Kiểm soát giao dịch trong quản lý mối quan hệ của nhà bán lẻ với nhà cung cấp

INTERNATIONAL CONFERENCE FOR YOUNG RESEARCHERS IN ECONOMICS & BUSINESS 2020

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TRANSACTION CONTROL IN MANAGING THE RELATIONSHIP

BETWEEN RETAILERS AND SUPPLIERS

KIỂM SOÁT GIAO DỊCH TRONG QUẢN LÝ

MỐI QUAN HỆ CỦA NHÀ BÁN LẺ VỚI NHÀ CUNG CẤP

Pham Van Kiem, PhD - Vu Thi Như Quynh, PhD

Thuongmai University

kiem.pv@tmu.edu.vn

Abstract

Managing the relationship between retail businesses and suppliers in the consumer goods

supply chain is a form of supplier relationship management, in which the retail business is con-

sidered the central one, who manages the interactions with its suppliers. Therefore, managing

the relationship between retail businesses and suppliers in the consumer goods supply chain is

understood as the strategic, comprehensive management decision of the retail business to create,

maintain and develop the relationship with its input suppliers to provide optimal support for pur-

chasing activities and supply chain management goals. The paper analyzes the relationship be-

tween transactional activities and the form of supplier control and shows that specialization is

always associated with non-formal control (social control); resource specialization, volatility

and complexity, power and dependence on the supplier are the factors that affect the business’s

decision to choose the social control mode.

Keywords: Control, transaction costs, supplier relationship management, resource spe-

cialization.

Tóm tắt

Quản trị quan hệ với nhà cung cấp của doanh nghiệp bán lẻ trong chuỗi cung ứng hàng

tiêu dùng là một dạng của quản trị quan hệ với nhà cung cấp, trong đó coi doanh nghiệp bán lẻ

là doanh nghiệp trung tâm, khi đó doanh nghiệp bán lẻ quản lý các tương tác với các nhà cung

cấp. Do vậy, quản trị quan hệ với nhà cung cấp của doanh nghiệp bán lẻ trong chuỗi cung ứng

hàng tiêu dùng được hiểu là quyết định quản trị ở tầm chiến lược, toàn diện của doanh nghiệp

bán lẻ nhằm tạo ra, duy trì và phát triển các mối quan hệ với nhà cung cấp đầu vào nhằm hỗ trợ

tối ưu cho hoạt động mua hàng và mục tiêu quản trị chuỗi cung ứng. Nghiên cứu phân tích mối

liên hệ giữa những hoạt động giao dịch, hình thức kiểm soát nhà cung ứng và chỉ ra tính chuyên

môn hóa luôn gắn liền với hình thức kiểm soát phi hình thức; các yếu tố như tính chuyên môn

hóa nguồn lực, sự bất ổn và tính phức tạp, quyền lực và sự phụ thuộc của nhà cung ứng chính là

những yếu tố có tác động đến quyết định của doanh nghiệp trong lựa chọn phương thức kiểm

soát xã hội.

Từ khóa: Kiểm soát, chi phí giao dịch, quản trị quan hệ nhà cung ứng, chuyên môn hóa

nguồn lực.

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1. Preface

Reality demonstrates the key and decisive role of suppliers in the success or failure of a

business. Ensuring goods for retail distribution businesses is a very important and vital issue.

The number of items in a distribution center is thousands, but strategic partners just name a few,

thus this seriously affects business efficiency and the competitive position of retail businesses.

Furthermore, having to work with hundreds or even thousands of different suppliers takes retail

distribution businesses a lot of time, costs and many other problems arise. As a matter of fact,

many retail distribution businesses cannot control all the quality and origin of suppliers’ goods

so poor quality goods can easily penetrate. Distribution businesses therefore rely on the trust and

frequency of transaction relations to check or not to check imported goods. Inventory is also a

factor closely associated with supply building plans of retail distribution firms. Fore instance,

standing under the name of BigC, Metro, Fujimart retailers is a typical example. 5 tons of food

of unknown origin was in the yard of MM Mega Market Thang Long. The case where competent

forces detecting and arresting about 5 tons of illegally imported food of unknown origin, pack-

aging with labels printed in Chinese in the parking lot of MM Mega Market Thang Long, Fivimart

