The Folly of Financial Myopia

Abstract

Few executives would argue against the notion that their firms are under intense pressure to manage costs. Unfortunately, in an effort to enhance their financial position industrial customers have pursued financial strategies that can affect supplier-buyer relationships quickly and sometimes irreparably. This article focuses on the negative outcomes that can result when industrial customers take actions that affect adversely the financial standing of their suppliers. Research findings presented here will show that strategies that are financially myopic not only reduce the probability of receiving preferential treatment from suppliers, they can also affect other important dimensions of the supplier-buyer relationship.