Knowledge transfer between supply chain partners: a conceptual model

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     Int. J. Process Management and Benchmarking, Vol. 1, No. 3, 2006 231  Copyright © 2006 Inderscience Enterprises Ltd. Knowledge transfer between supply chain partners: a conceptual model Qile He Middlesex University Business School, The Burroughs, London NW4 4BT, UK E-mail:  Abby Ghobadian and David Gallear* Brunel Business School, Brunel University, Elliott Jaques Building, Uxbridge, Middlesex UB8 3PH, UK E-mail: E-mail: * Corresponding author  Amrik Sohal Faculty of Business and Economics, PO Box 197, Caulfield East, Vic 3145, Australia E-mail: Abstract: The opportunity to learn more effective practices from firms operating within a strategic supply chain partnership is viewed as critical to enhanced competitiveness. Despite the perceived importance of knowledge transfer in a strategic supply chain partnership there is a paucity of conceptual models depicting the variables that have an impact on transfer effectiveness. This paper presents such a model and discusses how the variables are inter-related, through systematically reviewing the literature. The model development process involved both induction and deduction. The authors contend that the proposed model contributes to the developing literature and is of relevance to both researchers and practitioners. Keywords:  knowledge; knowledge transfer; supply chain; buyer-supplier  partnership. Reference  to this paper should be made as follows: He, Q., Ghobadian, A., Gallear, D. and Sohal, A. (2006) ‘Knowledge transfer between supply chain  partners: a conceptual model’,  Int. J. Process Management and Benchmarking  , Vol. 1, No. 3, pp.231–262. Biographical notes: Qile He is a Research Associate at Middlesex University Business School. He received his first degree, a BA in Economics from the University of Colorado at Denver. Subsequently he gained an MSc in Financial Decision Management from the University of Luton and an MSc in Research Methods from Middlesex University. He is now pursuing his PhD at Middlesex University. His principal research interest is the knowledge transfer processes and practices in the context of firms’ supply chain management.   232 Q. He, A. Ghobadian, D. Gallear and A. Sohal Abby Ghobadian is Professor of Management at Brunel Business School and Visiting Professor at Warwick Business School. He is author/co-author of seven research monographs, two edited books, over 60 refereed journal  papers, and numerous chapters in books and conference papers. His research interests lie in examining the reasons for heterogeneous organisational  performance and how organisational performance can be improved. David Gallear is Senior Lecturer in Operations Management at Brunel Business School. His research interests include operations strategy, quality management and supply chain management. Current work focuses on examining the nature, form and determinants of supply chain purchasing strategy relationships. He has authored/co-authored two research monographs, two edited books and a significant number of papers. Amrik Sohal is a Professor in the Department of Management and Associate Dean, Research Development in the Faculty of Business and Economics at Monash University. He has authored or co-authored over 100 papers in refereed  journals, as well as three books and a number of chapters contributed to books. His current research interests are in manufacturing/operations strategy, technology/information management, quality management, supply chain management, lean/agile production systems and electronic business. 1 Introduction Hyper competition has propelled supply chain partnerships to the forefront of  practitioners’ and researchers’ agenda (for example, Harland, 1996; Christopher, 1998; Monczka et al., 1998). A supply chain is a network of actors that transform raw materials into distributed products (Bowersox et al., 1999). In some supply chains members seek to develop long-term collaborative relationships in pursuit of stability and predictability, however, to avoid inflexibility links are severed when needs change (Hult et al., 2004). The proponents of strategic supply chain partnerships argue that partnership enables the members to develop new solutions to complex problems by creating stability, enhancing synchronisation, improving coordination, increasing innovativeness, aiding information flow and encouraging learning (Hult et al., 2002, 2004). The outcome is faster cycle times, improved quality, better delivery performance, lower costs, higher market share and ultimately higher profitability and return on investment for members of the chain (Macbeth and Ferguson, 1994; Christopher, 1998; Monczka et al., 1998). In short, strategic supply chain partnership offers long-term competitive advantage in highly turbulent and low munificence environments coupled with ever more demanding customer expectations (Lemke et al., 2003). The attraction of this promise has led firms to invest vast sums to improve supply chain processes, for example, UPS spent $9 billion  between 1986 and the late 1990s to improve its supply chain (Farhoomand and  Ng, 2000). A number of prepositions have been advanced to explain why partnership results in improved performance. Lawrence et al. (2002) posit