Buyer–Supplier Collaboration Quality in New Product Development Projects

• Published date: 01 April 2014
• DOI: http://doi.org/10.1111/jscm.12032
• Author: Kevin Dooley,Tingting Yan
• Date: 01 April 2014

BUYER–SUPPLIER COLLABORATION QUALITY IN NEW

PRODUCT DEVELOPMENT PROJECTS

TINGTING YAN

Wayne State University

KEVIN DOOLEY

Arizona State University

Previous research has found that buyer–supplier collaboration in new

product development can contribute to project success. Empirical evidence

is mixed, however, and the concept of buyer–supplier collaboration is

under-developed. This work develops a new construct, buyer–supplier col-

laboration quality, defined as the extent to which a buyer and supplier

exploit shared resources while minimizing waste through interacting dur-

ing project planning and execution. We use resource dependence theory

to formulate interfirm and project-level antecedents of buyer–supplier

collaboration quality and argue how it affects new product development

project outcomes. Data from an empirical survey of 214 buying organiza-

tions validate the measurement structure of the new construct and support

its positive associations with design quality and project efficiency. We also

find that goal congruence, complementary capabilities and interfirm

coordination efforts increase buyer–supplier collaboration quality, while

interfirm relationship-specific investment reduces it.

Keywords: buyer–supplier collaboration quality; new product development; supplier

involvement; resource dependence theory; intergroup management; project

management

INTRODUCTION

Supplier involvement in new product development

(NPD) is a widely advocated practice, even during the

recent economic recession (Andrew, Manget, Michael,

Taylor, & Zablit, 2010; Harbour-Felax, 2009). Buyers

depend on suppliers’ resources, such as innovative

technologies, manufacturing capability, engineering

talents and financial support, to improve their NPD

performance (Azadegan, Dooley, Carter, & Carter,

2008; Handfield, Ragatz, Petersen, & Monczka, 1999;

Narasimhan & Narayanan, 2013, forthcoming; Parker,

Zsidisin, & Ragatz, 2008). Suppliers also rely on buy-

ers for market knowledge, product architecture infor-

mation, project management capability and assembly

coordination expertise (Hong & Hartley, 2011; Hong,

Pearson, & Carr, 2009; Joshi & Sharma, 2004). To

manage such resource interdependencies, a buyer may

collaborate with a supplier to identify, acquire and

exploit critical resources for developing new products

(Pfeffer & Salancik, 1978). But not all buyer–supplier

project-level interactions lead to good designs or effi-

cient processes, which partially explains the mixed

empirical evidence regarding performance of some

joint NPD projects (Birou, 1994; Business-Wire, 2002;

Inforsys, 2005; Swink, 1999; Zirger & Hartley, 1996).

Previous research highlighted the importance of

effective buyer–supplier interactions in NPD (Hartley,

Zirger, & Kamath, 1997; Van Echtelt, Wynstra, & Van

Weele, 2007). Because intensive buyer–supplier inter-

actions are not always effective, researchers have

examined factors regarding the quality of interactions,

such as the timeliness and accuracy of communica-

tion, the existence of a mutually supportive atmo-

sphere and the participative nature of decision-making

(Hoegl & Wagner, 2005; Hoegl, Weinkauf, &

Germuenden, 2004; Marks, Mathieu, & Zaccaro, 2001;

Wagner & Hoegl, 2006). Despite such increased atten-

tion given to understanding the quality of buyer–

supplier interactions, the NPD literature lacks a coher-

ent theoretical framework to define and operationalize

April 2014 59

the concept of buyer–supplier collaboration quality.

Due to this gap, rigorous empirical research has not

been carried out to identify the antecedents and con-

sequences of buyer–supplier collaboration quality.

A better understanding of buyer–supplier collabora-

tion quality helps examine how contextual issues at

the interfirm and project level influence the effective-

ness of buyer–supplier interactions. At the interfirm

level, a collaborative buyer–supplier relationship is

generally believed to be critical for joint project suc-

cess (Petersen, Handfield, & Ragatz, 2005; Primo &

Amundson, 2002; Ragatz, Handfield, & Scannell,

1997). However, studies have also shown it to be

unnecessary or even counterproductive in joint NPD

(Bidault & Castello, 2010; Zirpoli & Caputo, 2002).

Similarly, at the project level, buyer–supplier congru-

ent goals and complementary capabilities enable

synergistic exploitation of interdependent group

resources, and as a result, should contribute to joint

NPD success (Rothaermel & Deeds, 2004; Sivadas &

Dwyer, 2000). However, congruent goals could also

reduce decision quality due to a lack of healthy

debate and criticism (Thomsen, 1998; Yan, 2010),

while complementary capabilities might cause ineffi-

cient processes due to the difficulty of processing

diverse information and disparate knowledge (Jack-

son, 1992; Lane & Lubatkin, 1998). Such mixed

empirical evidence makes it important to study

whether effective buyer–supplier interactions are more

likely to emerge in seemingly favorable interfirm and

project contexts.

To address these knowledge gaps, this study answers

the following research questions: (a) What does

buyer–supplier collaboration quality mean and how

should it be measured? (b) How do the interfirm rela-

tionship and project context influence buyer–supplier

collaboration quality? (c) What are the project-level

consequences of buyer–supplier collaboration quality?

Built upon Hoegl and Gemuenden’s teamwork quality

concept (Hoegl & Gemuenden, 2001) which measures

the effectiveness of intragroup interactions, buyer–

supplier collaboration quality is conceptualized as a

project-level intergroup interaction effectiveness con-

struct. Specifically, it is defined as the extent to which

the buyer and supplier synergistically exploit shared

resources while minimizing waste through interacting

during project planning and execution.

In the following sections, we develop the buyer–

supplier collaboration quality construct, propose its

interfirm and project antecedents and project-level

consequences, and use survey responses to test its

measurement structure. We also test the hypotheses

associated with these antecedents and consequences

and discuss implications of the results. Table 1 lists

definitions of the main constructs examined in this

study.

CONSTRUCT DEVELOPMENT,

ANTECEDENTS AND CONSEQUENCES

Buyer–Supplier Collaboration Quality: The

Effectiveness of Buyer–Supplier Project-Level

Interactions

Collaboration is a process through which parties

with diverse interests and interdependent resources

interact to search for solutions to problems that go

beyond their own limited vision of what is possible

(Amabile et al., 2001; Gray, 1989; Jassawalla &

TABLE 1

Definitions of the Main Constructs

Constructs Definitions

Buyer–supplier

collaboration quality

The extent to which buyer and supplier groups synergistically exploit shared

resources while minimizing wastes through interacting during project planning

and execution

Coordination efforts The regular pattern of similar or complementary activities, often in the form of

joint projects, that are tailored to the dyad’s needs

Relationship-specific

investment

Nonfungible investment that uniquely supports the buyer–supplier relationship

Goal congruence The extent to which a buyer group and a supplier group perceive the

possibility of common goal achievement in the joint NPD project

Complementary

capabilities

The degree to which partners are able to fill out, or complete, each other’s

performance by supplying distinct capabilities, knowledge, and resources in the

joint NPD project

Design quality The degree to which the product design meets performance goals related to its

fitness for use

Design efficiency The extent to which resources are fully utilized on productive design activities

Volume 50, Number 2

Journal of Supply Chain Management

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