Supplier relationship management capability: a qualification and extension

Supply chain management theory recognizes the importance of managing supplier relationships. However, we know less about the capabilities underlying such supplier relationship management that are required to restructure and develop the supply base in order to continuously improve its performance. A recent study by Mitrega and Pfajfar (2015) provides initial insights regarding this topic. The objective of the present article is to provide a qualification and extension based on their argument. For this purpose we utilize the concept of supplier relationship management (SRM) capability, in line with a dynamic capabilities approach to management. SRM capability comprises organizational processes and routines oriented at the initiation, development, and ending of supplier relationships. Our study qualifies and extends Mitrega and Pfajfar (2015) by providing a rigorous conceptualization, nomological model, and operationalization of SRM capability. This study specifically shows that differential effects of components of SRM capability exist, which are attributed to the characteristics of the business environment in combination with the firm's strategic choices. A latent class analysis reveals the existence of two groups of distinct SRM capability strategies: a status-quo optimization strategy and a dynamic optimization strategy, which are contingent on characteristics of the supply base and the business environment.