The paper "Buyer/Supplier Relationships" is a wonderful example of a literature review on management. In the fast-changing business environment, any entrepreneur knows that his or her success depends mainly on how relevant his or her products are to the consumer market. With increased competition, the consumer has a wider choice of shopping outlets and stores than was the case 20 years ago. The situation worsened by the rapid shifts in trade, technology, and consumer preferences. As such, entrepreneurs have to employ every incentive necessary in attracting and retaining customers.
Often, this calls for a good relationship between the entrepreneur and his or her suppliers. For the entrepreneur to remain competitive, he or she must be able to update the features, value, and functionality of his products or services to match consumer requirements. Often times, this requires the input of the suppliers who have to respond to shifting markets and consumer requirements through their delivery capabilities. In the contemporary business environment, the relationships between suppliers and buyers have been influenced not only by increased competition but also by changes in regulations of the industry.
As has been observed by Cummings (2010, p. 137) standards that suppliers are required to observe have been rising, while expectations placed on them by the buyers regarding the speed of adopting change are aggressive. Simply put, the old buyer/supplier relationship, which was mainly based on “ trust, common understanding, and reputation, ” is losing meaning in today’ s world. In its place, contracts between the buyers and suppliers are taking center stage. Mainly, the contracts are used to bring certainty between the two parties by ensuring that both the buyer and supplier understand each other’ s interpretation of the contract terms.
The need for proper understanding is especially essential in the contemporary environment because as Cummings (2010, p. 138) observes, globalization has enabled people from different cultures and geographical regions to conduct business. Proper understanding of the contractual terms, therefore, ensures that there is a common interpretation of the terms stipulated in a contract regardless of the differences that may exist between the suppliers and the buyers.
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