A Dynamic Collaboration Capability as a Source of Competitive Advantage

The resource‐based view of the firm argues the essence of decision making is to determine how firm and supply chain resources can be configured to achieve inimitable advantage and superior performance. However, combining resources found among diverse members of a supply chain requires higher levels of coordination than exist at most companies. Manifest cross‐functional and interorganizational conflict impedes the relational advantages of collaboration. This research employs a multimethod—survey and interview—approach to evaluate collaboration's influence on operational and firm performance. Our findings show that collaboration, as a dynamic capability, mediates the conflict resulting from functional orientations, and improves performance. Specific structural enablers to enhance an organization's collaborative capability are identified and described, providing insight into how firms can exploit interfirm resources for competitive advantage.     

The Two Facets of Collaboration: Cooperation and Coordination in Strategic Alliances

This paper unpacks two underspecified facets of collaboration: cooperation and coordination. Prior research has emphasized cooperation, specifically partners' commitment and alignment of interests, as the key determinant of collaborative success. Scholars have paid less attention to the critical role of coordination—the effective alignment and adjustment of partners' actions. To redress this imbalance, we conceptually disentangle cooperation and coordination in the context of inter-organizational collaboration, and examine how the two phenomena play out in the partner selection, design, and post-formation stages of an alliance's life cycle. As we demonstrate, a coordination perspective helps resolve some empirical puzzles, but it also represents a challenge to received wisdom grounded in the salience of cooperation. To stimulate future research, we discuss alternative conceptualizations of the relationship between cooperation and coordination, and elaborate on their normative implications.     

Exploring the Impact of Cross-side Network Interaction on Digital Platforms on Internationalization of Manufacturing Firms

This study aims to explore how manufacturing firms utilize the benefits of network externalities on digital platforms and how they co-create value with foreign customers to expand internationally through their interactions with customers across the sides of the platform-mediated network. Building on the demand-side perspectives, we develop and empirically test a theoretical model explaining the effect of cross-side network interaction on digital platforms upon manufacturing firms' international intensity, as well as adding critical boundary conditions of industry structure and firm size. Based on a sample of 4197 Chinese manufacturing firms, our empirical findings indicate that manufacturing firms' cross-side network interaction on digital platforms could improve international intensity. We also find that industry growth at home country and larger firm size negatively moderate the relationship between cross-side network interaction and international intensity, while regional industry agglomeration has no significant moderating effect. This study contributes to research on firms' international intensity in the digital age and also extends the demand-side perspectives literature in an IB context.     

Sourcing Strategy,Supplier Relationships and Firm Performance: An Empirical Investigation of UK Organizations

This article conceptualizes and empirically examines buyer–supplier relationships in respect of supply sourcing strategies, relationship characteristics and firm performance. Two sourcing strategies available to organizations are examined, critical and leverage, which in turn, influence the approach to managing the supplier relationship (arms‐length or collaborative). We argue that different relationship approaches are appropriate to achieving different performance outcomes. A structural equation model, using a sample of 142 manufacturing firms based in the United Kingdom, is used to test this hypothesized model. The results indicate that a critical sourcing strategy requires collaborative supplier relationships in order to achieve higher relationship and business outcomes, while leverage sourcing strategies have a direct impact on these same performance outcomes. In addition, a leverage strategy was associated with increased levels of supplier power, though this power was found not to have a significant effect on performance. Our study provides support for the importance of aligning sourcing strategies to particular supplier relationship approaches in order to improve firm performance. Managerial implications of these findings and future directions for research are then offered.     

Discount Pricing Policies and the Coordination of Decentralized Distribution Systems*

A challenge of supply chain management is to align the objectives, and hence coordinate the activities, of independent supply chain members. In this study, we approach this problem in a simple way by extending traditional quantity discounts that are based solely on buyers' individual order size to discount policies that are based on both buyers' individual order size and their annual volume. We show that discount policies are able to achieve nearly optimal system profit and, hence, provide effective coordination, for a decentralized two‐echelon distribution system, whereby a supplier sells a product to a group of heterogeneous and independent retailers each facing a downward‐sloping demand curve of its retail price. When buyers are heterogeneous, a critical issue of coordination is to motivate different customers to increase their demand and lot size according to their potential so as to improve profits. We show that market heterogeneity presents an effective discriminating factor for the supplier to segment customers in the design of a coordination mechanism.     

