Inter-organizational relationships and knowledge sharing through the relationship and institutional orientations in supply chains

Abstract

Sharing knowledge in inter-organizational relationships is one way to enhance strategic competitiveness. It is generally agreed that the development of close relationships facilitates such sharing among partners. This paper presents a research model comprises five research hypotheses with four constructs, including relationship orientation, institutional orientation, relational risk and knowledge sharing. This study develops a conceptual model that relational risk as a mediating construct to examine the inter-relationship effects that affect knowledge sharing and these relationships. We analyze data collected from 312 of the top 1000 Taiwanese manufacturing firms in 2011 listed in Business Weekly. The results of the empirical study suggest that the role played by relationship orientation and institutional orientation is critical in ensuring the inter-organizational knowledge sharing as it mitigates the relational risk in the process. The findings of the study provide practical insights into how supply chain members should reinforce their relational and institutional view of relational governance and manage relational risks so as to improve their collaborative behaviors and in turn achieve the competitive advantage of knowledge sharing for the supply chain as a whole.

Introduction

Knowledge and learning have increasingly become key determinants of enhancing competitive advantages in supply chains (Cheng et al., 2008, Panteli and Sockalingam, 2005). For a supply chain to be successful, manufacturing firms need to focus on knowledge management to facilitate effective sharing among collaborative members (Desouza, 2003). To improve supply chain coordination and product quality, firms often demand that their partners, including subcontractors or suppliers, implement common processes, which usually requires the sharing of knowledge. Inter-organizational knowledge sharing within a supply chain has become a common practice, because it contributes vitally to sustaining the competitive advantage of the supply chain as a whole.

To achieve the advantages of knowledge sharing, it is strategic important to understand those factors that affect the partners’ behavior of knowledge sharing. Existing research has focused on modeling all the factors under investigation as precursors or independent variables that directly affect the behaviors of inter-organizational knowledge sharing, as shown in Table 1. Research on inter-organizational knowledge sharing, have examined resource commitment (Wagner & Bukó, 2005), justice (Liu, Huang, Luo, & Zhao, 2012), and ambidextrous management and ontological commitment (Im & Rai, 2008), among other factors to respond to market changes (e.g., Myers & Cheung, 2008). Little has examined the inter-relationship between relational governance and risk management that affect knowledge sharing and these relationships, despite being an important issue in inter-organizational research (Lee and Johnson, 2010, Szczepański and Światowiec-Szczepańska, 2012). It is generally believed that the knowledge sharing is greater when parties have a close relationship (Hartley and Benington, 2006, Kim et al., 2012, Panteli and Sockalingam, 2005, Wang and Wei, 2007). With collaborations between manufacturing firms and their partners, a base of jointly held knowledge can be created and maintained through knowledge sharing, thus enhancing mutual understanding and expectations (Larsson, Bengtsson, Henriksson, & Sparks, 1998).

Relational governance is a major perspective from relational or social capital which is important for the maintenance of good relationships in supply chains (Cousins et al., 2006, Kale et al., 2000, Liu et al., 2009). Business relationships are built, maintained, and enhanced to achieve corporate goals. In inter-organizational relationships, different types of relationships are formed, based on the type of collaboration, from close collaborative product development to simple buy-and-sell interaction. Consequently, when firms develop inter-organizational relationships, they are confronted with a relational risk (Delerue, 2005, Ratnasingam, 2007). Both partners in a relationship strive to gain value and control probable risks, which require some degree of trust, commitment, and flexibility in the relationship (Lewin & Sager, 2009). It implies their governance value by relying on common positive and shared expectations through the relational exchange in inter-organizational network. Resource-based view (RBV), political economy perspective, institutional theory and relational risk perspective concentrate on the specific relational resources perspective, inter-organizational linkages, social environment and relational risk, which can be measured based on the value gained through relationships, among other factors. Because partners that create superior governance value and manage relational risk are fundamental to firms’ long-term survival and success in supply chains, firms will commit themselves to establishing, developing, and maintaining relationships with such partners (Morgan & Hunt, 1994). Our main research question is “What are the impacts of relational governance on relational risk and inter-organizational knowledge sharing?”

In this study, we first examine how the relationship orientation and institutional orientation of a company affects its attitude toward sharing knowledge with supply chain partners. Then, we look into how relational risk mediated the influence of relationship orientation and institutional orientation on inter-organizational knowledge sharing. To verify this research model, we conduct an empirical study on manufacturing firms and their partners in Taiwan's supply chains.

The rest of this paper is organized as follows. Section 2 provides a brief review of relational governance and inter-organizational knowledge sharing in supply chains, and Section 3 presents the research model and hypothesis development. The data collection method and research design are described in Section 4, and the study findings are presented in Section 5. Finally, Section 6 provides a discussion of the results, and Section 7 concludes the paper and offers directions for future research.