Structuring Supplier Involvement in New Product Development: A China-U.S. Study

Buying and supplying organizations rely on each other for developing better products in an efficient manner, which explains the popularity of involving suppliers in new product development (NPD). However, such involvement is not always successful, partially due to the challenges of structuring a buyer–supplier team to manage joint dependence and dependence asymmetry. This study adopts an organizational dependence view to examine how three types of intergroup structures—administrative (formalization and centralization), task (task interdependence), and physical (colocation)—influence project performance and buyer learning in NPD projects. Furthermore, adopting a contingency theory perspective, we study whether the national context moderates the effects of intergroup structures on project outcomes. We adopt a two-group structural equation modeling approach to test hypotheses with survey responses from a sample of NPD projects in the United States (US) and China. Results show different ways in which intergroup structures influence project performance and buyer learning in the two culturally, economically, and institutionally distinct countries. We discuss the implications of these new findings and present directions for future research.

[1]  Mohan V. Tatikonda,et al.  Technology novelty, project complexity, and product development project execution success: a deeper look at task uncertainty in product innovation , 2000, IEEE Trans. Engineering Management.

[2]  Edward F. McDonough,et al.  An empirical study of the relationships among co-location, integration, performance, and satisfaction , 1997 .

[3]  M. Feldman,et al.  Fishing upstream: Firm innovation strategy and university research alliances , 2007 .

[4]  E. Autio,et al.  SOCIAL CAPITAL, KNOWLEDGE ACQUISITION, AND KNOWLEDGE EXPLOITATION IN YOUNG TECHNOLOGY-BASED FIRMS , 2001 .

[5]  Lars Frederiksen,et al.  The Core and Cosmopolitans: A Relational View of Innovation in User Communities , 2012, Organ. Sci..

[6]  A. Griffin.  The Effect of Project and Process Characteristics on Product Development Cycle Time , 1997 .

[7]  Aleda V. Roth,et al.  Decision Sciences Research in China: Current Status, Opportunities, and Propositions for Research in Supply Chain Management, Logistics, and Quality Management , 2007, Decis. Sci..

[8]  A. V. D. Ven,et al.  Measuring And Assessing Organizations , 1980 .

[9]  E. Andersen,et al.  National Systems of Innovation: Towards a Theory of Innovation and Interactive Learning , 1992 .

[10]  Jason P. Davis,et al.  Rotating Leadership and Collaborative Innovation , 2011 .

[11]  Mohan V. Tatikonda,et al.  Integrating Operations and Marketing Perspectives of Product Innovation: The Influence of Organizational Process Factors and Capabilities on Development Performance , 2001 .

[12]  Rick D. Hackett,et al.  Individual-Level Cultural Values as Moderators of Perceived Organizational Support–Employee Outcome Relationships in China: Comparing the Effects of Power Distance and Traditionality , 2007 .

[13]  E. Kelly.  Individualism and collectivism , 1901 .

[14]  Phillip L. Carter,et al.  SUPPLIER INNOVATIVENESS AND THE ROLE OF INTERORGANIZATIONAL LEARNING IN ENHANCING MANUFACTURER CAPABILITIES , 2008 .

[15]  Richard H. Hall,et al.  Ownership patterns and centralization: A China and U.S. comparison , 1993 .

[16]  R. Emerson.  Power-Dependence Relations , 1962, Power in Modern Societies.

[17]  K. WeiK..  The Collapse of Sensemaking in Organizations: The Mann Gulch Disaster , 2009, STUDI ORGANIZZATIVI.

[18]  Marjorie A. Lyles,et al.  Managing Tacit and Explicit Knowledge Transfer in Ijvs: The Role of Relational Embeddedness and the Impact on Performance , 2004 .

[19]  Klaus G. Lüder.  A CONTINGENCY MODEL OF GOVERNMENTAL ACCOUNTING INNOVATIONS IN THE POLITICAL- ADMINISTRATIVE ENVIRONMENT , 2007 .

