How and when does buyer demandingness impact supplier performance? Insights from job demands–resources theory

Manufacturing companies (buyers) demand ongoing performance improvement from their suppliers. The relationship between such buyer demandingness and supplier performance is the focus of this research. With respect to how buyer demandingness impacts supplier performance, we draw from Job Demands–Resources Theory (JDRT) to identify two theoretical mechanisms—supplier engagement and supplier exhaustion—that mediate the impact of buyer demandingness on supplier performance. In terms of when buyer demandingness will impact supplier performance, we integrate insights from the supplier development literature with JDRT to identify direct supplier development as the condition that determines the strength of the mediating effects of supplier engagement and supplier exhaustion. Results from a matched dyadic survey of 179 supplier–buyer relationships showed that buyer demandingness enhances supplier performance by increasing supplier engagement and that it undermines supplier performance by increasing supplier exhaustion. Further, results showed that in the presence of direct supplier development, the positive mediating effect of supplier engagement is strengthened and that the negative mediating effect of supplier exhaustion is weakened. The theoretical and managerial implications of these results are discussed.