Supplier relationship-specific investments and the role of safeguards for supplier innovation sharing

The vast majority of the supplier innovation literature has focused on how buying firms can effectively “pull” innovations from their suppliers. Yet, we know remarkably little about the factors that contribute to a supplier voluntarily “pushing” innovations to its customers. The present study addresses this research gap in the context of industrial buyer–supplier relationships and with a specific focus on relationship-specific investments. Drawing on theory from the relationship-marketing literature and on transaction cost theory, we devise and test a proposed theoretical model that links the level of a supplier's relationship-specific investments to its sharing of innovative ideas regarding products and processes with customers. The model also considers the role of contract length, relationship age, and buyer–supplier cooperation as possible safeguards. The empirical results suggest that a supplier's relationship-specific investments encourage a supplier to suggest ideas of process innovations but to refrain from suggestions about product innovations. The latter effect, however, can be attenuated by appropriate formal and informal safeguards.     

Supplier dependence asymmetry and investment in innovation: The role of psychological uncertainty

A key source of competitive advantage for large firms accrues from investments in innovative products and processes by their suppliers, incentivized by a positive relationship climate. A fundamental hindrance lies in a condition that commonly characterizes buyer-supplier relationships: asymmetric levels of dependence between business partners. Such asymmetry has been shown to be detrimental to the relationship, enhancing the likelihood of conflict, and negatively impacting the performance of the more dependent party. Considering that such dependence asymmetry is likely to persist, large buyers face the challenge of promoting a relationship environment that provides an incentive for suppliers to invest in innovation. In this study, we propose that large, dominant buyers can influence suppliers' intentions and behaviors by mitigating the effects of their perceived riskiness and ambiguity that emerge from a situation of dependence asymmetry. Specifically, using the lens of resource dependence theory, we investigate the effects of these two psychological dimensions of uncertainty on a supplier's trust, commitment, and willingness to invest in innovation, as well as the moderating effect of a buyer's information sharing in shaping a supplier's perceived uncertainty. The model is tested with a scenario-based experiment and results are corroborated by interviews with experienced managers of retail suppliers. Our findings indicate that a supplier's dependence on a large buyer increases its perception of ambiguity and riskiness in the relationship, negatively impacting its trust, commitment, and willingness to invest in innovation. However, a buyer who shares relevant and timely information with the supplier mitigates its perceived uncertainty, promoting the supplier's positive attitudes towards the buyer and incentivizing innovation. Sharing operational and strategic information such as point-of-sales data, sales forecasts, or strategic plans, becomes a valuable strategy to powerful buyers in the pursuit of becoming a preferred customer and enhancing a supplier's resource mobilization towards the relationship.     

Supplier's involvement and success of radical new product development in new ventures

Supplier involvement is essential to a new venture seeking to develop a radical innovation. Despite this, prior literature has not adequately addressed supplier involvement in radical innovation, nor what the antecedents to increased supplier involvement are. We build and test a conceptual model of the antecedents and new product performance outcomes of supplier involvement in the development of radical innovation by new ventures. Antecedent variables (supplier's specific investments and the new venture's qualification of the supplier's abilities) are drawn from the transaction cost analysis literature. We include new venture's relative power and new venture's level of commitment to the supplier as contingency conditions. We develop a set of hypotheses relating supplier involvement to radical innovation performance, relating the antecedent variables to supplier involvement, and also testing the interaction effects of the two contingency conditions. We gather data from both new ventures and their major suppliers for 173 recent radical innovation projects, and use hierarchical regression analysis to test our hypotheses. We find that the contingency conditions moderate achieved levels of supplier involvement, and also find a direct relationship between achieved level of involvement and performance. We conclude with theoretical contributions and managerial implications.     

