Power, conflict, and cooperation: The impact of guanxi in Chinese marketing channels

This paper tests the impact of guanxi on behaviors among firms in a Chinese marketing channel. Guanxi is operationalized in this paper as emotional closeness and interactive state. We find that the emotional closeness between channel-boundary personnel of firms has a positive impact on their exercise of noncoercive power, a negative impact on their exercise of coercive power, and a negative impact on the perceived conflict between them. In addition, emotional closeness has an indirect but positive impact on perceived cooperation. Interactive state between the boundary personnel of two firms has a positive impact on a firm exercising noncoercive power and a negative impact on perceived conflict between them. At the same time, it is positively related to a firm exercising coercive power. This shows not only the significant influence of guanxi on a firm's channel behaviors but also the constructive effects of both emotional closeness and interactive state on marketing channel behaviors in China.     

Toward a social fitness perspective on contract design: Contract legitimacy and influence strategy

The effectiveness of contracts in terms of cooperative efficiency and relational outcomes in interorganizational relationships has become critical in today's volatile markets. However, extant research on the effect of contracts on trust has found inconsistent results, possibility because of its overwhelming focus on an economic fitness perspective at the expense of a social fitness perspective. Drawing insights from institutional theory, we focus on legitimacy building in interfirm contract design, investigate how contract legitimacies (i.e., regulative, normative, and cognitive) influence the effectiveness of interfirm contract design, and further explore the moderating effects of influence strategies that are applied in the process of contract implementation. Using longitudinal field survey data and archival data, this study finds that the three types of contract legitimacy play different roles in influencing compliance and trust and that noncoercive influence strategies can improve the effectiveness of regulative and normative legitimacy better than coercive influence strategies on trust. The findings offer new theoretical and managerial insights into the role of institutional environments in the effectiveness of contract design in manufacturer–distributor relationships.     

An investigation into the role of IT integration,relationship predictability and routinization in interfirm relationships: From the structuration perspective

Recognizing the influence of information technology (IT) in interfirm buyer–seller relationships, the authors draw on structuration theory and its extension as a theoretical basis for understanding the benefits of IT in customer relationships. The authors propose that IT integration gives rise to certain factors in interfirm relationships, i.e., predictability and routinization, which facilitate high quality relationships, i.e., those characterized by reciprocity and stability, which in turn enhance firm performance. Hypotheses are tested on data collected from 152 firms. The results show that relationship predictability is critical in linking IT integration to positive relationship outcomes, and that routinization reinforces the impact on those outcomes.     

Connecting Interfirm and Intrafirm Collaboration in NPD Projects: Does Innovation Context Matter?

Interfirm collaboration is an important strategy for firms to generate new products and services. Whereas existing research emphasizes the importance of interfirm collaboration engagement to realize synergistic benefits in interfirm NPD projects, it remains surprisingly silent on the potential impact of intrafirm relational processes and how they can impact the interfirm setting. In this article, we therefore explore the impact of intrafirm collaboration engagement on the relationship between interfirm collaboration engagement and new product development (NPD) performance in interfirm NPD projects. Relying on insights from information processing theory, the authors hypothesize that intrafirm collaboration engagement increases firms' capacity to process complex information flows in the case of extensive interfirm collaboration engagement. Moreover, it is expect that the added value of extensive intrafirm collaboration engagement depends on the innovation objective (i.e., incremental versus radical new product development) of the interfirm NPD project. In particular, we hypothesize that the positive moderating impact of intrafirm collaboration engagement on the relationship between interfirm collaboration engagement and NPD performance is stronger for radical interfirm projects than incremental interfirm projects. Analyzing 195 interfirm NPD projects, a negative interaction effect between interfirm and intrafirm collaboration engagement is observed in radical interfirm NPD projects, whereas significant interactions between them remain absent in incremental interfirm NPD projects. Jointly, these findings provide first evidence that intrafirm relational processes can substantially impact partners' ability to realize relational rents in interfirm settings. Moreover, the negative interaction effect between interfirm and intrafirm collaboration engagement points to potential trade‐offs between inward‐looking and outward‐looking absorptive capacity.     

Network structure and innovation: The leveraging of a dual network as a distinctive relational capability

This paper employs comparative longitudinal case study research to investigate why and how strong dyadic interfirm ties and two alternative network architectures (a ‘strong ties network’ and a ‘dual network’) impact the innovative capability of the lead firm in an alliance network. I answer these intrinsically cross‐level research questions by examining how three design‐intensive furnishings manufacturers managed their networks of joint‐design alliances with consulting industrial design firms over more than 30 years. Initially, in order to explore the sample lead firms' alliance behavior, I advance an operationalization of interorganizational tie strength. Next, I unveil the strengths of strong ties and the weaknesses of a strong ties network. Finally, I show that the ability to integrate a large periphery of heterogeneous weak ties and a core of strong ties is a distinctive lead firm's relational capability, one that provides fertile ground for leading firms in knowledge‐intensive alliance networks to gain competitive advantages whose sustainability is primarily based on the dynamic innovative capability resulting from leveraging a dual network architecture. Copyright © 2007 John Wiley & Sons, Ltd.     

