Social power as an antecedence of governance in buyer-supplier alliances

Buyer-supplier alliances require certain governance mechanisms to be successfully controlled and coordinated. However, relatively little is known about how power differentials between the actors affect the applicability of those governance mechanisms. This paper follows the assumption that different sources of social power among firms directly influence the governance mechanisms and indirectly their performance. Our study utilizes a sample of 250 European firms to test the influence of four social power sources on three different governance mechanisms. We find different influences of social power on certain governance mechanisms. Suppliers' perception of buyers' coercive power leads to stronger contractual governance and stronger buyer directives but reduces the use of relational norms. Reward power only relates to contractual governance. Expert power steers towards buyer directives and relational norms. Referent power stimulates the development of relational norms. A cluster analysis of power types provides additional insights and enriches our managerial implications.