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INFORMATION TO USERS This manuscript has been reproduced from the microfilm master. UNO films the text directly from the original or copy submitted. Thus, some thesis and dissertation copies are in typewriter face, while others may be from aity type of computer printer. The quality of this reproduction is dependent upon the quality of the copy submitted. Broken or indistinct print, colored or poor quality illustrations and photographs, print bleedthrough, substandard margins, and improper alignment can adversely afreet reproduction. In the unlikely event that the author did not send UMI a complete manuscript and there are missing pages, these wiU be noted. Also, if unauthorized copyright material had to be removed, a note wiH indicate the deletion. Oversize materials (e.g., maps, drawings, charts) are reproduced by sectioning the original, beginning at the upper left-hand comer and continuing from left to right in equal sections with small overly. Each original is also photographed in one exposure and is included in reduced form at the back of the book. Photographs included in the original manuscript have been reproduced xerographically in this copy. Higher quality 6" x 9" black and white photographic prints are available for any photographs or illustrations ^jpearing in this copy for an additional charge. Contact UMI directly to order. UMI A Bell & Howell information Company 300 North Zeeb Road. Ann Arbor. Ml 48106-1346 USA 313.761-4700 800.521-0600 INFLUENCES OF POWER UPON SUPPLY CHAIN RELATIONSHIPS: AN ANALYSIS OF THE AUTOMOTIVE INDUSTRY DISSERTATION Presented in Partial Fulfillment of the Requirements for the Degree Doctor of Philosophy in the Graduate School of the Ohio State University By Michael Maloni, M.A. ***** The Ohio State University 1997 Dissertation Committee: A p ^ v e d by Professor W.C. Benton, Adviser Professor Amelia Carr Professor Glenn W. Milligan Business Adminiâtcatîdn CMduate Program UMI Number: 9 8 0 1 7 4 1 Copyright 1998 by Maloni, Michael J. All rights reserved. UMI Microform 9801741 Copyright 1997, by UMI Company. All rights reserved. This microform edition is protected against unauthorized copying under Title 17, United States Code. UMI 300 North Zeeh Road Ann Arbor, MI 48103 ABSTRACT Supply chain management involves the extensive coordination of planning and processes among firms within the supply chain. Such integration should conceptually generate decreased uncertainty, enhanced responsiveness, and reduced costs, thus translating to higher customer satisfaction and subsequent supply chain profitability. Supply chain management necessitates an environment of mutuality and cooperation, but inter-firm power influences may upset this relational nature. Thus, power presents a potential barrier to effective supply chain integration. This dissertation sought to investigate the presence of power within the supply chain in attempt to understand power as a critical component of the supply chain management environment. The research methodology involved a survey of suppliers in the automobile industry, a pioneer of supply chain management. The survey instrument served to gather perceptions of power bases, critical inter-firm relationship elements, performance, and satisfaction. Structural equation modeling was then utilized to analyze the causal effects of power bases within the supply chain. The research produced several important findings. First, expert, referent, and reward power sources were found to have significant positive effects upon the relationship between buyer and supplier, while coercive and legal legitimate power sources were u found to have significant negative impacts. As a second major finding, the research verified that a strong supply chain relationship was perceived to have a beneficial influence upon supplier satisfaction as well as supplier, buyer, and supply chain performance. Based on the results, the research indicates that supply chain strategy must incorporate power effects or risk compromising its functional effectiveness. The research also reveals evidence for the use of power management as a tool for enhancing supply chain integration. Such findings justify the need for further supply chain power research to provide additional insight into power management strategies and effects. Ill Dedicated to my parents who have never wavered IV ACKNOWLEDGMENTS I am forever grateful to my advisor. Dr. W.C. Benton, who provided solid guidance, direction, and enthusiasm throughout the research. Dr. Benton taught me the value of carefully planned, well executed scholarly research. Without his support, this dissertation as weU as my subsequent graduation would not have been possible. I would like to thank the committee members. Dr. Amelia Carr and Dr. Glenn Milligan, for their critical insight with the research analysis and dissertation composition. I would also like to thank Dr. David A. Schilling and Dr. Bernard J. La Londe for their critical guidance during my coursework. Further thanks are extended to Jeff Trimmer of the Chrysler Corporation, David Curry of Honda of America, and Gunter Schmirler of General Motors for their assistance with research direction and contact lists. I am also grateful to all the survey respondents. Without their thoughtful participation, the research would not have been a success. I would like to thank the National Association of Purchasing Management which provided a critical financial support through their doctoral dissertation grant program. I am in further gratitude to numerous colleagues who provided instrumental guidance throughout the research project including fellow Ph.D. candidates Rebecca Duray, Ling Li, Seungwook Park, and Darryl Wilson. Furthermore, Frederik Schlingemann, Sara Moeller, John Griffin, and Jim Morrison made the long days and nights in Page Hall fun and bearable. Brad Damewood of Andersen Consulting deserves much recognition for his consistent guidance in serving as my primary mentor in both work and life. I would like to recognize the Glassware Club, a steadfast symbol of Nittany Lion masculinity. For their undying support, I would like to thank my parents who have inspired me to pursue advanced degrees and have never wavered in their support. My new in-laws are also pretty sharp. Finally, I wish to thank my wife and best friend, Rachel, who helped me in more ways than she will ever know. Here we go Steelers here we go! Life is a journey, not a guided tour. VI VTTA 1988-1991 ..................................... B.S. Quantitative Business Analysis, Penn State University University Park, PA 1991-1992 ..................................... Analyst Programmer, Armstrong World Industries Lancaster, PA 1992-Present ................................. Graduate Teaching and Research Associate, Max M. Fisher College of Business The Ohio State University Columbus, OH 1992-1995 ..................................... Master of Arts (Business Administration) Max M. Fisher College of Business The Ohio State University Columbus, OH PUBLICATIONS Maloni, Michael J. and W.C. Benton, "Supply Chain Parmerships: Opportunities for Operations Research," European Journal of Operational Research, Vol 101, No 3, 1997, pp 419-429. FIELDS OF STUDY Major Field: Business Administration vu TABLES OF CONTENTS Abstract..................................................................................................................................ii Dedication .............................................................................................................................iv Acknowledgments..................................................................................................................v Vita.......................................................................................................................................vii List of Tables...................................................................................................................... xiv List of Figures..................................................................................................................... xvi CHAPTERS CHAPTER I - INTRODUCTION........................................................................................ 1 1.1 Operations as a Competitive Weapon ........................................................................I 1.1.1 Operations Leadership ......................................................................................... 1 1.1.2 Critical Elements for Best Practice Manufacturing............................................3 1.1.3 Supply Chain Management and Competitive Operations ..................................5 1.1.4 Barriers to Supply Chain Management .............................................................. 7 1.2 Supply Chain Partnerships .........................................................................................9 1.2.1 Benchmark Supplier Partnershipping: Chrysler Corporation ........................... 10 1.2.2 Importance of Supply Chain Partnership Awareness ....................................... 11 1.3 Motivation and Scope of Research ........................................................................... 11 1.4 Research Problem ..................................................................................................... 13 1.5 Research Overview ................................................................................................... 14 1.6 Contributions.............................................................................................................17