dependence in the dark side of customer–supplier relationships Again our NVivo analysis led us to draw a heuristic map (see Fig. 7) with the major themes and constructs related to dependence. Our findings are categorized in three major domains, the conditions that create dependence, the “dark” side or negative consequences of dependence, the two types of (cost and benefit-based) dependence. We also found two minor domains of investigation: the role of the sales force and strategies to decrease dependence. In our findings we decided to focus on issues that were very different to the ones discussed in the conflict and power sections, such as dependence in the context of ‘Strategic Account Management’ (SAM) and the role of the sales force. We also focus on the specific impact of dependence on supplier innovation as the stream of research on this topic is quite recent (Jean, Kim, & Sinkovics, 2012; Nijssen, Hillebrand, de Jong, & Kemp, 2012; Yli-Renko & Janakiraman, 2008). Finally, we discuss the bi-polarity of dependence and link it to our analysis of power. Dependence is often defined in relation to power. Zhuang and Zhou (2004) state that dependence comes first, not by freedom of choice, but by restraint and in turn this provides the other party with power. Thus, power by one party is derived from the other party's dependence. Other scholars develop the concept of restraint, by stressing that dependence often comes with few available alternatives, unease about switching partners (Ganesan, 1994; Heide & John, 1988), and in situations where the magnitude of the relationship is high. Pfeffer and Salancik (1978) relate dependence to resources, their allocation, availability and control. From this resource perspective, dependence can be on the customer side, as highlighted when the resources that a customer buys from a supplier are such that there exist very few alternatives on the market (Hallikas, Puumalainen, Vesterinen, & Virolainen, 2005). Hence, the supplier holds considerable power and has very limited or no choice to switch supplier; the customer is highly dependent on such a supplier and its bargaining position is weakened (Ahern, 2012). Dependence can also be present on the supplier's side, especially when a major part of the sales turnover derives from a limited number of large customers or when some specific investments have to be made to develop the relationship with the customer, which increases dependence on that customer (Kim & Frazier, 1997). Interestingly, from an academic perspective, whereas power seems to be predominantly studied from the supplier's side as the weaker party, dependence is studied from both parties' perspectives. A number of studies highlight the customer's dependence on suppliers, especially in situations where buyers anticipate significant switching and termination costs in a relationship with a supplier. In various industries buying firms are becoming increasingly dependent on their suppliers (Lyons, Krachenberg, & Henke, 1990), as outsourcing has progressively become an industry-wide management practice (Espino-Rodrıguez & Padron-Robaina, 2006; Narasimhan & Das, 1999).

Please cite this article as: Johnsen, R.E., & Lacoste, S., An exploration of the ‘dark side’ associations of conflict, power and dependence in customer– supplier relationships, Industrial Marketing Management (2016), http://dx.doi.org/10.1016/j.indmarman.2015.12.011

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Fig. 6. The bi-polar approach to power and the use of power.

Nevertheless, some seminal articles on dependence focus on asymmetric relationships, when a smaller supplier depends on a strategic customer within a key or strategic account management program (KAM or SAM), such as Piercy and Lane (2006, p. 100), who state that, “our focus here has been on the relationships between suppliers and very large, often situationally powerful customers, which are frequently institutionalized in SAM systems”. 6.3.1. Dark side of relationships: dependence within a SAM approach Lacoste (2012, p. 650) defines the key account (or strategic customer) status perceived by such customers as “their expectation that they will represent for their suppliers a natural development of customer focus and relationship marketing in business-to-business markets” (McDonald, Millman, & Rogers, 1997). Piercy and Lane (2006) also stress that theoretically SAM is based on a collaborative relationship, but the business model is based on a very asymmetrical balance of power between the very large customer and smaller suppliers, so that most business decisions are made by buyers using their bargaining power for their sole benefit. Piercy and Lane (2006, p. 100) conclude that “the evidence suggests also that those (suppliers) entering into such relationships should be aware that implied promises of loyalty and partnership may be an illusion, suggesting that economic consequences may also be unattractive.” In such asymmetric relationships with a high level of dependence upon the customer, the relationship may last, as long as the supplier cannot find any alternative, but there may be a high level of (latent) conflict and low level of trust (Kumar et al., 1995). Furthermore, dependence brings behavioral loyalty rather than affective loyalty (Davis and

