Mutual adaptation in buyer-supplier relationships

In buyer-supplier relationships, effective partnerships require mutual adaptation to execute strategies effectively. Using LISREL, we test a model of relational exchange factors that includes dependence, joint action and trust and their influence on the mutual adaptation of supplier and buyer firms in the U.S. automotive industry. The results of the study indicate that both economic and social dimensions of the relationship impact mutual adaptation, but that these two are not necessarily complementary. Specifically, supplier adaptation is negatively impacted by trust between supplier and buyer, but positively impacted by dependence and joint action. Buyer adaptation, on the other hand, is positively impacted by trust between the two, joint action and the adaptation undertaken by the supplier. The negative relationship between trust and supplier adaptation may be symptomatic of deeper issues in the U.S. automotive industry that should merit concern. (C) 2007 Elsevier Inc. All rights reserved.