Understanding collaborative supply chain relationships through the application of the Williamson organisational failure framework

Abstract

PurposeWithin the supply chain the need for much closer, long‐term relationships is increasing due to supplier rationalisation and globalisation and more information about these interactions is required. The research specifically tested the well‐accepted Williamson's economic organisations failure framework as a theoretical model through which long‐term collaborative relationships can be viewed.Design/methodology/approachAn exploratory research project was designed and carried out on a self‐selected census of 54 monopolistic relationships representing £575.8 m annual spend on equipment and associated services within the UK defence procurement organisation (a 10 per cent sample). Its aims were to understand the relationship dynamics within long‐term, sustained monopolies and to determine if generic success factors could be found to assist managers to break out of the essentially negative situation. A triangulated data capture approach was employed using both quantitative and qualitative methods from both the industry and MoD sides of each relationship and the research instruments concentrated on the five dimensions of the theoretical model with questions grounded in the literature.FindingsThe study demonstrated that the theoretical model could provide powerful insights into the research subject and especially revealed the important part played by co‐operation, co‐ordination and collaboration (C3behaviour) in reducing the inherently negative effects of close proximity and limited choice relationships.Research limitations/implicationsThe research has used a narrow view through a specific theoretical model lens to achieve a broad understanding of business relationships within a single, albeit large, organisation.Practical implicationsManagers can reduce sources of frustration that generate negative behaviours by taking joint actions. Central to achieving this is C3behaviour where setting synchronised objectives, pursuing joint approaches to service and product delivery, lowering costs and risks and promoting measures to support the growth of trust appear to be the best ways of halting negative behaviour spirals.Originality/valueThe prime contribution of this exploratory research is the exposure of relationship dynamics within a large sample of long‐term, collaborative supply chain business dyads using an integrated application of Williamson's organisations failure framework.