De-Embedding Buyer-Supplier Relationships: A Complexity Perspective

Abstract

Research on buyer-supplier relationships has debated the advantages and disadvantages of embedded ties. We join this debate by building theory on the performance implications of temporarily relaxing embedded buyer-supplier relationships-a phenomenon we refer to as de-embedding. First, we conducted a case study of the relationship between Nissan and a strategic first-tier supplier. This case study suggests that de-embedding can lead to higher performance for both the buyer and supplier. To analyze and explain these performance implications we use complexity theory and its fundamental notion of search as a theoretical perspective. Second, grounded in the case and using our complexity theory perspective, we built an agent-based simulation model to generalize and augment the theory emerging from our case study. Our simulation experiments corroborate the case findings, and shed additional light on the trade-offs pertaining to de-embedding, as well as on the pivotal role of complexity as a contingency factor.