Constellational Interdependence, Trust, and Cooperation in Supply-Chain Alliance Social Dilemmas

Abstract

In their article about why supply chain alliances struggle to create value, McCarter and Northcraft (2007) observe that, as a collective action, supply chain alliances are social dilemmas, and McCarter and Northcraft point to the supply chain alliance structure as a culprit that undermines trust and subsequent cooperation among partners. An untested supply chain alliance structure of their model is constellational interdependence - or the number of independent supply chain alliances partners are involved in. We test predictions presented in the model about constellational interdependence with data from the experimental laboratory. Congruent with the model’s predictions, we find: (1) a partner’s contribution to a supply chain alliance decreases as the number of separate supply chain alliances their partners are engaged in increases; (2) trust among supply chain alliance partners decrease as the number of separate supply chain alliances those partners are engaged in increases; and (3) trust mediates the relationship between the size of the supply chain alliance constellation and partner contributions. In extending the model, we also find that constellation interdependence can benefit supply chain alliance cooperation when there are asymmetrical benefits among supply chain alliance partnerships.