The emergence of the network supply-chain : a study of co-operation and performance in supply-chain relationships in the UK fibre-optics industry
This study focuses on the emergence of a new governance form, the network supplychain, in the UK optical communications systems industry. In doing so, it pursues two objectives. The first is to investigate the extent of the shift from market-oriented to co-operation oriented mechanisms in governing supply relationships. The focus is on the contingencies of this change and, in particular, on the impact of technology on the development of co-operative forms of governance. The second objective of the research is to test the linkage between governance forms in the supply-chain a nd organisational. Performance, particularly efficiency and innovation. Again, the impact of technology on this relationship is put to test. The study relies on a combination of secondary, survey and interview data. The key finding is that the degree of maturity of the technology has an impact on both the type of co-operative form governing supply relationships and its relationship with organisational performance. For performance, co-operative governance forms in the supply-chain have a positive impact on efficiency (both global and partial) and innovation when the core technology of the firm is mature. When a radically new technology is still emerging, the network supply-chain has a limited positive impact on efficiency (partial only) and a negative one on innovation. Moreover, in emergent industries, the network supply-chain can hamper and delay technological development. For the type of co-operative form, we identify two models of co-operative supply relationships, respectively named the exploitative and the explorative model. These are ideal-types that take into account the connection between technology, governance mechanisms, and organisational performance, and can be found in more or less pure form in real contexts. The exploitative model is consistent with environments where the technology is well established; 'exploitation' is the main strategic driver; and efficiency and incremental innovation the predominant objectives. The explorative model is consistent with environments where a specific technology has not yet established itself as the dominant one; 'exploration' is still a strategic priority; and the search for opportunities to diffuse the emergent technology is the fundamental objective. Both the exploitative and the explorative models need a 'trigger' to develop in contexts previously dominated by market-oriented mechanisms. In other words, the change in governance forms in the supply-chain only occurs in response to an external event or condition.