The article, Threats and benefits of power discrepancies
between organisations: a supply chain perspective, by Baofeng Huo, Qiang
Wang, Xiande Zhao and Sebastian Schuh evaluates the supply chain relationship
from the perspective of the supplier who normally has less of a beneficial
position. The article also focuses on
the different powers, information sharing, willingness to share information between
the suppliers and customers, and performance.
In the article, it
describes two different “powers” – coercive and non-coercive. Coercive power is described as “where the
power source holds the ability to administer punishment”. It is described that customers may hold
coercive power because they have the ability to cancel an order and reduce the
volume of business with the manufacturer.
Normally, this type of “power” is used to negotiate prices and
conditions of the customer relationship.
Non-coercive power, or also known as “expert power”, means power
is derived from the skills or special knowledge of a particular subject. Within a supply chain network, the expert
power of a focal company can be achieved if the network actors believe that it
possesses a special knowledge which is valuable to them.
sharing also plays a huge role in supply chain management. It plays a role in hopefully improving operational
and financial performances. Information
sharing in supply chains has become more efficient by the global introduction
of long- term cooperation and coordination which leads ultimately to the
improvement of companies’ competitive advantages.
Though information sharing is ideal, it can also be risky because it increases
the possibility of sensitive information being shared with competitors and a
transparency and vulnerability of negotiations.
in all, this article emphasizes that coercive and non-coercive power impacts information
sharing between inter-organizational relationships. Furthermore, the study explains and explores
the reaction of 4569 randomly selected companies “in the face of two different
types of power imbalances”.