[20]  Jan W. Rivkin,et al.  Hiding the Evidence of Valid Theories: How Coupled Search Processes Obscure Performance Differences among Organizations , 2009 .

[21]  Ron Sanchez,et al.  Modularity, flexibility, and knowledge management in product and organization design , 1996 .

[22]  T. S. Lee,et al.  Pooling Data Across Transparently Different Groups of Key Informants: Measurement Equivalence and Survey Research , 2008, Decis. Sci..

[23]  Larry C. Giunipero,et al.  Organizational Learning in Global Purchasing: A Model and Test of Internal Users and Corporate Buyers , 2000, Decis. Sci..

[24]  Henk W. Volberda,et al.  Exploratory Innovation, Exploitative Innovation and Peformance: Effects of Organizational Antecedents and Environmental Moderators , 2006, Manag. Sci..

[25]  J. Farley,et al.  Corporate Culture, Customer Orientation, and Innovativeness in Japanese Firms: A Quadrad Analysis , 1993 .

[26]  Karen L. Newman,et al.  Culture and Congruence: The Fit Between Management Practices and National Culture , 1996 .

[27]  K. Eisenhardt,et al.  Swimming with Sharks: Technology Ventures, Defense Mechanisms and Corporate Relationships , 2008 .

[28]  Danny Miller,et al.  Strategy, Environment and Performance in Two Technological Contexts: Contingency Theory in Korea , 1996 .

[29]  David Wilemon,et al.  The Credibility–Cooperation Connection at the R&D‐Marketing Interface , 1988 .

[30]  Dovev Lavie,et al.  Collaborating for Knowledge Creation and Application: The Case of Nanotechnology Research Programs , 2011, Organ. Sci..

[31]  Anne P. Massey,et al.  New Product Development Decision-Making Effectiveness: Comparing Individuals, Face-To-Face Teams, and Virtual Teams , 2001, Decis. Sci..

[32]  Shikhar Sarin,et al.  The Effect of Team Leader Characteristics on Learning, Knowledge Application, and Performance of Cross-Functional New Product Development Teams , 2003, Decis. Sci..

[33]  Thomas H. Brush,et al.  Supplier Performance in Vertical Alliances: The Effects of Self-Enforcing Agreements and Enforceable Contracts , 2006, Organ. Sci..

[34]  Mike W. Peng,et al.  Formal control and social control in domestic and international buyer–supplier relationships , 2010 .

[35]  Sandy D. Jap.  Pie-Expansion Efforts: Collaboration Processes in Buyer–Supplier Relationships , 1999 .

[36]  Preet S. Aulakh,et al.  The influence of complementarity, compatibility, and relationship capital on alliance performance , 2001 .

[37]  Gang Peng,et al.  Learning and Open Source Software License Choice , 2013, Decis. Sci..

[38]  C. Phelps.  A Longitudinal Study of the Influence of Alliance Network Structure and Composition on Firm Exploratory Innovation , 2009 .

[39]  William B. Gudykunst,et al.  Culture’s Consequences: Comparing Values, Behaviors, Institutions, and Organizations Across Nations [2nd edition]: Geert Hofstede , 2005 .

[40]  Harry C. Triandis,et al.  Individualism and collectivism: Theory, method, and applications. , 1996 .

[41]  Yadong Luo,et al.  Guanxi and organizational dynamics: organizational networking in Chinese firms , 2001 .

[42]  Stephan M. Wagner.  Tapping Supplier Innovation , 2012 .

[43]  K. Eisenhardt,et al.  Accelerating Adaptive Processes: Product Innovation in the Global Computer Industry , 1995 .

[44]  Craig C. Lundberg,et al.  Social change in complex organizations , 1970 .

[45]  R. Narasimhan,et al.  Supplier integration—Finding an optimal configuration , 2006 .

[46]  G. Tomas M. Hult,et al.  Managing the International Strategic Sourcing Process as a Market‐Driven Organizational Learning System* , 1998 .

