Fabian J. Sting

Ensuring responsive capacity: How to contract with backup suppliers

Firms that source from offshore plants frequently perceive the lack of reliability and flexibility to be among the major drawbacks of their strategy. To mitigate against imminent mismatches of uncertain supply and demand, establishing capacity hedges in the form of responsive backup suppliers is a way out that many firms follow. This article analyzes how firms should contract with backup suppliers, inducing the latter to install responsive capacity. We show that supply options are appropriate to achieve sourcing channel coordination under forced compliance, whereas any firm commitment contract imposes a deadweight loss on the system. Whereas price-only contracts are unable to coordinate the sourcing channel under voluntary compliance, utilization-dependent price-only contracts are. Under the former contract, a price-focused strategy on the part of the manufacturer turns out to diminish the systems service level and possibly has negative implications on installed backup capacity, and not least on the manufacturers profit.

On the Effectiveness of Patenting Strategies in Innovation Races

Which, if any, of a firms inventions should it patent? Should it patent at all? Many companies engaged in an innovation race seek a patenting strategy that balances protection of their intellectual property against the knowledge spillovers resulting from disclosure requirements. Not much is known about factors that determine the patenting strategy best able to resolve this trade-off. Although scholars in various management, economics, and engineering disciplines have researched patents and patenting regimes, little work has addressed the normative issues that pertain to forming an appropriate firm-level patenting strategy. We develop an inventory of real-life patenting strategies and integrate them into a coherent framework. Our simulation model characterizes the optimal patenting choices for different environmental and firm-level contingencies while capturing the dynamics between competing firms. We identify the firms research and development strategy as the most salient determinant of its optimal patenting strategy. Our research contributes to establishing a contingency theory of patenting strategies. This paper was accepted by David Hsu, entrepreneurship and innovation.

Encouraging Help Across Projects

Companies struggle with timely project execution despite employing sophisticated management methods. Although help across projects is critical for time performance, it has not been explicitly incor...

Temporary De-Embedding Buyer-Supplier Relationships: A Complexity Perspective

Research on buyer-supplier relationships has debated the advantages and disadvantages of embedded relationships. We join this debate by developing theory on the performance implications of relaxing embedded buyer-supplier relationships for a limited period of time — a previously neglected phenomenon we refer to as temporary de-embedding. To capture this phenomenon’s dynamic and complex nature, we use a combined-method approach. First, we conducted a longitudinal case study of the relationship between Nissan and a strategic first-tier supplier. This case study suggests that temporary de-embedding reinvigorates search and leads to higher performance for both the buyer and supplier. Second, we built a computational simulation model using the search perspective from complexity theory to complement the theory grounded in our case study. Our simulations confirm the case findings while shedding additional light on how frequency, duration, and intensity of de-embedding affect supply chain performance.

Simulationsstudie: Exogene Risiken in der Beschaffung – Zusammenspiel von Diversifikation und Flexibilität

Ein bewahrtes Rezept zur Bewaltigung von Beschaffungsrisiken ist die Streuung von Lieferquellen – getreu dem Motto „nicht alles auf eine Karte zu setzen“. In diesem Artikel soll diese Logik der Diversifikation um einen wichtigen Aspekt bereichert werden: Die Diversifikation von Lieferquellen ist ein Schlussel zur Schaffung von Beschaffungsflexibilitat. Diese Flexibilitat stellt Firmen eine Realoption zur Verfugung, die effektiv als Hedge gegen exogene Risiken „ausgeubt werden kann“. Auf Grundlage einer Monte Carlo Simulation wird der Wert unterschiedlicher Diversifikationsund operationeller Hedging-Strategien untersucht und quantifiziert. Es zeigt sich, dass flexible Beschaffungsstrategien fur Unternehmen, die exogenen Beschaffungsrisiken ausgesetzt sind, ein leistungsfahiges Instrument des strategischen Risikomanagements darstellen. Das Zusammenspiel von Diversifikation und Flexibilitat ist entscheidend. Das Vehikel dieser Studie, ein zweistufiges Entscheidungsmodell, ist bewusst einfach gehalten, um essentielle Effekte isolieren zu konnen.