The role of indigenous technological capability and interpersonal trust in supply chain learning

Publication Date11 Jun 2018
AuthorMin Li,Zhiqiang Wang,Xiande Zhao
SubjectInformation & knowledge management,Information systems,Data management systems,Knowledge management,Knowledge sharing,Management science & operations,Supply chain management,Supply chain information systems,Logistics,Quality management/systems
The role of indigenous
technological capability and
interpersonal trust in supply
chain learning
Min Li
Guangdong Mechanical and Electrical Polytechnic, Guangzhou, China
Zhiqiang Wang
School of Business Administration, South China University of Technology,
Guangzhou, China, and
Xiande Zhao
China Europe International Business School, Shanghai, China
Purpose The purpose of this paper is to investigate the effects of indigenous technological capability and
interpersonal trust on product innovation through supply-chain learning under a dynamic environment.
Design/methodology/approach The proposed model is tested with a sample of 300 manufacturers in China.
Findings The results show that the learning from customers partially mediates the relationship between
indigenous technological capability and product innovation, as well as between interpersonal trust with
customers and product innovation. In addition, the influence of indigenous technological capability on
learning from customers is weakened under a dynamic environment as well as the influence of learning from
customers on product innovation.
Originality/value This study illustrates the comparative roles of indigenous technological capability and
interpersonal trust in learning customer knowledge and promoting innovation. It also enriches the innovation
research by understanding the learning roles of indigenous technological capability and interpersonal trust
under a dynamic environment.
Keywords Product innovation, Environmental dynamism, Emerging economy, Interpersonal trust,
Indigenous technological capability
Paper type Research paper
In todays rapidly changing economic circumstances, innovation is one of the most
important factors to meet the changing needs of customers and achieve a firms competitive
advantage. Innovation can be implemented and developed by combining knowledge and
resources from external partners in a supply chain (Lin et al., 2010; Yeniyurtv et al., 2014).
Customers have been identified as a particularly important source of innovative ideas by
providing demand preferences, expectations of new products and improvement suggestions
for existing products (Bohlmann et al., 2013; Chatterji and Fabrizio, 2014). Although
customer knowledge has been demonstrated as a key source of product innovation (Greer
and Lei, 2012; Menguc et al., 2014), it is not easy to effectively acquire and apply knowledge
for manufacturers from external partners (Zhou and Li, 2012). From the perspective of
absorptive capacity, manufacturers should have the ability to acquire and apply valuable
external knowledge (Carnabuci and Operti, 2013). Strong indigenous technological
Industrial Management & Data
Vol. 118 No. 5, 2018
pp. 1052-1070
© Emerald PublishingLimited
DOI 10.1108/IMDS-08-2017-0350
Received 8 August 2017
Revised 20 October 2017
Accepted 16 December 2017
The current issue and full text archive of this journal is available on Emerald Insight at:
This research was supported by the National Natural Science Foundation of China (Nos 71473087,
71420107024 and 71520107001). The abstract version was presented at the First International
Symposium of Supply Chain and Service Innovation, Guangzhou, China, April 6-7, 2017.
This paper forms part of a special section Featured issue on supply chain innovation.
capability provides companies with the capacity to absorb different types of information
and knowledge, which helps to effectively integrate knowledge and related resources
(Cassiman and Veugelers, 2006). However, an emphasis on indigenous technological
capability may reduce the sensitivity of the external knowledge perception and acquisition
(Ebersberger and Herstad, 2013), it requires a bridgeas an efficient way to acquire and
transfer external knowledge. Boundary-spanning theory addresses organization-
environment interaction (Aldrich and Herker, 1977). According to this theory,
organizations manage their interactions across boundaries through boundary-spanning
activities. Individual employees as boundary spanners play a crucial role in establishing
inter-organizational relationship; they are viewed as the critical link between two different
organizations, and they act as a bridge,transferring knowledge due to their extensive
contact with external partners (Huang et al., 2016). As boundary spanners, contact persons
from different firms and their relationships are important for firms to learn from external
partners (Li et al., 2011; Jayaram and Pathak, 2013).
Although thecurrent literature supports the importance of internal capability and external
relationship in promoting learning and product innovation (Lin et al., 2010; Tzokas et al., 2015),
there remain two research issues that have not been addressed in depth. First, the existing
studies mainly focus on the organizational level relationship between two organizations.
Less attention has been paid to the relationship between the boundary spanners who are
contact persons in buyersupplier relationships. Especially in China, social interactions rely
heavily on interpersonal relationships. Trust between two individual persons can simplify the
complex relationships among actors and facilitate transactions and collaboration. Interpersonal
trust plays a key role in the willingness of network actors to share knowledge and contributes
to the exchange of knowledge between supply-chain partn ers (Inkpen and Tsang, 2005).
Therefore, exploring the effect of interpersonal relationships (e.g. interpersonal trust) on
supply-chain learning and product innovation is of interest in the China context.
Second, some studies have demonstrated the positive role of internal capability for
external learning. However, it is suggested that the internal capability may reduce the
sensitivity toward external knowledge (Ebersberger and Herstad, 2013). The sensitivity lies
in the recognition of the importance of external knowledge. Firms that have strong internal
capability may be blinded by their own success and, thus, ignore valuable external
knowledge (Arza, 2013). At the same time, employees in firms that have a strong internal
capability tend to solve problems and implement innovative activities with their own
knowledge and expertise. This knowledge inertia may disrupt the knowledge absorption
from external partners and, thus, inhibit external learning (Liao et al., 2008; Fang et al., 2011).
According to boundary-spanning theory, boundary spanners could act in the roles of
information processor and external representative, complementing internal capability.
While the existing literature recognizes the importance of external relationships in
complementing internal capability (Mahr et al., 2014; Tzokas et al., 2015), few have examined
internal capability and external relationships in an integrated framework.
To fill the gaps,this study draws upon absorptive capacitytheory and boundary-spanning
theory to investigatethe effects of indigenous technological capabilityand interpersonal trust
on product innovation through the supply-chain learning. Further, the contingency effect of
environmental dynamism on the above relationships is investigated.This study makes three
contributions.First, this paper provides furtherinsight into boundary-spanningtheory in the
China context by examiningthe impact of interpersonal trust with customerscontact person
on learning and product innovation. Second, this study extends the innovation literature by
comparing the direct and indirect effects of internal capability and external relationships on
product innovation through supply-chain learning. Last, testing the moderating effect of
environmental dynamism helps scholars and practitioners understand the conditions under,
which the roles of indigenous technological capability and interpersonal trust take effect.
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