The symbiotic existence of interorganizational and interpersonal ties in supply chain collaboration

• Published date: 14 August 2017
• Pages: 723-754
• DOI: https://doi.org/10.1108/IJLM-12-2014-0198
• Date: 14 August 2017
• Author: Samanthi Ekanayake,Paul Childerhouse,Peter Sun
• Subject Matter: Management science & operations,Logistics

The symbiotic existence

of interorganizational and

interpersonal ties in supply

chain collaboration

Samanthi Ekanayake

Department of Management Systems, The University of Waikato,

Hamilton, New Zealand

Paul Childerhouse

School of Engineering and Advanced Technology, Massey University,

Palmerston North, New Zealand, and

Peter Sun

Waikato Management School, The University of Waikato,

Hamilton, New Zealand

Abstract

Purpose –Social network perspective to interorganizational relations focuses on the effect of organizations’

external relationships in collaboration as opposed to their internal resources and capabilities. It presumes that

effectively managing such relationships is vital to gaining collaborative synergies. The purpose of this paper

is to contribute to the growing interest in the social network perspective to explain supply chain collaboration.

Design/methodology/approach –Literature from the network field is discussed in the context of

interorganizational collaboration. A logistics service provider’s network is explored in depth leading to the

inductive construction of a multi-level model of social network collaboration.

Findings –The conceptual model provides a useful lens to evaluate supply chain collaboration.

The symbiotic relationship between interorganizational and interpersonal networks is highlighted as vital for

effective collaboration.

Research limitations/implications –The conceptual model has only been developed from a single

network. Wider application is required to ensure generalizability. The critical role of the personal networks of

boundary spanning actors at different levels wants further investigation.

Practical implications –Partners’intra-organizational structures and personal ties of boundary spanners,

both at the senior and operational level, have a profound effect on supply chain operations.

Originality/value –Personal networks interact with organizational networks and complement each other in

yielding interfirm collaborative synergies.

Keywords Interorganizational networks, Supply chain collaboration, Interpersonal networks

Paper type Research paper

1. Introduction

An increasing proportion of value creation is now taking place outside firm boundaries

(Halldórsson et al., 2007). Asa result, the third party logistics (TPL) industry is in the growth

phase of its lifecycle in many countries (Larson and Gammelgaard, 2001; Sankaran et al., 2002).

However, the majority (70 percent) of logistics alliances continue to fail (Cruijssen et al., 2007)

with more than half ending within five years of formation, forcing companies to take

previously outsourced functions back in-house (Sankaran et al.,2002).Interfirm

collaboration remains challenging (Razzaque and Sheng, 1998; Sandberg, 2007) and the

work of Min and Mentzer (2004) and Chen and Paulraj’s (2004), for example

(Halldórsson et al., 2007, p. 286), affirmed that the “current frameworks of SCM [….]

do not address the economic, strategic, and socioeconomic theoretical rationales”behind

the managing of supp ly chain relationships.

The International Journal of

Logistics Management

Vol. 28 No. 3, 2017

pp. 723-754

© Emerald PublishingLimited

0957-4093

DOI 10.1108/IJLM-12-2014-0198

Received 21 December 2014

Revised 29 July 2015

2 December 2015

29 February 2016

Accepted 8 April 2016

The current issue and full text archive of this journal is available on Emerald Insight at:

www.emeraldinsight.com/0957-4093.htm

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Supply chain

collaboration

The dominant theories applied to understand supply chain collaboration, such as

transaction cost economies (TCE) and the resource-based view (RBV ) (Defee et al., 2010) fail

to explain the phenomenon fully. The primarily focus of these theories has been the

“formation”of interorganizational relationships (IOR), thus neglect the crucial aspect of

“managing”them effectively (Barringer and Harrison, 2000; Gulati, 1998). Moreover, TCE

and RBV largely adopt an organizational (macro) lens to the study of IOR, thus overlooking

the individual (micro) behavioral complexities involved in these relationships.

TCE, for instance, stresses the transaction cost advantages in forming IORs (e.g. Jarillo,

1988; Williamson, 1991). By viewing strategic alliances as intermediate or hybrid

governance structures, the theory attempts to explore the most efficient frameworks that

yield the highest economic transaction (Bernardes, 2010; Skjoett-Larsen, 1999). It presumes

that firms are in a position to organize and control their boundary-spanning activities

(e.g. coordination, negotiation, monitoring) through integrated decision networks and

communication patterns to minimize the sum of its transaction and production costs

(Barringer and Harrison, 2000; Gulati, 1998; Gulati and Singh, 1998). Trust in these

relationships is a “calculated risk”manifested at the aggregate organizational level

(Williamson, 1996). Hence, the consequences of trusting behavior at the individual level in

designing and managing such governance mechanisms are largely overlooked in their

frameworks (Bernardes, 2010; Ring and Van de Ven, 1994; Skjoett-Larsen, 1999).

RBV, on the other hand, presumes that a firm is a collection of heterogeneous resources

(Wernerfelt, 1984), hence it focuses on accumulating these resources for competitive advantage

(Skjoett-Larsen, 1999; Das and Teng, 2000). More contemporary work (e.g. Ahuja, 2000; Ireland

et al., 2002; Parkhe et al., 2006) on the theory nevertheless discusses the firm’spotentialto

sourcing preferential resources by partnering with other organizations (Ireland et al., 2002).

