Managers’ Risk Propensity and Destructive Behavior in Buyer–Seller Relationships: An Application of PLS-analysis

Abstract

Despite their popularity, buyer–seller relationships are often dissatisfying and engender destructive behavior, such as opportunism and exit by one partner. To explain destructive behavior, previous supply chain management studies primarily focused on the influence of situational factors, such as social and economic dissatisfaction, without accounting for managers’ risk propensity. Accounting for risk is critical though, because destructive behavior in buyer–seller relationships cannot be dissociated from the people who manage them. Drawing on risk and buyer–seller literature, the authors develop and empirically test a model that incorporates a moderating effect of the risk perceptions of situational factors on the relationship between a manager’s risk propensity and the inclination to exit the relationship and act opportunistically. A survey of purchasing managers indicates that the positive relationship between risk propensity and destructive behavior is strengthened by social dissatisfaction and mitigated by economic dissatisfaction.