Managing supplier capabilities for buyer innovation performancein e-business

Abstract

Purpose The purpose of this paper is to analyze the connections between the capabilities of suppliers, buyer operations and the innovation performance of buyers in service-based supply chains. In particular, the authors use a construct of supplier capabilities comprising the capabilities needed to produce an online store and divided into capabilities related to the product, capabilities related to service delivery and capabilities related to the buyer-supplier relationship. Design/methodology/approach Data were collected with cross-sectional, random sampling from Finnish companies that have an active online store. A survey was used to collect data on managerial assessments of capabilities of a supplier, the operations of buyers and the innovation performance of buyers. Multiple regressions were used to test the hypotheses. Findings The results reveal that capabilities related to the buyer-supplier relationship are positively connected with the innovation performance of the buyer, but those related to the product and service delivery do not significantly influence the innovation performance of the buyer. The results show that the moderating influence of buyer operations on the relationship between capabilities related to the product and the innovation performance of the buyer is negative. The moderating influence of buyer operations on the relationship between capabilities related to service delivery and the innovation performance of the buyer is positive. Research limitations/implications Forming tight relationships with online store suppliers appears to be a successful way to attain innovation performance for online store operators. Online store operators should not expect supplier capabilities related to online store functionality and characteristics of online store delivery alone to improve their innovation performance. Originality/value Few studies use an e-business operations model to comprehend the role played by supplier capabilities in buyer innovation performance in service-based supply chains. Building on a resource-based view with inter-organizational management and e-business literature streams, the authors focus on three supplier capabilities and buyer operations to investigate their effects in terms of enhancing innovation performance.