Triggers and patterns of integration initiatives in successful buyer–supplier relationships
| DOI | http://doi.org/10.1016/j.jom.2013.11.002 |
| Author | Ann Vereecke,Kenneth K. Boyer,Evelyne Vanpoucke |
| Published date | 01 January 2014 |
| Date | 01 January 2014 |
Journal
of
Operations
Management
32
(2014)
15–33
Contents
lists
available
at
ScienceDirect
Journal
of
Operations
Management
j
o
ur
na
l
ho
mepage:
www.elsevier.com/locate
/jom
Triggers
and
patterns
of
integration
initiatives
in
successful
buyer–supplier
relationships
Evelyne
Vanpouckea,∗,
Ann
Vereeckeb,
Kenneth
K.
Boyerc
aMarketing
and
Supply
Chain
Management
Department,
School
of
Business
and
Economics,
Maastricht
University,
P.O.
Box
616,
6200
MD
Maastricht,
The
Netherlands
bTechnology
and
Operations
Management
Area,
Vlerick
Business
School
and
Ghent
University,
Reep
1,
9000
Gent,
Belgium
cManagement
Sciences
Department,
Fisher
College
of
Business,
Ohio
State
University,
644
Fisher
Hall,
2100
Neil
Avenue,
Columbus,
OH
43210,
United
States
a
r
t
i
c
l
e
i
n
f
o
Article
history:
Received
22
April
2013
Received
in
revised
form
16
October
2013
Accepted
11
November
2013
Available
online
21
November
2013
Keywords:
Inter-organizational
relationships
Integration
practices
Buy–sell
relationships
Relationship
life-cycle
theory
a
b
s
t
r
a
c
t
While
previous
studies
have
focused
on
the
benefits,
risks
and
outcomes
of
buy–sell
relationships,
little
is
known
about
the
dynamics
of
these
relationships.
Our
study
takes
an
initial
step
in
this
direction
by
examining
how
firms
develop
successful
relationships.
We
review
the
literature
and
analyze
multiple
buyer–supplier
relationships
to
explore
developments
over
time,
identify
triggers
for
change,
and
identify
effective
management
practices
for
long-term
inter-organizational
relationships.
We
employ
retrospec-
tive
data
to
compare
six
long-standing
buyer–supplier
relationships.
Our
data
suggest
a
recurring
pattern
of
integration
initiatives
in
the
evolution
towards
a
successful
buy–sell
relationship.
Specifically,
our
field
data
indicate
that
this
pattern
starts
with
initiatives
for
logistics
responsiveness,
followed
by
knowledge
exchange
initiatives
and
finally
initiatives
to
increase
the
use
of
common
resources.
Each
of
these
initia-
tives
are
triggered
by
specific
opportunities
and
are
emergent
in
nature.
By
examining
the
triggers
in
the
development
and
maintenance
of
buy–sell
relationships,
our
study
adds
to
the
integration
of
existing
life-cycle
frameworks,
which
increases
our
understanding
of
a
life-cycle
theory
for
inter-organizational
relationships.
©
2013
Elsevier
B.V.
All
rights
reserved.
1.
Introduction
A
significant
body
of
literature
examines
the
antecedents
and
the
outcomes
of
inter-organizational
relationships
(e.g.,
Schoenherr
and
Swink,
2012;
Villena
et
al.,
2011;
Swink
et
al.,
2007;
Frohlich
and
Westbrook,
2001;
Monczka
et
al.,
1998),
yet
there
has
been
little
research
regarding
the
time-phased
develop-
ment
of
these
relationships
(Arino
and
de
la
Torré,
1998).
Since
changes
in
any
of
the
variables
of
the
relationship
to
the
respec-
tive
partners,
whether
external
or
endogenous,
do
necessarily
lead
to
changes
in
the
efficiency
and
the
quality
of
the
relationship,
Arino
and
de
la
Torré
(1998)
call
for
a
better
understanding
of
these
time-phased
developments.
