--- To enhance the value and performance of procurement and SCM practitioners and their organizations worldwide ---
Vol. 49, No. 4
Special Topic Forum
Special Topic Forum on Innovation in Business Networks from a Supply Chain Perspective: Current Status and Opportunities for Future Research
This editorial introduces the special topic forum in "innovations in business networks from a supply chain perspective". Additionally, it highlights the gap between the importance attributed by practice and the current state of academic research focusing on the confluence of innovation and supply chain perspectives. By specifically assessing the current status of research as well as practice, this paper not only identifies the key issues in current research and proposes an agenda for future research; it also points out the challenges that scholars will encounter in pursuing the proposed research agenda.
Jan Stentoft Arlbjørn, Ph.D., is a professor of supply chain management in the Department of Entrepreneurship and Relationship Management at the University of Southern Denmark in Kolding, Denmark;
Antony Paulraj, D.B.A., is the Globalization Professor in Supply Chain Management in the Department of Entrepreneurship and Relationship Management at the University of Southern Denmark in Kolding, Denmark.
Moving Corporate Boundaries: Consequences for Innovation Redesign
The latest century has witnessed two major transformations of the business landscape through which the boundaries of firms were modified substantially. The first was the establishment of the large-scale integrated hierarchies, like the Ford Motor Company, in the beginning of the 20th century. The second was the disintegration of these hierarchies at the end of the same century. In both cases, the objective of the boundary movement was to improve the opportunities for innovative redesign. Because the strategic approaches to achieve this objective were quite different, the interplay between innovative redesign and changes in the boundaries of firm deserves further exploration. This article is based empirically on previous research on these two types of transformations. The information from these studies is used to formulate seven propositions concerning the interplay between innovative redesign and corporate boundaries. Three main findings spring from this study. First, the boundaries of firms are multifaceted. In addition to the ownership boundary, it is demonstrated that influence boundaries and awareness boundaries are central to innovative redesign. Second, corporate boundaries are dynamic. The study shows that sometimes they function as buffers in relation to other firms, while in other situations they serve as bridges. Third, for the individual firm's boundary setting, two issues appear to be critical: One concerns the trade-off between specialization and integration, and the other relates to the interaction between the internal capabilities of the firm and those that are accessible from business partners.
Lars-Erik Gadde, Ph.D., is a professor of industrial marketing at the Chalmers University of Technology in Gothenburg, Sweden.
Perspectives on Supply Network-Enabled Innovations
As organizations become increasingly specialized, their ability to engage the supply network in innovation efforts is becoming critical to their success. In addition, it is imperative for organizations to align internal research and development strategies with knowledge available in the supply network in order to gain superior innovation performance. In this article, we present some perspectives on supply network-enabled innovation and discuss two frameworks that integrate a firm's internal knowledge with that of its supply network to achieve innovation objectives. The inter-related frameworks discussed are anchored in the absorptive capacity and ambidexterity theories. They explicate how firms effectively can align internal innovation activities and knowledge available in the supply network to gain superior innovation outcomes.
Ram Narasimhan, Ph.D., is a University Distinguished Professor, and the John H. McConnell Endowed Professor, in the Department of Supply Chain Management in the Eli Broad College of Business at Michigan State University in East Lansing, Michigan;
Sriram Narayanan, Ph.D., is an assistant professor in the Department of Supply Chain Management in the Eli Broad College of Business at Michigan State University in East Lansing, Michigan.
Strengthening the Innovation Chain: The Role of Internal Innovation Climate and Strategic Relationships with Supply Chain Partners
In this study, we use blended theoretical arguments from resource dependence theory, social capital theory, and the knowledge-based view to posit that supply chain partner innovativeness enhances a firm's innovation strategy — which, in turn, positively influences innovation performance. In addition, we argue that the effect of supply chain partner innovativeness on product innovation strategy could further be enhanced by innovation climate, and by having strategic relationships with key supply chain partners. Using data collected from 207 manufacturing firms in Australia, the findings show that key supply chain partner innovativeness has a positive effect on product innovation strategy. Further, the effect of supply chain partner innovativeness on innovation strategy is enhanced when firms have stronger strategic relationships with their key supply chain partners. Finally, we find that the joint influence of innovation climate and strategic relationships with key supply chain partners enhances the effect of supply chain partner innovativeness on innovation strategy. The theoretical and practical implications of the study are discussed.
Adegoke Oke, Ph.D., is an associate professor of supply chain management in the Department of Supply Chain Management at the W.P. Carey School of Business at Arizona State University in Tempe, Arizona,
Daniel J. Prajogo, Ph.D., is an associate professor in the Department of Management at Monash University in Victoria, Australia;
Jayanth Jayaram, Ph.D., is a professor of management science, and a Moore Research Fellow, in the Department of Management Science of the Moore School of Business at the University of South Carolina in Columbia, South Carolina.
