BENEFITING FROM SUPPLIER OPERATIONAL INNOVATIVENESS: THE INFLUENCE OF SUPPLIER EVALUATIONS AND ABSORPTIVE CAPACITY

As suppliers take on more important roles in manufacturing and designing products, their operational innovativeness becomes an important source of value. We use the relational view theory to hypothesize for a positive association between operational innovativeness of established suppliers and manufacturer performance. Furthermore, we posit that the manufacturer can enhance this value by ensuring that the supplier is performing as expected (i.e., through supplier evaluation programs), and by focusing on learning from the supplier (i.e., through absorptive capacity). We then develop hypotheses as to how the influence of these two approaches differs when working with suppliers assigned to different types of tasks. We test the hypotheses using survey responses from 136 manufacturers evaluating 272 of their suppliers. Results show that supplier evaluation programs and absorptive capacity are both effective means of augmenting the benefits of supplier operational innovativeness. Contrary to theoretical predictions, benefits of operational innovativeness of suppliers with knowledge-intensive tasks are enhanced through increased absorptive capacity and through increased supplier evaluation programs.

[1]  Kevin J. Dooley,et al.  Supplier innovativeness, organizational learning styles and manufacturer performance: An empirical assessment , 2010 .

[2]  Henk W. Volberda,et al.  Absorbing the Concept of Absorptive Capacity: How to Realize Its Potential in the Organization Field , 2009 .

[3]  Oscar F. Bustinza,et al.  Outsourcing As Seen From the Perspective of Knowledge Management , 2010 .

[4]  S. S. Rao,et al.  SUPPLY MANAGEMENT, SUPPLY FLEXIBILITY AND PERFORMANCE OUTCOMES: AN EMPIRICAL INVESTIGATION OF MANUFACTURING FIRMS , 2010 .

[5]  Xiaowei Xu,et al.  Multi-criteria decision making approaches for supplier evaluation and selection: A literature review , 2010, Eur. J. Oper. Res..

[6]  E. Bernardes.  THE EFFECT OF SUPPLY MANAGEMENT ON ASPECTS OF SOCIAL CAPITAL AND THE IMPACT ON PERFORMANCE: A SOCIAL NETWORK PERSPECTIVE , 2010 .

[7]  E. Hartmann,et al.  SUSTAINABLE GLOBAL SUPPLIER MANAGEMENT: THE ROLE OF DYNAMIC CAPABILITIES IN ACHIEVING COMPETITIVE ADVANTAGE , 2010 .

[8]  Arun Rai,et al.  Interfirm Strategic Information Flows in Logistics Supply Chain Relationships , 2009, MIS Q..

[9]  Marjorie A. Lyles,et al.  Absorbing the Concept of Absorptive Capacity: How to Realize Its Potential in the Organization Field , 2009 .

[10]  Marjorie A. Lyles,et al.  Absorbing the Concept of Absorptive Capacity , 2009 .

[11]  W. Mitchell,et al.  The Hollow Corporation Revisited: Can Governance Mechanisms Substitute for Technical Expertise in Managing Buyer-Supplier Relationships? , 2009 .

[12]  Carl Marcus Wallenburg.  INNOVATION IN LOGISTICS OUTSOURCING RELATIONSHIPS: PROACTIVE IMPROVEMENT BY LOGISTICS SERVICE PROVIDERS AS A DRIVER OF CUSTOMER LOYALTY , 2009 .

[13]  Stephan Vachon,et al.  COLLABORATION AND EVALUATION IN THE SUPPLY CHAIN: THE IMPACT ON PLANT‐LEVEL ENVIRONMENTAL INVESTMENT , 2003 .

[14]  Cheryl Gaimon,et al.  ANALYSIS OF THE LEAD TIME AND LEARNING FOR CAPACITY EXPANSIONS , 2009 .

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

[16]  Thomas H. Brush,et al.  Comparing the resource-based and relational views: Knowledge transfer and spillover in vertical alliances , 2008 .

[17]  Kevin J. Dooley,et al.  Design creativity: static or dynamic capability? , 2008 .

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

[19]  M. Fung.  To What Extent Are Labor‐Saving Technologies Improving Efficiency in the Use of Human Resources? Evidence from the Banking Industry , 2008 .

[20]  Madeleine E. Pullman,et al.  UNRAVELING THE FOOD SUPPLY CHAIN: STRATEGIC INSIGHTS FROM CHINA AND THE 2007 RECALLS* , 2008 .

[21]  Carol Prahinski,et al.  Supplier Evaluations: The Role of Communication Quality , 2007 .

[22]  Stephen J. Carson.  When to Give up Control of Outsourced New Product Development , 2007 .

[23]  D. Teece.  Reflections on "Profiting from Innovation" , 2006 .

[24]  Qiang Tu,et al.  Absorptive capacity: Enhancing the assimilation of time-based manufacturing practices , 2006 .

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

[26]  K. Ferdows.  POM Forum: Transfer of Changing Production Know‐How , 2006 .

[27]  N. Sakkab,et al.  Connect and Develop : Inside Procter & Gamble's New Model for Innovation , 2006 .

[28]  Clayton M. Christensen,et al.  Innovacion disruptiva para el cambio social , 2006 .

[29]  Rachna Shah,et al.  Use of structural equation modeling in operations management research: Looking back and forward ☆ , 2006 .