Similarly,
Grayson
and
Ambler
(1999,
p.
139)
note
that
“the
length
of
the
relationship
changes
the
nature
of
the
association
between
relational
constructs”
and
“the
exact
nature
of
these
relational
dynamics
remain
elusive”.
In
fact,
the
knitting
thread
of
the
process
of
relationships
is
the
series
of
interactions
between
partners
over
time
(Ring
and
Van
de
Ven,
1994;
Madhok,
1995;
Arino
and
de
la
Torré,
1998).
Moreover,
∗Corresponding
author.
Tel.:
+32
485
063
663.
E-mail
addresses:
e.vanpoucke@maastrichtuniversity.nl
(E.
Vanpoucke),
Ann.vereecke@vlerick.com
(A.
Vereecke),
Boyer
9@fisher.osu.edu
(K.K.
Boyer).
investigating
how
new
buy–sell
relationships
are
born
and
develop
into
long-term
relationships
has
been
highlighted
as
a
promising
research
direction
(Villena
et
al.,
2011;
Lumineau
and
Henderson,
2012;
Palmatier
et
al.,
2013).
This
gap
was
also
noted
by
Lewicki
et
al.
(2006,
p.
991),
namely,
that
little
attention
focuses
on
“con-
ceptualizing
and
measuring
relationship
development
over
time”.
Instead,
most
research
has
taken
a
‘static,
snapshot’
view
of
rela-
tionships
and
fails
to
account
for
the
information
contained
in
a
relationship’s
trajectory.
While
previous
research
of
Dwyer
et
al.
(1987),
Ring
and
Van
de
Ven
(1994)
and
Jap
and
Anderson
(2007)
describes
conceptual
frameworks
for
inter-organizational
relationship
devel-
opment
over
time,
we
investigate
how
these
frameworks
fit
together.
In
particular,
we
want
to
understand
the
process
of
developing
a
successful
buy–sell
relationship
and
the
triggers
and
patterns
of
integration
initiatives
on
the
road
towards
com-
mitted
buyer–supplier
relationships.
We
believe
that
insights
in
the
development
of
inter-organizational
relationships
provide
managers
with
valuable
information
on
when
to
start
up
new
integration
initiatives.
Managers
need
to
know
the
conditions,
nec-
essary
investments
and
organizational
structures
that
facilitate
mature
inter-organizational
relationships.
Moreover,
we
believe
that
timing
and
conditions
of
these
initiatives
influence
not
only
performance,
but
also
future
developments
of
the
relationships.
0272-6963/$
–
see
front
matter
©
2013
Elsevier
B.V.
All
rights
reserved.
http://dx.doi.org/10.1016/j.jom.2013.11.002
16
E.
Vanpoucke
et
al.
/
Journal
of
Operations
Management
32
(2014)
15–33
Providing
managers
with
guidelines
on
if
and
when
to
start
up
new
integration
activities
will
stimulate
thoughtful
decision
making.
The
overall
objective
of
this
paper
is
to
explore
the
development
patterns
of
inter-organizational
relationships,
and
more
specifi-
cally
of
buy–sell
relationships
by
increasing
our
understanding
of
how
different
life-cycle
frameworks
as
described
in
the
literature
fit
together.
Specific
objectives
include
answering
three
questions.
First,
how
do
buy–sell
relationships
develop
over
time?
Second,
which
integration
initiatives
do
successful
relationships
engage
in
over
time?
Finally,
what
triggers
new
integration
initiatives
and
how
does
this
strengthen
the
relationship
in
terms
of
governance
and
relationship
characteristics?
This
study
makes
three
contributions
to
literature.
First,
it
helps
to
create
an
integrated
framework
of
inter-organizational
rela-
tionship
development.
Second,
it
links
integration
initiatives
to
the
life-cycle
of
inter-organizational
relationships,
resulting
in
the
description
of
a
clear
recurrent
pattern
of
integration
initiatives.
