Understanding opportunism in buyer-supplier-supplier triadic relationships: the role of power asymmetry

Purpose Firms often struggle with opportunistic behavior from supply chain partners. Relying on Transaction Cost Economics and its extensions, this study developed a conceptual model theorizing the antecedence, consequences and conditional factors of opportunism within a buyer-supplier-supplier triadic relationship. Design/methodology/approach This study employed a cross-sectional survey data collected from 200 U.S. firms. The collected data were analyzed with SPSS and AMOS, the two statistical software, for reliability, validity, confirmatory factor analyses and structural equation modeling. Findings First, opportunism negatively influences operational performance and business performance, and such an effect is fully mediated by relationship stability. Second, this study classified power asymmetry as asymmetrical power discrepancy and asymmetrical power advantage with these two forms playing different roles in influencing opportunism. Results indicate that asymmetrical power discrepancy induces opportunism while asymmetrical power advantage strengthens the negative influence that opportunism has on relationship stability. Additionally, the mediated moderating effect of asymmetrical power advantage by relationship stability is confirmed. Originality/value The results provide significant academic and managerial insights that can guide managerial efforts in distinguishing types of power asymmetry, controlling opportunism and further mitigating the consequences of opportunism within a triadic relationship.