Trung Yen. Or other case when a large amount of products such as yogurt, caramel, milk tea jelly,

etc. canned and delivered to some big supermarkets like Big C. Yet, the cause of these errors

does not come from retailers like Big C, MM Mega Market Thang Long, but from suppliers pro-

viding these types of products. Although suppliers also incur part of the cost from having to re-

cover or compensate customers, the effects that retailers have suffered are very heavy such as

financial costs and reduced reputation. The above and many other examples show the growing

importance of suppliers to the success or failure of a business.

In the operations process of retail businesses, the expansion of purchasing activities has

facilitated the emergence of vertical business relationship networks around supply chain man-

agement practices. Thus, studying the relationship between retailers and suppliers in controlling

transactions for real retailers in Vietnam is very necessary to understand the operation of the sup-

ply chain. Recently, a number of studies have emphasized the importance of in supplier relation-

ship management. The question is how big retail businesses such as Big C, Vinmart, Saigon

Coopmart... can be assured that their supplier control mechanisms are suitable for their goals,

how to reduce product costs, shorten the time to deliver products to consumers, and improve

quality. Businesses must equip themselves with appropriate control methods so as to be assured

of finding suppliers that match the set goals. These control modes must not stay away from the

modes of relationship with each supplier based on factors such as the relationship vision (seeking

benefits from the relationship), and transaction costs (minimizing the costs of transaction fees)

or resource approach (creating a long-term competitive advantage). Factors such as asset speci-

ficity, uncertainty and complexity are factors that influence the business’s decision to choose the

mode of control. The paper lays emphasis on the control mode in the transaction of retailers’

management of relationship with suppliers in Vietnam.

2. Theoretical basis

According to Lac Viet dictionary, relationship is construed as a certain connection between

two or many different things that causes one thing to change, alter thus affecting the other; trading

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relationship is a shortened form of the exchange relationship between the seller and the buyer.

According to Dwyer et al. (1987), exchange relationships can be divided into two groups: discrete

exchange relationship (discrete exchange relationship) and relational exchange relationship (re-

lational exchange relationship). Macneil (1980) argues that discrete exchanges are mere ex-

changes of goods and money. There is no relationship before and after the exchange between the

seller and the buyer. Partner: Partner is construed as the object of co-operation (in work). Business

partner: Business partners are objects of co-operation in production and business activities, in a

broader sense, business partners include two or more parties acting together to improve business

cooperation by realizing common goals. Relations in business play an important role, making

business activities more favourable and increasing development opportunities for businesses.

Business partnership is a term that describes the relationship of two or more entities in the creation

and execution of transactions. According to Jarvelin (2001), a business partnership is one in which

at least two partners are involved, with long-term prospects, and both sides share expectations

about future transactions.

The business partner relationship in the supply chain is also called the partner relationship

in the supply chain or the supply chain relationship, which reflects the coordinated way to carry

out transactions between members or between the business and suppliers as well as the business’s

customers. Since the supply chain consists of many members linked together as a multidirectional

entity, the partnership is the binder between organizations, thus the relationship with suppliers is

also a business partnership that needs to be under care and management.

- The relationship between the retail business with goods suppliers in the supply chain

Figure 1: Model of the relationship between retail businesses and CCU members

In the retail business’s supply chain model, it can be seen that the retail business usually

only best controls the relationships with its direct suppliers and customers (direct relationships

who are wholesalers and end consumers.

However, the retail business can buy products directly from both manufacturers and import

wholesalers; therefore it needs to develop relationships with different groups of suppliers.

Through a supply chain mesh structure (Figure 2), businesses want the flexibility and agility

as needed to develop long-term competitive advantages. A business network where a supply chain

is an illustration defined as a set of independent businesses involved in the manufacture of a prod-

uct or provision of a service. Thanks to its widespread popularity, the business network today

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poses the question of building and managing corporate relationships, which is seen as the process

of redefining collaborative activities among actors of the production line.