[47]  A. Hillman,et al.  Resource Dependence Theory: A Review , 2009 .

[48]  F. Wynstra,et al.  Managing supplier involvement in new product development: A multiple-case study , 2006 .

[49]  D. W. Barclay.  Interdepartmental Conflict in Organizational Buying: The Impact of the Organizational Context , 1991 .

[50]  J. Kennedy,et al.  Culture , Leadership , and Organizations : The GLOBE Study of 62 Societies , 2022 .

[51]  R. Bhagat.  Culture's Consequences: Comparing Values, Behaviors, Institutions, and Organizations Across Nations , 2002 .

[52]  Jose Albors-Garrigos,et al.  The Role of the Firm's Internal and Relational Capabilities in Clusters: When Distance and Embeddedness are Not Enough to Explain Innovation , 2008 .

[53]  Robert Drazin,et al.  Equifinality: Functional Equivalence in Organization Design , 1997 .

[54]  Dean G. Rojek,et al.  Social Control in the People's Republic of China , 1989 .

[55]  Eric M. Olson,et al.  Organizing for effective new product development: The moderating role of product innovativeness. , 1995 .

[56]  N. Venkatraman,et al.  Configurations of inter-organizational relationships : a comparison between US and Japanese automakers , 1995 .

[57]  A. Walter,et al.  Relationship-specific factors influencing supplier involvement in customer new product development , 2003 .

[58]  F. Dwyer,et al.  An Examination of Organizational Factors Influencing New Product Success in Internal and Alliance-Based Processes , 2000 .

[59]  Hans-Georg Gemünden,et al.  Interteam Coordination, Project Commitment, and Teamwork in Multiteam R&D Projects: A Longitudinal Study , 2004, Organ. Sci..

[60]  K. Dooley,et al.  Buyer-Supplier Collaboration Quality in New Product Development Projects , 2013 .

[61]  Jeffrey T. Polzer,et al.  Extending the Faultline Model to Geographically Dispersed Teams: How Colocated Subgroups can Impair Group Functioning , 2006 .

[62]  G. Huber.  Organizational Learning: The Contributing Processes and the Literatures , 1991 .

[63]  William E. Souder,et al.  Context and Antecedents of Information Utility at the R&D/Marketing Interface , 1996 .

[64]  M. Swink.  Threats to new product manufacturability and the effects of development team integration processes , 1999 .

[65]  Mike W. Peng,et al.  The Growth of the Firm in Planned Economies in Transition: Institutions, Organizations, and Strategic Choice , 1996 .

[66]  Lowell W. Busenitz,et al.  Country Institutional Profiles: Unlocking Entrepreneurial Phenomena , 2000 .

[67]  R. Handfield,et al.  A Model of Supplier Integration into New Product Development , 2003 .

[68]  Stephan M. Wagner,et al.  An Empirical Investigation of Knowledge-Sharing in Networks , 2005 .

[69]  Morgan Swink,et al.  Design-manufacturing integration as a mediator of antecedents to new product design quality , 2004, IEEE Transactions on Engineering Management.

[70]  Andrew C. Inkpen,et al.  Cross-border R&D alliances, absorptive capacity and technology learning , 2005 .

[71]  Dean M. Behrens,et al.  Redundant governance structures: an analysis of structural and relational embeddedness in the steel and semiconductor industries , 2000 .

[72]  K. Sivakumar,et al.  National Culture and New Product Development: An Integrative Review , 1996 .

[73]  V. Grover,et al.  An assessment of survey research in POM: from constructs to theory , 1998 .

[74]  M. Primo,et al.  An exploratory study of the effects of supplier relationships on new product development outcomes , 2002 .

[75]  David Miller.  Strategy Making and Structure: Analysis and Implications for Performance , 1987 .

[76]  Thorbjørn Knudsen,et al.  Organization Design: The Epistemic Interdependence Perspective , 2010 .

