Coordination mechanisms, collaboration quality, and supplier involvement in new product development

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Coordination mechanisms, collaboration quality,
and supplier involvement in new product
development

• Tingting Yan
• Supply Chain Management
• Arizona State University
• tingting.yan_at_asu.edu
• Dissertation Presentation
• Academy of Management Doctoral Consortium
• August 8, 2009, Chicago, IL

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Dissertation Summary

• Title Coordination mechanisms, collaboration
  quality, and
• supplier involvement in new product
  development
• Dissertation Committee
• Kevin Dooley Chair, Thomas Choi, Joe Carter
• Dissertation Stage
• Proposal defense within a week
• Practical Contribution
• Suggests manufacturers to consider both how (the
  structure of interactions) and how well (the
  quality of each interaction) they interact with
  suppliers as predictors of design performance
• Theoretical Contribution
• Unveiling the black-box of inter-firm
  interactions in collaborative new product
  development through differentiating the
  structural from the behavioral aspect
• Examining the interaction between the two aspects
  through the use of alternate theory (work group
  effectiveness theory)

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Dissertation Summary (continued)

• Research Questions
• When a manufacturer collaborates with a supplier
  on new product design, how should members from
  the two firms be coordinated to deliver good
  designs both effectively and efficiently?
• How does collaboration quality affect product and
  process outcomes and whether it moderates effects
  related to the coordination mechanism?
• Research Method
• Survey research with a three-level embedded
  design
• Unit of Analysis
• Mfg-Supplier Relation
• Levels of Analysis
• (1) Dyadic Relationship
• (2) Project
• (3) Manufacturer
• Statistical Procedure
• Structural equation modeling (SEM)
• Multi-group SEM is used to investigate
  measurement invariance and population
  heterogeneity across firms
• Dummy variables controlling for project-level
  unobserved confounding variables

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Research context Buyer-supplier collaboration
in new product development
Hewlett-Packard (HP) delegates most of its
product development efforts to custom
manufacturers or other supply-chain collaborators
(Parker and Anderson 2002)
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Drivers, benefits and challenges

• Drivers for buyer-supplier collaboration in NPD
• Increased focus on new product development
• Overcome competence limitations (Heimeriks and
  Schreiner 2002)
• Benefits for buyer-supplier collaboration
• Improved design performance (Swink 1999,
  Bonaccorsi and Lipparini 1994).
• Challenges for buyer-supplier collaboration
• Loss of control, increasing difficulty in
  coordinating interdependent tasks (Barringer and
  Harrison 2000).
• An important task
• Making best use of suppliers expertise without
  sacrificing necessary coordination

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Research scope
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Literature review
Question
Field
This Study
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Gaps

• No uniform findings regarding effects of
  individual attributes of coordination mechanisms
  on performances
• The alignment between task uncertainty and
  information processing capacity of coordination
  mechanisms in an inter-firm collaborative NPD
  context is never studied
• Collaboration quality is not well defined,
  generating ambiguity in explaining research
  findings.
• The interaction between the structural and
  behavioral aspects of inter-firm interactions on
  product and process performance are never
  studied.

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Conceptual model
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Task uncertainty

• Task uncertainty
• The difference between the amount of information
  required to perform the task and the amount of
  information already possessed by the organization
  ( Galbraith 1973).
• Analyzability and exceptions (variety) (Perrow
  1967)
• Two types of coordination tasks
• Design-design coordination
• Design-manufacturing coordination
• Commonality transform mismatch into match

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Coordination mechanisms

• Coordination mechanisms
• Organizational structures for managing
  interdependent tasks (Malone and Crowston 1994)
• Varies on three attributes
• formalization (extent of using formal rules),
• cooperativeness (extent of shared decision
  making),
• centralization (locus of decisional autonomy)
  (McCann and Galbraith 1981, Olsen et al.1995)

Formal Dominating Centralized
Informal Participative Decentralized
Mechanistic
Organic


hierarchical directives
design centers
integrating managers
design teams

Increasing information processing capacity
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Structural alignment coordination mechanisms
vs. task uncertainty
Proposition 1 Structural alignment between task
uncertainty in design-design/design-manufacturing
fit and coordination mechanisms leads to better
design performance.
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Two types of performance

• Fit-type performance
• Product integration
• Design manufacturability
• Efficiency-type performance
• Development cost
• Design cycle time
• Two types of structural misalignment
• Under- and over-coordination

Fit-type performance
Efficiency-type performance
Under-coordination
Over-coordination
Under-coordination
Over-coordination
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Buyer-supplier dyad as a work group

