The Performance Impact of the New-Incumbent Supplier Selection before and after the Emergence of an Architectural Innovation

• In Event: STRATEGIC MANAGEMENT: Manufacturing and Supply Chains

Abstract

Despite the emphasis of previous studies on the preference for vertical integration over outsourcing when dealing with architectural innovations, we suggest potential moderators for outsourcing during the period within which a new architectural innovation rapidly evolves. We investigate the performance impact of a new supplier (forming exchange relationships with new suppliers) vs. an incumbent supplier choice (reinforcing exchange relationships with current suppliers) before and after an architectural innovation’s dominant design emergence. This study provides theoretical and managerial implications regarding when to embark on new relationships with new suppliers or stay put with the current suppliers when dealing with architectural innovations.

Authors

• Woo Yong PARK, University of Nevada (Las Vegas)

• Young Ro, University of Michigan (Dearborn)

• Chanchai Tangpong, North Dakoda State University