[77]  Murray R. Barrick,et al.  Team Structure and Performance: Assessing the Mediating Role of Intrateam Process and the Moderating Role of Task Type , 2000 .

[78]  W. E. Holland,et al.  Communicators and Innovators in Research and Development Organizations , 1983 .

[79]  K. Eisenhardt,et al.  PRODUCT DEVELOPMENT: PAST RESEARCH, PRESENT FINDINGS, AND FUTURE DIRECTIONS , 1995 .

[80]  Tingting Yan,et al.  Communication Intensity, Goal Congruence, and Uncertainty in Buyer-Supplier New Product Development , 2013 .

[81]  Jinhong Xie,et al.  Antecedents and Consequences of Goal Incongruity on New Product Development in Five Countries: A Marketing View , 2003 .

[82]  A. Faggian,et al.  Collective Learning and Relational Capital in Local Innovation Processes , 2005 .

[83]  D. Pugh,et al.  Dimensions of Organization Structure , 1968 .

[84]  A. Athos,et al.  Effects of Organizational Structure of Marketing Planning on Credibility and Utilization of Plan Output , 2007 .

[85]  Robert M. Morgan,et al.  The Role of Existing Knowledge in New Product Innovativeness and Performance , 2003, Decis. Sci..

[86]  Robert W. Ruekert,et al.  Marketing's Interaction with Other Functional Units: A Conceptual Framework and Empirical Evidence , 1987 .

[87]  Akira Takeishi,et al.  Bridging inter‐ and intra‐firm boundaries: management of supplier involvement in automobile product development , 2001 .

[88]  D. Pugh,et al.  Organization theory : selected readings , 1971 .

[89]  Ruth Stock,et al.  How Should Customers Be Integrated for Effective Interorganizational NPD Teams? An Input–Process–Output Perspective , 2014 .

[90]  Mark A. Zupan,et al.  Capture and Ideology in the Economic Theory of Politics , 1984 .

[91]  Rudolf R. Sinkovics,et al.  Drivers and Performance Outcomes of Supplier Innovation Generation in Customer-Supplier Relationships: The Role of Power-Dependence , 2012, Decis. Sci..

[92]  M. Bell,et al.  The micro-determinants of meso-level learning and innovation: evidence from a Chilean wine cluster , 2005 .

[93]  Peter J. Lane,et al.  Relative absorptive capacity and interorganizational learning , 1998 .

[94]  Anne S. Tsui,et al.  Where Guanxi Matters , 1997 .

[95]  M. Lessnoff.  Capitalism, Socialism and Democracy , 1979 .

[96]  A. V. D. Ven,et al.  The Concept of Fit in Contingency Theory. , 1984 .

[97]  Matté Hartog,et al.  Explaining the Structure of Inter-Organizational Networks using Exponential Random Graph Models , 2011 .

[98]  Stephan M. Wagner,et al.  Creating and appropriating value in collaborative relationships , 2010 .

[99]  M. Aiken,et al.  Organizational interdependence and intra-organizational structure. , 1968 .

[100]  Jeffrey Pfeffer,et al.  Joint Ventures and Interorganizational Interdependence , 1976 .

[101]  David A. Ralston,et al.  The impact of national culture and economic ideology on managerial work values : a study of the United States , Russia , Japan , and China , 2005 .

[102]  F. Damanpour.  Organizational Innovation: A Meta-Analysis Of Effects Of Determinants and Moderators , 1991 .

[103]  Daniel G. Bachrach,et al.  Effects of task interdependence on the relationship between helping behavior and group performance. , 2006, The Journal of applied psychology.

[104]  Thomas V. Scannell,et al.  Success Factors for Integrating Suppliers into New Product Development , 1997 .

[105]  J. Ettlie,et al.  Service versus Manufacturing Innovation , 2011 .

[106]  G. Ahuja.  Collaboration Networks, Structural Holes, and Innovation: A Longitudinal Study , 1998 .

[107]  S. Fawcett,et al.  Exploring a Governance Theory of Supply Chain Management: Barriers and Facilitators to Integration , 2010 .