Open collaborative innovation and digital platforms

Abstract

This study uses contract theory to analyse the relationship between open collaborative innovation strategies and digital platforms. We argue that a collaborative mechanism and governance of the platform affect how operations are run and impact firm ambidexterity. We also explain how the twofold revealing strategy, both selective and free occurs via the platform and how governance positively impacts the coordination mechanism. A case study analysis on TIM OPEN draws a ground-breaking framework for future investigations. The analysis suggests that the combination of digital platform and collaborative innovation can facilitate the creative process and be a driver of operational synergies. Results confirm that the adoption of digital platforms for collaborative innovations reduces transaction costs.     

Managing Maturing Government‐Supported Networks: The Shift from Monitoring to Embeddedness Controls

In formal inter‐firm networks backed with significant financial support by policy‐makers, network boards are typically established to monitor network activities and to manage the tension between organizational and collective interests. This approach to network governance, however, builds mainly upon agency logic. We integrate agency with embeddedness theory to offer insights into the effectiveness of monitoring as a governance mechanism as networks mature and member firms become embedded. The analyses focus on two issues: (1) how network board characteristics typically associated with monitoring – board independence, board size and board compensation – influence network performance; and (2) how these effects are moderated by network age. The model is tested with longitudinal data on 53 government‐supported networks. In addition to the direct effects of board characteristics, network board size and board compensation have a stronger positive impact on network performance in younger networks than in more mature networks. This study provides insight into why the instituting of boards may prove successful for network‐level performance in newly formed government‐supported networks, but also explains why the positive effects from network board monitoring may diminish as networks grow older.     

Capacity Planning and Allocation for Web‐Based Applications

Motivated by the technology division of a financial services firm, we study the problem of capacity planning and allocation for Web‐based applications. The steady growth in Web traffic has affected the quality of service (QoS) as measured by response time (RT), for numerous e‐businesses. In addition, the lack of understanding of system interactions and availability of proper planning tools has impeded effective capacity management. Managers typically make decisions to add server capacity on an ad hoc basis when systems reach critical response levels. Very often this turns out to be too late and results in extremely long response times and the system crashes. We present an analytical model to understand system interactions with the goal of making better server capacity decisions based on the results. The model studies the relationships and important interactions between the various components of a Web‐based application using a continuous time Markov chain embedded in a queuing network as the basic framework. We use several structured aggregation schemes to appropriately represent a complex system, and demonstrate how the model can be used to quickly predict system performance, which facilitates effective capacity allocation decision making. Using simulation as a benchmark, we show that our model produces results within 5% accuracy at a fraction of the time of simulation, even at high traffic intensities. This knowledge helps managers quickly analyze the performance of the system and better plan server capacity to maintain desirable levels of QoS. We also demonstrate how to utilize a combination of dedicated and shared resources to achieve QoS using fewer servers.     

Coordination in a Single‐Supplier,Multi‐Retailer Distribution System: Supplier‐Facilitated Transshipments

We consider supplier‐facilitated transshipments for achieving supply chain coordination in a single supplier, multi‐retailer distribution system with non‐cooperative retailers. The previous transshipment literature has focused on coordination through retailer‐negotiated transshipments and thus does not consider the supplier's decision‐making. In contrast, in this study, we assume the supplier is an active participant in the system and we seek to understand how the supplier can facilitate the implementation of coordinating transshipments. We study a two‐period model with wholesale orders at the start of the first period and preventive transshipments performed at the start of the second period. Inspired by a supplier‐facilitated transshipment scheme observed in practice, we assume the supplier implements transshipments through a bi‐directional adjustment contract. Under this contract, each retailer can either buy additional inventory from, or sell back excess inventory to, the supplier. We show that coordination can be achieved through carefully designed contracts with state‐dependent adjustment prices and a wholesale price menu. We demonstrate that the supplier's role in facilitating coordinating transshipments is critical. In addition, we use our understanding of the coordinating contract form to derive some simpler and easier‐to‐implement heuristic contracts. We use a numerical study to demonstrate the value, to the supplier, of using the coordinating adjustment and wholesale prices, and to evaluate the heuristics’ performance.     

