Supplier's involvement and success of radical new product development in new ventures

Michael Song, Anthony Di Benedetto

Research output: Contribution to journalArticleAcademicpeer-review

251 Citations (Scopus)

Abstract

Supplier 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.
Original languageEnglish
Pages (from-to)1-22
JournalJournal of operations management
Volume26
Issue number1
DOIs
Publication statusPublished - 2008

Keywords

  • Product Development
  • Questionnaires/surveys/interviews
  • Transaction cost analysis
  • Supplier involvement
  • Power and commitment
  • METIS-246772
  • Innovation
  • IR-82789

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