Escaping the Exploitation Trap of Power-Disadvantaged Firms in Asymmetric Networks: A Study of Vietnamese Contract Manufacturing Exporters in Buyer-Driven Global Value Chains

<p>This study investigates how power-disadvantaged firms in power asymmetric networks can improve their performance. Drawing on theoretical insights from the Resource-Based Theory and the Resource Dependence Theory, the proposed model suggests that when participating in power asymmetric networks, the exploitation strategy of power-disadvantaged firms affects their exploration strategy. While these two strategies are related, their influences on performance through firm competitive capability are different. Exploitation strategy negatively impacts firm competitive capability whereas exploration strategy positively impacts firm competitive capability. The model further posits that the impact of exploitation and exploration strategies on competitive capability depends on absorptive capacity of the firm. The model is tested on Vietnamese contract manufacturing exporters who participate in buyer-driven global value chains, where the exporting firms are dominated by powerful international buyers. The study employs a mixed-methods approach to test the proposed conceptual model. Survey data was collected from a sample of 154 Vietnamese contract manufacturing exporters following the drop-and-collect method. At the same time, ten semi-structured interviews were conducted with key informants from top management teams of Vietnamese contract manufacturing exporters to seek contextual details for the enhancement and triangulation of the survey findings. The survey data were analysed using the partial least square structural equation modelling technique, whereas the interview data were examined using theoretical thematic analysis. The results broadly support the proposed model for Vietnamese contract manufacturing exporters. The findings of this study indicate that power-disadvantaged firms in power asymmetric inter-organisational networks benefit from the dual practice of exploitation and exploration strategies. The study shows that exploitation strategy motivates exploration strategy in this type of interfirm linkage. This motivation is primarily shaped by the power imbalance structure. This finding confirms the explanation for the behaviour of power-disadvantaged firms in asymmetric relationships advanced by the Resource Dependence Theory. Moreover, the study also contributes to the Resource-Based Theory by emphasising the critical role of competitive capability in explaining firm performance. Competitive capability is found to mediate the relationships between exploitation strategy, exploration strategy and firm performance. Furthermore, the links between exploration strategy and competitive capability act as serial multiple mediators transmitting the influence of exploitation strategy on performance. In addition, the influences of exploitation strategy and exploration strategy on firm competitive capability are found to be intensified by firm absorptive capacity. Thus, an alignment of exploitation strategy, exploration strategy, competitive capability, and absorptive capacity enhances the performance of contract manufacturing exporters in buyer-driven global value chains.</p>

Escaping the Exploitation Trap of Power-Disadvantaged Firms in Asymmetric Networks: A Study of Vietnamese Contract Manufacturing Exporters in Buyer-Driven Global Value Chains

<p>This study investigates how power-disadvantaged firms in power asymmetric networks can improve their performance. Drawing on theoretical insights from the Resource-Based Theory and the Resource Dependence Theory, the proposed model suggests that when participating in power asymmetric networks, the exploitation strategy of power-disadvantaged firms affects their exploration strategy. While these two strategies are related, their influences on performance through firm competitive capability are different. Exploitation strategy negatively impacts firm competitive capability whereas exploration strategy positively impacts firm competitive capability. The model further posits that the impact of exploitation and exploration strategies on competitive capability depends on absorptive capacity of the firm. The model is tested on Vietnamese contract manufacturing exporters who participate in buyer-driven global value chains, where the exporting firms are dominated by powerful international buyers. The study employs a mixed-methods approach to test the proposed conceptual model. Survey data was collected from a sample of 154 Vietnamese contract manufacturing exporters following the drop-and-collect method. At the same time, ten semi-structured interviews were conducted with key informants from top management teams of Vietnamese contract manufacturing exporters to seek contextual details for the enhancement and triangulation of the survey findings. The survey data were analysed using the partial least square structural equation modelling technique, whereas the interview data were examined using theoretical thematic analysis. The results broadly support the proposed model for Vietnamese contract manufacturing exporters. The findings of this study indicate that power-disadvantaged firms in power asymmetric inter-organisational networks benefit from the dual practice of exploitation and exploration strategies. The study shows that exploitation strategy motivates exploration strategy in this type of interfirm linkage. This motivation is primarily shaped by the power imbalance structure. This finding confirms the explanation for the behaviour of power-disadvantaged firms in asymmetric relationships advanced by the Resource Dependence Theory. Moreover, the study also contributes to the Resource-Based Theory by emphasising the critical role of competitive capability in explaining firm performance. Competitive capability is found to mediate the relationships between exploitation strategy, exploration strategy and firm performance. Furthermore, the links between exploration strategy and competitive capability act as serial multiple mediators transmitting the influence of exploitation strategy on performance. In addition, the influences of exploitation strategy and exploration strategy on firm competitive capability are found to be intensified by firm absorptive capacity. Thus, an alignment of exploitation strategy, exploration strategy, competitive capability, and absorptive capacity enhances the performance of contract manufacturing exporters in buyer-driven global value chains.</p>

