Assessing the contingent effects of collaboration on agility performance in buyer–supplier relationships

Abstract

Several studies in the buyer–supplier relationship literature have addressed the impact of collaboration on agility performance. While some studies have concluded that collaboration leads to beneficial effects, others have questioned the positive effects of collaboration on relationship performance. Drawing on contingency theory and transaction cost economics (TCE), we seek to better understand the linkage among collaboration, trust and agility performance in a buyer–supplier relationship. Further, we study the contingent influence of requirements certainty and supplier asset specificity, two key TCE constructs in buyer–supplier relationships, on the collaboration–agility performance relationship. We show that while trust mediates the impact of collaboration on agility performance, the indirect effect of collaboration on agility performance via trust is significant only beyond a threshold level of collaboration. The theoretical implication of this result is that the performance relationship is non-linear, a result that has not been recognized in current literature. The practical implication is that organizations need to establish a certain level of collaboration before its positive impact can be realized. In addition, we show that the impact of collaboration on agility performance in buyer–supplier sourcing relationships can be positive, negative or neutral depending on the levels of trust, supplier asset specificity and requirements certainty, emphasizing the need to develop contingency theories.