Trading-off innovation novelty and information protection in supplier selection for a new product development project: Supplier ties as signals

Tingting Yan, Yang Yang, Kevin Dooley, Sangho Chae

Research output: Contribution to journalArticlepeer-review

2 Scopus citations

Abstract

A supplier's interorganizational ties can be a source of novelty as well as information leakage risk when a buyer involves suppliers in a new product development project. We use signaling theory to explain how supplier ties affect a purchasing manager's perception of suppliers. Three types of supplier ties are considered: ties with external innovation partners, with customers outside the buying firm's industry, and with the buying firm's competitors. We posit that managers use supplier ties as signals to indicate a supplier's potential in contributing to innovation novelty or information protection. Results from two scenario-based experiments with practicing managers support most of our hypotheses. When innovation novelty is the goal, managers perceive other-industry customer ties and external innovation ties as positive signals, while competitor ties as a negative signal. When information protection is the goal, all three types of ties are perceived negatively. When both goals are considered, information protection has a greater influence than innovation novelty on the final supplier selection likelihood.

Original languageEnglish (US)
Pages (from-to)933-957
Number of pages25
JournalJournal of Operations Management
Volume66
Issue number7-8
DOIs
StatePublished - Oct 1 2020

Keywords

  • behavioral experiment
  • conjoint analysis
  • information protection
  • innovation novelty
  • signaling theory
  • supplier selection
  • supplier ties

ASJC Scopus subject areas

  • Strategy and Management
  • Management Science and Operations Research
  • Industrial and Manufacturing Engineering

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