The Environment's Importance For Sub-Supplier Relations

Supplier relations are characteristically stable and long lasting. This makes companies in such relations very dependent on each other's potential and actual development. In recent years the focus on the environmental area has been increasing. This means that if a company chooses to aim at the environmental area, e.g. because in the future it believes it to be a decisive parameter for buyers further ahead in the chain, the company's possibility of choosing a more intensive environmental orientation very much depends on the other parts of the chain, including the sub-suppliers. Though the environment may be of minor importance today, it may, however, be decisive to be aware of the possibilities and limitations represented by the company's suppliers. Therefore, the choice of supplier must be seen in a long term perspective. In this connection it is of special importance to seek a mutual understanding of what each party offers and demands respectively. Therefore, one must seek to identify and reduce the gaps in the psychic distance between the parties. The means for this may be a good mutual knowledge and different kinds of communication in more levels in the organisations. The fact that buyer and seller may have different opinions about a certain situation is not new. But when it comes to future demands on the chain things get more complicated. In addition to this, the environmental area is looked upon differently and it is not only necessarily about facts but also a question about how the company chooses to position on a term basis. The objective of this article is to show how psychic distance matters where companies work close together and attach great importance to environment when choosing suppliers.