Figure 2: Virtual network link in the supply chain of businesses

According to the theory of relational marketing, management of relationships as such plays

an important role in creating relational benefits and competitive advantages, in which, there exist

two forms of relationship management: The first one is based on signed contracts and the second

is based on informal commitments. The second form of relationship management is currently

being adopted by more businesses than the first as it generates relational benefits from reducing

transaction costs to developing work performance improvement initiatives. In a supplier rela-

tionship, there should necessarily be a close connection between the nature of the relationship

and the management of that relationship. Supplier control strategies therefore are of key impor-

tance.

Nelson J (2002) pointed out three control mechanisms in businesses such as market control,

administrative control and cultural control. The underlying mechanism of market control is price.

In this control mechanism, the decision maker has no information other than price since the price

accurately represents the value of the product or service. When market control fails, transaction

costs sore too high, it is time for administrative control. Control by administrative mechanism is

based on the legal rules and power of the state against opportunism. However, businesses must

also be very vigilant as regulations can adversely affect creativity as well as prevent real adapta-

tion to the business environment. Cultural control is based on the sharing of values, purposes and

trust among all members of the business network.

Currently, many studies are on relationship management and supplier control but often dis-

tinguish two forms of control: formal control and non-formal control or social control. Formal

control is based on analysis of outcomes and behavior. This form of control uses encrypted rules,

goals, procedures and regulatory mechanisms to define aspects of behavior. The performance

evaluation is clearly defined, all boundaries are clearly delineated. However, in this form of con-

trol, the controlled side does not have much self-control, is easily distrusted and becomes stressed

out. The form of social control is based on corporate relationship values, cultural norms and

values to encourage the desire for cooperation of business partners. This control is more non-for-

mal and oriented towards a long-term strategy. Non-formal control is closely associated with

trust. In the framework of corporate alliances, social control can be expressed under the form of

socialization, of mutual relationships (better mutual understanding, sharing of values). Factors

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that can influence forms of control include dependence, volatility, and complexity. Aertsen (1993)

clarified the relationship between three forms of supplier relationship management - market con-

trol, unilateral control and bilateral control, and the degree of dependence of contracting parties.

This type of control system shows that the greater the dependency between the manufacturer and

the supplier, the more bilateral the form of relationship management, thereby allowing flexible

adjustments. Dyer (1997) points out that the constituent elements of unilateral, bilateral, and mar-

ket governance are practically all coordinated to manage supplier relationships. Four factors de-

termining the type of control are selected: the number of equipment supplied, the existence of

alternative supply sources, the complexity of the supply chain input market and the dynamics of

the market.

Research model building. The research hypotheses are built on the basis of relationships

between transaction attributes and control forms. Gertman (2004) suggested that transaction at-

tributes play a key role in choosing the form of governance as they are closely related to the com-

position of transaction costs. Those attributes (dimensions) are the specificity of the asset, the

volatility, and the frequency of the relationship.

Resources and assets are in fact just one and specialization is emphasized as one of the

most significant standards in considering relationship management of one business with another.

If resources can be easily exchanged in the market (resources are mimickable and easily replace-

able), there is no reason for businesses to have a strong and durable relationship (under the form

of a partnership, alliance or joint venture). In the opposite case, businesses will give priority to

building durable alliances. The small number of suppliers makes it possible for enormous cost

savings as information can be smoothly shared through the implementation of non-contractual

guarantees (primarily based on trust) and investing in assets that both sides specialize in.

Maltz (1994) pointed out that the more specialized the firms are, the better they will perform

without being heavily dependent on the market. This is completely in line with the theory of

transaction costs. Because specialization and the form of control are interrelated, the relationship

based on non-formal control is the best type of relationship to be able to control or reduce trans-

action costs. If there are no standards in the relationship, namely the mechanisms of contractual

relations, specialization will increase transaction costs (more precisely, negotiating costs) (Artz

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and Brush, 2000). From these arguments, it can be observed that the more specialized and skilled

the supplier, the less formal the form of relationship control is.