The impact of supplier dependence on suppliers' CSR: The moderating role of industrial dynamism and corporate transparency

To improve corporate social responsibility (CSR) in the supply chain, focal buyers may use supplier dependence to influence the supplier's resource strategy to promote the supplier's CSR initiatives. Thus, supplier dependence is particularly critical to the supplier's CSR, especially for Chinese suppliers with resource constraints. However, there is limited understanding and research on the degree to which a supplier depends on major buyers for the supplier's CSR from the supplier's perspective. Based on a sample of 284 Chinese listed companies, this study analyses the relationship between supplier dependence and suppliers' CSR through the lens of resource dependence theory (RDT). In addition, we investigate the moderating roles of industrial dynamism and corporate transparency in the relationship between supplier dependence and suppliers' CSR. The results indicate that supplier dependence has a negative impact on the Chinese supplier's CSR performance. Meanwhile, the negative impact of supplier dependence is mitigated for the supplier's more volatile industrial context, while improving corporate transparency enhances the negative impact of supplier dependence. This study verifies the applicability of RDT for the analysis of CSR in the supply chain in emerging markets such as China. Moreover, the study further extends research on the role of buyer-supplier relationships in CSR in the supply chain by extending the research perspective to the supplier side and adding the external and internal uncertainty of the supplier to the theoretical framework for analysis. We also provide managerial implications for implementing Chinese suppliers' CSR from the buyer's and supplier's perspectives.     

The micro-processes of supplier satisfaction: A longitudinal multiple case study

Supplier satisfaction has often been argued to be an important determinant for supplier performance in the buyer-supplier relationship. The micro-processes of how supplier satisfaction develops and how it relates to supplier performance, however, are not well understood. By means of a longitudinal multiple case study design of 18 buyer-supplier relationships, this paper provides insights into the micro-processes of how supplier satisfaction develops. Our findings provide several new insights. First, we observed how supplier satisfaction levels showed little change even though the buyer's behavior did not align with the supplier's expectations, thereby nuancing current conceptualizations of supplier satisfaction being a function of expected and realized relational value. Second, we show how intra organizational dynamics at the supplier influence the relationship between supplier satisfaction and supplier performance. Third, our findings give insights into the complex interplay between the relational and economic antecedents of supplier satisfaction.     

Can supplier innovations substitute for internal R&D? A multiple case study from an absorptive capacity perspective

Prior literature suggests that significant internal R&D resources are needed to leverage suppliers for innovation and that external knowledge sources can be used to complement the internal knowledge base. Based on the analysis of four inbound open innovation projects at Fortum, a multinational energy utility company, we argue that companies with low R&D intensity may adopt an alternative approach which aims at substituting – not merely complementing – internal R&D with external innovations. We adopt the absorptive capacity perspective while investigating the cases and focus on four distinct capabilities: acquisition, assimilation, transformation, and exploitation. We find that the substitution approach consists of short-term research on new technological areas in order to gain the ability to identify and evaluate alternative technologies, as well as joint business models and operations based on complementary capabilities between the parties. The cases also suggest that the innovation process requires significant collaboration and the buying company's supplier management capabilities may improve the success of inbound open innovation projects of this type.     

Supplier empowerment: Mediating situational factors and perceived performance

The understanding of the behavioral and cognitive factors that affect organizations' performance has attracted increasing attention of scholars and practitioners. Based on the literature of psychological empowerment at the individual and the team levels, this study develops the concept of supplier empowerment in the context of purchasing and supply management. Further, this study proposes a research model that explores the role of supplier empowerment as a cognitive concept in mediating the relationship between situational factors (a supplier's process modularity and the mutual trust with its customers/buyers) and the supplier's perceived performance in its operations and customer service. This model is tested with 208 responses from automotive industry suppliers. The findings highlight the importance of empowered suppliers in decreasing inventory levels and increasing order fulfillment performance.     

