Simon Sheng, Ph.D., associate professor of marketing in the University of Alabama at Birmingham Collat School of Business, advises manufacturers and supply-chain managers to better define relationships with suppliers and business partners based on recent study findings.
Sheng’s study, featured in the Journal of Operations Management in March, takes a closer look at conflicting evidence in the field of supply-chain and strategic management and examines the role of relational ties — or information-carrying connections — between a firm and its partners. Much research underscores the benefits of strong relational ties to an organization, such as increased communication and knowledge-sharing; but recent research differs. New findings caution that highly embedded ties can restrict information and make a firm susceptible to exploitation by an opportunistic partner.
Sheng’s team studied manufacturer-supplier relationships to evaluate the effect that the intensity of relational ties has on partners’ ability to acquire specific types of knowledge, and he found a correlation between the two. Manufacturers, he determined, benefit from building relational ties that best support the type of knowledge that is being transferred through that relationship.
Sheng suggests that managers must learn to employ appropriate mechanisms to manage knowledge-acquisition from supply-chain partners and ensure the organization remains open to new information and opportunities while maintaining control of its valuable knowledge base.