Third,
the
study
provides
insights
into
the
triggers
for
integra-
tion
initiatives
and
the
development
of
relationship
characteristics
throughout
the
relationship
life-cycle.
Since
constructing
a
theory
of
inter-organizational
relation-
ship
development
requires
analysis
over
time
and
since
we
want
to
answer
questions
that
explain
both
the
‘how’
and
‘why’,
we
believe
that
rich
data
is
the
most
appropriate
way
to
address
this
gap.
Towards
this
end,
we
conducted
six
case
studies
of
different
buy–sell
relationship
trajectories.
In
each
case
study,
our
unit
of
analysis
was
the
relationship
and
not
the
individual
companies,
thus
we
collected
paired
retrospective
data
from
both
the
supply
and
the
buy
sides
of
the
relationship.
The
paper
begins
with
a
literature
review
of
supply
chain
integration
initiatives.
Next,
we
examine
the
literature
on
inter-
organizational
relationship
development.
More
specifically,
we
compare
the
different
frameworks
in
the
literature.
Third,
we
describe
our
case
study
methodology,
including
company
selec-
tion,
data
gathering
protocols
and
analytical
techniques.
Next,
we
analyze
the
cases
from
a
within
and
between
case
perspective.
This
leads
to
theoretical
propositions
and
explanations
in
the
discussion
part.
The
paper
concludes
with
a
discussion
of
the
limitations
and
future
research
opportunities.
2.
Literature
review
2.1.
Inter-organizational
integration
initiatives
Inter-organizational
relationships
are
defined
as
long-term
cooperative
relationships
designed
to
increase
the
operational
per-
formance
of
the
buyer
and
supplier.
Some
of
the
main
benefits
of
these
relationships
are
the
increase
in
synchronization
of
the
supply
chain,
the
reduction
of
total
costs,
the
improvement
of
quality
and
cycle
time,
and
a
stronger
competitive
position
than
any
possible
(Monczka
et
al.,
1998).
The
literature
describes
inter-
organizational
relationships
as
being
different
from
traditional
buy–sell
contractual
arrangements
in
terms
of
the
following
three
necessary
and
sufficient
conditions
(Yoshino
and
Rangan,
1995):
interdependence
of
the
parties,
shared
benefits
among
the
parties
and
on-going,
joint
participation
in
one
or
more
key
strategic
areas
such
as
technology,
products
or
markets.
Dyer
and
Singh
(1998,
p.
662)
suggest
that
relational
rents
are
possible
when
partners
“combine,
exchange
or
invest
in
idiosyncratic
assets,
knowledge
and
resources/capabilities,
and/or
employ
effective
governance
mechanisms
that
lower
transaction
costs
or
permit
the
realization
of
rents
through
the
synergistic
combination
of
assets,
knowledge
or
capabilities”.
Accordingly,
Frohlich
and
Westbrook
(2001)
suggest
three
integration
initia-
tives
to
create
these
relational
rents:
knowledge
exchange,
logistics
responsiveness
and,
use
of
common
resources.
They
describe
these
three
at
the
operational
and
tactical
level.
Subsequent
authors
(e.g.,
Koufteros,
2005;
Swink
et
al.,
2007;
Krause
et
al.,
2007;
Schoenherr
and
Swink,
2012)
have
supplemented
their
work
with
descriptions
of
integration
initiatives
at
the
strategic
level.
Knowledge
exchange
is
about
sharing
and
accessing
information
on
planning,
setting
up
information
and
knowledge
exchange
sys-
tems,
and
creating
visibility
in
the
supply
chain.
This
knowledge
exchange
positively
affects
relationships
by
revealing
points
of
sim-
ilarity,
resolving
problems,
providing
a
means
to
discover
and
align
goals,
and
finding
opportunities
to
create
value
for
both
partners
(Palmatier
et
al.,
2013).
