Inter-firm and intra-firm coordination of buyer-supplier collaborations in new product development under conflicts of interest

Abstract

Purpose The purpose of this paper is to analyze coordination mechanisms in buyer-supplier collaborations in new product development (NPD) and the influence of conflicts of interest. Inter- and intra-organizational coordination mechanisms are investigated. Design/methodology/approach The findings reported are based on a multiple case study consisting of four cases at two firms. Theoretical sampling consisted in selecting two projects with opposite levels of conflicts of interest between the collaborating firms. In total, 38 interviews were conducted with employees in buying and supplying firms. Findings The findings illustrate how inter-firm conflicts of interest affect the way firms coordinate both externally and internally. A high level of conflicts of interest related to information leakage emanated in more distant relationships with limited coordination between buyer and supplier. This restrictive relationship is also reflected in limited coordination between the buyer’s purchasing and research and development (R&D) units. Research limitations/implications Generalizability is limited, as only two large industrial firms have been studied, but with four projects investigated in detail. The study shows that in situations, in which there is a conflict of interest, external coordination affects the firms’ internal coordination. Conflicts of interest in buyer-supplier NPD collaborations are managed by limiting information sharing, which is reflected in the way R&D and purchasing are coordinated. Practical implications Managers need to be aware of that a firm’s fear of sharing information with its supplier can also transfer to intra-firm unit coordination, as R&D may limit its information sharing with purchasing. On the other hand, in buyer-supplier collaborations with little conflict of interest, firms can form close relationships. Such a close relationship is also mirrored in how R&D and purchasing openly share information and coordinate. Originality/value This research contributes to an increased understanding of coordination in buyer-supplier innovation collaboration. Firms not only need to consider their external coordination but also how coordination with suppliers may affect the way they coordinate in NPD projects within the firm between purchasing and R&D.