Buyer-Supplier Relationships and Organizational Health

SUMMARY This article examines the relationship between organizational health and buyer-supplier relationships. Contemporary research has emphasized the need for organizations to move toward closer cooperation. The decision to engage in partnership arrangements is one that has major implications for buyers and suppliers. Using evidence from an exploratory case study, the challenges presented in developing a close, cooperative, and mutually beneficial trading relationship between a buyer and a supplier, where one partner, the buyer, is in a powerful position, are investigated. It is argued that powerful buyers can seriously damage organizational health. The findings provide evidence that it is essential to promote communication structures that encourage dialogue, consultation, and employee participation in decisionmaking. This is particularly important where decisionmaking could benefit from the in-depth technical knowledge of middle and junior managers and shopfloor workers.