INFORMATION GATHERING IN ORGANIZATIONS: EQUILIBRIUM,WELFARE, AND OPTIMAL NETWORK STRUCTURE

We model an organization as a game in which all agents share a common decision problem and some level of coordination is necessary between individual actions. Agents have individual private information concerning the task they have to perform, and they share this private information through pairwise channels of communication. We analyze how this communication pattern, modeled by means of a network structure, affects individual behavior and aggregate welfare. In the unique equilibrium of this Bayesian game, each agent's optimal action depends on a properly defined knowledge index that measures how the aggregation of information helps him to infer higher‐order beliefs about other's information after communication. Adding communication channels is not always beneficial for the organization because it can lead to mis‐coordination. We single out the geometry of interagent communication links that the manager could implement in order to improve the organization's performance.     

Marketing Is from Mars,IT Is from Venus: Aligning the Worldviews for Firm Performance

A typical firm is operated by multiple functional managers who may collaborate as well as compete to achieve firm performance. In the digital age, firm performance is essentially customer‐dependent and technology‐dependent, with both marketing and information technology (IT) playing key roles. Unfortunately the two functions often have very different worldviews. We show how these differences can damage firm performance, and suggest ways to mitigate this damage. We build a worldview difference model, synthesized from multiple disciplines. The model is tested using both matched and nonmatched observations from marketing and IT managers, and is analyzed with hierarchical linear models using both perceptual and objective firm performance data over a 4‐year period. We find that differences between the beliefs and perceptions of marketing managers and IT managers generate a negative impact on firm performance, and suggest appropriate technology‐culture associations to effectively align their worldviews for firm performance. To improve firm performance, a cross‐functional appreciation for market and technology drivers can be achieved by making marketing managers more learning‐oriented and by providing IT managers a culture that is congruent with technology.     

Is it All About Money? – Affective Commitment and the Difference Between Family and Non‐family Sellers in Buyouts

In this paper we investigate private equity firm perceptions of sellers’ affective deal commitment in buyout transactions. Using a sample of 174 buyouts, we test trust, goal congruence and private equity reputation as potential antecedents of perceived deal commitment. We also examine whether and how different types of sellers, family versus non‐family firms, moderate sources of perceived affective deal commitment. In sum, we find evidence that non‐financial factors play a role in buyouts, particularly for family firm sellers.     

Market Orientation,Ownership Type,and E‐Business Assimilation: Evidence from Chinese Firms

While more and more firms have implemented e‐business in business operations, a better understanding of the factors that successfully drive the assimilation of e‐business will provide insights for firm executives and practitioners to develop effective strategies for e‐business. Different from previous studies that focus on individual‐level factors related to business executives and top management teams, this study examines how firm‐level strategic and cultural factors shape e‐business assimilation. Based on the strategy and marketing literature on market orientation and firm ownership, we developed a research model to describe how a firm's market orientation impacts e‐business assimilation. The model also describes the moderating effect of firm ownership type on the relationship between market orientation and e‐business assimilation. Based on data from 301 Chinese international trade firms, we found that two dimensions of market orientation (i.e., customer orientation, competitor orientation) had significant effects on e‐business assimilation. However, the third dimension, interfunctional coordination, was only partially significant. In addition, ownership type was a significant moderator of the effects of customer orientation and competitor orientation on e‐business assimilation, although ownership type was not a moderator of interfunctional coordination. Being one of the first studies of the impact of market orientation and firm ownership type on e‐business assimilation, we conclude with a discussion of the implications for future research and practice.     

Static and Dynamic Pricing of Excess Capacity in a Make‐to‐Order Environment

We consider a make‐to‐order manufacturer that serves two customer classes: core customers who pay a fixed negotiated price, and “fill‐in” customers who make submittal decisions based on the current price set by the firm. Using a Markovian queueing model, we determine how much the firm can gain by explicitly accounting for the status of its production facility in making pricing decisions. Specifically, we examine three pricing policies: (1) static, state‐independent pricing, (2) constant pricing up to a cutoff state, and (3) general state‐dependent pricing. We determine properties of each policy, and illustrate numerically the financial gains that the firm can achieve by following each policy as compared with simpler policies. Our main result is that constant pricing up to a cutoff state can dramatically outperform a state‐independent policy, while at the same time achieving most of the increase in revenue achievable from general state‐dependent pricing. Thus, we find that constant pricing up to a cutoff state presents an attractive tradeoff between ease of implementation and revenue gain. When the costs of policy design and implementation are taken into account, this simple heuristic may actually out‐perform general state‐dependent pricing in some settings.     

