Post-formational buyer directives: Aid or harm for learning and innovation in alliances?

Abstract

Innovation processes in alliances require ongoing clarifications, discussions, and adaptations among the allying firms. Especially buyer firms that configure the final product innovation from supplier components need to advise them about changes in innovation functionalities, designs, and features that emerge as necessary during the innovation process. A vehicle to do so is post-formational directives. These directives have ambivalent effects that explicate by sub-mechanisms of post-formational directives informed by speech-act theory. In short, post-formational directives can increase the control and clarity of the product innovation components. Yet, they can limit suppliers' autonomy and creativity and, as such, might reduce innovation. Our study clarifies the ambivalent effects of post-formational directives. Our empirical findings of 470 suppliers in alliances indicate that post-formational directives improve product innovation when associated with inter-organizational learning from the buyer. On the contrary, product innovation decreases when directives are not included in suppliers' learning processes from the buyer or when suppliers focus on a mere knowledge combination with their buyers.