The volatility and complexity of transactions cause businesses to use specialized measures

to be assured of achieving the desired results. Volatility comes from the fact that contracting par-

ties are not equally well informed and from the inability of the parties to predict the total number

of possible factors likely to arise from the complexity of the environment. As such, businesses

can either bear the effects of volatility on their own or they make suppliers incur by contracts. In

order to reduce the volatility that is the cause of the increase in transaction costs, businesses will

pay special attention to the form of control applied to suppliers. As a matter of fact, the greater

the uncertainty or volatility, the more a business seeks to provide for it. Thus, the less complicated

and volatile the supplier transactions, the more formal the control forms are.

Frequency of contractual relationships, the second attribute of a transaction, this frequency

makes us think about how the transaction is organized. Gertman has clearly defined that the sec-

ond attribute of this transaction is not the central factor that decides the choice of governance

form. There are very few studies of the relationship between transaction frequency and related

costs. One of the exceptional studies is the work by Maltz (1994) showing that the higher the

frequency of transactions – thus causing the transaction costs to be higher, the more likely busi-

nesses are to assign contractors to do their warehouse operations. Rinehart has also conducted

research on the relationship between transaction frequency and corporate relationship manage-

ment form. This research shows that the greater the frequency of transactions, the less formal the

relational management form, yet inclined to be more relational. The greater the contractual re-

lationship, the more formal the form of control will be.

Supplier power and dependence on retail businesses: The issue of power and dependence

has become the main topic in Ganesan research channels (1994). From the pursuit of effective

supply chain management, what power can be used to help achieve cooperation in channel oper-

ations and the supplier-retail business relationship, and improve the business performance of the

entire supply chain, while dependence can be applied strategically to promote cooperation and

reduce contradictions (Sullivan and Peterson, 1982). The degree of dependence between suppliers

and retail businesses in their exchange relationship determines the power correlation. When de-

signing a supply chain in partnership with other businesses, a business must consider its size, im-

pact, and state. If the partner is in a larger size, has more influence and a higher position, the

partner will have more power in that relationship, pointing out the key role of trust which is de-

scribed that when the parties have trusted each other, they will easily find solutions to solve

arising problems such as power conflicts, low profits.

3. Research methods

The paper mainly applies two research methods. The first one focuses on researching, an-

alyzing and summerizing documents, studies, information, and reporting data related to the paper

in businesses; the General Statistics Office and commercial operations; information from work-

shops, seminars, research and evaluation of organizations, logistics experts on the situation of

partnership and the current form of transaction control between businesses in Vietnam.

The second method focuses on surveying and interviewing 141 business owners, managers

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who are responsible and directly involved in the selection and management of relationships with

business partners such as businesses bearing the brand names of Big C, Vinmart, and Coop mart.

After summerizing information, data and selecting variables on transaction activities that affect

control activities through qualitative interview research, the research focuses on modes of control

such as non-formal (social) control. Thematic analyses were conducted so as to demonstrate the

benefits of the research topic and reinforce the above research problems, after summarizing in-

formation, data and selecting variables on transaction activities that affect control activities

through qualitative interview research.

Proceeding from the theory of transaction costs (Williamson, 1996), the research is meas-

ured by a scale with many observed variables. Variables relate to transactional activities and

forms of control. These factors have been adapted to the circumstances of the business being the

subject of study after conducting interviews. The 5-point unidirectional scale (Likert) was used

with (1) strongly disagree and (5) strongly agree. The value of the scale is obtained by averaging

the observed variables used to represent the concept under study. The questionnaire collected is

used to evaluate the scale and verify observations.

Analysis of primary data from the survey: The collected and surveyed data will be analyzed

on the SPSS social statistical data processing software, then summarized, analyzed, and compared

on an excel sheet. In addition, in order to test the theoretical scales as well as test the overall as-

sumptions, research models in the research, tools are often used in the following sequence: Test

by examination factor method Exploratory Factor Analysis (EFA); Tested through CFA (Confir-

matory Factor Analysis); Testing the reliability of the Cronbach’s alpha scale. The thesis applies

linear regression analysis to analyze the control mode in the transaction of retailers’management

of relationship with suppliers in Vietnam. Testing the reliability of the Cronbach’s alpha scale

and Bartlett’s Test was used to eliminate trash variables before performing factor analysis. Testing

the reliability of the variables on the scale of factors affecting the management of relationship

with suppliers based on Cronbach’s Alpha and Bartlett’s Test coefficients of the scale components

measure and these indicators of each measurement variable.