[108]  B. Uzzi,et al.  Social Structure and Competition in Interfirm Networks: The Paradox of Embeddedness , 1997 .

[109]  Gina J. Medsker,et al.  RELATIONS BETWEEN WORK GROUP CHARACTERISTICS AND EFFECTIVENESS: IMPLICATIONS FOR DESIGNING EFFECTIVE WORK GROUPS , 1993 .

[110]  Jeffrey H. Dyer,et al.  The Relational View: Cooperative Strategy and Sources of Interorganizational Competitive Advantage , 1998 .

[111]  Rajan R. Kamath,et al.  Managing the buyer-supplier interface for on-time performance in product development , 1997 .

[112]  Paul A. Pavlou,et al.  Technology-Based New Product Development Partnerships , 2006, Decis. Sci..

[113]  Charles H. Fine.  Clockspeed: Winning Industry Control In The Age Of Temporary Advantage , 1998 .

[114]  George P. Baker,et al.  Incentives and cooperation: the joint effects of task and reward interdependence on group performance , 1997 .

[115]  M. Brewer,et al.  Where (who) are collectives in collectivism? Toward conceptual clarification of individualism and collectivism. , 2007, Psychological review.

[116]  K. Cook,et al.  Social Exchange Theory , 1989, Theoretical Sociology.

[117]  George A. Marcoulides,et al.  Product development practices and performance: A structural equation modeling-based multi-group analysis , 2006 .

[118]  Aneil K. Mishra,et al.  Toward a theory of organizational culture and effectiveness. , 1995 .

[119]  David J. Miller,et al.  Strategic Process and Content as Mediators Between Organizational Context and Structure , 1988 .

[120]  Srinivas Talluri,et al.  Faster, better, cheaper: A study of NPD project efficiency and performance tradeoffs , 2006 .

[121]  Mcdp Mathieu Weggeman,et al.  Managing Learning in Informal Innovation Networks: Overcoming the Daphne-Dilemma , 2000 .

[122]  S. Schwartz.  Beyond individualism/collectivism: New cultural dimensions of values. , 1994 .

[123]  D. Hambrick,et al.  FACTIONAL GROUPS: A NEW VANTAGE ON DEMOGRAPHIC FAULTLINES, CONFLICT, AND DISINTEGRATION IN WORK TEAMS , 2005 .

[124]  Maurizio Sobrero,et al.  The Trade-Off between Efficiency and Learning in Interorganizational Relationships for Product Development , 2001, Manag. Sci..

[125]  J. Pearce,et al.  Guanxi: Connections As Substitutes for Formal Institutional Support , 1996 .

[126]  R. Wageman.  Interdependence and Group Effectiveness , 1995 .

[127]  K. Yu,et al.  The impact of national culture and economic ideology on managerial work values: a study of the United States, Russia, Japan, and China , 2008 .

[128]  P. Matthyssens,et al.  The impact of buyer–supplier relationships on supplier innovativeness: An empirical study in cross-border supply networks , 2013 .

[129]  James H. Liu,et al.  Distance Matters: Physical Space and Social Impact , 1995 .

[130]  E. McDonough,et al.  An investigation of the use of global, virtual, and colocated new product development teams , 2001 .

[131]  Thomas J. Kull,et al.  Quality management effectiveness in Asia: The influence of culture , 2010 .

[132]  Eric W. K. Tsang.  Can guanxi be a source of sustained competitive advantage for doing business in China , 1998 .

[133]  B. Wernerfelt,et al.  DETERMINANTS OF FIRM PERFORMANCE: THE RELATIVE IMPORTANCE OF ECONOMIC AND ORGANIZATIONAL FACTORS , 1989 .

[134]  R. Gulati,et al.  Dependence Asymmetry and Joint Dependence in Interorganizational Relationships: Effects of Embeddedness on a Manufacturer's Performance in Procurement Relationships , 2007 .