The efficiency of joint decision making in buyer-supplier relationships

This paper examines the effectiveness of joint decision making within 87 pairs of buyer-supplier relationships in manufacturing. Joint decision making is an important attribute of a more cooperative supply chain relationship that may ultimately result in a better performance. Efficiency is modeled as a multiple criteria problem using Data Envelopment Analysis (DEA). Inputs of five kinds of joint decision making activity are examined relative to two measures of output based on the assessment of the buying firm. Three contingent constructs (product customization and innovation, media richness of the communication between buyer and supplier, and continuity in the relationship) are then examined for their impact on the relative performance of each pair. The implications for the management of supply chain relationships and benchmarking of best practice are then discussed.