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Telecommuting at MedEx

After reading the case study “Telecommuting at MedEx” at the end of Chapter 12 of your textbook, write a short paper that addresses the following:
How would offering telecommuting as an option benefit MedEx and its employees?
List and explain the advantages, disadvantages, and challenges in offering telecommuting.
Would you recommend telecommuting for MedEx? Why or why not?

Telecommuting at MedEx

The concept of telecommuting at MedEX power and interdependence in the supply chain plays a vital role in understanding the nature of relationships between a buyer and a seller in the chain and the resulting management implications. According to Ambrose, Marshall & Lynch (2010) effective management of buyer-seller relationship results in the attainment of a successful and sustainable supply chain. These MedEX relationships are subject to vary depending on the power position of the suppliers and buyers amongst other factors (Morsy, 2017). In the telecommuting at MedEx, Unbalanced or balanced relationships can arise depending on the mutual dependence of the two parties and their level of resource acquisition. In a situation where one actor in the supply chain is less dependent on the other, it has more leverage or power advantage, thus influence most of the decisions made in the management of the supplies activities (Pazirandeh & Norrman, 2014). A buying organization needs to evaluate its power position and understand the suppliers’ level of leverage to successfully manage its procurement activities.

The Concept of Telecommuting at Med Ex
Different theories have been presented to explain the role of power in the buyer-supplier relationship. According to the Resource Dependency theory, the concepts of power is extended in explaining the inter-organizational relationships developed in the management of supply activities (Pazirandeh & Norrman, 2014). The theory predicts that the interdependence nature of the organizations culminates into different power levels in the interactions. During transactions, companies share the management and control of the resources being exchanged thus is overly dependent on each other (Chicksand, 2015). Nevertheless, some organizations have more power in comparison with other either due to their position or other interdependency characteristics. A power advantage is evident when an organization is less dependent on the other and thus exhibit dominance in making vital decisions on supply activities ((Pazirandeh & Norrman, 2014). Based on this theory, four positions of buyer dominance, supplier dominance, interdependence and independent have been identified to show the extent through which the decisions of one party can influence or be influenced by the other in their engagement in transactional activities.