Mentzer, 2006). Some scholars stress that the supplier will feel vulnerable and try to reduce dependence as well as minimizing participation in joint improvement efforts (Hald, Cordón, & Vollmann, 2009). Another stream of literature has also shown how dependence could be detrimental to supplier innovation, whether the customer is strategic or not, as discussed below. 6.3.2. Dark side of relationships: the specific impact on supplier's innovation Some authors state that dependence encourages organizational inertia (Nijssen et al., 2012), while others point out that it is simply detrimental to supplier innovation (Yli-Renko & Janakiraman, 2008). Jean et al.’s (2012) research results show that a supplier with a lower dependence on its customer occupies a more central place in the customer's network than a supplier with a high dependence level; the central position facilitates the supplier's relationship learning, which in turn has a positive effect on innovation generation. A high dependence level does not position the supplier to generate innovation specific to that customer, but to focus on existing products and to neglect competence development for new products (Nijssen et al., 2012). While focusing on existing products, the supplier will focus on sales performance and the role of the sales force may prevail in cases of high dependence. 6.3.3. Dark side of relationships: the role of the sales force in dependence situations Certainly the supplier's sales force is the customer-facing part of an organization and should be the first to try to reduce dependence with powerful customers. They develop the customer base and grow the

Fig. 7. The heuristic map of dependence in the dark side of relationships (derived from NVivo analysis).

Please cite this article as: Johnsen, R.E., & Lacoste, S., An exploration of the ‘dark side’ associations of conflict, power and dependence in customer– supplier relationships, Industrial Marketing Management (2016), http://dx.doi.org/10.1016/j.indmarman.2015.12.011

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company sales turnover in order to minimize the turnover share from large customers. Salonen and Gabrielsson (2012) studied the case of Nokia-dependent suppliers, who benefited from their customer's growth in the 1990s and were unable to predict the less gloomy times approaching. When these suppliers realized their high level of dependence on Nokia was to lead them towards bankruptcy, it was already too late; they no longer had the financial strength to invest in new customer relationships, nor had they developed new competencies apart from the idiosyncratic ones used with Nokia. Hence, the role of the sales force is critical to preserve the existing customer relationship on which the supplier depends, while leveraging learning gained with their powerful customer in the development of new customer relationships. At the opposite end of the spectrum, the role of the sales force is also to gain power over customers and to make them dependent by increasing their switching costs and turning them into “captive” customers. Some scholars have shown that a salesperson's power can be the basis of influence strategies (Brown, 1990; Chakrabarty, Brown, & Widing, 2010; Spiro & Perreault, 1979) and that “opportunistic sales people may exploit perceived customer dependence” (Chakrabarty et al., 2010, p. 328). This is not without risk, as customers may retaliate if they become aware of such opportunistic behavior (Kumar et al., 1995) and the supplier may lose some share of wallet as the customer will reduce their dependence on them. Of course, we have to be cautious about such findings drawn from Western contexts as results may vary according to different national cultures. Zhuang and Zhou (2004) show that the causal relationship between power and dependence in China is the reverse of the Western one (power appears as a cause and dependence as an outcome) and dependence in a Chinese context could have a more positive meaning or outcome because of greater institutional trust. This demonstrates the complexity of dependence, which can be studied as a bi-polar concept. For instance, Scheer, Miao, and Garrett (2010) highlight two dependence dimensions (based on Emerson's framework (1962)): benefit-based dependence and costbased dependence. 6.3.4. Dark side of relationships: dependence as a multi-dimensional concept Scheer et al. (2010, p. 92) define two dimensions of dependence as follows: “Benefit-based dependence – the need to maintain the relationship because of the irreplaceable net benefits that result from the on-going relationship – focuses on manifest, presently-realized positive relational benefits. In contrast, cost-based dependence – the need to maintain the relationship because of the new costs that will be incurred if the relationship ends – focuses on the latent, currently dormant negative factors that would be realized in the future upon relationship termination.” According to this definition, there is a “good side” of dependence, which stimulates a collaborative relationship, whereas there is a “dark side” of dependence, which leads to disengagement and relationship termination. This dichotomy in the concept of dependence is also to be found in the research from Zhuang and Zhou (2004), who define two types of dependence, a passive one and an active one. They state, that, “passive dependence is due to lack of choice: one does not desire to depend, but has to. Active dependence is, on the other hand, due to one's perceptions of the importance of a relationship in the long run and therefore to the power of the related member: one actively pursues dependence on a powerful member, because the relation is important for one's future” (2004, p. 689). If we relate those findings to the concept of power, we could argue that passive dependence is linked to exercised power, whereas active dependence is linked to un-exercised power. 6.3.5. Critique and concluding remarks on “dependence” and avenues for further research The findings from the literature review have highlighted a number of gaps and limitations in the literature. First, we have to be extremely