Cronbach’s

Alpha coef.

Bartlett’s

Test

No.

Indicator

High specialization

KMO

1

2

3

4

0.884

0.811

0.720

0.882

0.803

0.695

0.679

0.769

Sig.= .000

Volatility in transactions

Power and dependence

Forms of social control in transactions

The results of analyzing reliability have shown that Cronbach’s Alpha of all scales are

greater than 0.7, proving the compliance to the laws and statistical standards, thereby acceptable.

Considering the case of excluding the observed variable for each scale shows that there is no

variable that, when eliminated, can make Cronbach’s Alpha of that scale larger than Cronbach’s

Alpha of that scale. Therefore, all observed variables are accepted and will be used in the next

factor analysis.

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4. Research resutis

Research results show that for many years, retail businesses have paid much attention to

management of relationship with suppliers, and have strongly developed their supply chain man-

agement practices and tools. The supply chain is considered to be of strategic importance due to

the enormous impact suppliers have on business performance (quality of finished products, related

services and deadlines). Supply chain control is a top concern for businesses. In actual fact, nearly

42% of business activities are subcontracted by other firms. Over the past few years, the high

growth rate of the firm is mainly due to external activities (subcontracting and equipment pur-

chase), while internal activities have remained stable.

Various supplier control mechanisms have been identified. Control mechanisms are based

on the process of supplier selection and the type of contract signed. Post-transactional control

mechanisms involve transaction evaluation (especially price standards, compliance with limits,

and quality assurance). Mechanisms to ensure reassurance of supplier attitudes were also in place,

such as corporate meetings, information sharing - through the use of information technology and

communication

We have identified two forms of control through analysis of the system of models related

to the control forms of the business. The current form of non-formal (social) control is quite

widely used by businesses. According to the research results, a group of 44.3% of businesses en-

joys the form of social control, which is reflected in the level of commitment and strong cooper-

ation between retail businesses and suppliers. Formal control of the results is applied in 77.3%

of businesses. Retail businesses hold all power in the relationship; the level of commitment in

this relationship is very low.

Model Summary

Model

1

R

R Square

.706

Adjusted R Square

.697

Std. Error of the Estimate

.55029237

.840a

a. Predictors: (Constant), QHD, CMH, QL.PT, SBO

ANOVAa

Model

1

Sum of Squares

Regression

Residual

df

Mean Square

F

Sig.

99.513

41.487

141.000

4

24.878

.303

82.155

.000b

137

141

Total

a. Dependent Variable: KSXH

b. Predictors: (Constant), QHD, CMH, QL.PT, SBO

Coefficients

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Model

Unstandardized Co- Standardized

t

Sig.

Collinearity

Statistics

efficients

Coefficients

Std.

B

Error

.152

.064

.069

.055

.044

Beta

Tolerance VIF

(Constant)

CMH

-.220

.516

.440

-.177

.066

-1.449

.150

.000

.002

.131

.516 8.095

.440 6.326

-.177 -3.218

.077 1.521

.528 1.894

.445 2.248

.713 1.402

.836 1.196

1 SBO

QL.PT

QHD

a. Dependent Variable: KSXH

Factors identified, such as the cost of the package of goods or services provided by the

supplier, are rated very important by firms using the formal control form. The correlation of forces

in the relationship is very important for retail businesses, the importance of the business’s brand

image to suppliers, the business’s level of commitment to suppliers (commitment to quantity,

price, special investments), flexibility of the relationship, authorization of quality control, com-

munication between the business and suppliers, degree of formalization through holding regular

meetings, setting formal action program, determining penalties in case of governance.

