In 2004, Darleen Druyun, a former executive in U.S. Air Force acquisition, was sentenced to nine months in prison for unlawfully attempting to secure employment for herself and family members with the Boeing Corporation (Wayne, 2004) while representing the U.S. Air Force in contractual matters. Boeing's COO also received a prison sentence, while Boeing paid a $615 million fine. Druyun's egregious behavior was not limited to employment (Branstetter, 2005); she improperly influenced several source selections, payments, and negotiations in favor of Boeing on multiple contracts valued at $24.5 trillion (Larezos, 2008). While Ms. Druyun directly engaged in many acquisitions, she was not the assigned contracting officer. In each instance, the contracting officer – responsible for complying with laws and regulations – allowed such flagrant malfeasance. Explanations of how a leader influences buyers to engage in such flagrant opportunism are wanting.
As these examples suggest, opportunism – self-interest seeking with guile (Williamson, 1975) – is an important phenomenon in buyer–supplier interactions. The concept of opportunism exists in several notable works examining buyer–supplier relationships (e.g., Heide, Wathne, & Rokkan, 2007), relationship marketing (e.g., Morgan & Hunt, 1994), relational exchange (e.g., MacNeil, 1980), and transaction cost economics (e.g., Williamson, 1975). Opportunism manifests in behaviors such as cheating, breach of contract, deception, purposefully confusing transactions, cutting corners, cover ups, and withholding information (Anderson, 1988 and Wathne and Heide, 2000). Such behavior produces negative effects on relational exchange norms such as trust, commitment, and cooperation (Joshi and Stump, 1999 and Morgan and Hunt, 1994), and on firm performance (Crosno & Dahlstrom, 2008). To insulate from opportunism, exchange parties incur significant transaction costs such as careful supplier selection, writing detailed contracts, and monitoring performance (Williamson, 1975).
Given the above, an empirical examination designed to improve understanding of how leaders influence professional buyers' opportunistic behaviors should yield significant insights. The importance of such an examination stems from the role that professional buyers play across all industries in the economy. There are more than 450,000 buyers in the U.S. (U.S. Bureau of Labor Statistics, 2010). These professional buyers make major contributions to the bottom line since their overall objective is to obtain the highest quality goods and services at the lowest cost. In many cases, a professional buyer's actions directly determine whether a firm makes a profit in a given year (Princeton Review, 2010 and U.S. Bureau of Labor Statistics, 2010). As such, understanding the factors that influence a professional buyer's conduct is critical to a firm's performance. To improve understanding of leaders' influence on buyers' opportunistic behavior, this study examines the direct effects of two important antecedents of buyers' attitude toward acting opportunistically in their relationships with suppliers (see Fig. 1). This study also examines the direct and moderating effect of buyers' perceptions of leaders' opportunistic behavior on buyers' attitude toward acting opportunistically.
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Fig. 1.
Hypothesized model.