careful with the results of some studies as they rely on “perceptions”, either they only rely on the perceptions of purchasing, to study suppliers' dependence, or at the opposite, they only studied the suppliers' point of view. Hence, the main issue here is that data is too often collected from only one side of the dyad and such studies based on the other party's “perceptions” are difficult to interpret or run the risk of misinterpretations. We recommend that further research should focus on collecting data from both sides of the dyad, although it is much more time-consuming to execute, but this is the only way to check whether buyers' perceptions do match suppliers' ones. Of course, in such a research design, buyers should not recommend their suppliers, or vice-versa, which would introduce another bias. Thus, we are aware of the difficulty for researchers that can occur in doing so while finding the right participants, which explains why so few studies use such a truly dyadic research field. Nevertheless, such research highlighting the dependence perceptions from both sides of the dyad will help researchers and practitioners to understand if there are cases of misperceptions and what are the consequences on the relationship. They will help research in the field of vertical dependence to move forward. Another critique lies in the choice of using single respondent (mostly buyers) and not to use multi respondents from each studied organization. Involving some other members from the buying center, such as engineers in R&D or product development managers and studying the network effect could reduce the perception bias and put the dependence concept into a broader perspective. Especially today with the increase of globalized organizations, the buyer–seller dyad tend to be emerged in a broader network of relationships involving other functions and involving more virtual relationships within a greater geographic spread — “dependence” can be perceived differently by different actors or different locations. Further to these critiques, we also find that studies that take place only within one industry sector, may “not be sufficient to fully assess the scope of the results” as recognized by Pulles et al. (2014). We also observe the cultural limitation of studies that take place in a specific country: there should be a call for replication in other countries to test whether cultural differences enhance or challenge the findings. We may miss here the launching of a large project to study dependence, involving researchers from different countries and able to launch a multidimensional research project involving multi-respondents from both sides of dyads. Future research should also involve more longitudinal research that would capture the dynamic nature of supplier–customer relationships and the evolving nature of dependence, more specifically the bi-polar aspect of dependence: whereas a lot of studies focus on the “dark” side of dependence, few studies have investigated the bright side of it. Still, some scholars have recently stressed the bi-polar aspect of dependence, “reflecting positive and negative motivations (Scheer and Smith, 1996). Benefit-based dependence – the need to maintain the relationship because of the irreplaceable net benefits that result from the on-going relationship – focuses on manifest, presently-realized positive relational benefits. In contrast, cost-based dependence – the need to maintain the relationship because of the new costs that will be incurred if the relationship ends – focuses on the latent, currently dormant negative factors that would be realized in the future upon relationship termination.” (Scheer et al., 2010, p. 92). This positive aspect of dependence can be related to the findings of Caniëls and Gelderman (2007). In their literature review they first posit that, when strategic products are purchased from one supplier (single source), this can cause a significant supply risk, as the customer is totally dependent on the supplier. In order to counterbalance this risk, they suggest that customers will aim to build a partnership relationship with their supplier (referring to Elliott-Shircore & Steele, 1985). The mutual trust and commitment that comes with the intensified

Please cite this article as: Johnsen, R.E., & Lacoste, S., An exploration of the ‘dark side’ associations of conflict, power and dependence in customer– supplier relationships, Industrial Marketing Management (2016), http://dx.doi.org/10.1016/j.indmarman.2015.12.011

