Social capital, power and information sharing – evidence from the Dutch meat processing industry

Abstract

Purpose: Buying companies in the food industry increasingly recognize the need to cultivate relationships with their suppliers. Social capital and power are important to understand buyer–supplier relationships. Maintaining these relationships appears highly dependent on the degree of information sharing. Design/methodology/approach: The study investigates how power and social capital dimensions are related to information sharing. A survey of first-tier suppliers in the Dutch meat processing industry was carried out. The data from 82 suppliers was analyzed using partial least squares. Findings: It appears that expert power contributes to the cognitive and structural social capital. In contrast, coercive power showed no influence at all. Cognitive and structural social capital dimensions have a direct link to relational social capital, which significantly improves buyer–supplier information sharing in the food industry. Practical implications: Buying companies can encourage supplier information sharing by building up their own expertise and cultivating social relationships. They should refrain from strong-handed practices. Originality/value: Companies in the food and food processing industry are dependent on effective information exchange for their very survival. This study investigates the role of power and social capital in making such exchange possible and sustainable.