Ghasem Zaefarian

Networking capability in supplier relationships and its impact on Product Innovation and Firm Performance

Purpose The purpose of this paper is to propose and empirically investigate the concept of networking capability (NC) for the management of supplier relationships and their dynamics in order to leverage product innovations. NC in the context of supplier relationships is conceptualized based on dynamic capabilities aimed at relationship initiation, relationship development, and relationship ending. Furthermore, the study tests the interaction of NC with relationship proclivity as an organizational feature, and analyzes latent classes of NC affecting product innovation. Design/methodology/approach This study brings together prior research on company routines related to inter-firm networking, the dynamic capability approach to strategy, and literature on inter-firm innovation. The study utilizes multiple informant survey data gathered from 156 firms operating in the automotive parts industry in Iran. Data are analyzed with partial least square structural equation modeling, as well as latent class analysis using finite mixture modeling (FIMIX-PLS). Findings This research provides evidence for the positive influence of NC with respect to supplier relationships on firm product innovation, as well as overall firm performance. Relationship proclivity is shown to amplify this effect. At the same time, the research illustrates that NC may be applied in different combinations in the context of supplier relationship portfolio management. Two mechanisms are tentatively identified: firms using “static optimization” focus mainly on supplier relationship development capabilities, while those using “dynamic optimization” utilize supplier relationship initiation and ending capabilities. Research limitations/implications This research focuses on one setting (i.e. the automotive parts industry in Iran). Further studies need to broaden these findings to other industries and countries, specifically those which show a different cultural make-up from Iran. Furthermore, this research indicates the existence of two distinct mechanisms as to how different aspects of NC impact product innovation. While it is reasonable to identify these mechanisms as networking “strategies,” this study does not clarify whether this represents intended strategies by firms or relates to emerging capability patterns. Practical implications The study contributes to managerial knowledge by illustrating the need for a dynamic approach with regard to networking-related routines in supplier relationships in the context of product innovation. This study suggests that managers should devote equal attention to strengthening existing supplier relationships as well as to initiating new supplier relationships (e.g. screening for promising partners and signaling firm’s relationship value to attract new counterparts) and managing non-performing supplier relationships (e.g. by developing routines to exit from those supplier relationships). Originality/value The paper contributes to a better understanding of dynamic approaches to networking with suppliers and their impact on product innovation from the perspective of the focal firm. It furthermore provides a fine-grained understanding of different latent classes of firms in terms of how they utilize networking capabilities.

Subsidiary Knowledge Development in Knowledge-Intensive Business Services: A Configuration Approach

The international marketing literature has suggested that the characteristics of the subsidiary–headquarters relationship play an important role in subsidiary knowledge development within the field of multinational corporations. However, few studies have examined the association between the subsidiary–headquarters relationship and the subsidiary strategic role and its effects on subsidiary knowledge development. In this article, the authors first examine the effect of four subsidiary–headquarters relational characteristics (socialization mechanisms, autonomy, shared values, and internal embeddedness) on subsidiary knowledge development. Then, building on configuration theory, the authors employ two perspectives of fit (moderation and profile deviation) to investigate the impact of fit between strategy and relational characteristics and examine their effects on subsidiary knowledge development. Using data from 184 U.K. foreign-owned subsidiaries operating in the knowledge-intensive business services sector, the authors confirm that internal embeddedness, socialization mechanisms, and autonomy are positively related to subsidiary knowledge development. Furthermore, the findings support the moderation and profile deviation perspectives and indicate that aligning the subsidiarys strategic role with relational characteristics can lead to superior knowledge development.

Antecedents of behavioural commitment in inter-organizational relationships: a field study of the UK construction industry

Commitment is vital in inter-organizational relationships. It is important to understand what drives commitment which then affects the relationship between organizations. Commitment is a multidimensional construct and its dimensions can be broadly categorized into attitudinal and behavioural perspectives. In conventional practice, commitment researchers have tended to focus on the attitudinal perspective, while the behavioural perspective is largely ignored. In an attempt to buck that conventional trend commitment research is proposed along the unconventional but widely accepted as important behavioural perspective, building up a more complete understanding of the importance of behavioural commitment, as well as developing and validating a theoretical model that depicts precisely the relationship between behavioural commitment and its key driving factors. Accordingly a large-scale questionnaire survey has been conducted in the UK construction industry and 636 responses were collected. Structural equation modelling was then used to test the theoretical model. Results validate trust, reliance and dependence as the major antecedents of behavioural commitment. A new direction in commitment research adds new findings to the current body of commitment literature.

A Capability Perspective on Relationship Ending and its Impact on Innovation and Performance

Business relationships are seen as beneficial way of structuring inter-organizational exchanges. For example, transaction cost economics (TCE) posits that relationships as a governance form are specifically important for recurrent transaction types in terms of their mix and ideosyncratic nature (Williamson, 1985; 1996). Interdependencies between the relational partners due to asset specificity are expected, i.e. relationship-specific investments are prevalent in business relationships (Harrison, 2004). In such situations contracts are often seen to provide the foundation for long-term relationships as duration safeguards (Williamson, 1985; Weber et al., 2011), for example against opportunism (Stump & Heide, 1996; Wathne & Heide, 2000). Such business relationships are seen provide specific benefits above and beyond mere transactional exchanges.

Configuration Theory Assessment of Business Relationships

Extant research has identified several relationship characteristics that are essential in developing successful business relationships with counterparts. Drawing on configuration theory, this research aimed at examining the confluence of seven relationship characteristics and business strategy and the impact of their coalignment on both firm performance and relationship performance. The main focus of configurational research is on firms that share key underlying organizational characteristics, such as strategy and structures (Meyer et al. 1993). Configuration theory asserts that firms with superior performance have more coherent structural (organizational) characteristics than those with lower performance (Child 1975).