that through repeated interactions, groups of organisations develop common understandings and superior practices. On the other hand, Gray (1989) argued that collaborative relationships facilitate a greater level of innovation. The combination of these two propositions led (Lawrence et al., 2002) to theorise that collaboration results in new practices, technologies and rules, hence,     Knowledge transfer between supply chain partners: a conceptual model 233 improved performance. This point of view is supported by other scholars who argue that  partnership can potentially act as a source of additional information and new ideas critical to the development of sustainable competitive advantage (Powell et al., 1996; Dyer and Singh, 1998; Inkpen, 1998; Dussauge et al., 2000). The above propositions and resulting theory are implicitly based on the assumption that the exchange of knowledge between the collaborating organisations goes beyond that which takes place in a typical market transaction. In fact, many scholars argue that the key incentive for businesses to form supply chain partnership, apart from stability and  predictability, is the potential for exchange of knowledge and access to best practice (Contractor and Lorange, 1988; Lamming, 1993; Mody, 1993; Crossan and Inkpen, 1995; Mowery et al., 1996; Kale et al., 2000; Chen, 2004). Supply chain theory development is at an early stage and despite the recognised catalytic role of knowledge transfer within the strategic supply partnership there is a  paucity of conceptual models depicting both the key factors influencing knowledge transfer between supply chain partners and the knowledge transfer mechanisms (Bessant et al., 2003; Hult et al., 2004). The aim of this paper is to address this gap by developing a conceptual model of knowledge transfer within strategic supply chain  partnerships grounded in theory and empirical research. A three-stage process was used to develop the conceptual model presented in this  paper. First, an initial inductive skeleton model was developed. To this end, the authors identified theories relevant to the knowledge transfer process in the context of strategic supply chain partnerships and used these to isolate appropriate variables from prior empirical studies. Second, a deductive process was used, by conducting an extensive review of the literature, to verify the relevance of these variables. Third, with the help of literature, the relationship between factors identified previously was examined, to develop a comprehensive conceptual model of knowledge transfer in the context of strategic supply chain partnership. The process used follows Ginsberg and Venkatraman’s recommendation, that “... an analytic review scheme is necessary for systematically discerning  patterns from a widely differing set of studies and evaluating the contributions of a given body of research.” (Ginsberg and Venkatramans, 1985, p.422) Moreover, the framework constitutes a well-specified model, which can help guide future research. The rest of the paper is organised into seven sections. Supply chain partnership literature is reviewed in the next section. This is followed by presentation of the initial skeleton model. Next the stages of knowledge transfer process are examined, followed by organisational factors influencing interfirm knowledge transfer.   This is followed by an examination of relationships between the organisational factors and the stages of knowledge transfer, and an examination of relationships amongst these organisational factors. Next our comprehensive conceptual model is presented. In the final section our conclusions are elaborated.   234 Q. He, A. Ghobadian, D. Gallear and A. Sohal 2 Strategic supply chain partnership: an overview The nature of the relationship between actors in a supply chain varies along a continuum – at one end they operate at arms-length and at the other end they operate as a virtually vertically integrated entity (Spekman et al., 1998; Mentzer et al., 2000; Knemeyer et al., 2003; Moberg and Speh, 2003). In between there are different levels of cooperation. The extant literature suggests that supply chains characterised by a high level of cooperation are more effective than those relying on traditional market mechanisms and operating at arms-length from each other (for example, Macbeth and Ferguson, 1994; Lambert et al., 1996; Spekman et al., 1998; Dyer and Nobeoka, 2000). Collaboration is defined as a cooperative, interorganisational relationship that is negotiated in an ongoing communicative process and that relies on neither market nor hierarchical mechanisms of control (Heide, 1994; Lawrence et al., 1999; Phillips et al., 2000; Lawrence et al., 2002). In the supply chain context, cooperation is considered as a step towards partnership (for example, Spekman et al., 1998). The difference between cooperation and partnership is best summarised by a quote from Copacino (1996, p.60), “although it is challenging to develop true partnership relationship, the fact is that without strategic partnerships, it is impossible to manage the supply chain as a single entity”. The implication here is that strategic supply chain partnership is characterised by a high level of integration. Despite its popularity there is no commonly accepted definition of strategic  partnership (Lemke