Manufacturer-supplier coordination in product development projects: An investigation of organizational context, project condition and pattern of inter-firm cooperation

Abstract

Existing studies have emphasized importance of supplier involvement in new product development. New product development has been recognized as iterative process of problem solving. In this perspective, joint problem solving and extensive communication have been often valued for the inter-organizational coordination. Extending the research stream, some researchers have investigated locus of problem solving and pattern of inter-firm communication under specific characteristics of project. Yet, how the project conditions interact with organizational context in the product development project, thereby influencing problem solving process is largely unexplored. This study presents eight cases of manufacturer-supplier product development. Based on cross-case analysis, it is observed that both locus of problem solving and inter-firm communication are formed by the interaction of organizational context and project conditions. Respective value system of manufacturer and supplier, often consistent across projects, directly specifies distinct coordination mechanism which is more compatible to the organization. These characteristics along with inter-firm power structure are involved in the formation of the cooperation pattern. Project’s own conditions such as technology uncertainty and knowledge distribution also require particular pattern of inter-organizational cooperation for effective problem solving. In certain product development projects, organizational context and project condition match particular coordination pattern well. But it does not apply to all inter-organizational coordination. If different coordination patterns are required by organizational context and project condition, it should be noted that organizational contexts are deeply rooted in the firms. Even though compatible to the project conditions, maintaining problem solving process not perfectly suitable to the organization may cause cost to some extent due to organization inertia. In such circumstanc...