Supplier Development at LG Electronics

Supplier development has been a critical supply management practice since the 1990s. In many instances, it has even become imperative for buyer firms to support and prepare their supply bases for uncertain economic and market environments, socially and environmentally conscious customers, advances in digital technologies, and increasing competition. Yet, research that approaches supplier development with the objective to advance all these dimensions in an integrated fashion is scarce. This study fills this void by exploring how a buyer firm may address these emerging challenges in its supply base. Specifically, an in-depth case study of LG Electronics explores how the firm designs and operates multidimensional supplier development activities to foster the stability and sustainability of its supply base while enhancing its core suppliers’ competitive capabilities. This chapter illustrates how supplier development can be taken to the next level, presents implications for managerial practice, and outlines promising future research avenues.

Twofold relationship dynamics of supplier’s knowledge sharing

Purpose Assuming that supplier knowledge can either strengthen the partnership by nurturing the commitment and trust between partners or allow the buyer to be more calculative, this study aims to propose two types of knowledge sharing in supplier relationship – a type benefiting the partnership and another privately benefiting only one partner. Design/methodology/approach Using structural equation modeling and a surveyed dataset from 352 buyer–supplier partnerships, this study tested the research model of dual mechanism, where two types of knowledge sharing co-exist and have opposite effects on partnership longevity. Findings This study found that the two types of knowledge sharing create divergent effects on partnership continuation. For a buyer firm developing supplier knowledge, its supplier firm reciprocates by sharing knowledge with the buyer. While relation-specific knowledge promotes partnership longevity through developing trust, institutionalized knowledge hampers partnership longevity. Research limitations/implications Findings overall indicate that knowledge plays a more instrumental role in sharing knowledge in a buyer–supplier relationship, and alternative forces simultaneously work in the partnership. Although this study explicates two mediating mechanisms for the effect of supplier knowledge, there remain many unknown aspects of the effect. Practical implications From the buyer’s perspective, it is possible its institutionalized knowledge can facilitate its relationship with a current supply chain partner so that it can gain more benefits from the relationship. From the supplier’s perspective, caution should be exercised in selecting the type of knowledge to share. Social implications This study may have a broad impact on public policy by theorizing and testing why some partnerships last longer/shorter than others in association with the dynamics of the relationship initiated by one’s relational knowledge and the other’s knowledge sharing. Originality/value What this study contributes to involves the theorizing and testing the effects of the dual mechanism of knowledge sharing on partnership longevity. This study provides an example of a private investment in knowledge that is reciprocated with each type of knowledge – benefiting the partner and also benefiting the focal buyer firm.

Industrial buyer-seller interactions: negotiating in the Arabian Gulf

Purpose – The purpose of this study is to explore the key cultural factors that shape the Arab style of buyer-seller negotiations in the industrial goods sector; formulate propositions predicting behaviors of empowered buyers, avoidant buyers and deciders in an expensive industrial purchase situation; and develop a model of communication structure in an industrial buyer firm in the Arabian Gulf. In addition, the study advances propositions concerned with the bargaining style of Arab industrial buyers and the relationships between industrial sales effectiveness and negotiation tactics. Design/methodology/approach – The study draws on literature in the domains of industrial buying behavior, influence tactics in industrial buyer-seller negotiations and communication in industrial buyer-seller bargaining interactions. Findings – The more expensive an industrial purchase is the more empowered buyers will tend to anticipate the wishes of and seek the endorsement of powerful stakeholders, the more avoidant buyers will tend not to take responsibility for the purchase and the more decision makers will tend to rely on unwritten and formal rules and consult with influencers, subordinates and peers. Aggressive bargaining is unlikely to be used by Arab industrial buyers, who prefer a problem-solving approach. Sales effectiveness will be higher when industrial vendors incorporate tactics of ingratiation and inspirational appeal to influence Arab industrial buyers. Originality/value – The study offers a systematic examination of industrial purchasing characteristics through the lens of Arab culture. It synthesizes several literature streams, develops eight original research propositions and proposes a new conceptual model of the communication structure in an industrial buyer firm in the Arabian Gulf.