Cooperative Buyer/Seller Relationships and a Firm's Competitive Posture

The purchasing function of U.S. manufacturing firms has long relied on price‐driven tactics to acquire an uninterrupted flow of intermediate‐products from suppliers. These tactics help reduce direct material costs for the buying firm, and allow the purchasing function to support the firm's strategic posture of overall cost leadership. Some purchasing managers, however, have begun to use “cooperative buyer/seller relationships” with a few preferred‐suppliers; this approach enhances the purchasing function's ability to support several strategic postures available to a manufacturing firm. Cooperative buyer/seller relationships allow purchasing managers to better manage the interdependent tasks of the buying and selling firms, and to become conduits of information between the manufacturing firm and its preferred‐suppliers. This article presents a general description of cooperative buyer/seller relationships, contrasts the attributes of such a relationship with traditional acquisition options (i.e., open market bargaining and vertical integration), and suggests the contributions to a firm's strategic posture available from cooperative buyer/seller relationships. While the findings presented in this article have not been tested empirically for their descriptive or predictive ability, they are based on data gathered from field interviews completed with 50 purchasing managers representing a cross‐section of organizational responsibilities and standard industrial codes.