Supplier collaboration and new product performance: a contingency model
| Published date | 09 March 2012 |
| DOI | https://doi.org/10.1108/02635571211204290 |
| Date | 09 March 2012 |
| Pages | 268-289 |
| Author | Kuen‐Hung Tsai,Mu‐Lin Tsai,Jiann‐Chyuan Wang |
| Subject Matter | Economics,Information & knowledge management,Management science & operations |
Supplier collaboration and new
product performance:
a contingency model
Kuen-Hung Tsai
Department of Business Administration,
National Taipei University, Taipei, Taiwan, ROC
Mu-Lin Tsai
Department of Logistics Management,
Takming University of Science and Technology, Taipei, Taiwan, ROC, and
Jiann-Chyuan Wang
Chung-Hua Institution for Economic Research, Taipei, Taiwan, ROC
Abstract
Purpose – The purpose of this paper is to present a contingency model to examine how technological
capacity, promotion capacity, and technological substitution affect the supplier collaboration-new
product performance relationship.
Design/methodology/approach – This study uses data from a Government survey of
technological innovation. A total of 201 machinery/electronics equipment manufacturing firms in
Taiwan comprise the sample. A Tobit regression analysis is adopted to analyze the data.
Findings – It is found that technological capacity and promotion capacity enhance the effect of
supplier collaboration on new product performance. Technological substitution mitigates the
relationship between supplier collaboration and new product performance.
Research limitations/implications – The sample of this study just focuses on
machinery/electronics equipment manufacturing firms. The new insights of this study imply that by
failing to consider the contingency roles of technological capacity, promotion capacity, and
technological substitution, previous research may have assumed away the conditions external and
internal to a firm and thus may have reached an oversimplified view of the link between supplier
collaboration and product innovation performance.
Practical implications – Firms can improve the effect of supplier collaboration on product
innovation by enhancing their technological capacity and promotion capacity.
Originality/value – The paper makes contributions to explain why some firms attain better new
product performance than others under the same level of supplier collaboration.
Keywords Taiwan,New products, Supplierrelations, Manufacturingindustries, Suppliercollaboration,
New product performance, Technologicalcapacity, Promotion capacity, Technological substitution
Paper type Research paper
1. Introduction
As market competition continues to intensify, many firms must collaborate with their
suppliers to achieve technological innovation. Utilizing supplier expertise and
knowledge of components and parts may help firms build a broad knowledg e-sharing
network and improve product design (Hong et al., 2004; Oh and Kim, 2005) or create
new methods for developing new products of a higher quality (Tsai, 2009). Also,
supplier involvement may help firms quickly identify potential technical problems that
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IMDS
112,2
268
Received 21 April 2011
Revised 4 August 2011
Accepted 4 August 2011
Industrial Management & Data
Systems
Vol. 112 No. 2, 2012
pp. 268-289
qEmerald Group Publishing Limited
0263-5577
DOI 10.1108/02635571211204290
hinder design changes or enable firms to conduct concurrent engineering (Hilletofth
and Eriksson, 2011). In addition, firms may benchmark best practices/processes with
suppliers, thereby enhancing the ability to respond to customers’ needs and wants
(Stank et al., 2001). Overall, supplier involvement can therefore speed up the
development of new products and achieve a competitive advantage (Langerak and
Hutlink, 2008; Lau, 2011; Oh and Rhea, 2010).
Supplier collaboration (SCL) in the new product development process refers to the
cooperation of a firm with its key supplier(s) through a collaborative agreement. An
increasing number of studies illustrate the impact of SCL on new product performance
in terms of sales (Belderbos et al., 2004; Faems et al., 2005; Freel, 2003; Ledwith and
Coughlan, 2005; Miotti and Sachwald, 2003). These studies theoretically hypothesize a
positive link between SCL and new product performance, but empirical evidence has so
far produced ambiguous results. Miotti and Sachwald (2003) and Faems et al. (2005)
found that SCL has a positive impact on new product performance. However, the
findings of Freel (2003) and Belderbos et al. (2004) show an insignificant relationship
between SCL and new product performance. In addition, Ledwith and Coughlan (2005)
found that SCL has no effect on new product performance. These studies were
conducted using the Community Innovation Survey (CIS) database with a primary
focus on the manufacturing sectors of European countries (French, the UK, Germany,
and Spanish). Several control variables were used, including firm size (FS), research
and development intensity, and industrial sectors. Thus, the conflicting results of these
studies may logically result from ignoring the factors that affect the relationship
between SCL and new product performance. In other words, understanding the
relationship between SCL and new product performance may require the additional
consideration of moderating variables. As such, this study aims to investigate the
factors affecting the SCL-new product performance relationship.
Existing literature suggests that the successful integration of external knowledge
may depend on the firm’s internal conditions (Jones et al. , 2001). The resources required
for successful innovation differ in emphasis according to the level of perceived
environmental uncertainty (Dro
¨ge et al., 2008). Past research suggests that the new
product development process and its outcomes depend on a firm’s decision makers’
level of perceived the changes of external environment (Calantone et al., 2003;
Dro
¨ge et al., 2008). The current study considers three factors as moderating variables:
technological capacity (TC), promotion capacity (PC), and technological substitution.
The first two are part of the firm’s internal conditions, and the last one represents
changes in the technological environment.
From the organizational learning perspective (March, 1991), inter-organizational
collaboration is a learning process of external knowledge. During this process, the level
of accumulated technological knowledge is associated with the effectiveness of
external learning. Firms having a great deal of technological knowledge can effectively
identify and utilize external knowledge, thus improving the effect of externa l linkage
on product innovations ( Jones et al., 2001). PC refers to a firm’s ability to sense market
situation and effectively execute the promotional activities of a new product launch
(Parry and Song, 1994). Firms with a high level of PC may contribute market insights
to the SCL for product innovation (Wheelwright and Clark, 1992). Furthermore,
as technological change increases, incorporating new technological knowledge into
product development is becoming more uncertain. Past research suggests that
New product
performance
269
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