Manufacturing readiness assessment for evaluation of the microneedle array patch industry: an exploration of barriers to full-scale manufacturing

Microneedle array patch (MAP) technology is a promising new delivery technology for vaccines and pharmaceuticals, yet due to several differing and novel production methods, barriers to full-scale manufacturing exist. PATH conducted a manufacturing readiness assessment and follow-up interviews to identify both the current manufacturing readiness of the industry as well as how readiness varies by developer type and MAP type. Follow-up interviews identified barriers the industry faces in reaching full manufacturing readiness, including the perceived regulatory and investment risk of manufacturing MAPs at scale due to quality requirements and control methods, uncertain sterility requirements, lack of standard production methods (especially around dissolvable MAP drying methods), and the lack of available contract manufacturing organizations with MAP manufacturing capabilities. A Regulatory Working Group has been established to identify and address critical quality issues specific to MAP manufacturing with the aim of providing developers insight into what will be expected for MAP product approvals. Standardizing MAP production equipment and automatic, visual quality control could reduce the overall investment risk to developers and contract manufacturing organizations in pursuing pilot-scale manufacturing capabilities and ultimately lower barriers to the scale-up of full medical MAP product lines. Graphical abstract

Aplikasi Administrasi Gudang Sparepart PT Lasallefood Indonesia Berbasis Dekstop

PT Lasallefood Indonesia merupakan suatu perusahaan yang bergerak pada bidang manufaktur dan pemasaran serta contract manufacturing makanan dan minuman, dalam proses produksi selalu ada kendala dimanaseringterjadikesalahandalamsetiap pencatatandisebabkanpenginputandatamemerlukanwaktuyanglama,serta penyimpanan data belum menggunakan file database.Dalam praktiknya admin selalu melakukan pendataan terhadap penggunaan sparepart dan alat pendukung yang dibeli tanpa ada proses Purches Order (PO) dengan memasukan data tersebut kedalam Microsoft Excel. System manual seperti ini membutuhkan waktu dan tenaga yang cukup besar, penelitian kali ini peneliti menggunakan metode Grounded Research dimana penelitian ini mendasarkan kepada fakta dan menggunakan analisa perbandingan bertujuan untuk mengadakan generelasi empiris, menetapkan konsep- konsep, membuktikan teori dan mengembangkan teori dimana pengumpulan data dan analisa data berjalan pada waktu yang bersamaan. Sistem ini dirancang untuk mempemudah dan proses presensi dan penggajian pada Pt lasallefood

The Impact of Service Quality on Business Commitment in Contract Manufacturing Services: An Exploratory Study of F&B Industry in Malaysia

