Relational Antecedents of Organizational Slack: An Empirical Study into Supplier-Customer Relationships

Abstract

This paper builds on the relational exchange and power-dependency literature to explore the role played by specific relational antecedents that lead to the hoarding of slack resources. We hypothesize about the impact of four different aspects characterizing supplier- customer relationships on the level of slack resource hoarded by the suppliers: 1/ the interdependence equilibrium between supplier and customer, 2/ the reciprocal power of supplier and customer, 3/ the relational norms that structure the relationship, and 4/ the performance of the supplier. The hypotheses were tested on a sample of 98 French automotive component suppliers. Our findings allow us to distinguish between potential and available slack, and suggest that a supplier’s level of available slack resources increases when its dependence on the customer is higher, when its power is lower, and when the relational norms governing the relationship with the customer are stronger. Moreover, the statistical results point out that the level of potential slack resources held by a supplier is explained neither by the relational behavior of the firm nor by the power-dependence equilibrium between the partners, however a high performance supplier enjoys a higher level of potential slack.