Supplier alliance success and failure: a longitudinal dyadic perspective

  1. Ian Stuart

International Journal of Operations & Production Management

1997, Vol. 17, No. 6 P. 539-557

1)      Inter-Organizational Relationships (IOR)

  1. a) A form of cooperative relationship within the supply chain
  2. i) How do they form?
  3. ii) Why do they succeed/fail?

(1)   Buyers perspective

(2)   Suppliers perspective

  1. b) Organizational / Strategic context
  2. i) Forms of IORs

(1)   Supplier alliance

(2)   JVs

(3)   Mergers/Acquisitions

  1. ii) Impact of time

(1)   Parties develop interdependence

(2)   Both parties gain synergistic effects

  1. c) Why do they form?
  2. i) Technology development
  3. ii) Risk management

iii)     Non-conformance cost reduction

  1. d) Attractive in situations where:
  2. i) There is a need for efficient, reliable information
  3. ii) There is a need for larger organizations to become more dynamic

iii)     There is a need to provide stability in contractual dealings

  1. e) The relationship
  2. i) Dynamic: evolves as needs change
  3. ii) Evolves into a more informal, interpersonal relationship

iii)     Longevity based on the parties ability to hide the use of power

2)      Hypotheses and research methodology

  1. a) Hypotheses
  2. i) H1: Firms with strong alliances should report higher productivity and quality
  3. ii) H2: Positive trend alliances will be associated with subordinate or hidden power

iii)     H3: Future expectations for the alliance will be positively related to the personal relationship that develops

  1. iv) H4: The trend in the alliance can be predicted based on disagreements over enablers
  2. b) Results
  3. i) H1

(1)   Results are stable, but the relationship between alliance strength and outcome weakens marginally over time

  1. ii) H2

(1)   There is no support for this hypothesis

iii)     H3

(1)   Satisfaction increases as the alliance strengthens

  1. iv) H4

(1)   Buyers Perspective: positive trend relationships are associated with lower levels of perceived buyer benefits

(2)   Supplier perspective: the best predictor comes from similar low expectations of buyer gains from co-operation

  1. v) In General

(1)   Supplier relationships are relatively stable and satisfactory to both parties

(2)   Both parties view the relationships in terms of business, not personal, relationships

(3)   Little support for the theory of power in the relationship

  1. c) Conclusions
  2. i) Buyers can maximize the probability of forming long term relationships by tempering the perceived benefits through collaboration
  3. ii) Information exchange and honesty will help the relationship, whereas overly optimistic projections can harm the relationship