In supply chain management (SCM), for example, the theory is recognized as one that can be

used to achieve competitive advantage(Lewis, 2000; Pandzaet al., 2003; Rungtusanatham et al.,

2003). This work argues that it is the key decision makers’ability to maximize firm resources

via forming alliances that provide the optimal resource configuration relative to other possible

combinations (Das and Teng, 2000). However, the process of maximizing value of a firm’s

resources through these alliances is filled with ambiguity and uncertainty (Anand and Khanna,

2000). Hence, effective alliance management is viewed critical in this work (Ireland et al., 2002).

Yet, the theory fails to address the micro-behavioralcomplexities involved in the management

of such relationships (Skjoett-Larsen, 1999).

Social network perspective in contrary addresses both why firms engage in IOR and how

these relationships are managed and evolved. It presumes that alliances are formed in the

context of relationships and unfolds through ongoing micro and macro interactions

(Carter et al., 2007; Galaskiewicz, 2011; Gilgor and Autry, 2012; Zaheer et al., 2010). Hence, the

partners’strategic actions are significantly influenced by the social context they are embedded

in (Gulati, 1998). For instance, Zaheer et al. (2010) affirmed that a firm’s resources and

capabilities account considerably to its performance outcomes; however, at the same time the

firm is empowered and constrained by its networkof external relationships. Thisperspective is

thus recognized as a unique approach to exploring collaboration between firms (Gilgor and

Autry, 2012; Skjoett-Larsen, 1999; Zaheer et al., 2010; Carter etal., 2007). Particularly in the field

of SCM, it is gaining increased recognition as one that can be applied to “deepen the

sophistication and efforts on theorizing SCM”(Halldórsson et al., 2015, p. 577). For instance,

Halldórsson et al. (2007, p. 286) affirmed that although the term “SCM”carries many definitions

to it, they all attempt to “refer to one specific “setting”, which is the management of relations of

independent organizations in a particular structure,”and hence, the application of a social

network perspective is most welcome.

By employing a socialnetwork lens, our study attempts to explorethe relational dynamics

manifested at both organizational and individual levels in interorganizational collaboration.

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As we specifically focus on the nature of “relations”between collaborating partners,

the “resource”flows between them ( Jones et al., 1997) are deliberately excluded. In other

words, the studyseeks to understand the “meanings”attached to the differentrelational ties at

the micro and macro levels;thus exploring resource content in these ties(Galaskiewicz, 2011)

is beyond scope.

Empirical data are purposely collected in a TPL context as it is deemed to operationalize

the relational dynamics at their highest whilst trying to become more responsive to the

demands of the many stakeholders they caters to (Razzaque and Sheng, 1998).

Most significantly in the field of SCM, logistics alliances are recognized as an emerging

opportunity for improving service levels, responsiveness, and efficiency while gaining

market share, enhancing capacities, and reducing inventory costs (Audy et al., 2012).

By carrying out a qualitative exploration of a logistic service provider’s relationships, the

study also addresses the ever increasing need of logistics research to employ a subjective,

cognitive perspective (i.e. case studies, observations) that can provide an in-depth

understanding of the phenomenon (Frankel et al., 2005; Halldórsson et al., 2015, p. 204):

“case and observation research methods appear to be very useful and appropriate for much

of the relationship-based (individual to individual and/or organization to organization)

research that is becoming increasingly important and popular in the logistics discipline.”

Moreover, this sector has been widely examined in social sciences from the perspective

of interorganizational (IO) ties, and rarely from the perspective of interpersonal (IP) ties

(Pina-Stranger and Lazega, 2011).

The reminder of this paper follows the typical structure of a case study manuscript.

The literature review explores the work on social network perspective in IOR domain.

Section 3 explains and defends the research methodology. The next section pertains to the

qualitative data and is followed by analysis that draws out the insights from this empirical

data. The final section reflects on the conceptual value of the case in relation to previous

research and highlights the original contribution of the study.

2. Social network perspective in interorganizational research

The conceptual roots of social network perspective stem from the sociology literature that

explore the structure and impact of social relations between and among individuals

(e.g. social groups and cliques) (Lavie, 2006). It is defined originally as “the study of the

interconnectedness”among social actors (Bloor and Wood, 2006, p. 157). Quatman and

Chelladurai (2008, p. 341) identified that:

•ontologically, the perspective views the social world through a unique lens, i.e. the

relational properties present between and among social actors;

•epistemologically, it views the social world as one that can be understood by

studying the relational components of phenomena; and

•methodologically, it offers unique tools to measure and analyze how the relational

properties of a system affect a phenomena being studied.

In organizational theory, Tichy et al. (1979) work is often cited as the original management

study to dialog the social network approach in an organizational context. Tichy et al. (1979)

saw organizations as social groupings where relatively stable patterns of interactions evolve

over time. To date, the macroorganizational theory has fully embraced the perspective

(Galaskiewicz, 2011). Borgatti and Foster’s (2003) review identifies a variety of

organizational settings, with the network associated concepts, being applied in many

traditional areas such as leadership, power, staff turnover, job satisfaction, job performance,

entrepreneurship, stakeholder relations, knowledge utilization, innovation, profit

maximization, and vertical integration.

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