Corporate integration and Competitiveness: Turkish suppliers’ perspective

This paper examines the nature and the consequences of the relationship between suppliers and their industrial buyers. Integrated and arms’ length relationships are the two possible relationship structures that dominate industrial life. Integrated types of relationships have unique characteristics such as commitment, trust, cooperation, communication structures, and joint conflict resolution techniques of the related parties that discriminate them from traditional business relationships. Both univariate and multivariate analysis showed that firms having at least one integrated relationship performed better than those operating only in an arms’ length manner for all relational outcome variables, which include product quality, delivery reliability, process flexibility and cost leadership. These firms were also more innovative but the differences were statistically significant only for innovativeness, process flexibility and cost leadership. The findings of hierarchical regression analysis supported a two-way relationship among the four integration intensity factors (cooperation, trust, communication, joint conflict resolution) and the three relational outcome variables (product quality, process flexibility and cost leadership). Innovativeness was found to be an important mediating variable between the two integration intensity factors communication and cooperation and the two relational outcome measures product quality and process flexibility