Role of Knowledge in Buyer Supplier Relationships

What is it about?

Global competition, ever-demanding customer expectations, and rapid technological changes are forcing firms to restructure the scope of operations and then outsource non-core processes to outside suppliers. Such organisational efforts have resulted in increased dependence on supplier firms to sustain competitive advantage. This paper provides a theoretical model to understand the process of successful learning and knowledge transfer in buyer-supplier alliances. The proposed model uses a social exchange framework for effective knowledge exchange and learning. Reciprocal commitment, interorganisational trust, power sharing, and socialisation are identified as essential for collaborative behaviour for successful learning and knowledge transfer between alliance partners. Specific testable propositions are presented.

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Why is it important?

Global competition, ever-demanding customer expectations, and rapid technological changes are forcing firms to restructure the scope of operations and then outsource non-core processes to outside suppliers. Such organisational efforts have resulted in increased dependence on supplier firms to sustain competitive advantage. This paper provides a theoretical model to understand the process of successful learning and knowledge transfer in buyer-supplier alliances. The proposed model uses a social exchange framework for effective knowledge exchange and learning. Reciprocal commitment, interorganisational trust, power sharing, and socialisation are identified as essential for collaborative behaviour for successful learning and knowledge transfer between alliance partners. Specific testable propositions are presented.

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