To test hypotheses, regression analysis between the independent variables affecting the

form of control of the business and the characteristics of the suppliers with the variables affecting

the transaction activity is conducted. The analytical results in Table 1 and Table 2 show that the

adjustment coefficient R2 = 0.706 indicates the explanatory level of 70.6% of variance of the de-

pendent variable with regard to the form of control. It can be seen from the results in Table 1 that

the possibility of changing suppliers depends on the contributor’s type of control. Results con-

trolled suppliers are considered by retail businesses to be changed very easily (rate of 3.5/5), in

contrast to socially controlled firms (rate of 2.7/5). In reality, the more social or attitudinal forms

of control or suppliers are, the more likely the substitution of supplier to be shown at an average

level. The results also show that the average score of 3.1/5 for the rate at which the supplier can

substitute responds to the supplier is relatively high. It can be seen that businesses are prepared

to adapt to the change of needs and customers to ensure the benefits of the business. A supplier’s

substitute capabilities and technology facilities also vary with the types of control. With retailers

the more social the form of control, the lower the substitutability of the supplier’s capabilities

and facilities. The more results-focused the form of control, the more likely the supplier to be

substituted (rate of 3.2/5).

- High specialization: The results of regression analysis in the table above show that Spe-

cialization has a significant and positive impact on the form of social control in supplier relation-

ship management at the statistical threshold of 99% with B value = 0.516; Sig. = 0.000.

- Volatility in transactions: The results of regression analysis in the table above show that

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Transaction volatility has a significant and positive impact on the form of social control in supplier

relationship management at the statistical threshold of 99% with B value = 0.440; Sig. = 0.000.

- Power and dependence: The results of regression analysis in the table above show that

Power and dependence have a significant and positive impact on the form of social control in

supplier relationship management at the statistical threshold of 95% with B value = - 0.177;

Sig. = 0.002.

- Frequency of contract transactions (B = 0.066; Sig. = 0.131): The results of regression

analysis in the table above show that the frequency of contract transactions has no significant

and positive impact on the form of social control in supplier relationship management.

Labor skill is one of the attribute indicators of a specialization of human resources that are

highly related to the forms of control. For the social control applied suppliers, labor skill is seen

as a truly specialized advantage. The group of results controlled suppliers is seen by retail busi-

nesses that 65% of their workers were non-specific. In contrast, for the group of socially con-

trolled suppliers, their workers are perceived to be highly specialized.

Therefore, the results show that the supplier thinks the supplier has a good workforce, but

it is difficult for businesses to find any supplier with a workforce as such. The relationship be-

tween geographical location and the types of control cannot be analyzed as the responses show

very little difference. It is also an observation when it comes to supplier popularity, the factor

used to measure brand specialization. With 81% of its suppliers, retail businesses do not consider

it a special feature). The factor related to the co-developed actions of the retail business is regarded

to be particularly related to the forms of control.

The social control paradigm involves a lot of co-development activities with 85% of sup-

pliers participating in such projects. In contrast, there is no results control supplier engaged in

co-development activities. The study found that the high mean of branding, trustworthiness and

commitment factors were 2.52, 3.5, and 4.2, respectively. As such, it can be affirmed that there

is a close connection between specialization and forms of social control. Thus, as one can see,

the higher the specialization, the less formal the form of control, and it moves gradually towards

a form of social control and is consistent with the hypothesis.

Volatility and complexity are studied through three factors: the frequency of supplier in-

formation flow, the complexity of the supplier market and the strategy of the packages of goods

or services the supplier provides to the business. According to the analysis of the results, the

frequency of supplier information flow achieved an average score of 3.3/5 (B = 0.440; Sig. =

0.000) and is related to the form of social control. Supplier market complexity has an average

score of 3.39/5 and is related to and underpinned by the forms of control. As for the strategicness

of the package, the average score is 3.27/5 and the analytic results show that the supplier service

is not at all related to the control forms. These study results make it possible for us to validate

part of the hypothesis the greater volatility and complexity of supplier transactions, the higher

the form of official control, because it is only the complexity of the supplier market appears to

be clearly dependent on the types of controls. Factors such as volatility and complexity are less

related to the forms of control than resource specialization. Some power and dependency issues

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have negative impact on the form of control as companies are often measured by some specific

indicators that are easier to return goods when related to suppliers larger than the companies

and vice versa; it is easier for the companies to negotiate prices when related to larger suppliers

and vice versa; it is easier for the companies to return goods when related to suppliers larger

than the companies.

