Interorganizational imitation in supply chain relationships: The case of inventory leanness

Abstract

We examine the extent to which suppliers assimilate to their customers' inventory leanness levels. Drawing on institutional theory, we hypothesize that there is a positive relationship between major customer and supplier inventory leanness and that this effect is moderated by compliant, reflexive, and normative isomorphic forces. Specifically, we contend that interdependence, uncertainty, and the age of the customer−supplier relationship strengthen the supplier's imitative behaviors and, thus, the assimilation to its major customer's inventory leanness. The hypotheses are tested empirically using a large panel data set of dyadic customer–supplier observations obtained from a variety of archival databases. The econometric analyses provide strong and robust evidence of interorganizational imitation in the domain of inventory management and, thus, document the role key customers play in shaping supplier firms' inventories. We discuss implications of our research for the further development and broadening of the academic inventory literature as well as managerial practice.