Stakeholders expect focal firms to improve their environmental performance. While firms may be able to accumulate the environmental expertise needed to achieve this goal internally, doing so may require significant time and resource commitments. Alternatively, buyer firms can leverage their suppliers’ existing environmental expertise and gain access to such expertise when they purchase products and services from these suppliers. The purpose of this study was to develop and test theory regarding under what conditions suppliers’ environmental expertise influences a buying firms’ procurement spend with these suppliers. We ground our study in transaction cost economics and agency theories and empirically test our hypotheses using a unique buyer–supplier dyadic data set. We find that buyer firms are willing to increase their overall business spend with suppliers that have strong environmental expertise, particularly when the buyer firms are more profitable and have higher levels of absorptive capacity. However, we find the opposite effect when the buyer firm’s executive compensation is linked to the firm’s environmental, social, and governance (ESG) performance. Likewise, we also find that the buyer firm’s environmental concern ratings negatively moderate the relationship between the supplier’s environmental expertise and the buyer’s procurement spend with the supplier.

Purpose A supplier may sell not only to one buyer (sole relationship configuration) but also to the buyers competitors (shared relationship configuration) for a specific product category. This study examines the performance implications when suppliers establish shared relationships with the buyer’s competitors.Design/methodology/approach Secondary data are used to test hypotheses relating a supplier’s relationship configurations to its operational performance. A seemingly unrelated regression approach (SUR) is applied to analyze the data, followed by endogeneity checks of the empirical findings.Findings The study shows that suppliers with less-shared ties with buying firms’ competitors exhibit superior inventory efficiency and asset turnover. Thus, suppliers can improve operational efficiency by creating relatively exclusive, deep and trust-based relations instead of more extensively shared and shallower relationships.Research limitations/implications Based on agency theory as a theoretical lens and aerospace industry data, this research contributes by addressing the supplier’s perspective and linking its operational efficiency performance with its chosen supply relationship configuration.Practical implications Suppliers need to understand the performance implications of choosing relatively exclusive relationships versus shared relationships with buying firms. The research provides new insights for managers and can guide their supply chain decision-making.Originality/value Little is known about how a supplier’s relationship configurations can elevate, or impair, its operational efficiency. While conventional wisdom holds that suppliers should focus on multiple avenues of revenue growth by selling to buyers’ competitors, this study demonstrates that more sales to a buying firm’s rivals might, in fact, reduce a supplier’s efficiency.

PurposeThis research is aimed at understanding how inter-organizational team members' ability to encode, interpret, retain and recall knowledge can lead to effective supply chain collaboration, resulting in improved firm performance. Using the lens of transactive memory systems (TMS), this research demonstrates the value of knowing who knows what (specialization), is it trustworthy (credibility) and how to retrieve it (coordination) on supply chain firm performance through network collaboration.Design/methodology/approachThe authors used a multi-method approach that includes quantitative survey methodology and a qualitative methodology using semi-structured interviews. In total, 207 survey responses and six semi-structured interviews provided valuable insights into the use of TMS in supply chain relationships.FindingsThis study shows that TMS can enable firms to exploit potential benefits of collaboration on network optimization, thus improving the overall efficiency and process innovations.Practical implicationsTo maintain the efficient use of a firm's assets while suppliers get added or removed from the network, this study’s findings suggest that managers should be more knowledgeable of supply chain partners carrying codified knowledge, which can contribute to superior firm performance. Recognizing that when two or more firms collaborate, there are multiple supply chains affected by each decision, it is important that managers carefully assign the specific role of each firm within the supply chain.Originality/valueThis research takes a new approach to network optimization by specifically considering how firms work together to share information about their changing networks to allow firms throughout the supply chain to gain greater levels of asset efficiency and process improvement.