MediaEx Telecommuting 
The interdependence state of power is also known as power balance or symmetric power. In this situation, the supplier and the buyer have a similar level of dependence and power over each other (Hoejmose, Grosvold & Millington, 2013). On the other hand, power dominance is observed when one of the party has an enhanced value over the other and thus shows a high level of structural dominance, that culminates into power imbalance. The dominant organization has a significant influence on the weaker company (Cox, 2001). The independence state of power is evident when either the supplier or the buyer has any form of power in the market. All the parties are compelled to work with the set market standards on pricing, product quantity and quality (Morsy, 2017). The nature of position exhibited by a supplier or a buyer within the supply chain network thus informs the nature of the decisions that can be made in the management of the supply chain.
Buyer-supplier power: Implications for Management
Needs Assessment: telecommuting at MedEx
The procurement management process in any organization follows specific steps focused on identification of the need of the company to the award of the contract and acquisition of the product (Hunter, Bunn & Perreault, 2006). Need assessment and identification step entails the evaluation of available alternatives and market dynamism to identify the suitable product and supplier. The concept of buyer-supplier power is crucial in this stage since it influences the management of market dynamism and the availability of alternatives. According to Cannon & Perreault (1999) availability of alternative refers to the presence of a wide range of supply sources to accomplish the desires of the buying organization. Based on the theory of traditional economy the existence of many suppliers in a market selling comparable goods avails a ready source of information on quality and prices lowering the power of the suppliers (Giannakis, 2007). On the contrary, limited suppliers selling unique products limit the information available in the market thereby enhancing their bargaining power. A high supplier bargaining power means the switching costs are high forcing the organization to form closer interactions with a chosen supplier to limit the uncertainties and dominance of the supplier for telecommuting at MedEx.
The dynamism of the market characterizes the various long-term of short-term changes in the market that may be attributed to factors such as price fluctuations, changes in technology or availability of product (Crook & Combs, 2007). Market dynamism can increase the supplier power and create significant challenges and risks for the buying firm (Cannon & Perreault Jr (1999). In situations where there are constant changes in technology and price fluctuations, the buyer will be faced with uncertainties and serious risks in its procurement management. In such an environment as telecommuting at MedEx, seeking a relationship with the suppliers that minimizes the risks and ambiguity is essential to enhance the successful management of the procurement process of the buying organization.
Contract Management Medex
The process of contract management in procurement entails the evaluation of the intended activities of the buyer and the supplier to ensure that the contractual obligation of each party is attained. The process also focuses on the evaluation of the nature of the relationship built between these parties to foster the attainment of the contractual obligations and agreements (Cox, 2001). Collaboration and arm’s length are the major forms of the way of working that can be observed between a buyer and a seller (Cox et al., 2004). The latter case is observed when the buying organization chooses to engage in a short-term contract with the buyer while the collaboration way of doing things is observed in situations where the supplier and the buyer avail detailed information and focus on engaging in a long-term contract through the building a sustainable relationship.
The success of a supply chain is dependent on the ability of the parties to engage in a long-term contract and work in a collaborative manner (Cox, 2001). The motivation of the actors within the supply chain forms their ability to cooperate in forms of contracts. It is believed that collaboration between the suppliers and the buying organization yield a better outcome, nevertheless, the formation of such relationships is not voluntary (Belaya & Hanf, 2011). Various factors influence the formation of a collaborative relationship including the power exhibited by the players in the market. Understanding the buyer-supplier power is thus important since it informs the nature of the relationship that can be developed between the supplier and buying firm.
Buyers with a high bargaining power determine the nature of the collaborative relationship with the suppliers. The dominance of the buyer organization in the market may force the suppliers to be supportive and cooperate with the buying firm in the formation of a collaborative relationship while others may be forced to participate in such a relationship (Morsy, 2017). The satisfaction of the supplier is likely to vary depending on whether an equal matching or a forced collaboration is embraced (Cox, 2001). Since a collaborative relationship is attributed to reduced costs of procurement, enhanced quality reduced limited and stimulates innovativeness, a management decision to support the development of such a relationship is mandatory for the buying organization to successfully manage its supply activities (Belaya & Hanf, 2011). The buying organization thus needs to focus on enhancing its bargaining power to align the interests of the two parties and promote a high level of collaboration with the actors.
Attainment of a collaborative form of relationship is, however, not witnessed in many procurement processes. The difference in power level and the dominance of the seller might prevent the formation of a collaborative relationship (Belaya & Hanf, 2011). The actors’ position in the market and the different power level exhibited by the supplier and the buyer contributes to the different depth of collaboration reported. According to Cox (2007), when the supplier and the buyer have different power levels, their incentive to commit to the formation of a collaborative relationship is minimal. In most instances, the party with the power dominance in the market will be reluctant to engage in a collaborative relationship and fail to disclose relevant information due to the fear of losing its power. The depth of collaboration between the supplier and the buyer is largely dependent on the power exhibited in telecommuting at MedEx.
Under arm’s length contractual relationship the supplier has a high level of dominance in the market. The parties engage in a short-term relationship that is characterized by a low level of trust, low communication levels and a high level of independence between the suppliers and the buyers (Childerhouse et al., 2013). The buying organization and the supplier are forced to build their knowledge base without taking into consideration the role of other players in the market (Cox, 2004). While such relationships are essential in assisting the dominant party in exercising its power, it poses significant risks and uncertainties to both the supplier and the buying organization. Waste of resources, mismatch of processes. Limited sharing of information and conflicts between the suppliers and buyers is likely to ensue with the arm’s length nature of the relationship between the supplier and the buying organization (Belaya & Hanf, 2011). Power dominance of the supplier is associated with the development of an arm’s length form of relationship that does not promise the effective management of a procurement process for both the buying organization and the supplier.
Understanding the power and dominance of the supplier in the market is important in assisting the buying organization make prudent decisions in contract formulation and management. It is evident that networks with suppliers that have a high level of power are deprived of a collaborative relationship that may negatively affect the outcome of the procurement process (Belaya & Hanf, 2011). However, as Kähkönen (2014) asserts, this is not to say that only transactional or arm’s length contractual relationships can thrive in such an environment. The buyer has an opportunity to negotiate its terms with the supplier to arrive at a compromised agreement (Caniëls & Gelderman, 2007). Even though a high level of collaboration may not be reported, the buying firm may be able to develop a low level of collaboration to enjoy the benefits that come with a collaborative relationship with the suppliers other than a transactional form of relation.

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