Ambidextrous Governance in Supply Chains; The Impact on Innovation and Cost Performance
Ambidexterity has been gaining attention among supply chain scholars due to its potential for overcoming trade-offs. Associated with these complexities is the choice of an appropriate governance mechanism in buyer-supplier relationships, which can include relational and contractual approaches. Extending ambidexterity research to the supply chain management domain, we focus in the present study on ambidextrous governance, which we define as the simultaneous pursuit of both relational and contractual governance elements. We investigate the effect of ambidextrous governance on innovation and cost performance. In addition, as this relationship is highly dependent on the ambidexterity that may be present on the firm level, we theorize about the moderating effect of organizational ambidexterity. We further consider external contextual factors as influencing the ability of ambidextrous governance to effectuate performance, recognizing that the former may not be as effective under conditions of greater demand uncertainty and product complexity. We delineate our hypotheses based on extensions of complementarity theory and test them, taking a buyer's perspective, with data collected in a multi-respondent survey of manufacturing firms. Our results demonstrate the positive relationship between ambidextrous governance and both innovation and cost performance, and highlight the critical role of organizational ambidexterity as an enabler for innovation performance. We furthermore detect mixed effects for the contextual variables considered — demand uncertainty and product complexity — as moderators, emphasizing that the impact of ambidextrous governance on performance is subject to dynamics that are more complex than originally perceived. With our investigation, we extend ambidexterity research to the supply chain management domain and offer important implications for research and practice.
Constantin Blome, Ph.D., is the GSK Vaccinces Chair Professor in Strategic Sourcing and Procurement at the Louvain School of Management of the Université Catholique de Louvain in Louvain-la-Neuve, Belgium,
Tobias Schoenherr, Ph.D., is an associate professor of supply chain management in the Eli Broad School of Business at Michigan State University in East Lansing, Michigan;
Matthias Kaesser, Dipl.Ing., is an external research assistant at the Institute for Supply Chain Management at the European Business School in Munich, Germany.
Purchasing Managers' Perceived Bias in Supplier-Selected Referrals
In evaluating suppliers in complex purchasing decisions involving customized solutions, purchasing managers must judge the capabilities suppliers have to provide the solutions, a judgment that often includes considerable uncertainty. To reduce this uncertainty, suppliers often ask their existing customers to be "reference customers" and give a referral to purchasing management — that is, suppliers and purchasing managers consider a supplier-selected referral as a source of information. However, in contrast to other information sources, reference customers are selected by suppliers, not by purchasing managers; thus, purchasing managers may perceive a bias in the supplier-selected referral. We study the antecedents of purchasing managers' perceived bias with a mixed-design experiment with purchasing managers as respondents. We find that the greater the experience of purchasing managers, the less the bias in the referral they perceive. We also find that reference customers can reduce purchasing managers' perceived bias in the supplier-selected referral by giving a referral that has some negative information in an otherwise positive referral.
Mahima Hada, Ph.D., is an assistant professor of marketing in the Zicklin School of Business at Baruch College in the City University of New York in New York City, New York,
Rajdeep Grewal, Ph.D., is the Irving & Irene Bard Professor of Marketing, and the Associate Research Director of the Institute for the Study of Business Markets, in the Smeal College of Business at The Pennsylvania State University in University Park, Pennsylvania;
Gary L. Lilien, DES, is a Distinguished Research Professor of Management Science, and the Founder and Research Director of the Institute for the Study of Business Markets, in the Smeal College of Business at The Pennsylvania State University in University Park, Pennsylvania.
Enhancing Strategic Supply Decisions by Estimating Suppliers' Marginal Costs
The ability to estimate a supplier's marginal cost confers a strategic competitive advantage to the buyer, whether in negotiations with suppliers; in an auction setting; or when an auction is used to initiate the process, which then is followed up with a traditional negotiation. Focusing on electronic reverse auctions characterized by a one-shot, first-price sealed bid format, this article proposes an approach for estimating a supplier's marginal cost. Specifically, we suggest a two-stage model: In the first stage, empirical analysis is used to predict the winning bid. In the second stage, a game-theory approach is used to refine the outcome of the first stage, to provide an estimate of the supplier's marginal cost. To assess the model, we apply it to data from a food and beverages company that carried out electronic auctions to select suppliers for industrial maintenance services. We find that our estimates are very close to those made by the suppliers, and compare favorably to the efficient marginal costs determined with the widely-used approach of data envelopment analysis. This also implies that, after selecting a supplier through an auction, the buyer can enhance follow-up negotiations with the supplier by contrasting our model's estimates of the marginal costs with the supplier's inefficiencies detected with the data envelopment analysis.
Eyal Eckhaus, Ph.D., is a researcher in the department of management at Bar-Ilan University in Ramat-Gan, Israel,
Konstantin Kogan, Ph.D., is a professor in, and head of, the department of management at Bar-Ilan University in Ramat-Gan, Israel;
Yael Perlman, Ph.D., is a lecturer in the department of management at Bar-Ilan University in Ramat-Gan, Israel.