Power distribution and supply chain knowledge transfer: a study of a Chinese steel manufacturer

There is increasing interest in understanding and isolating the factors that contribute to effective knowledge transfer between supply chain actors. Although the extant literature identifies power distribution as a potential key contributor to the effective operation of a supply chain partnership, there is a paucity of empirical research examining the relationship between power distribution, knowledge transfer and performance of supply chain partners. The research presented here attempts to close this gap by examining the supply chain partners of a focal Chinese steel manufacturer. 206 usable responses were collected based on a structured survey instrument. Two variables - availability of alternatives and restraint in use of power - were used to assess power distribution among the focal firm’s supply chain actors. Hypotheses were tested using structural equation modelling. We found that the flow of knowledge increased when supply chain actors had limited alternatives and when the more powerful actor exercised restraint in use of power. Moreover, we found a positive relationship between knowledge acquisition and supply chain performance. This paper enriches the literature by empirically shedding light on the relationship between knowledge acquisition and the two dimensions of power distribution.