Supplier relationship portfolio management: A social exchange perspective

Despite the importance of relationship portfolios, it's unclear how a buying firm's differential investment in its suppliers affects the distribution of its supplier relationships and the supplier-provided benefits that result. Drawing from social exchange theory (SET), we assess the sequential linkages among supply management practices, supplier relationship sets that vary in closeness, and relational benefits. Empirically, we adopt a multi-methodological approach that combines abductive case-based and deductive survey-based research. In our case-based approach, interview responses from 34 professionals within a global Tier 1 automotive manufacturer (MFGR) and four of its suppliers, open-ended survey responses from 56 buyers and 86 engineers within MFGR, documentary evidence, and direct observations facilitate the operationalization of supply management practices and relationship closeness constructs. The survey-based study integrates case-based findings and uses response data from sales managers within 292 suppliers to MFGR and matched supplier performance data from MFGR to test a theoretical model of social exchange. In a multi-step process, we apply cluster analysis, multinomial logistic regression, ANOVA, and multiple regression to this aggregated dataset to (1) identify three distinct sets of supplier relationships that are distributed along a relationship closeness continuum, (2) show how specific supply management practices affect the composition of supplier relationship sets that comprise a buying firm's portfolio, and (3) demonstrate how supplier-provided benefits differ across supplier relationship sets. Our results validate the utility of SET as applied to supplier portfolio management and provide insights into buyers' actions that drive closer relationships, minimize risk, and maximize benefits across a supplier portfolio.     

The effects of bargaining power on trade credit in a supply network

We develop a multi-tier supply network model, rooted in social network theory, to evaluate the effect of bargaining power on trade credit and to track the effect of buyers' trade credit on suppliers' trade credit. We apply social network analysis to measure companies' bargaining power in the supply network of Hennes & Mauritz AB (H&M, the Swedish clothing retailer). The results show that the buyer's bargaining power significantly affects the choice of trade credit, and that the supplier's “upstreamness” is significantly associated with its trade credit. We find limited evidence to support the notion of a financial bullwhip effect, a result that merits further research, since this study is limited to the network of one company up to its fourth tier of suppliers in one financial year. Our results can be applied by companies seeking to control their cash flow and, therefore, the financial pressure within their supply network. This study contributes to the literature by bringing social network measures into the buyer–supplier financial flow, as well as offering one of the first empirical examinations of the propagation of financial pressure in a multi-tier supply network.     

Understanding supplier structural embeddedness: A social network perspective

Despite a significant amount of attention, the potential of supplier structural embeddedness (i.e., the value of the structural position in an extended network) to improve the performance of a buying firm remains poorly understood. This study drew on the social network theory to empirically examine a conceptual framework specifying a relationship between the efforts of a buying firm to understand supplier structural configuration and operational and financial performance. This study also examines how the comprehension of structural embeddedness is transformed into performance for a buying firm through relational embeddedness (i.e., the strength of a dyadic relationship). Survey data collected from companies in the U.S. were analyzed using hierarchical regression analysis. The results indicate that the understanding of the structural dimension does help to enhance operational performance of a buying firm, but it does not lead to better financial performance. Empirical evidence shows that a buying firm does improve the quality of a dyadic relationship between the buying firm and a supplier by understanding how the supplier is connected to other firms and what positional values are produced. Further, relational embeddedness is found to mediate the influence of the enhanced understanding of the structural configuration on operational performance.     

Does supplier development lead to supplier satisfaction and relationship continuation?

The primary purpose of this study is to find out if supplier development can serve as a means for buying firms to actively increase supplier satisfaction and eventually predict relationship continuity. Supplier relationships provide an essential means for buying firms to access and leverage supplier resources. One way in which buying firms influence the supply management process is through supplier development. The findings show that supplier development is an important means by which buying firms can increase supplier satisfaction. Supplier development significantly predicts the future of business relationships. Further analysis based on polynomial regressions provides evidence to show how congruence or discrepancy between economic and non-economic satisfaction impact continuance.     

How to stimulate supplier innovation? Insights from a multiple case study

Drawing on the literature on supplier innovation, supplier development, and the relational view, we bring forward the concept of stimulation of supplier innovation, which refers to the buyer company's actions which aim to enhance its suppliers' innovativeness, guide its suppliers' innovation processes, and/or encourage its suppliers to share their innovations. Through four case studies about purchasing categories in three companies, we study how the stimulation focus is determined and what methods can be used for stimulating supplier innovation. We propose that stimulation comprises indirect and direct forms of knowledge-sharing and governance with an emphasis on indirect methods and suggest that the concept sheds light on the research gap on the push model of supplier innovation. We also elaborate the literature on supplier development and relational view in the context of supplier innovation.     