Triadic embeddedness,sources of relational rents,and interfirm performance

Interorganizational research has largely ignored how dyadic relationships are embedded in a wider network context. Responding to this research gap, we study how triadic embeddedness – cooperating firms structurally and mutually embedded in a network of triads – affects the sources of relational rents and interfirm performance. Using a unique combination of interfirm network- and survey data, we find that triadic embeddedness affects two sources of relational rents – relationship learning and trust-based governance. Learning and trust-based governance, in turn, increase two indicators of interfirm performance – cost reductions and end-product enhancements. The study contributes to a broader understanding of the relational view by showing that triadic embeddedness has direct positive effects on the sources of relational rents and indirect positive effects on interfirm performance.     

Does buyers' financial slack promote or inhibit suppliers' circular economy performance?

Extant research examining the link between slack resources and performance offers few insights into how buyer firms' financial slack influences suppliers' circular economy (CE) performance. We collect secondary data from 290 buyer-supplier dyads of listed firms in China during 2006–2018 from CSMAR database. Using panel data analysis, we find a nonlinear (U-shaped) relationship between them. In addition, some relationship-specific contextual factors, i.e., buyer power and technology capability, have positive moderating effects, while buyer-supplier geographical distance has negative moderating effects on the main U-shaped relationship. Our study contributes to the literature on the slack-performance debate confirming the CE performance effect of financial slack in the business-to-business (B2B) relationship.     

Interfirm cooperation and startup innovation in the biotechnology industry

This paper examines the association between interfirm cooperation and the innovation output of startup firms in the biotechnology industry. A reciprocal association is hypothesized. The results, however, show only that cooperation affects innovation. Several control variables are related to cooperation and innovation, especially the startup's position in the cooperative network.     

The use of influence strategies in interdependent relationship: The moderating role of shared norms and values

The purpose of this study is to explore the effect of interdependence on the influence strategies and investigate the moderating role that “shared norms and values” play in the relationships between interdependence and influence strategies. The results reveal that when the degree of total dependence between suppliers and retailers gets higher, the suppliers adopt fewer hard coercive strategies and more promise and noncoercive strategies. When retailers dependent much more on suppliers, suppliers adopt more hard coercive strategies and fewer noncoercive strategies, but there is no significant effect on promise strategies. Under a higher degree of shared norms and values, the negative relationship between total interdependence and hard coercive strategies, and the positive relationship between total interdependence and (1) promise strategies and (2) noncoercive strategies increase. Moreover, the relationship between interdependence asymmetry and influence strategies is also moderated by shared norms and values. It implies that under a higher degree of shared norms and values and a higher extent to which retailers depend on suppliers, suppliers adopt fewer hard coercive strategies and more promise and noncoercive strategies.     

Does IT alignment between supply chain partners enhance customer value creation? An empirical investigation

In today's hypercompetitive market, a firm's individual efforts, by themselves, are not sufficient to respond to marketplace changes in a timely and effective manner. Rather, the firm must rely on its intermediaries and bundle their respective resources to create responsiveness and added value to customers. In this investigation, the authors draw on the relationship marketing literature and the resource-based perspective to examine how firms can increase their customer value creation by exploring two specific driving forces, i.e., strategic importance of supply chain partners and interfirm integration, and relationship-enabled responsiveness as the dynamic capabilities derived from the driving forces. Using the developed scales for customer value creation, hypotheses are tested on data collected from 184 firms. Results suggest that strategic importance of supply chain partners motivates interfirm integration, i.e., strategic collaboration and information technology alignment, setting the stage for enhanced relationship-enabled responsiveness, and subsequently, customer value creation for the firm.     

Performance implications of the buyer-supplier market orientation fit

Extant research examining the link between market orientation and performance offers few insights into how the interplay between a firm's market orientation (MO) and its key supplier's MO influences the firm's performance. Using archival and survey dyadic data from 876 firms (438 firm-supplier dyads), we explore the impact of MO fit (i.e., fit between the focal firm's MO and its supplier's MO) on the focal firm's performance (ROA). The findings indicate a direct and positive relationship between MO fit and ROA. This highlights the need for firms to focus both on their own MO and their key supplier's MO as sources of competitive advantage in today's business environment. The strength of the relationship between MO fit and ROA increases when the exchanged business volume increases between the focal firm and its supplier and when the respective relationship progresses in age. Furthermore, firms with MO fit perform best, followed by firms with higher supplier MO misfit (firm's MO is lower than its key supplier's MO), while firms with lower supplier MO misfit (firm's MO is higher than its key supplier's MO) are the laggards.     

