Innovation outsourcing versus joint innovation in collaboration with suppliers: A strategic relational-institutional perspective

Companies are increasingly outsourcing their new product development (NPD) to their suppliers and jointly developing their new products with them. From the perspective of buyer firms, we study how these two types of supplier collaboration in NPD influence the buyer firms' new product performance. Using a strategic relational-institutional perspective, we study how knowledge sharing, as a relational factor, and organizational culture, as an institutional factor, can moderate these relationships. We surveyed 103 supply-chain practitioners from multinational firms operating in the consumer products industry. The results showed that both types of supplier collaboration in NPD were positively associated with new product performance. They further showed that while knowledge sharing did not moderate the relationship between outsourcing NPD to suppliers and new product performance, it positively moderated the relationship between co-developing new products with suppliers and new product performance. They also showed that while the relationship between outsourcing NPD to suppliers and new product performance was stronger when buyer firms emphasized the adhocracy dimension of organizational culture, the relationship between co-developing new products with suppliers and new product performance was stronger when they did not emphasize it. We acknowledge the limitations of our study and discuss its research and practical implications.