Supplier involvement in new product development and innovation: Taking stock and looking to the future

This paper provides a comprehensive and critical review and synthesis of the current state of empirical research into supplier involvement in new product development (NPD). The paper begins by defining supplier involvement in NPD and evaluating the rationale for supplier involvement in NPD. This suggests that early and extensive supplier involvement in NPD projects has the potential to improve NPD effectiveness and efficiency, however, existing research remains fragmented and empirical findings to date show conflicting results. The paper takes stock of the research on supplier involvement in NPD, tracing the origins of the literature to the late 1980s, and evaluating the development of the field up to the present day. From this broad base of empirical research the analysis identifies a set of factors affecting the success of supplier involvement projects. The paper concludes with a discussion of two emerging themes: (1) supplier relationship development and adaptation; (2) supply network involvement in product innovation.     

Questioning the relevance of supplier satisfaction for preferred customer treatment: Antecedent effects of comparative alternatives and multi-dimensionality

Through the construct of supplier satisfaction, recent research explains the supplier's preferred treatment of a given customer. This cause-and-effect phenomenon is often not contrasted with other reasons or controlled for. This work addresses this issue and uses two tactics to elaborate upon social exchange theory, namely, construct splitting and construct contrasting, to analyse the development of preferential customer treatment. For this purpose, a structural equation model is used with data from the international automotive industry. The results extend the breadth of constructs explaining preferred customer treatment (PCT) and challenge the existing reasoning by questioning the relative importance of supplier satisfaction. While supplier satisfaction does affect PCT, the relative supplier satisfaction defined as a comparison of outcomes between the actual and the best alternative business relationships influences PCT much more.Furthermore, by distinguishing between the economic and non-economic dimensions of supplier satisfaction, the study indicate that economic satisfaction has a higher influence on the relative satisfaction whereas social satisfaction a higher one on absolute supplier satisfaction.These findings imply that despite the current debate about the importance of behavioural constructs such as supplier interaction and social capital, supplier resource allocation decisions are actually dominated by economic and relative aspects of satisfaction. This outcome calls for a more economically driven debate about behavioural supply management approaches.     

供应商网络关系、网络结构与结点活性——美的空调的案例研究

借助于结点活性的概念来描绘供应商的属性与状态，并结合企业网络中网络关系与网络结构的理论划分原则，通过将项目投资组合理论与企业网络理论相结合，尝试从供应商网络关系、网络结构与结点活性三个角度对供应商网络效率进行分析。基于美的空调的案例研究发现，从网络关系视角来看，焦点企业与供应商之间的信息共享程度、企业高层及中基层员工的交流频率将对供应商网络效率产生重要影响；从网络结构视角来看，焦点企业与供应商之间的业务份额对于供应商网络效率的影响作用较为明显；而从结点活性视角来看，焦点企业在供应商客户群体中的排名以及彼此之间的技术合作强度是影响供应商网络效率的重要因素。本文的研究成果对于供应商网络管理实践以及焦点企业供应商选择具有重要的借鉴意义与指导作用。     

Integrating Suppliers into Green Product Innovation Development: an Empirical Case Study in the Semiconductor Industry

Green innovation has been recognized as one of the key factors to achieve environmental and economic success in markets. Understanding green product innovation development as a result of suppliers' involvement has become a strategic priority for academics and practitioners. This paper aims to explore and understand the role of suppliers in enhancing the manufacturer's ability to successfully carry out green innovation in product development. As a research methodology, a case study approach is employed. Primary data were collected through site visits and extensive interviews with corporate and plant management in Korea. Based on the Korean study, the paper presents following outcomes. First, there is a strong linkage between environmental compliance and green new product developments. Second, there is a strategically close relationship of environmental collaboration between suppliers and the buying company through technological integration. Finally, involving key suppliers in green new product development for environmentally demanding customers and markets can bring both environmental and commercial success. This research provides new insights on supplier involvement and green product innovation development in supply chain management. Copyright © 2011 John Wiley & Sons, Ltd and ERP Environment.     

