Perceived Effectiveness of the Automotive Supplier Evaluation Process

Purdy, Lyn; Astad, U.; Safayeni, Frank

doi:10.1108/01443579410062112

Cited by 37 publications

(28 citation statements)

References 17 publications

(24 reference statements)

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“…It does not, however, eliminate the possibility that even a high-ability supplier fails to make a sufficient commitment to the exchange relationship. This is the so-called moral hazard problem (Stump and Heide, 1996;Purdy et al, 1994). The new venture is highly dependent on the supplier for the development and commercial performance of its radical innovation, and stakes a commitment on the supplier's consistent future behavior.…”

Section: Discussionmentioning

confidence: 99%

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

Song

Benedetto

2007

J of Ops Management

352

310

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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. Published by Elsevier B.V.

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Section: Discussionmentioning

confidence: 99%

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

Song

Benedetto

2007

J of Ops Management

352

310

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“…Another reason to argue for perceived satisfaction as a mediator is its relation to the reverse selection problem in agency theory. In view of the moral hazard problem, the possibility of a disrupted relationship may always exist since even the best distributor may fail to exert a sufficient effort (Purdy et al, 1994). Karunaratna and Johnson (1997) posit a direct link between the manufacturer's satisfaction and switching likelihood in international channel arrangements.…”

Section: Distributor Switching Likelihood and Manufacturer Satisfactionmentioning

confidence: 99%

The Achilles' heel of an enduring relationship: Appropriation of rents between a manufacturer and its foreign distributor

Deligonul

Kim

Roath

et al. 2006

Journal of Business Research

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“…A number of studies have emphasized the need to determine the contributing factors of SDP success or failure Purdy et al, 1994). To our knowledge, a study by Krause et al (2000) was the only study that considered the importance of SDPs on supply chain performance.…”

Section: Introductionmentioning

confidence: 99%

Supplier evaluations: communication strategies to improve supplier performance

Prahinski

Benton

2004

J of Ops Management

537

454

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As firms increasingly emphasize cooperative relationships with critical suppliers, executives of buyer firms are using supplier evaluations to ensure that their performance objectives are met. Supplier evaluations, one type of supplier development program (SDP), are an attempt to meet current and future business needs by improving supplier performance and capabilities. The purpose of this study was to determine how suppliers perceive the buying firm's supplier evaluation communication process and its impact on suppliers' performance. Three communication strategies (indirect influence strategy, formality and feedback) were tested separately and one in unison (collaborative).Using structural equation modeling (SEM) and data collected from 139 first-tier North American automotive suppliers, the results of this research have shown that, contrary to the SDP literature from the buying firm's perspective, the supplier's perceptions of the buying firm's communication does not directly influence suppliers' performance. Specifically, the supplier evaluation communication process does not ensure improved supplier performance unless the supplier is committed to the buying firm. Buying firms can influence the supplier's commitment through increased efforts of cooperation and commitment. The results also indicate that when a buying firm utilizes collaborative communication, the supplier perceives a positive influence on the buyer-supplier relationship.

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Perceived Effectiveness of the Automotive Supplier Evaluation Process

Cited by 37 publications

References 17 publications

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

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

The Achilles' heel of an enduring relationship: Appropriation of rents between a manufacturer and its foreign distributor

Supplier evaluations: communication strategies to improve supplier performance

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