A Dyadic Investigation of Collaborative Competence, Social Capital, and Performance in Buyer–Supplier Relationships

• Author: Robert Wiedmer,Kenneth K. Boyer,Judith M. Whipple
• Date: 01 April 2015
• DOI: http://doi.org/10.1111/jscm.12071
• Published date: 01 April 2015

A DYADIC INVESTIGATION OF COLLABORATIVE

COMPETENCE, SOCIAL CAPITAL, AND PERFORMANCE

IN BUYER–SUPPLIER RELATIONSHIPS

JUDITH M.WHIPPLE AND ROBERT WIEDMER

Michigan State University

KENNETH K. BOYER

Ohio State University

As supply chains become increasingly complex, the management of

buyer–supplier relationships is essential for achieving superior perfor-

mance. To enhance external collaborative relationships, many firms are

investing in the development of internal relationship management skills.

We propose that the development of internal collaborative process compe-

tence (CPC) is an important component for improving external collabora-

tive relationships through the creation of social capital. Our research

examines the potential for social capital, which is modeled as a second-

order factor consisting of structural, cognitive, and relational capital, to

mediate the relationship between CPC and operational performance. Our

findings provide insights as to whether internal competence alone is suffi-

cient for improving the operational performance of the relationship.

Based on a dyadic comparison of buyers and suppliers, we find that

investment in internal CPC without building external social capital does

not lead to any improvement in operational performance. However,

investment in CPC is beneficial in cases where buyers and suppliers have

also built a high level of social capital, which, in turn, leads to desired

operational performance for the relationship.

Keywords: buyer–supplier relationships; collaborative competence; social capital;

operating performance; resource-based view; relational view; dyadic data; mediation;

structural equation modeling

INTRODUCTION

Firms continue to recognize the need for strong rela-

tionships with their supply chain partners as a means

for managing the complexities involved in today’s

competitive global markets. In particular, collaborat-

ing with suppliers is a key element of many firms’

strategic approaches to achieving competitive advan-

tage. Such collaboration often takes the form of for-

mal supplier integration initiatives. Supplier

integration has been defined as “the combination of

internal resources of the buying firm with the

resources and capabilities of selected key suppliers

through the meshing of intercompany business pro-

cesses to achieve competitive advantage” (Wagner,

2003, p. 4). When deciding whom to collaborate

with, it is important to find key suppliers that offer

new knowledge and complementary competencies

(Zacharia, Nix & Lusch, 2011). In this sense, supplier

integration can lead to enhancing both parties’ supply

chain competencies while offering the potential for

competitive advantage. Dyer and Singh (1998)

referred to such advantages as the attainment of

relational rents.

To attain relational rents, Bowersox, Closs and

Stank (2003) indicate that various competencies

(e.g., supplier integration, internal integration) are

required to integrate a firm’s internal capabilities

with its external partner’s capabilities. As such, suc-

cessful interorganizational collaboration often requires

significant intra-organizational investments, namely

the ability to collaborate with external partners.

Unfortunately, “few companies are organized prop-

erly to implement and manage collaborative relation-

ships” (Bowersox et al., 2003, p. 19). To build

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successful interorganizational relationships, firms

must build internal resources and management capa-

bilities (Wagner, 2003). Zacharia et al. (2011) use

the term “collaborative process competence” (CPC)

to describe the intra-organizational skills needed to

successfully manage interorganizational collaborative

initiatives.

