The effects of power asymmetry in B2B relationships in automotive industry

Abstract

The subject of this study is to examine how power asymmetry will affect B2B relationships in automotive industry supply chains. Traditionally automotive industry has been seen as highly hierarchical industry. The higher position a company has on a supply chain, the more power it will have. The goal of this study is to examine if the participating companies of this study have experienced the use of coercive power and what kind of effects the use of coersive power will cause to their relationships. This study also focuses to the meaning of other B2B characters, such as trust and commitment when power asymmetry exists in the relationship. The research method of this study is semi-structured interview. The intervies were done in two phases: the first background interviews were done in IAA Frankfurt car show at September 2017. The actual research interviews were done at end of the year 2017. The key result of this study is that power asymmetry clearly exists. The power asymmetry can cause communicational problems, sanctions, price bargains, imbalanced possibilities to negoatiate about the terms and imbalanced possibilities to join common development projects. It is challenging to increase communication between companies that have highly hierarchical company cultures. Another important result of this study is that even relationships that have high level of power asymmetry can be succesful for both companies if there is enough trust and commitment between them. There was no sign that any of the participating companies would have used coercive power in their relationships but some of the companies told that they had experienced it in their previous relationships.