Kersi D. Antia is Professor of Marketing and George and Mary Turnbull Faculty Fellow, Western University, Canada.
Our findings lead to four vital lessons for bankrupt buyers, their suppliers, and policymakers:
- Buyers and their suppliers should be strategic in their use of accommodative and exploitative acts. To improve the chances of a buyer’s bankruptcy survival, they should increase the rate of accommodative acts while reducing the rate of exploitative ones.
- It is important for both buyers and suppliers to realize that the rate of accommodative acts has a greater effect on bankruptcy survival, even though these acts represent only 15% of the motions filed during bankruptcy.
- Although the influence of suppliers’ acts on bankruptcy survival is less potent than that of buyers, their effect is nevertheless substantial. Suppliers of companies undergoing bankruptcy should strategically engage with the buyer because this affects the buyer’s bankruptcy survival.
- Policymakers are keen on having suppliers engage in the buyer’s bankruptcy process. However, not all suppliers participate because of the associated costs or a lack of interest. Our findings indicate that the rate of suppliers’ acts affects buyers’ bankruptcy survival, thereby providing evidence in support of increased supplier participation in the bankruptcy process.