In service outsourcing, buying organizations frequently experience shortcomings in supplier-initiated innovation. To address this problem, a team of researchers from WHU (Professor Wallenburg and Dennim Johne) collaborated with researchers from The Ohio State University, the University of Tennessee and the Warsaw School of Economics. https://doi.org/10.1016/j.pursup.2019.100575
The paper distinguishes two mechanisms for buyer-supplier alignment (i.e. relational and formal innovation alignment) and outlines how their effectiveness for supplier-initiated innovation differs depending on the level of hierarchy in the relationship. Using data from the logistics service industry, it is shown that when the level of hierarchy is comparatively low, where buyers and suppliers interact participatively, both relational and formal innovation alignment are effective in fostering supplier-initiated innovation. Yet, as the relationship becomes more hierarchical and dominated by the buyer, the effect of relational innovation alignment diminishes and eventually turns negative, while the effect of formal innovation alignment is strengthened.