Abstract
Knowledge-based, nonphysical (or intangible) products such as software and information and financial services present a different set of supply chain management challenges than those encountered by manufacturers of tangible products. Yet as intangible product manufacturers have developed more complex service and quality characteristics in their product-service bundles, they have adopted the supply chain practices of physical product manufacturers. One of the most salient differences between the two types of manufacturing is the reliance of intangible producers on collaboration and partnering with customers and suppliers created as a result of the reexamination of make-versus-buy decisions for nearly all components and services. This study focuses on software firms to identify and understand how these changes affect firm behavior. Contrary to our expectations, software firms do not fully exploit risk-sharing (teaming) alliances. We attempt to explain this via the lenses of trust and asset specialization between supply chain partners.
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