Social cross-functional vendor selection in technologically uncertain sourcing situations

Abstract

Based on an in-depth case study of an automotive manufacturer sourcing parts for high technology projects, this study investigates the intentions and structure of socialization within and between firms during the supplier selection process in technologically uncertain sourcing situations. Here, we aim to answer the question of how socialization can hedge against the high levels of uncertainty for manufacturers selecting suppliers of high technology resources. The case represents a major automotive manufacturer in Northern Europe, and is based on 38 semi-structured interviews with representatives of the different functions involved in the sourcing for the new development projects. Our data suggest that internal and external socialization during the supplier selection process can improve internal alignment and problem solving, and external familiarity towards the sourcing task. In this context, socialization took place on functional, cross-functional, and (inter)corporate levels, with higher functional autonomy during the assessment, and higher cross-functional integration during negotiations and decision making, adding to the debate on whether functions should be integrated or separated. • In some industries firms need to source technology from outside their existing supply base. • This has increased the uncertainty with future relationships and inclusion of input from multiple functions internally. • Higher level of socialization during supplier selection can increase familiarity with the supplier and reduce uncertainty. • Higher levels of internal socialization during supplier selection can improve alignment of the decision making.