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relationship is likely to reduce the supply risk to a minimum and interdependence is thus created, balancing the relationship. Their research findings totally contradict this approach: they observed supplier dominance in a position of single sourcing strategic products, where they expected a balanced power situation (referring to previous academic literature). They call the result “provocative” as it sheds a new light on the buyer's understanding of dependence. It shows that buyers do not mind being dependent on suppliers when they perceive the partnership to be satisfactory. This is a clear illustration of benefit-based dependence. This benefit-based dependence can only last if the supplier offering is idiosyncratic and if the supplier is considered as a “strategic” supplier (Lacoste, 2012). As further highlighted by Scheer et al. (2010), even a supplier that excels to generate benefit-based dependence based on current product quality and delivery performance, will not avoid to move to cost-based dependence. Especially in highly competitive environments, supplier's competitors can quickly match product offerings and services, so that there may be other suppliers capable of providing comparable product and service quality. The customer's cost-based dependence will depend on the switching cost of changing supplier. Another construct can consolidate benefit-based dependence: trust. Building mutual trust can avoid termination of the relationship, even when benefit-based dependence is turning towards cost-based dependence. Yang, Zhou, and Jiang (2011) demonstrate that trust has a far more significant effect on building long-term relationships than dependence; they advise suppliers that to sustain their relationship with customers, they should nurture the relationship by fostering the development of trust. Hald et al. (2009) see a correlation between trust and dependence. They posit that as long as the buyer's perceived trust is high, the perceived dependence presents no problem to the buyer (even when the nature of the dependence is cost-based); the buyer will probably stay in the exchange relationship, focusing on creating and sharing value. However, if the buyer perceives trust on the supplier side as low, the combination of high perceived dependence and low trust will cause the buyer to perceive the relationship as risky and to end the relationship or to lower the supplier's share of wallet. In conclusion, dependence is seen as positive as long as it is coupled with a high level of trust and brings relational benefits to the other party. Dependence is seen as negative when it is connected to high switching costs together with a low level of trust (see Fig. 8). Further research should deepen the study between trust/commitment and dependence and more specifically investigate how to maintain a high level of trust and to keep a positive level of dependence with relational benefits. Research may also investigate how to move on the relationship continuum from cost-based dependence towards benefit-based dependence. Despite both types of dependence being well established in the literature, the mechanism by which companies move from one type of dependence towards the other remains underinvestigated and requires further exploration. 7. Concluding discussion In this paper we set out to answer research questions on the key themes in the literature on the dark side of conflict, power and

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dependence in customer–supplier relationships and the avenues of research that may guide future conceptual developments in the field. We have found that certain themes predominate, as discussed in the findings and shown in our integrated heuristic map of the literature on conflict, power and dependence (see Fig. 9). In relation to conflict, dark side associations are resident in relationships where customers and suppliers have discrepancies or contradictions in their relationship. This, conflict can be viewed as contingent to problems related to quality and performance in customer–supplier relationships. Conflict can have both positive and negative consequences sometimes bringing life to a stale relationship or reinvigorating interaction between a supplier and customer and creating opportunities for creative collaboration, although positive consequences of conflict are much less studied than the ones leading to the deterioration of the relationship. On the more negative side conflict can drive opportunism. Unscrupulous behavior by one actor can incite reprisals by its counterpart, especially in the context of asymmetric relationships where bonds between the parties may be less strong because of perceptions of inequality. The strong connection between coercive power and conflict means that it is difficult to fully untangle the influences of conflict and power in dark side consequences in customer–supplier relationships. Thus, many researchers have considered both characteristics in drawing conclusions about the negative consequences of relationships. At its darkest, power is viewed as a relationship killer and has a particularly destructive role in customer–supplier relationships when those relationships are unbalanced and asymmetric. However, it is important to acknowledge that power may be implicit and the extent of the negative consequences of power depends on whether the power is fully exercised. Coercive power is associated with the wielding of opportunistic and unethical behaviors, but neither the source nor the possession of power can purely define the nature of a customer–supplier relationship. Rather, it is the inclination and predisposition to use and exploit a position of power that will determine the nature of the customer–supplier relationship and whether the darker consequences of power will have the potential to flourish and negatively influence the relationship. The research analyzed in our study has highlighted that dependence is frequently linked to a restriction on choice and limitations of alternative partners. Dependence is implicit in relations where power imbalance exists, creating conditions whereby the power of one party stems from the other party's dependence. Dependence can be curbed, to a certain extent, by the role of sales people in sustaining viable key customer relationships, while at the same time using their influence to add value to competencies that would be appreciated by new customers. Evidence of such a delicate balancing act has demonstrated that a salesperson's power can be a formidable force in effective influencing strategies of suppliers and reducing dependence on a limited number of customers. However, long-term dependence in asymmetric relationships has been found to be much more difficult to overcome, giving rise to inertia, dormant conflict and poor levels of trust in a counterpart. Furthermore, living with dependence as the natural condition in customer–supplier relationships is linked to poor capacity for learning and innovation by suppliers. The darkest implications of long-term dependence may thus be concomitant to more frequent and contentious dissolution in customer–supplier relationships. As for conflict, there can be a

Fig. 8. The bi-polar approach to conflict and the two dimensions of conflict.

