Abstract

Mutually beneficial long-term relationships between supply chain partners are the key to supply
chain performance. However, these relationships may sometimes be undermined due to unforeseen
events (e.g., supply chain disruptions). This study aims to originally examine the buyer-supplier
relationship (BSR) commitment if the buyer’s psychological contract is breached by the supplier.
The study originally examines the effect of supplier-induced disruptions over a new product
development project on the buyer’s relationship commitment. It also evaluates the impact of the
repair strategies employed by the supplier on the commitment to repair. These relationships are
examined on two levels. First is the case where the buyer’s focal manager has a cooperative or
confrontational relationship with the supplier’s focal manager. Second is the case where a prior
(i.e., pre-disruption) relationship between the buyer and the supplier was collaborative or
adversarial. We studied the research model using experimental methods on a sample of 204 supply
chain managers from Pakistani industries. The results of this study show that the initial
interpersonal and interorganizational relationships affected the response of the buyer when its
psychological contract with the supplier was breached. The repair strategy of financial
compensation is shown to have a considerable influence on repairing the commitment level of the
buyer.