A contingent theory of supplier management initiatives: Effects of competitive intensity and product life cycle

Abstract

a b s t r a c tDirect investments in supplier development and close relationship building are the two major collaborative supplier management strategies for developing and accessing superior supplier capability. The impact of these two strategies, however, has not been uniform across firms, calling for a deeper examination of their relative effectiveness. Utilizing multiple theoretical frameworks, this study examines the relevance and effectiveness of the two collaborative strategies across the growth and maturity stages of the product life cycle (PLC). Specifically, the study analyzes the influence of competitive intensity as an antecedent to supplier development and relational initiatives, and the role of product life cycle as a moderator of the inter-relationships among competitive intensity, supplier development, relational initiatives, and supplier capability. Based on primary survey data, and discussion with practicing managers, the study finds that the individual and integrative effectiveness of supplier development investments (SDI) and relational orientation (RO) can be influenced differently by competitive intensity and PLC stage. In particular, RO can have a foundational role in motivating SDI for superior supplier capability, as also in safeguarding against supplier opportunism in the standardized product market context of the maturity stage. The managerial and theoretical implications of varied emphasis on the two collaborative supplier management strategies across the PLC stages are discussed.

An investigation of the cross-border supplier development process: Problems and implications in an emerging economy

“…This has allowed a pertinent question to be raised as to whether a supplier development programme must manifest both transactional and relational facets in each phase of its inception, or whether one or the other might only be needed in each phase, or if both need only to be evident at some point in the process for it to be labelled as a supplier development 'programme'. The findings suggest that the construct of relational orientation advanced in some studies (Arroyo-Lopez, Holmen, & Boer, 2012;Mahapatra, Das, & Narasimhan, 2012) has temporal dynamics and may be subject to a perception gap. Japanese suppliers clearly see Stage 1 as 'development' whereas Pakistani suppliers clearly do not.…”

“…A further prominent aspect of SDP research are relational variables. Mirroring other bodies of literature such as relationship marketing (Morgan & Hunt, 1994), variables such as commitment/trust (Ghijsen, Semeijn, & Ernstson, 2010;Govindan, Kannan, & Haq, 2010;Krause, Handfield, & Tyler, 2007;Li et al, 2007;Nagati & Rebolledo, 2013;Prahinski & Benton, 2004), programme specific investments (Ghijsen, Semeijn, & Ernstson, 2010;Govindan, Kannan, & Haq, 2010;Li et al, 2007;Mahapatra, Das, & Narasimhan, 2012;Wagner, 2006), dependence (Carr et al, 2008;Ghijsen, Semeijn, & Ernstson, 2010), relationship orientation (Arroyo-Lopez, Holmen, & Boer, 2012;Mahapatra, Das, & Narasimhan, 2012) and fair distribution of costs and benefits (Praxmarer-Carus, Sucky, & Durst, 2013) have been used to examine SDPs relative to certain performance outcomes. Further variables not commonly associated with relationship marketing have also been used such as relational capital (Krause, Handfield, & Tyler, 2007) and value co-production (Lakshman & Parente, 2008) which may encompass buyer-supplier involvement and supplier training initiated by buyers (Carr et al, 2008) and staff transfers (Wagner, 2006;Wagner & Krause, 2009).…”

Supplier development and its incentives in infrastructure mega-projects: A case study on Hong Kong–Zhuhai–Macao Bridge project

“…Krause et al, 2000;Nagati and Rebolledo, 2013;Li et al, 2007;Krause, 1999 Suppliers' competitiveness Suppliers' own abilities, including product quality, productivity, and management capacity, affect the owner's supplier selection and supplier development method and input. Hahn et al, 1990;Mahapatra et al, 2012;Modi and Mabert, 2007 land near the construction site to assemble large segments of steel box girders. Therefore, the perception of the future market demand will influence the strategy chosen by the supplier, furthermore, the successive supplier development activities (Nagati and Rebolledo, 2013).…”

“…Therefore, the perception of the future market demand will influence the strategy chosen by the supplier, furthermore, the successive supplier development activities (Nagati and Rebolledo, 2013). 4) Trust, bilateral communication and suppliers' competitiveness Apart from the above-mentioned factors, the mutual trust between the owner and the supplier (Handfield et al, 2000;Li et al, 2007;Sako, 2004), bilateral communication (Krause, 1999), and competitiveness of the supplier (Hahn et al, 1990;Mahapatra et al, 2012;Modi and Mabert, 2007) may influence supplier development. Table 1 summarizes the drivers and barriers of construction supplier development.…”

Measures of Competitive Intensity – Analysis Based on Literature Review

“…In another study, based inter alia on the assumptions proposed by Lusch and Luczniak, the intensity of competition is described as the managers' perception of competition, which the company faces on both the domestic and global market (Mahapatra et al, 2012). Export managers' perception of the level of competition in export markets has been the subject of a separate study involving 830 companies from the UK (Boso et al, 2012).…”