Please cite this article as: Johnsen, R.E., & Lacoste, S., An exploration of the ‘dark side’ associations of conflict, power and dependence in customer– supplier relationships, Industrial Marketing Management (2016), http://dx.doi.org/10.1016/j.indmarman.2015.12.011

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Fig. 9. Integrated heuristic map of the literature on conflict, power and dependence.

“benefit-based” and positive form of dependence, which is much less studied than the negative consequences of dependence. In conclusion, the contribution of this research has been to provide a better understanding of the literature on the dark side issues of conflict, power and dependence in customer–supplier relationships, creating a platform for future researchers related to the derivations, foundations and findings from a systematic literature review of this body of research from 1980 to 2014. Our findings have identified specific dark sides associations in each of the three relationship characteristics studied, but have also highlighted the intertwining of dark side consequences across the domains of conflict, power and dependence and the bi-polar nature of the constructs. This demonstrates the complexity of investigating the dark side of customer–supplier relationships which is intricate and often difficult to untangle and uncover. Finally, our study has pinpointed the importance of developing a better understanding of the dark side associations in asymmetric customer–supplier relationships which appear to be a particularly important context to unravel in getting to the root of the negative consequences and associations of the dark side of customer–supplier relationships. 8. Managerial implications Managers (on the supplying or buying side) are often in action and do not spend a lot of time to think over the quality of their relationships with their counterparts or do not strategize over such a relationship until it is often too late and that relationship is about to terminate. Our literature review draws attention to the consequences of conflict, power and dependence and should help all actors in vertical relationships to ponder over those major relational characteristics. First, they should “strategize” their use of power: how do they want to use

power if they are the powerful party or how should they build a countervailing power if they are the weaker party. For managers it is critical to consider and think over where they stand on the relational continuum and where they want to stand. It may be fine to stand on the transactional end of the relational continuum if none of the actors look for relational benefits or minor ones, if the involved product is basic or is a commodity, and if the relationship is a sustained transactional one. Then, power may be used but will not trigger conflict as both parties look at the relationship as recurrent episodes determined by tenders. If one of the actors would like to develop the relationship in a way, which is not aligned with the other actor, the conflict may arise, power may be exercised and the relationship will enter into its “dark side”. A similar approach my be analyzed with dependence — some suppliers or even customers may not think over their situation of dependence until the powerful party wants to change the relationship and then realize too late they will encounter great financial hurdles as a consequence. Again, analyzing the outcome of the dependence situation when the relationship is “bright” may help to take some steps to minimize the risk related to that situation of dependence. It may be difficult in the case of “passive” dependence, but easier in “positive” dependence. In one of our studies, a small Swiss supplier was explaining that he was very proud to work with the most prestigious name in the clock making industry until this brand was struck by an economic slowdown, but in the meantime he had reduced his dependence to this strategic customer by entering into a relationship with another strategic customer from another industry. Not all suppliers are so cautious in managing their dependency level with strategic customers. Our literature review should draw practitioners' attention to the fact that the “bright” side of a relationship can turn to the “dark” side and

Please cite this article as: Johnsen, R.E., & Lacoste, S., An exploration of the ‘dark side’ associations of conflict, power and dependence in customer– supplier relationships, Industrial Marketing Management (2016), http://dx.doi.org/10.1016/j.indmarman.2015.12.011