[30]  J. Ramsay.  The real meaning of value in trading relationships , 2005 .

[31]  Paul Humphreys,et al.  Early supplier involvement in the design process: lessons from the electronics industry , 2004 .

[32]  M. Hammer,et al.  Deep change - how operational innovation can transform your company , 2004, IEEE Engineering Management Review.

[33]  W. C. Benton,et al.  Supplier evaluations: communication strategies to improve supplier performance , 2004 .

[34]  Stephan Duschek.  Inter-Firm Resources and Sustained Competitive Advantage , 2004 .

[35]  Eve D. Rosenzweig,et al.  The influence of an integration strategy on competitive capabilities and business performance: An exploratory study of consumer products manufacturers , 2003 .

[36]  K. Möller,et al.  Business suppliers' value creation potential: A capability-based analysis☆ , 2003 .

[37]  Jill Sweeney.  Customer-perceived value , 2003 .

[38]  Judy A. Siguaw,et al.  Measuring the Performance of Suppliers: An Analysis of Evaluation Processes , 2002 .

[39]  Geoffrey G. Parker,et al.  The Effect of Learning on the Make/Buy Decision , 2002 .

[40]  Andreas Eggert,et al.  Customer perceived value: a substitute for satisfaction in business markets? , 2002 .

[41]  R. Vandenberg.  Toward a Further Understanding of and Improvement in Measurement Invariance Methods and Procedures , 2002 .

[42]  Marjorie A. Lyles,et al.  Absorptive capacity, learning, and performance in international joint ventures , 2001 .

[43]  R. Narasimhan,et al.  The impact of purchasing integration and practices on manufacturing performance , 2001 .

[44]  Dhruv Grewal,et al.  Value Creation in Markets: A Critical Area of Focus for Business-to-Business Markets , 2001 .

[45]  H. Gemünden,et al.  Value Creation in Buyer–Seller Relationships: Theoretical Considerations and Empirical Results from a Supplier's Perspective , 2001 .

[46]  J. Ettlie.  Managing Technological Innovation , 2000 .

[47]  T. Khanna,et al.  Do Firms Learn to Create Value? The Case of Alliances , 2000 .

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

[49]  S. Vickery,et al.  Supply Chain Flexibility: An Empirical Study , 1999 .

[50]  Eric H. Kessler,et al.  A reexamination of product and process innovations using a knowledge-based view , 1999 .

[51]  M. Bensaou.  Portfolios of Buyer-Supplier Relationships , 1999 .

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

[53]  G. Hult,et al.  Innovation, Market Orientation, and Organizational Learning: An Integration and Empirical Examination , 1998 .

[54]  E. Kelloway.  Using LISREL for Structural Equation Modeling: A Researcher′s Guide , 1998 .

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

[56]  Kevin J. Murphy,et al.  Relational Contracts and the Theory of the Firm , 1997 .

[57]  David M. McCutcheon,et al.  Suppliers' contributions to product development: an exploratory study , 1997 .

[58]  L. Ellram,et al.  A Portfolio Approach to Supplier-Relationships , 1997 .

[59]  C. Ford.  A Theory of Individual Creative Action in Multiple Social Domains , 1996 .

[60]  S. Snell,et al.  THE STRATEGIC USE OF INTEGRATED MANUFACTURING: AN EMPIRICAL EXAMINATION , 1996 .

[61]  Gregory G. Dess,et al.  Clarifying the Entrepreneurial Orientation Construct and Linking It To Performance , 1996 .

[62]  George J. Avlonitis,et al.  Assessing the Innovativeness of Organizations and its Antecedents:Project Innovstrat , 1994 .

[63]  Robert A. Simons.  How new top managers use control systems as levers of strategic renewal , 1994 .

[64]  A. Roth,et al.  A taxonomy of manufacturing strategies , 1994 .

[65]  Daniel A. Levinthal,et al.  Fortune favors the prepared firm , 1994 .

[66]  Jan B. Heide,et al.  Do Norms Matter in Marketing Relationships? , 1992 .

[67]  James C. Anderson,et al.  Predicting the performance of measures in a confirmatory factor analysis with a pretest assessment of their substantive validities. , 1991 .

[68]  Kim B. Clark,et al.  Architectural Innovation: The Reconfiguration of Existing Product Technologies and the Failure of , 1990 .

[69]  Daniel A. Levinthal,et al.  ABSORPTIVE CAPACITY: A NEW PERSPECTIVE ON LEARNING AND INNOVATION , 1990 .

[70]  Jan B. Heide,et al.  ALLIANCES IN INDUSTRIAL PURCHASING - THE DETERMINANTS OF JOINT ACTION IN BUYER-SUPPLIER RELATIONSHIPS , 1990 .

[71]  Teresa M. Amabile.  From individual creativity to organizational innovation. , 1988 .

[72]  Roger J. Calantone,et al.  Strategies of Product and Process Innovation: A Loglinear Analysis , 1988 .

[73]  F. Dwyer,et al.  Developing Buyer-Seller Relationships: , 1987 .

[74]  J. Scott Armstrong,et al.  Estimating nonresponse bias in mail surveys. , 1977 .

[75]  G. Richardson,et al.  The Organisation of Industry , 1972 .

[76]  L. Cronbach.  Coefficient alpha and the internal structure of tests , 1951 .