The inevitability of conflict between buyers and sellers

Abstract

Examines the source of conflict between buyers and sellers as it relates to the price of goods purchased for use in production. Focuses on management’s understanding and application of the term “maximize shareholder value”, which is found to result in business decisions that marginalize suppliers’ capabilities and interests. Concludes that conflict between buyers and sellers is an inevitable outcome when buyers make decisions principally centered upon the literal interpretation of management’s role as agents of the board whose primary responsibility is to maximize shareholder value. This finding has widespread implications for both academics and practitioners, as making this linkage explicit defines the challenge for improving purchasing and supply chain management practices in a new way.