A theory of supplier network-based innovation value. Issue 3 (June 2017)

• Record Type: Journal Article
• Authors: Yan, Tingting; Yang, Sophie; Dooley, Kevin
• Is Part Of: Journal of purchasing and supply management. Volume 23:Issue 3(2017:Sep.)
• Page Start: 153
• Page End: 162
• Publication Date: 2017-06
• Subjects: Supply network -- Customer network -- Supplier innovation value -- Supplier involvement -- Buying company innovation -- Structural equivalence; Industrial procurement -- Europe -- Management -- Periodicals; Purchasing -- Europe -- Periodicals; Purchasing -- Europe -- Management -- Periodicals; Materials management -- Europe -- Periodicals; Industrial procurement -- Management; Materials management; Purchasing; Purchasing -- Management; Europe; Periodicals; 658.7205
• DOI: 10.1016/j.pursup.2017.02.002
• Languages: English
• ISSNs: 1478-4092

Abstract

Abstract: To understand how a supplier helps a buying company create value through innovations, studies have focused on a supplier's internal resources or its relationship with a buying company. Building upon this body of literature, we develop a theory of supplier network-based innovation value in this conceptual paper. This theory explains how a supplier's upstream and downstream value network can be a source of competitive advantage for a buying company. Specifically, it proposes that the levels and types of supplier innovation value is contingent on the configuration of a dual-ego value network, characterized by the locus and degree of buyer-supplier structural equivalence. This theory also explains how a supplier's ties with a buying firm's competitors can pose both opportunity and risk to buying company innovation. This theory contributes to the literature by showing when "seemingly undesirable" suppliers, due to a lack of technical capability or strong relationship with a buying company, might still be valuable to a buying company's innovation. Highlights: This paper provides a network-based explanation for how buying firms can extract innovation value from their suppliers' value networks. This study develops propositions concerning how different types of structural equivalence, a social network concept, between the buyer's and supplier's value networks can lead to different types of supplier innovation value. The theory also explains how a supplier's ties with a buying firm's competitors can pose both opportunity and risk to buyer innovation.