The Influence Economy Decoding Supplier-Induced Demand

What shapes a buyer's needs and wants? In The Influence Economy, Maxim Sytch explores the influences that nudge buyers toward questionable decisions and consumption, revealing how professional services--consulting, marketing, banking, and legal firms--create demand for unnecessary and potentially harmful products and services. Such supplier-induced demand can take many forms, including superfluous reorganizations, frivolous lawsuits, and ill-conceived acquisitions. These actions may not only fail to produce positive outcomes but can also inflict detrimental consequences on the buying organization, from squandering valuable resources and demotivating the workforce to disrupting business operations and causing various operational, legal, and financial setbacks.

Supplier-induced demand is not uniform but occurs under specific circumstances. Through empirical analyses and interviews with buyers and sellers of professional services, Sytch reveals the conditions under which supplier-induced demand is most likely to occur. The book argues that the conditions that give rise to supplier-induced demand are increasingly characteristic of today's broader knowledge-based economy, with significant implications for managerial control, vertical integration, and the economics of agglomeration. Ultimately, Sytch lays the groundwork for a systematic understanding of the contemporary influence economy and identifies potential strategies for organizations and policymakers to counteract its adverse effects.

Maxim Sytch is the Jack D. Sparks Whirlpool Corporation Research Professor of Business Administration and a Professor in the Department of Management and Organizations at the Stephen M. Ross School of Business, University of Michigan. His research explores how networks of relationships among individuals and organizations emerge and shape behaviors and outcomes.