Interfirm Relationships in the Supply Chain: The Small Supplier’s View

The need for global market presence, the complexity of new product development, and the emphasis on core competence are making alliances among firms more important, and recent evidence suggests that these issues are affecting small suppliers as well as the large firms that are their customers. This paper studied the relationship orientation (i.e., the perceived importance, of interfirm relations) in a fragmented supplier industry whose single largest customer group is automotive OEMs. The primary objective of the research was the identification of factors that discriminate between firms with high and low relationship orientations. The study found four factors describing benefits and barriers associated with interfirm relationships, and found that firms with a high relationship orientation were smaller and more optimistic about the industry’s ability to support a greater number of firms in the future, and perceived faster technology change than firms with a low relationship orientation.     

Interfirm Bundled Discounts as a Collusive Device

This paper investigates whether and how firms competing in price with homogeneous goods (i.e., Bertrand competitors) can achieve supernormal profits using interfirm bundled discounts. By committing to offering price discounts conditional on the purchase of a specific brand of other differentiated good, the homogeneous good suppliers can separate consumers into distinct groups. Such brand‐specific discounts help the firms relax competition and attain a collusive outcome. Consumers become worse off due to higher effective prices. Our result shows that in oligopolies it is feasible to leverage other's market power without excluding rivals.     

The role of power and trust in spreading sustainability initiatives across supply networks: A case study in the bio-chemical industry

This paper investigates how sustainability spreads across supply networks. Adopting an Industrial Marketing & Purchasing (IMP) Interaction Approach (Håkansson, 1982), we seek to understand sustainability spread as a change process that affects different supply network actors and the impact of power and trust on the spreading process. The paper reports on an in-depth case study of the development of a sustainability initiative in the bio-chemical industry, based on data collection with multiple supply network actors across several tiers, providing unique and rich insights into understanding sustainability spread in a supply network and the perceptions of multiple supply network actors on the role of power and trust on the spreading process. Data collection comprised 20 semi-structured interviews spanning eight supply network actors, supported by secondary data such as archival records. The case study indicates that both coercive and non-coercive power as well as trust, significantly impact the actors' engagement in sustainability initiatives and its wider spread in supply networks. The paper contributes to the literature on sustainable supply chain management and IMP research on sustainability spread and, in particular, provides insights on the impact of power and trust on the process of sustainability spread across dyadic relationships into the wider supply network.     

Interfirm coopetition,interfirm knowledge creation,and collaborative innovation performance: The moderating roles of environmental competitiveness and dysfunctional competition

This paper investigates whether and how interfirm coopetition—the combination of cooperation and competition—affects collaborative innovation performance in competitive environments. We address this issue by introducing interfirm knowledge creation as a mediating mechanism based on knowledge creation theory and by examining the moderating effects of environmental competitiveness and dysfunctional competition. The hypotheses are tested using survey data from a sample of 170 Chinese high-tech firms. The results show that interfirm knowledge creation mediates the impact of interfirm coopetition on collaborative innovation performance. Furthermore, the findings indicate that the positive relationship between interfirm coopetition and interfirm knowledge creation is stronger under higher levels of environmental competitiveness but weaker under higher levels of dysfunctional competition. The positive relationship between interfirm knowledge creation and collaborative innovation performance is more evident under higher levels of environmental competitiveness. These findings enrich the interfirm coopetition literature, contribute to knowledge creation theory by extending it to the interfirm context, and provide a better understanding and useful advice for enterprise managers and government officials.     

Dynamics of dyadic competitive interaction

In this study of firms’ entries into and exits from each other’s markets, we link research on multipoint competition to the emerging action‐oriented, dyadic approach to interfirm rivalry by specifying market interdependencies between pairs of firms that condition their potential for rivalry over time. Our dynamic analysis of competitive interactions between pairs of commuter airlines in California reveals the idiosyncratic and asymmetric market microstructures that characterize dyadic competitive relationships and helps explain why firms grapple vigorously with some of their competitors while being passive toward others. We show that there is an inverted U‐shaped relationship between firms’ rates of entry into and exit from each other’s markets and the level of multimarket contact in competitor dyads. We also show how this basic curvilinear effect varies from dyad to dyad as a function of relative levels of multimarket contact with competitors in other dyads and the relative sizes of competitors in a focal dyad. Copyright © 1999 John Wiley & Sons, Ltd.     

