Dyad Buyer-Supplier and its Relation to Financial Performance

Abstract

This study aims to raise which practices of buyer-supplier dyad are related to the financial performance of the manufacturing industry in Brazil. Based of 174 Brazilian companies and a total of 312 respondents, the analysis use CFA (Confirmatory Factor Analysis) to validate the measurement of constructs and multiple regressions to analyze the relationship between practices of buyer-supplier dyad and financial performance. Our results showed a positive relationship dimension--strategic sourcing and buyer-supplier relationships--with the company's financial performance. However, the supplier evaluation system showed no statistically significant relationship. The findings reinforce the lack of formalization in the buyer-supplier relationship, a situation that often hinders the development of a long-term relationship. The lack of systematic evaluations of supplier performance can generate insecurity in the relationship, since historical actions taken by suppliers could serve as a criterion of choice in a future negotiation. As practical contributed to this study, it is expected that managers understand the importance of buyer-supplier relationship to the company's financial performance.