In
dynamic
environments,
accumulated
knowledge
and
established
information
exchange
processes
that
result
from
effective
interactions
allow
partners
to
be
responsive
to
changing
conditions,
such
that
partners
can
continue
to
create
new
value
for
customers
and
contribute
to
relationship
growth.
Alternatively,
an
inability
to
exchange
knowledge
and
information
causes
the
relationship
to
stagnate,
problems
to
fester,
and
partners
to
miss
opportunities
(Ulaga
and
Eggert,
2006).
Product
development
is
an
area
in
which
knowledge
sharing
in
the
supply
chain
is
of
high
importance.
Koufteros
(2005)
investi-
gates
how
product
development
initiatives,
in
which
a
buyer
and
seller
collaborate
in
the
design
process
and
exchange
technical
expertise
to
develop
a
product,
might
enhance
their
product
inno-
vation
capabilities
and
subsequently
quality
(Mohr
and
Spekman,
1994;
Nelson,
1995;
Petersen
et
al.,
2005;
Tan,
2001).
Such
initia-
tives
include
the
temporary
allocation
of
personnel
to
improve
the
skill
base
of
the
supplier,
technical
assistance,
training
and
informa-
tion
sharing
that
build
on
the
knowledge
base
of
the
buying
firm.
The
buying
firm
may
be
prepared
to
help
the
supplier
in
return
for
the
benefits
of
improved
performance
and
joint
value
creation
(Zajac
and
Olsen,
2003).
Dyer
and
Hatch
(2006)
showed
that
knowl-
edge
sharing
by
Toyota
resulted
in
learning
from
the
supplier
and
as
a
result
a
reduction
of
the
defects
by
50%.
This
reduction
of
the
defects
was
twice
as
high
as
for
other
buyers,
who
were
not
involved
in
knowledge
exchange
initiatives
with
this
supplier.
Logistics
responsiveness
initiatives,
a
second
type
of
supply
chain
integration
initiatives,
include
initiatives
such
as
the
customization
of
packaging
or
the
adaptation
of
delivery
frequencies
towards
the
partners’
requirements.
The
aim
of
these
initiatives
is
to
synchro-
nize
supply
chain
activities
(Frohlich
and
Westbrook,
2001),
which
requires
close
coordination
of
solutions
and
timing
among
the
dif-
ferent
members
of
the
supply
chain.
This
is
not
easy
in
a
supply
chain
context
since
firms
tend
to
manage
their
operations
inde-
pendently
and
customers
require
different
services
(Fraser,
1997).
An
example
of
a
successful
initiative
is
the
development
by
Hyundai
Motor
Company
of
a
synchronized
production
planning
system
which
allowed
its
supplying
partners
to
formally
request
changes
in
the
master
production
plan
(Hahn
et
al.,
2000).
To
provide
full-
information
transparency,
Hyundai
agreed
to
communicate
every
change
in
its
own
master
production
plan
to
all
its
supply
chain
partners.
This
approach
required
Hyundai
to
install
a
centralized
coordination
group
to
synchronize
the
planning
efforts
in
the
sup-
ply
chain.
Li
and
Fung,
Hong
Kong’s
largest
export
trading
company,
offers
another
example
of
supply
chain
coordination.
This
com-
pany’s
core
activity
is
the
synchronization
of
virtual
supply
chains
of
firms
located
in
diverse
geographical
areas
(Neela
and
Gupta,
2005).
Finally,
buyers
and
suppliers
might
use
common
resources
such
as
containers
and
third-party
logistics
providers
to
perform
activi-
ties
in
the
supply
chain.
We
know
from
Transaction
Cost
Economics
(TCE;
Williamson,
1979)
that
the
performance
of
a
firm
is
linked
to
the
extent
to
which
the
firm
and
its
suppliers
make
site,
physical
(e.g.,
customized
tools,
dies,
machinery),
and
human
asset-specific
(e.g.,
dedicated
engineers
or
knowledge
building)
investments.
In
particular,
Dyer
(1996)
found
that
firms
realize
a
competitive
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