Business environment is highly competitive for food & beverage(F&B)industry due to the low entry barrier. In order to improve their financial performances, F&B manufacturers opt to offer contract manufacturing services (CMS).There is a formal relationship established between the service provider and the buyer. However, the impact of service quality on retaining the business relationship particularly has not been empirically investigated. To fill this gap, this study explores the determinants of contract manufacturing service quality (CMSQ) and the interrelationship between CMSQ, customer satisfaction and loyalty of the F&B CMSs’ customers in Malaysia. Four focus group interviews (28 participants) were held in this study and they comprised 12 contract manufacturers and 16 business customers. Three new dimensions were discovered from the focus group interviews; product development capability, Halal certification and outcome quality in addition to the SERVQUAL dimensions. Relevantinformation via structured questionnaires were collected via online survey and drop-off method. 146 usable questionnaires were analysed using partial least squares. The results indicate that CMSQ consists of eight dimensions namely empathy, assurance, reliability, responsiveness, tangibles, outcome quality, Halal certification and product development capability. The Empathy dimension is the most important dimension influencing customers’ decision to stay with the contract manufacturers.CMSQ was found to have a small effect size on loyalty while customer satisfaction largely influenced loyalty. The result implies that CMSQ is a complement in the formation of customer loyalty while customer satisfaction is a significant predictor of behavioural intention.The findings also provide empirical evidence that the contextual specific service quality is essential particularly for contract manufacturing in F&B.

Manufacturing Readiness Assessment for Evaluation of the Microarray Patch Industry: An Exploration of Barriers to Full-Scale Manufacturing

Microarray patch (MAP) technology is a promising new delivery technology for vaccines and pharmaceuticals. Yet due to several differing and novel production methods, barriers to full-scale manufacturing exist. PATH conducted a manufacturing readiness assessment and follow-up interviews to identify both the current manufacturing readiness of the industry as well as how readiness varies by developer type and MAP type. Follow-up interviews identified barriers the industry faces in reaching full manufacturing readiness, including the perceived regulatory and investment risk of manufacturing MAPs at scale due to quality requirements and control methods, uncertain sterility requirements, lack of standard production methods (especially around dissolvable MAP drying methods), and the lack of available contract manufacturing organizations with MAP manufacturing capabilities. A Regulatory Working Group has been established to identify and address critical quality issues specific to MAP manufacturing with the aim of providing developers insight into what will be expected for MAP product approvals. Standardizing MAP production equipment and automatic, visual quality control could reduce the overall risk to developers and contract manufacturing organizations in pursuing pilot-scale manufacturing capabilities and ultimately lower barriers to the scale-up of full medical MAP product lines.

The knowledge interconnection process: evidence from contract manufacturing relationships

Purpose The main goal of the paper is to describe the knowledge interconnection process embedded in an interactive business relationship. The purpose of this study is to understand the knowledge interconnection inside the supplier-buyer relationship in the field of contract manufacturing. The knowledge interconnection process is defined by the authors as a process linked to business relationships, which contains different types of knowledge and various sub-processes related to them. Design/methodology/approach The Industrial Marketing and Purchasing Group (IMP) research framework has been applied and the contribution is a better understanding of the role of knowledge in the interactive business world. The empirical evidence is based on a case study of a Hungarian contract manufacturing company. This paper describes empirical, qualitative research about knowledge interconnection processes applying an abductive research design. Findings The knowledge interconnection process is linked to business relationships. It is a complex process, which contains three types of knowledge and five sub-processes. The knowledge evolution indicates the links between the different types of knowledge. The sub-processes relate to different types of knowledge and allow the flow of knowledge between the supplier and the buyer. In the business relationship, this flow of knowledge makes possible the new knowledge creation. A model of the knowledge interconnection process has been developed. Research limitations/implications Single case studies can create rich descriptions of complex phenomena, but the possibility for generalization is limited. Another limitation is that the knowledge interconnection process has been studied only from the supplier’s perspective. The present research extends IMP’s knowledge of embedded knowledge. In addition, empirical research contributes to the emerging field of IMP research that explores knowledge as a resource but lacks an empirical foundation. Practical implications The knowledge interconnection process is a decisive factor in the development and maintenance of long-term customer relations in the field of contract manufacturing. The evolution of knowledge types – from the body of knowledge to knowledge in use – demands the management of different sub-processes. Knowledge selection, knowledge recombination, knowledge mobilization and new knowledge creation processes are more strongly related to the supplier-customer dyad, while the knowledge relocation process has a network character. The knowledge interconnection process influences the company’s body of knowledge and its relationship management capability. Originality/value The originality of the study is, on the one hand, an empirical examination of the process of knowledge interconnection. On the other hand, the development of a model of the knowledge interconnection process. A further feature is that empirical research has been conducted in the field of contract manufacturing.