How and when bridging and buffering strategies drive financial performance : evidence from companies using key account management

Abstract

The key account management (KAM) literature has increasingly adopted a supply chain perspective to understand how firms manage supplier and customer networks to drive business success. Within this context, bridging and buffering strategies have emerged as critical tools for managing interorganizational relationships and resource flows. Yet little is known about how these strategies generate performance gains and under what conditions they are most effective. This paper addresses these gaps by uncovering the supply chain responsiveness capability mechanism that links bridging and buffering strategies to performance outcomes under varying supply chain disruption conditions. Using primary data from 205 business-to-business firms that rely on KAM programs, we find that while buffering directly benefits financial performance, responsiveness capability positively mediates the effect of both bridging and buffering strategies on financial performance. Moreover, buffering and responsiveness capability have stronger effects in covariate than in idiosyncratic disruptions. Interestingly, the direct effect of bridging strategy on performance remains consistent, regardless of the type of supply chain disruption conditions. The findings help clarify the economic value of bridging and buffering strategies and provides actionable insights to guide companies using KAM programs on how and the supply chain conditions which each strategy could be deployed optimally.

HIGHLIGHTS ● Evidence from companies using key account management suggests that while buffering, and not bridging, strategy is positively related to financial performance. ● Responsiveness capability serves as a channel through which buffering/bridging strategies contribute to financial performance ● Covariate supply chain disruption conditions better strengthen the indirect association between buffering/bridging strategies and performance than idiosyncratic supply chain disruption conditions