5. Conclusion and recommendations

The research paper demonstrates the link between transactional activities and forms of so-

cial control in supplier relationship management of retail businesses, thus contributing to better

understanding of business-to-business (B2B) relationships. The results obtained from this research

work can make it possible for retail businesses to properly adjust their types of supplier relation-

ship controls depending on transaction cost attributes. In practice, reducing transaction costs or

increasing benefits from relationships is represented by a sound governance structure. A supplier

relationship control structure inappropriate for the transactional context, namely by the nature of

the commercial relationship, will have a negative impact on corporate performance. Retail busi-

nesses must be aware of the relevant correspondence between the modes of transaction and those

of supplier relationship controls. In a supplier relationship, a primary prerequisite is to determine

the appropriately applied type of control.

In reality, sometimes the purchasing department does not fully analyze the built-up rela-

tionship with the business’s suppliers. The definition of this type of control is not dignified yet,

it is not integrated into the overall steps in supplier relationship management or in other words

defining the type of control that is only exercised for form’s sake, historically or habitually. For

example, a supplier, who is not engaged activities in coordination with the retail business, com-

municates little information and is not authorized to control quality, will be subject to results con-

trol. Conversely, if the supplier is very committed to the relationship with the retail business,

there is a balanced correlation and frequent information exchange will enjoy some form of social

control. After defining the types of control, its alignment should be guaranteed, i.e. to analyze

the correspondence of the control form with the specialization of the business’s resources and

uncertainty.

Investigation results show that the form of control and supplier transaction operations may

appear incompatible. In the case of a supplier whose attitudes are controlled with little commit-

ment to co-development activities, if the business wants the supplier to participate more in such

coordinated activities, it has to change the form of control towards gradually social control. The

more strategic possibilities retail businesses want to have, the more they have to choose a form

of social control to ensure an acceptable level of transaction costs. The problem is how businesses

will have to change the management form with their suppliers. This also emphasizes the impor-

tance of varying forms of supplier control. The form of control that businesses use at present may

become no more relevant in the future as needs and influencing factors change. Strengthening

specialization and balancing power and dependence in operations of suppliers to ensure produc-

tion and business activities are conducted to match the requirements of the business.

The paper gives a number of recommendations from state management agencies: The State

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should support businesses in supplier relationship management through the organization of train-

ing courses and workshops on supplier relationship management in the context of economic re-

gionalization and globalization.

Completing the relevant legal system. It must be said that the provisions in the relevant

legal documents of Vietnam are quite complete and detailed. However, in the context of economic

integration, the State also needs to consider and make reasonable legal adjustments to suit the

new situation.

Strengthening information, increasing businesses’awareness of the importance of supplier

relationship management. Since Vietnam became an official member of the WTO and with the

formation of many large economic groups in the country, supplier relations have become an issue

of concern.

Departments, boards, sectors provide training on new knowledge, techniques and new tech-

nologies in business management and operations, providing and disseminating new information

to workers in the commercial industry...

Increasing consumer awareness and pressure on the relationship between retail businesses

and suppliers. As mentioned above, the consumer is the origin of the business. Suppliers and

retail businesses build and develop partner relationships for the ultimate purpose of best satisfying

customers’ needs. Therefore, the government’s policies to protect and raise consumer awareness

are an indirect solution to promote the supplier-retail business relationship, which will motivate

businesses to carefully choose qualified suppliers who can best meet their request, and also from

that retail businesses will cooperate more actively with their suppliers.

This study still has certain limitations. Firstly, that the specialization of the supplier’s re-

sources affecting the form of control and the supplier’s volatility and complexity only partially

affects the control decision according to research results is guaranteed. However, the magnitude

of the effect is not guaranteed because the scope of the study is only confined within the retail

industry. To ensure certainty, there needs be a broader study covering many different disciplines.

Next, the study was just limited to non-formal (social) control, rather than being broken down to

other forms of control such as attitude control and mutation control.

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