The impact of inter-firm authentic leadership on relationship performance in the buyer-supplier context

The literature on buyer–supplier relationships suggests that supplier responsiveness is a critical driver for buyer firm responsiveness and also the entire supply chain’s responsiveness. Beyond documented contracts, the social interactions and socially embedded relationships can also help buyer firms to manage their suppliers’ responsiveness. Leadership has been regarded as an important antecedent of social interactions and exchange relationships, but most studies in inter-organizational leadership have only been carried out in a small number of areas. Previous studies of inter-organizational leadership have not dealt with limitations of applying traditional leadership styles to the inter-organizational context. This thesis answers this lacuna by examining the effect of authentic leadership on supplier responsiveness. A survey with a sample of 224 supplier firms operating in China was conducted, covering a broad spectrum of industries, firm size, and ownership structures. Data management and analysis were mainly performed using SPSS 25. The results show that buyer authentic leadership is positively related to justice perceptions of suppliers, and further influences supplier responsiveness. Moreover, the findings show that the positive relationships between buyer authentic leadership and justice perceptions are enhanced when suppliers operate in intensively competitive markets. While this positive relationship between buyer authentic leadership and perceived procedural justice is weakened in the face of a high level of dependence asymmetry within a buyer–supplier relationship, the positive relationship between buyer authentic leadership and justice perceptions is not moderated by dependence asymmetry. This thesis expands the existing knowledge about the role of authentic leadership in the channel context. First, leadership has not been studied well in the dyadic relationship. Only a few studies have focused on the effect of traditional leadership shown by a focal firm on influencing the entire supply chain. This thesis is an important addition to the current focus on traditional leadership styles in managing buyer–supplier relationships by unveiling that authentic leadership shown by buyers affects supplier responsiveness. Second, this thesis further reveals the mechanism through which buyer authentic leadership can enhance supplier responsiveness by examining the mediating roles of perceived procedural justice and distributive justice in dyadic relationships based on social exchange theory. Third, this thesis enriches previous research, which posits authentic leadership is a favourable driver of organizational performance. This thesis develops an extensive model by revealing the context in which buyer authentic leadership is most effective in enhancing supplier responsiveness. From a managerial perspective, this thesis suggests that buyers should practice authentic leadership in relationships with their suppliers by showing care about the situations of suppliers, transparency in exchanges and interactions, and a standard of ethics. In doing so, suppliers feel treated in a respectful way, in return, they will be responsive to the buyer firms’ demands and requirements. Moreover, it is imperative for buyers to enhance perceived procedural justice and distributive justice in the buyer–supplier relationship, with particular attention to perceived procedural justice because perceived procedural justice could bring up suppliers’ perceptions of distributive justice. Finally, buyers should take the external environment (e.g., the markets where suppliers operate) and inter-firm structure (e.g., dependence asymmetry) into consideration when rationalizing the use of authentic leadership to enhance supplier responsiveness.