Modularity and the Impact of Buyer-Supplier Relationships on the Survival of Suppliers

Glenn Hoetker, Anand Swaminathan () and Will Mitchell ()
Additional contact information
Anand Swaminathan: Graduate School of Management, University of California at Davis, One Shields Avenue, Davis, California 95616-8609
Will Mitchell: Fuqua School of Business, Duke University, P.O. Box 90120, Durham, North Carolina 27708

Management Science, 2007, vol. 53, issue 2, 178-191

Abstract: Modularity in product design and flexible supply chains is increasingly common in buyer-supplier relationships. Although the benefits of supply chain flexibility and component modularity for end-product manufacturers are accepted, little is known about their impact on suppliers. We advance the literature on modularity by exploring how three aspects of a supplier's relationships with its customers affect the supplier's survival: duration of buyer-supplier relationships, autonomy from customers, and links to prominent buyers. We compared the effects of these aspects of buyer-supplier relationships for low- and high-modularity components. Using data on U.S. carburetor and clutch manufacturers from 1918 to 1942, we found that suppliers of high-modularity components benefited more from autonomy provided by potential customers, whereas suppliers of low-modularity components benefited more from ties to higher status customers. Both benefited from autonomy generated by existing customers. Thus, relationships that require trust and extensive sets of interfirm routines, as do those for low-modularity components, led to both greater relationship benefits and greater constraints.

Keywords: modularity; buyer-supplier relationships; status; autonomy; relationship duration (search for similar items in EconPapers)
Date: 2007
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Downloads: (external link)
http://dx.doi.org/10.1287/mnsc.1060.0630 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:53:y:2007:i:2:p:178-191

Access Statistics for this article

More articles in Management Science from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().