Continuous Supplier Performance Improvement: Effects of Collaborative Communication and Control

Manufacturing firms seek continuous supplier performance improvement because this outcome makes them more competitive in downstream markets. Although manufacturing firms use a range of tools to effect continuous supplier performance improvement, the author focuses on two that are especially important-collaborative communication and control-and poses the following research questions: (1) How does collaborative communication foster continuous supplier performance improvement? and (2) What are the combined effects of collaborative communication and control? The results from a survey of 153 manufacturer-supplier dyads show that collaborative communication fosters continuous supplier performance improvement by enhancing supplier knowledge (of manufacturer needs) and by building supplier affective commitment (toward the manufacturer). With respect to the combined effects of communication and control, the results show that capability control enhances the positive effects of both supplier knowledge and supplier affective commitment on continuous supplier performance improvement, whereas process control undermines the effect of supplier knowledge on the outcome. This pattern of results suggests that manufacturing firms should emphasize capability control and deemphasize process control to foster continuous supplier performance improvement.