However, companies are lacking in the development

of strategies that enable the effective management of

supply chain collaborations. One way to address this

challenge is to invest in programs that facilitate CPC

skills. The value of such programs is often difficult to

quantify. In fact, Zimmermann and Foerstl (2014)

indicate that purchasing and supply management

(PSM) practices that are internal-facing, such as

enabling skill development, are not well understood

from a research standpoint. Therefore, the question

becomes “Does the development of internal collabo-

rative skills pay off?” Firms expect developed compe-

tencies will result in management techniques that

generate successful supply chain relationships, but it

is unclear whether or not the presence of intra-organi-

zational CPC alone is sufficient to produce successful

interorganizational relationships. As indicated by Dyer

and Singh (1998, p. 675) “a relational capability is

not a sufficient condition for realizing relational

rents.” Zimmermann and Foerstl (2014) also

acknowledge the relationships among internal-facing

PSM practices, supplier-facing PSM practices, and per-

formance are under-researched. Given this research

gap, we propose that firms must actively demonstrate

their internal collaborative competence to enhance

external collaborative relationships. For example, buy-

ers cannot lure suppliers into collaborating and then

revert to adversarial behaviors, such as extreme cost

pressures, while expecting suppliers to still believe the

relationship is collaborative.

Social capital provides valuable resources for the

involved parties (Nahapiet & Ghoshal, 1998), which

can enhance interorganizational relationships. Social

capital refers to the “relational resources attainable by

individual actors through networks of social relation-

ships” (Tsai, 2000, p. 927). Social connections, char-

acterized by trust, information exchange, and shared

vision, play an important role in achieving superior

performance, which can result in added value for

firms engaged in collaboration (Autry & Griffis, 2008;

Cousins, Handfield, Lawson & Petersen, 2006; Krause,

Handfield & Tyler, 2007). Following this line of argu-

ment, social capital is viewed as a tacit resource resid-

ing in relationships.

The literature has paid only limited attention to

social capital within a supply chain management con-

text (Krause et al., 2007). Further, “the tension

between a strong desire to combine complementary

competencies for distinctive advantage and the

persistent inability to build relational advantage sug-

gests a need to take a closer look inside the ‘black

box’ of collaboration” (Fawcett, Fawcett, Watson &

Magnan, 2012, p. 45). This tension is well noted and

illustrated by the challenge that many firms face when

trying to manage supply chain relationships (Nyaga,

Lynch, Marshall & Ambrose, 2013). Regarding this

challenge, recent literature emphasizes the importance

of effectively managing supply chain resources to

ensure supply chains function and perform (Crook &

Esper, 2014). Despite the importance of managing

supply chain resources, Van Weele and Van Raaij

(2014) acknowledge a lack of research focused on the

“strategies and competences to manage external

resources” (p. 60).

Specifically, we examine the impact of intra-organi-

zational CPC on interorganizational social capital,

and the resulting impact on operational performance

in buyer–supplier relationships. This is important

given that research examining the relationship

between supply chain integration and performance

has shown inconsistent results, giving rise to the need

to study integration and performance more compre-

hensively (Flynn, Huo & Zhao, 2010). In addition,

our research addresses the internal-facing/supplier-

facing practices gap discussed by Zimmermann and

Foerstl (2014). We test whether a mediating effect

exists (i.e., CPC on operational performance through

social capital) to understand whether CPC alone is

sufficient for improving performance in buyer–sup-

plier relationships. In other words, are both intra- and

interorganizational competencies needed for successful

collaboration to occur?

Further, to understand whether the model is consis-

tent regardless of channel position, the proposed

model considers both buying and supplying firms’

perspectives. Given that the vast majority of supply

chain studies rely on data from a single party in the

relationship, understanding the impact of channel

position is an important consideration as only a lim-

ited number of multistakeholder studies have been

conducted (e.g., Carter, 2000; Cheung, Myers & Ment-

zer, 2010; Ellram & Hendrick, 1995; Nyaga et al.,

2013). The focus on different stakeholders is espe-

cially important in cases where external resources,

such as social capital, are developed collaboratively.

In that regard, many relationships are lacking relation-

ship-specific investments, which describe an ongoing

issue between supply chain partners (Paulraj, Chen &

Lado, 2012). We also address the question of how

such investments need to be made by both partners.

The next sections examine the proposed model and

hypotheses supported by theoretical perspectives and

the literature. The research design and methodology

are then presented, followed by our results and

conclusions.

Volume 51, Number 2

Journal of Supply Chain Management

4