Group 10 Based on Research Paper by- Corine S. Noordhoff Kyriakos Kyriakopoulos Christine Moorman Pieter Pauwels Benedict G.C. Dellaert Do embedded ties with customers help or hurt supplier innovation? Embedded ties interact with supplier and customer innovation knowledge to influence supplier innovation
Role of relational & governance mechanism
Embedded ties are defined as a close and reciprocal relationship between a customer firm and a supplier firm (Uzzi & Lancaster, 2003) Theory The conflicting effects of embedded ties on innovation The impact of supplier and customer innovation knowledge on supplier innovation Embedded ties strengthen impact of supplier innovation knowledge When embedded ties weaken impact of customer innovation knowledge When embedded ties strengthen impact of customer innovation knowledge Impact of innovation on supplier performance
The conflicting effects of embedded ties on innovation Close and reciprocal relationship between customer firm and supplier firm
Improve relational and business process outcomes
Extend of firms building innovation strategies
Does embedded ties help or hurt supplier innovation?
Embedded Ties Supplier Innovation Knowledge: The Bright Side (Hypothesis #1) Motivation for supplier to own market knowledge Early Learning Opportunity for supplier to test its ideas early in innovation process
Customer Innovation Knowledge: The Dark Side (Hypothesis #2) Increased worry of partner opportunism Increased perceptions of knowledge redundancy
Customer Innovation Knowledge: The Bright Side Long term relationship(Hypothesis #3) Less worry of opportunism Increase partners confidence in quality of knowledge
Relationship Formalization(Hypothesis #4) Governance mechanism for Transparency Reduce likelihood of partner knowledge redundancy
Customer Relationship specific investments (Hypothesis #5) Reduce customer Opportunism Quality of customer insights improved
Impact of innovation on supplier performance Nomological Validity of predicted relationships
Prior result linked to innovation to firm performance
Relationship between supplier innovation and performance Method of Study Cross Sectional Survey methodology SAMPLE
MEASURES
MEASURE VALIDATION
COMMON METHOD BIAS TEST
MODEL AND ESTIMATION
Results Tests of Hypothesized Relationships Wald Test of Model Hypothesis (H1) predicts positive interaction between SIK and ET Hypothesis (H2) predicts negative interaction between CIK and ET Hypothesis (H3) predicts positive and significant effect of ET x CIK x LENGTH Hypothesis (H4) predicts positive and significant effect of ET x CIK x FORM Hypothesis (H5) predicts positive and significant effect of ET x CIK x CINVEST
Mediation Process Validation : The Role of knowledge redundancy and Opportunism Japs Supplier Opportunism Scale Effect of ET x CIK interaction on supplier innovation Effect of ET x CIK interaction on length , formalization and customer investments
Supplier Innovation and Firm Performance Supplier Innovation has direct positive effect on supplier strategic advantage Supplier Innovation has direct negative effect on supplier financial performance Supplier Strategic Advantage has direct positive effect on supplier financial performance Positive Total effect of innovation on financial performance
Discussion The effect of embedded ties
Opportunism as a dark side mechanism
Knowledge Redundancy as a dark side mechanism
The effect of supplier innovation knowledge
Innovation and co-creation
Role of networks
Toward a theory of innovation relationships
Generalised Findings Managerial Implications Manage all facets of joint innovation relationships
Invest in supplier innovation knowledge
Reduce the risks of working with smart customer
Manage the benefits of Time
Add value as a lead user
Look to the strategic benefits of joint innovation Conclusion Joint Innovation increasingly common strategy Important contingencies determine when building embedded relationships with customers pays off- Customers Innovation Knowledge Relational and Governance safeguards by suppliers Level of relationship formalization and investments Customer Opportunism Length and formalization of relationship Owning Innovation Knowledge is always a benefit for suppliers