Supplier Relationship Management in China and Taiwan : A case study with Bufab to identify the main criteria for a healthy supplier buyer relationship

Background: Supply chain relations go far beyond simple transactions of money and goods. Today, with a low depth of added value in most companies, and low prices in China and Taiwan, sourcing in these countries is very common. Managing the relationship with these suppliers to increase the performance of the whole supply chain is crucial. We identified the cultural dimensions of trust, power, communication and time as most influential for the supplier buyer relationship and structure our paper accordingly. Purpose: Investigate the connection between supplier relationship management (SRM) and culture. We investigated which cultural factors in Taiwan and China may hinder a relationship with a foreign buyer and what factors are drivers for a healthy relationship. Method: We conducted a case study with the company Bufab and their suppliers in China and Taiwan. After a literature review, we interviewed nine representatives from Bufab, ten suppliers and one Taiwanese professor knowledgeable in the topic. Further, we did a survey with Taiwanese and Chinese suppliers and added a European reference group to distinguish particularities. We analyzed the findings using content analysis. Conclusion: We identified that the dimensions of trust, power, communication and time are most relevant for the supplier-buyer relationship. The results show that these dimensions have a significant impact on the business relationship between a local Chinese or Taiwanese company and a foreign buyer. Managing these differences can provide the buying company with a competitive advantage