Effects of Supplier Awards on Buyer-Supplier Relationships: Evidence From the Automobile Industry

This study examines the strategic use of non-monetary rewards, specifically symbolic awards granted by buyers to suppliers, and their effects on buyer-supplier relationships. While there is a rich body of research on the effects of awards targeted at individuals, studies on the effects of awards for companies are still in their nascent stage. In particular, research on the effects of supplier awards in buyer-supplier relationships is still unexplored. By applying resource dependence and signaling theories, the study shows that symbolic awards strengthen relationships with both the awarding company and other firms. The study analyzes data from Toyota Motor Corporation's supplier awards in Japan's automobile industry, revealing that awarded suppliers are more likely to expand their transactional relationships with Toyota and with other buyers who depend on them. This research provides insights for firms looking to leverage awards strategically in competitive environments.