• A work group as a set of people who (Hackman and
  Wageman 2005)
• (1) can be distinguished reliably from
  nonmembers,
• (2) are interdependent for some common purposes,
• (3) invariably develop specialized roles within
  the group,
• (4) have one or more group tasks to perform,
• (5) operate in a social system context
• In this study
• Engineers from the buyer and supplier firms form
  a work group for designing one component in the
  final product
• Collaboration quality
• The extent to which partnership-like behaviors,
  such as mutual support and adaptation, trust,
  open and timely information sharing, etc., are
  exhibited in each inter-unit interaction

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Collaboration qualityMain and moderating effects

• Theoretical supports for the main effect
• Hackmans theory of work group effectiveness
  (Hackman 1987)
• McGraths Input-process-output (IPO) model
  (McGrath 1984)
• High collaboration quality improves design
  performance through enhancing process
  effectiveness.

Proposition 2 Collaboration quality is
positively associated with design performance.

• Theoretical support for the moderating effect
• Hackmans group effectiveness theory contextual
  support moderates the effect of process
  effectiveness on group performance
• IPO model process effectiveness is exhibited
  through the alignment between task uncertainty
  (I) and coordination mechanisms (P).

Proposition 3 Collaboration quality enhances the
positive effects of the structural alignment on
design performance.
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Collaboration QualityMain and moderating effects
Fit-type performance
Efficiency-type performance
Over-coordination
Under-coordination
Over-coordination
Under-coordination
High collaboration quality
Low collaboration quality
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Control variables

• Task relevant expertise (Hackman 1987, Bunderson
  2003)
• Capability complementarity (Holcomb and Hitt
  2006, Jap 1999, Penrose 1959, Harrison et al.
  1991, Rothaermel 2001, Teece 1986)
• Suppliers design responsibility (Clark and
  Fujimoto 1991, Clark 1989, Peterson et al. 2005
  Jayaram 2008, etc.)
• Timing of supplier involvement (Hartley et
  la.1997, Peterson et al. 2005, etc.)
• Component complexity (Weingart 1992, Andres and
  Zmud 2002, , Sobrero and Roberts 2001)
• Group size (Hackman 1987, Steiner, 1972, Nieva,
  Fleishman Reick, 1985, Wicker et al. 1976,
  Campion et al. 1993, Magjuka and Baldwin 1991)

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Methodology

• Survey
• End Product Assembly Manufacturers
• Tangible Components, discrete products,
  independent organizations
• Each mfg multiple recently finished NPD projects
• Unit of Analysis Mfg-Supplier dyad
• Levels of Analysis (a) Dyadic Relationship (b)
  project (c) firm
• Sampling
• Theoretical sampling firms and projects are
  chosen to maximize differences on firm- and
  project-level characteristics so as to increase
  external validity
• Four manufacturers airplane, personal computer,
  automobile, and telecommunication
• Recently finished NPD projects reduce biases
  associated with recall
• Each project multiple suppliers involved, each
  of which works on the detailed design of one
  component

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Methodology (continued)

• Target respondents
• Independent responses for independent and
  dependent variables (reduce common method biases)
• Design engineers of manufacturers coordination
  mechanisms, collaboration quality, task
  uncertainty, capability complementarity, task
  relevant expertise
• Project managers of manufacturers four types of
  component design performances, supplier design
  responsibility, timing of a suppliers
  involvement, component complexity
• Design engineers of suppliers collaboration
  quality (conditional)
• Statistical analysis tool
• Structural equation modeling (SEM)
• Project dummy variables to control unobserved
  project-level confounding variables
• Multiple-group SEM analysis to investigate
  measurement invariance and population
  heterogeneity

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Questions Comments?
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Additional slides
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Limitations and future directions

• Limitations
• The subjective and retrospective nature of the
  collected data
• Weakness in inferring causal relationships
• Buyers as the only information source for
  coordination mechanisms and task uncertainty
• External validity of results from this study may
  be weakened by the small sample size
• Future directions
• Identifying antecedents to task uncertainty
• Exploring factors contributing to high
  collaboration quality
• Examining contingency factors tuning effects of
  collaboration quality
• Identifying factors, other than task uncertainty,
  that affect choices of a certain type of
  coordination mechanism

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When task is more uncertain?Antecedents to task
uncertainty
Technical newness

Component Business significance


Design tool Representation capability
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How to cultivate high collaboration
quality?Antecedents to high collaboration quality

_

Length of previous relationship
Relationship extendedness
Performance ambiguity
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When is collaboration more important?Contingency
factors for collaboration quality
Capability Complementarity

Supplier Design responsibility


Component Complexity
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What cause structural misalignment?Factors
affecting choices of coordination mechanisms
Organizational culture
Dedicated resources to an existing structure