Strategic purchasing and supplier partnerships—The role of a third party organization

•We explored how a credible third party facilitated the development of supplier partnerships.•The credible third party provided key compensating mechanisms that reduced the power and social distance between the potential partners.•By bridging the mental frameworks and expectations between the potential partners, the third party enhanced the chances for the development of supplier partnerships.•The credible third party facilitated the development of supplier partnerships by creating a market place that brought the parties together.

This study explored how a credible third party facilitated the development of supplier partnerships. By identifying qualified potential suppliers, serving as a surrogate for legitimacy for supplier firms and providing a market place for the potential partners to meet, the third party organization provided key compensating mechanisms to reduce the power and social distance and overall transaction costs associated with collaborating to effect supplier relationships between the parties. The study contributes to the supply and purchasing literature by integrating the role of third parties into research on buyer–supplier relationships that have so far been viewed predominantly as dyads and by demonstrating how third parties may actually influence relationships between buyers and suppliers. Our findings also provide firms with some guidelines on building successful buyer–supplier partnerships.