网络位置、产品创新战略与创新绩效——以中国制造企业为样本

以创新网络理论与产品创新战略理论为基础,本文将网络位置视为重要的外生性创新资源并作为模型的独特前置因素,以279家中国制造企业为样本,运用因子分析、回归分析以及Bootstrap方法实证研究产品创新战略与创新绩效问题。从技术、市场、设计三个维度将产品创新战略划分为技术推动型、市场拉动型和设计驱动型三种类型,进而厘清网络位置、三种产品创新战略以及创新绩效之间的逻辑关系,从产品创新视角清晰揭示不同网络位置影响企业创新绩效提升的内在机理和具体路径。研究结果表明,网络中心位置和中介位置均会显著促进企业绩效提升;三种产品创新战略分别在网络中心位置影响创新绩效过程中发挥显著的中介效应;但在网络中介位置影响企业创新绩效过程中,技术推动型产品创新战略的中介效应不显著,市场拉动型和设计驱动型产品创新战略则分别发挥显著中介效应。最后对研究结果进行分析和理论解释,以期对指导中国制造企业积极利用创新网络资源、选择适合自身发展的产品创新战略以促进绩效提升具有一定参考价值。     

Supplier–supplier relationships in the buyer–supplier triad: Building theories from eight case studies

Many researchers have studied how the buying company manages its relationship with suppliers (i.e. buyer–supplier relationship). Extending this genre of study, researchers have recently shown interest in investigating how the buying company manages relationships between the suppliers (i.e. supplier–supplier relationship). In other words, just as the relationship with the suppliers does, the relationships between suppliers have strategic implications for the buyer. We present in this study eight cases that describe supplier–supplier relationship dynamics. Using theory building through case studies, we identify five archetypes of supplier–supplier relationships. Each type of relationship is a unique configuration of the relational characteristics. We also present working propositions that associate the antecedent conditions that lead to these archetypes and eventual performance implications.     

Supplier satisfaction: Conceptual basics and explorative findings

In the past, supplier satisfaction has not been a major topic of interest within purchasing and industrial management from either a practitioner or an academic point of view. Yet, successfully managing buyer–supplier relationships is difficult without taking the supplier's satisfaction into account. Consequently, analysing supplier satisfaction should take into account interaction processes within buyer–supplier relationships (e.g., exchange of information) as well as the atmosphere within these relationships (e.g., power dependence). This paper aims to explore the construct of supplier satisfaction as a factor of buyer–supplier relationship quality. Supplier satisfaction is defined as a supplier's feeling of fairness with regard to buyer's incentives and supplier's contributions within an industrial buyer–seller relationship. Supplier satisfaction as a complex construct is operationalised through an index, and its determinants are measured using a survey.     

Exploration of congruence in perceptions of buyer–supplier attraction: A dyadic multiple case study

In long-term complex buyer–supplier relationships, many exchanges are non-contractual, a factor that emphasizes the social dimension of the relationship. Previous studies have shown that attraction is a fundamental aspect of the social dimension and a main driver in non-contractual exchanges. Although attraction is a determinant of a relationship, many studies have examined the relationship only from the buyer's or supplier's perspective. Our study extends this research stream by considering the dyadic aspect of attraction and poses the following questions: Does the success of a relationship require that both parties perceive it to be attractive? How important is it to understand how the company looks in the eyes of the other party? In this paper, we explore the dyadic aspect of buyer–supplier attraction by analyzing six cases, two buyer firms and six supplier firms and by conducting a total of 43 interviews. By using cross-case analyses, we develop a set of proposals for explaining how congruence in perceptions of attraction affects relationship success.