Opportunism in Distribution Networks: The Role of Network Embeddedness and Dependence

Prior research documents the value of network relationships to firm behavior but is relatively silent on how networks influence opportunism in distribution channels. Focusing on a common type of distribution networks in which multiple distributors serve a single, dominant supplier, this study moves beyond a dyadic view to examine how a focal distributor's relational and structural embeddedness in such a distribution network influences its opportunism toward the dominant supplier. In particular, we postulate that a distributor's relational embeddedness in the network curbs its opportunism, whereas its network centrality, as a form of structural embeddedness in the network, promotes its opportunism. Moreover, we propose that relational embeddedness magnifies the role of a focal distributor's dependence on the supplier in suppressing the distributor's opportunism, whereas network centrality buffers such a role. We first empirically test these hypotheses using data collected from car dealers in China; the results provide support for the hypotheses. We then develop an analytical model to validate and further explain the underlying mechanisms of the network effects. Our analytical results not only validate the empirical results but also provide guidance for managers on controlling opportunism in distribution networks.     

Multi‐Product Quality Competition: Impact of Resource Constraints

We study a multi‐product firm with limited capacity where the products are vertically (quality) differentiated and the customer base is heterogeneous in their valuation of quality. While the demand structure creates opportunities through proliferation, the firm should avoid cannibalization between its own products. Moreover, the oligopolistic market structure puts competitive pressure and limits the firm's market share. On the other hand, the firm has limited resources that cause a supply‐side fight for adequate and profitable production. We explicitly characterize the conditions where each force dominates. Our focus is on understanding how capacity constraints and competition affect a firm's product‐mix decisions. We find that considering capacity constraints could significantly change traditional insights (that ignore capacity) related to product‐line design and the role of competition therein. In particular, we show that when the resources are limited, the firm should offer only the product that has the highest margin per unit capacity. We find that this product could be the diametrically opposite product suggested by the existing literature. In addition, we show that for intermediate capacity levels, whereas the margin per unit capacity effect dominates in a less competitive market, proliferation and cannibalization effects dominate in a more competitive market.     

电子商务环境下合作采购效益分析

合作采购是一种重要的企业间电子商务应用模式,成功实施合作采购需要供应链成员的积极参与。本文针对供应商采取的两种批发价定价策略,比较分析了协调成本对买主间合作采购动力及其总体采购成本的影响。其结果表明,只要协调成本较小,买主便具有合作采购动力,且无论供应商采取固定价格策略还是采取数量折扣策略,都存在一个协调成本临界值,当协调成本小于该临界值时,合作采购将同时减少买主与供应商的总体成本;当协调成本大于该临界值时,则总有一方的总体成本在合作采购中增加。     

Price,Rebate, and Returns Supply Contracts for Coordinating Supply Chains with Price‐Dependent Demands

Channel rebates and returns policies are common mechanisms for manufacturers to entice retailers to increase their order quantities and sales ultimately. However, when the underlying demand depends on the retail price, it has been known that channel coordination cannot be achieved if only one of these mechanisms is deployed. In this article, we show that a policy that combines the use of wholesale price, channel rebate, and returns can coordinate a channel with both additive and multiplicative price‐dependent demands. In addition to determining the sufficient conditions for the contract parameters associated with the equilibrium policy, we show that multiple equilibrium policies for channel coordination exist. We further explore how the equilibrium policy can be adjusted to achieve Pareto improvement. Other issues such as the maximum amount of expected profit that the manufacturer can share under the coordinated channel, the structural properties of the contracts under both the additive and multiplicative price‐dependent demand functions are also discussed.     

Pay‐Back‐Revenue‐Sharing Contract in Coordinating Supply Chains with Random Yield

We consider coordination issues in supply chains where supplier's production process is subject to random yield losses. For a simple supply chain with a single supplier and retailer facing deterministic demand, a pay back contract which has the retailer paying a discount price for the supplier's excess units can provide the right incentive for the supplier to increase his production size and achieve coordination. Building upon this result, we consider coordination issues for two other supply chains: one with competing retailers, the other with stochastic demand. When retailers compete for both demand and supply, they tend to over‐order. We show that a combination of a pay back and revenue sharing mechanism can coordinate the supply chain, with the pay back mechanism correcting the supplier's under‐producing problem and the revenue sharing mechanism correcting the retailers' over‐ordering problem. When demand is stochastic, we consider a modified pay‐back‐revenue‐sharing contract under which the retailer agrees to not only purchase the supplier's excess output (beyond the retailer's order), but also share with the supplier a portion of the revenue made from the sales of the excess output. We show that this contract, by giving the supplier additional incentives in the form of revenue share, can achieve coordination.