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relational benefits attached to a specific relationship should not be considered as an outcome but as a resource that needs to be nurtured and developed. 9. Limitations and avenues of future research In developing this study we found that to extrapolate the dark side issues in previous research was sometimes a challenging task as it appeared that positive associations of relationship characteristics have tended to predominate in the literature between 1980 and 2014. Nevertheless, we were able to root out certain dark side associations related to conflict, power and dependence through our narrative method of analyzing and interpreting relevant contributions, providing a first step in the identification of the dark side of conflict, power and dependence in customer–supplier relationships. It may be argued that our methodological approach had some limitations. We chose to analyze the papers included in the review based on a subjective evaluation of relevant characteristics and categories. Our choice of reviewed papers did not include non-English language papers or books on the subject, therefore there may be bodies of research, which might have been relevant but were not included in this review. Our research has found that certain themes in the literature are likely to need further research. In particular, we have highlighted the bipolarity of each relationship characteristic. By bi-polarity we refer to situations where two opposite perceptions or dimensions of the same relationship characteristic exist. Conflict, power and dependence can therefore each be positioned on a continuum that moves from the “bright” to the “dark” side of their use. Studying the middle point of the continuum for each of the three characteristics would help to understand how to move back from the “dark” side of relationships towards the “brighter” one and vice-versa. This would mean investigating other themes and constructs, which mediate the three relationship characteristics. The three characteristics belong to the bright side of the relationship continuum when both parties in the vertical relationship (customer and supplier) believe they derive positive relational benefits from the relationship, and if the repartition of power is not necessarily balanced, at least, it is not exercised by the powerful party. Both parties are committed and trust each other. The three characteristics move towards the darker side of the continuum when trust is disappearing due to an asymmetry of relational benefits; we move into an adversarial relationship as one party is powerful and desires to enforce such power by keeping ownership of all relational benefits, running the risk of terminating the relationship, in case the other party resists. Further research could more specifically investigate the dynamics of relational benefits, the consequences of their evolution on interorganizational trust and its impact on the dark side of relationships. The supplier perspective on the dark side of relationships requires further study as it is still uncertain how suppliers manage in customer relationships where negative associations of conflict, power and dependence predominate. Indeed, studies of both sides of the relationship would add to the depth of knowledge on whether customers and suppliers perceive dark side issues similarly or differently. Our heuristic maps show that power and dependence are prevailingly understood and studied from the customer's perspective (being the powerful party). As stressed in previous sections, Caniëls and Gelderman (2007) even call their results “provocative” as they show customers can be satisfied in a situation of dependence from their suppliers. Still, in some industries, such as automotive, there has been a major shift of power from manufacturers to their OEM suppliers: “Decades of carmakers outsourcing their research and development to suppliers have left them more and more dependent on the expertise – and manufacturing capabilities – of the supply chain” (Foy, 2014). Further research should investigate power and dependence dynamics, the antecedents and consequences of power change from one party to the other — what happens when the submissive party creates some

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kind of countervailing power (Lacoste & Johnsen, 2015). Hence, the subject of asymmetric relationships and the experiences of firms within them require further investigation. There is still very limited research which tackles the issues related to the consequences of dark side characteristics for smaller firms in relationships with larger firms. Future research would benefit from a focus on understanding how negative consequences of long-term asymmetric relationships affect particularly smaller and more dependent firms and how they react to these relationships. There is a tendency, in past IMP research in particular, to focus on the bright side of relationships and the benefits of mutual, cooperative, trusting and committed relationships. In our review it was challenging to extrapolate the dark side issues as the focus of previous research has more frequently been on the positive associations of relationship characteristics. Thus, there needs to be stress in future IMP research on further identification of the dark side associations of customer– supplier relationships to deepen the understanding of researchers and practitioners alike on how to better cope in and manage the dark side of relationships. Hence, further conceptual avenues on the three studied constructs could emerged from “engaged scholarship” as a participative form of research to study complex problems (van de Ven, 2007) – scholars could use research for problem solving, especially the “negative” impact of a new strategy implementation within a focal company onto supplier relations – as described by Foy (2014) the outsourcing strategy of carmakers has led to a transfer of power and dependence towards their suppliers. Today carmakers complain about powerful suppliers having higher margins than they do. Some future academic research could investigate how business models influence and change power–dependence games and as managerial implications suggest avenues to create countervailing power and re-balance vertical relationships. Some scholars (Rousseau, 2012; van de Ven, 2007) call for more problem-focused research and the constructs of power, dependence and conflict is typically an academic area where scholars could engage those experiencing the problems of problematic relationships to draw on multiple theoretical frameworks and co-produce knowledge with practitioners.

Appendix A. Supplementary data Supplementary data to this article can be found online at http://dx. doi.org/10.1016/j.indmarman.2015.12.011.

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Please cite this article as: Johnsen, R.E., & Lacoste, S., An exploration of the ‘dark side’ associations of conflict, power and dependence in customer– supplier relationships, Industrial Marketing Management (2016), http://dx.doi.org/10.1016/j.indmarman.2015.12.011