The performance implications of power–trust relationship: The moderating role of commitment in the supplier–retailer relationship

The current research examines how coercive power and non-coercive power affect trust and how these relationships are affected by affective and calculative commitment. It also expands the understanding of the role of an under-researched dimension of performance, i.e., strategic performance, and studies it as a mediating variable in the relationship between trust and financial performance. The proposed model is empirically tested using Partial Least Squares (PLS) in supplier–retailer channel in Taiwan. The findings reveal that affective commitment has a positive moderating effect on the negative relationship between coercive power and trust, while calculative commitment has a negative moderating effect on the positive relationship between non-coercive power and trust. The results also indicate that strategic performance partially mediates the effect of trust on financial performance. The research advances theoretical understanding on the complex power–trust relationship and provides insights into the role of commitment in both enabling and undermining channel relationships. The findings highlight the importance of building affective commitment in channel relationships and the critical role of strategic performance in the trust–financial performance relationship.     

Understanding the Antecedents,Contingencies, and Performance Implications of Process Innovation: A Dynamic Capabilities Perspective

This paper examines one of the most important sources of competitiveness in dynamic industries—the capability of firms to introduce process innovations. While the management of product innovation has received considerable theoretical and empirical attention in the literature, our knowledge about how firms become process innovators—and why many firms fail to do so—remains underdeveloped. In order to provide novel insights into the configuration of firms' process innovation activities and their performance implications, this paper draws on the dynamic capabilities approach. More specifically, this study aims to shed light on the antecedents, contingencies, and performance consequences of interfirm differences in process innovation success, that is, firms' propensity and effectiveness of implementing new production, supply chain, or administrative processes. Particular emphasis is placed upon the analysis of potential complementarities or substitution effects between innovation activities such as internal and external research and development, prototyping, external knowledge acquisition, and employee training. Cross‐sectional data from a large‐scale survey of German manufacturing and service firms serves as the basis for testing the hypotheses advanced in this paper. Findings suggest that by engaging in a broad range of different innovation activities, firms can indeed increase the likelihood of achieving process innovation success, which is in turn positively related to firm financial performance. Yet decreasing marginal returns to innovation activities have to be considered as process innovation propensity was found to increase with the number of activities pursued simultaneously only up to a point, after which negative marginal returns set in (inverted U‐shaped relationship). Furthermore, while environmental turbulence was found to have surprisingly little influence when it comes to translating process innovation success into firms' subsequent financial performance, industry membership as well as the nature of the innovation process (i.e., internal generation, external adoption, or cocreation of an innovation) emerged as key contingency factors. These findings have important theoretical as well as practical implications for managing new process introductions.     

Interpersonal guanxi and partner extra-role behavior: Mediating role of relational and transactional governance strategy

This paper identifies interpersonal guanxi between boundary spanners as an individual-level antecedent of partner firms' extra-role behavior (ERB) in interfirm relationships. Drawing on interfirm governance and the guanxi literature, we propose that guanxi between boundary spanners at the operational level may promote partner firms' ERB through two governance strategies: interfirm trust and relationship-specific investment. We analyze 268 pairs of sales managers and salespeople in a variety of industries in China, and we find that guanxi between boundary spanners positively affects partner firms' ERB and that this positive relationship is strengthened by interfirm ownership homogeneity. Moreover, the relationship is mediated by interfirm trust and relationship-specific investment, and the mediation effect of interfirm trust is stronger than that of relationship-specific investment. These findings provide new insights into the relationship marketing and guanxi literature by highlighting the effects of guanxi between operational-level boundary spanners on partner firms' ERB.     

Biotechnology Commercialization Strategies: Risk and Return in Interfirm Cooperation

The management and exploitation of biotechnological product innovation have proven to be more difficult than initially expected because the number of currently marketed biotechnological products is far from sufficient to counter deficits in pharmaceutical innovation. This study provides insight into the role of governance structures in interfirm cooperation and their effects on biotechnological product innovation and company success. Most of the existing literature regarding alliances and mergers and acquisitions (M&A) examines their effects on technology recipients' innovation performance. Here, the effects of alliances and M&A on both the innovation success and financial performance of technology suppliers (i.e., sources) are examined. Drawing from a sample of 220 human therapeutic biotechnology and biopharmaceutical firms over a period of 32 years (1980–2011), an analysis of the effects of biotechnology clusters, strategic alliances, and acquisitions is provided. This study reveals the existence of a risk‐return trade‐off for strategic alliances between biotech companies and larger, more established firms. Increased biotech company involvement in product development alliances decreases risk by increasing the likelihood of future product introductions. The trade‐off, however, is that biotech companies earn lower returns when their products are developed through such alliances. A similar risk‐return trade‐off effect is found for clusters. However, acquisitions generally affect both product introductions and product returns in a negative way. These findings have strategic implications not only for managing the development of biotechnological product innovations and technology platforms but also for commercialization strategies with respect to interfirm cooperation and risk reduction.