et al., 2003). Table 1 depicts a range of definitions provided by supply chain researchers. These definitions, whilst different, share a number of important common characteristics. All the definitions imply a high level of interdependence characterised by shared: goals, information, reward, risk and practices. Implicit in all the definitions is the belief that the ultimate outcome of partnership is enhanced competitiveness. Table 1   Definitions of strategic supply chain partnership  Author  (  s )  Definition Mohr and Spekman (1994) Purposive strategic relationships between independent firms who share compatible goal, strive for mutual benefit, and acknowledge a high level of mutual interdependence Ellram (1995) An agreement between a buyer and a supplier that involves a commitment over an extended time period, and includes the sharing of information along with a sharing of the risks and rewards of the relationship Lambert et al. (1999) A tailored business relationship based upon mutual trust, openness, shared risk and shared rewards that yield a competitive advantage, resulting in business  performance greater than would be achieved by the firms individually Mentzer et al. (2000) An inter-organisational entity developed between two independent organisations in a vertical relationship within a supply chain Kotabe et al. (2003) Buyer-supplier relationship or partnership is set of practices and routines that support economic exchanges between the two firms Hult et al. (2004) Members of the chain are strategically, operationally, and technologically integrated The importance of strategic supply chain partnership as a catalyst for knowledge transfer is acknowledged by many researchers (for example, von-Hippel, 1988; Love and     Knowledge transfer between supply chain partners: a conceptual model 235 Gunasekaran, 1999; Kotabe et al., 2003). On the other hand, because chain members are not part of the same organisation, knowledge sharing potentially plays an important coordinating function, and thus, it is central to effective functioning of the chain (Hansen, 2002). It is contended that effective sharing of knowledge among supply chain  partners can potentially increase profitability because the flow of know-how, practices, and technology is a critical source of new ideas resulting in innovation and sustainable development of the entire supply chain (for example, Beecham and Cordey-Hayes, 1998; Kotabe et al., 2003; Lamming et al., 2004). Prior research also points to the importance of integration, for example, linking relationship and technology strategy together to facilitate technological innovations via links developed around supply chain nodes (Lamming, 1993). Dussauge et al. (2000) showed that ‘link alliances’ – that is to say, negotiated interorganisational partnerships which are formed by partners contributing differently but complementarily to the alliance – offer greater opportunities for learning. For example, customer-supplier relationship is more likely to lead to knowledge transfer than other forms of strategic alliances. The review of literature suggests that relatively few studies have addressed the interfirm knowledge transfer between strategic supply chain partners. Beecham and Cordey-Hays (1998) examined the knowledge transfer in a particular type of  buyer-supplier partnership in the UK motor industry, which they referred to as technology partnering. They defined technology partnering as a relationship between supplier and customer that encourages the development of technology to meet the customer’s requirements. Dyer and Nobeoka (2000) examined Toyota’s knowledge transfer practices to demonstrate the role of supply chain partnership in strengthening effective learning and knowledge transfer. Kotabe et al. (2003) examined the influence of technical exchange and technological transfer between suppliers and buyers and how the exchange contributed to the supplier performance improvement in the automotive industry. The empirical studies, although few in number, demonstrate a positive link  between knowledge transfer and improved performance. However, they do not provide a model showing the variables that potentially influence the effectiveness of knowledge transfer within a strategic supply chain partnership. The aim of this paper is to address this gap in the literature. 3 Initial conceptual model of interfirm knowledge transfer The definitions of strategic supply chain partnership presented in Table 1 and prior studies suggest that institutional theory, Resource-Based View (RBV), Knowledge-Based View (KBV), and organisational learning all play a role in explaining interorganisational knowledge transfer and its potential impact (for example, Hult et al., 2002, 2004; Lawrence et al., 2002). These theories were used to guide our examination of the prior empirical research investigating interfirm knowledge transfer. The review covered the  period 1990–2004 and examined interfirm knowledge transfer within different types of  partnership including that of strategic supply chain partnership. Table 2 depicts the outcome of this review along four dimensions of interest to this study – the type of interfirm relationship studied, method and unit of analysis, variables examined and outcomes of the study.
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