Knowledge that Transforms

AbstractThis research utilizes the framework of transaction cost economics (TCE) to develop an understanding of how firms manage the costs and risks of offshore outsourcing of professional services. This research examines the perspectives of eight organizations through interviews with 10 high‐ranking supply management executives. The paper first explores the rationale for offshore outsourcing among the organizations studied. Using the tenants of TCE, this paper postulates that fixed costs of establishing the relationship dominate the variable costs of day‐to‐day transactions, and that organizations will not offshore outsource areas where there is high perceived degree of unmanageable risk. The paper expands on themes provided by TCE and offers some lessons learned, and guidelines for managing and controlling offshore outsourced services relationships.

AbstractA typical approach to studying capabilities in the operations management literature is to assess the intended or realized competitive operational performance and their contribution to business and organizational objectives. While it is crucial to identify the operational performance that helps create competitive advantage, it is equally important to understand the means for delivering the needed performance at the operational level. Drawing on the resource‐based view (RBV), we argue that routines are a critical source of operations capabilities and subsequently investigate operations capabilities by means of their underlying routines. Because a common problem to studying capabilities is the ambiguous and confusing definitions, we conduct an extensive literature review to address the semantic confusion among various definitions of capabilities and delineate it from other related terms. We identify improvement and innovation as two critical plant level capabilities, each consisting of a bundle of interrelated yet distinct routines. We then empirically measure the two capabilities as second‐order latent variables and estimate their effects on a set of operational performance measures. The results suggest that routines form internally consistent bundles which are significantly related to operational performance. This supports our notion of “capabilities as routine bundles” that are difficult to imitate and thus a source of competitive advantage.

AbstractWe introduce and empirically test a theoretical metamodel that explains knowledge‐sharing behavior among employees. Building on the well‐established motivation–opportunity–ability (MOA) framework, we posit that knowledge sharing among employees is a function of their MOA to do so. Existing literature suggests that the interaction among motivation, opportunity, and ability drives knowledge‐sharing behavior. In contrast, we specify a new model in which the “bottleneck” or constraining factor among the MOA variables determines the degree of knowledge sharing that occurs. This constraining‐factor model (CFM) fits the data better than the traditional multiplicative model and reveals a new, qualitatively different portrait of knowledge sharing that resolves some of the puzzles in the previous literature. The CFM provides macro‐level insights with respect to how operations managers can improve employee knowledge sharing by focusing on the bottleneck MOA variable. As a result, the CFM can help set strategic directions of related policies. The model emphasizes that, counter to conventional wisdom, the MOA variables should not be addressed independently, but rather in a dynamic and coordinated way.

AbstractISO 9000:2000 is the latest version of the quality standard developed by the International Organization for Standardization (ISO). The standard aims to evaluate a firm's ability to effectively design, produce, and deliver quality products and services. This version of the standard tries to enhance customer satisfaction by including more top‐management involvement and continual improvement. Despite widespread international acceptance, the new standard is surrounded by controversy similar to that surrounding its predecessor, the 1994 version. The literature is clearly divided in its assessment of ISO 9000:2000, which is viewed as either a quality management (QM)‐based system or as another paper‐driven process that increases risk, uncertainty, and costs. This study utilizes case‐based research to address the competing views of the ISO 9000:2000 standard in an attempt to see if a sample of firms in the automotive industry can be positioned within the Miles and Snow [Miles, R.E., Snow, C.C., 1978. Organizational Strategy, Structure and Process. McGraw‐Hill, New York] strategic typology. We compare different amounts of quality standard integration and quality assurance in the supply chain of firms with ISO 9000:2000 registration while positing several research propositions.

AbstractSupplier involvement is essential to a new venture seeking to develop a radical innovation. Despite this, prior literature has not adequately addressed supplier involvement in radical innovation, nor what the antecedents to increased supplier involvement are. We build and test a conceptual model of the antecedents and new product performance outcomes of supplier involvement in the development of radical innovation by new ventures. Antecedent variables (supplier's specific investments and the new venture's qualification of the supplier's abilities) are drawn from the transaction cost analysis literature. We include new venture's relative power and new venture's level of commitment to the supplier as contingency conditions. We develop a set of hypotheses relating supplier involvement to radical innovation performance, relating the antecedent variables to supplier involvement, and also testing the interaction effects of the two contingency conditions. We gather data from both new ventures and their major suppliers for 173 recent radical innovation projects, and use hierarchical regression analysis to test our hypotheses. We find that the contingency conditions moderate achieved levels of supplier involvement, and also find a direct relationship between achieved level of involvement and performance. We conclude with theoretical contributions and managerial implications.

AbstractSupply chain integration (SCI) has received increasing attention from scholars and practitioners in recent years. However, our knowledge of what influences SCI is still very limited. Although marketing and management researchers have investigated power and relationship commitment issues between organizations, few have examined their impact on SCI. This paper extends the power–relationship commitment theory established in Western marketing literature and links it with SCI in China, through examining the relationship between power, relationship commitment and the integration between manufacturers and their customers. We propose and empirically test a model using data collected from 617 manufacturing companies in China. The results show that different types of customer power impact manufacturers’ relationship commitment in different ways. Expert power, referent power and reward power are important in improving manufacturers’ normative relationship commitment, while reward power and coercive power enhance instrumental relationship commitment. We also found that normative relationship commitment had a greater impact on customer integration than instrumental relationship commitment. These findings are interpreted in light of national culture differences between China and the U.S. in terms of power distance and collectivism, which provide a new perspective on SCI.