In the literature, considerable attention has been given to the role of supplying firms in the context of innovation. However, not every supplier is capable of contributing to a buyer's innovation performance. In addition, the willingness and commitment of suppliers to collaborate with buyers is not always apparent. Thus far, the literature has not given a conclusive description of the nature of innovative suppliers due to a lack of empirical evidence. In this study, we seek to identify a set of characteristics that can identify those suppliers that can make significant contributions to a buyer–supplier collaboration. Our statistical analysis of survey data shows that a supplier's technical characteristics and collaborative attitude, and the buyer–supplier relational characteristics on buyer–supplier relationships explain an important part of a supplier's contribution to buyer innovation. At a theoretical level, the findings of this study explain why some suppliers contribute more effectively than others to buyer–supplier innovations. At a practical level, the findings provide managers with a more complete picture of those suppliers with the highest expected innovation contribution in their network.
Business networks are an important source of the innovation performance of firms (Ahuja, 2000, Baum et al., 2000, Corsaro et al., 2012 and Wilkinson and Young, 2002). Industrial Marketing and Purchasing (IMP) theory posits that the interactions among actors, resources, and relationships in networks form an important basis for the technological development of industries (Håkansson, 1987 and Roy et al., 2004). From this perspective, IMP researchers strive to better explain innovation in business networks (e.g., Hoholm and Olsen, 2012 and Ritter et al., 2004). The interactions between firms enable the combination of existing ideas in new ways that are especially relevant to the creation of new ideas in the form of innovations (Ridley, 2010, Romer, 1990 and Welch and Wilkinson, 2002). The literature on network collaborations focuses increasingly on buyer–supplier relationships (e.g., Wynstra, Von Corswant, & Wetzels, 2010). Many of these studies describe the positive effect of supplier involvement on buyer innovation, which is defined as “the encouragement of improvement by the supplier with regard to how the buyer solves problems, develops ideas, and thinks of (process) improvements” (Mooi & Frambach, 2012, p. 1025).
Although many scholars describe the positive effects of buyer–supplier relationships, merely involving any supplier in design programs does not guarantee direct improvements in innovation performance (Freytag et al., 2012 and Liker et al., 1996). Choosing a supplier with the wrong capabilities can lead to lower innovation performance or even project obstruction (Wognum et al., 2002 and Zsidisin and Smith, 2005). Buying firms can increase their innovative performance by collaborating with the most innovative suppliers. However, the most innovative supplier in a certain supply network cannot dedicate its best resources to every buyer (Gulati, Nohria, & Zaheer, 2000). Therefore, if competitive buying firms rely on the innovativeness of the same suppliers, then “it would be extremely difficult for a buyer to create competitive advantages through a shared supplier network” (Dyer & Hatch, 2006, p. 703). Without the commitment of innovative suppliers to exclusive relationships with specific buyers, firms might fail to obtain innovation contributions from their suppliers and therefore lose the ability to differentiate themselves from their competitors (Takeishi, 2001). Thus, to obtain greater innovation value from their relationships with the suppliers in their networks, buying firms need to identify those suppliers that are both capable and willing to contribute to innovations for the buyers.
In the IMP literature, some theoretical frameworks that can be used to identify innovative suppliers have been proposed. For example, Rese (2006) introduces a decision model for selecting the ‘right’ supplier. Schiele (2006) proposes a framework in which he introduces supplier characteristics as well as relational characteristics that are argued to have a positive effect on buyer–supplier innovations. Even though early IMP studies empirically explored the different functions of buyer–supplier relationships (e.g., Håkansson and Snehota, 1995 and Walter et al., 2001), the literature provides few empirical insights into the antecedents of buyer–supplier innovation. Without a clear empirical indication of the nature of innovative suppliers, it would be very difficult for buying firms to fully benefit from the potential innovation value present in their supplier networks. In this study, we attempt to shed light on this issue by analyzing survey data in which the innovation contributions of 242 suppliers are evaluated by their buying firms. The main questions driving this paper are the following: What characteristics of suppliers might signal their high potential for making an innovative contribution to a buying firm, and how can a buying firm obtain an exclusive commitment from a supplier in order to achieve a better innovation contribution than their competitors?
To answer these questions, we develop and test a framework to (1) empirically identify the supplier characteristics that explain the innovation potential of different suppliers, (2) examine the supplier's collaborative attitude and identify how a supplier's willingness to collaborate enables the buying firm to better exploit the innovation capabilities of the supplier, and (3) determine which relational characteristics lead to a stronger supplier commitment resulting in a greater innovation contribution from the supplier.
