1. PEEKING INSIDE THE BLACK BOX: TOWARD AN
UNDERSTANDING OF SUPPLY CHAIN
COLLABORATION DYNAMICS
STANLEY E. FAWCETT
Georgia Southern University
AMYDEE M. FAWCETT
University of Arkansas
BRADLEE J. WATSON
Arlington Hills Care and Rehabilitation
GREGORY M. MAGNAN
Albers School of Business and Economics, Seattle University
Supply chain collaboration is a vital dynamic capability — one that can
deliver differential performance. Yet, few managers comprehend the
nuanced complexities involved in assessing heterogeneously dispersed
resources and bringing complementary competencies together up and
down the supply chain. As a result, gains from collaborative initiatives are
often disappointing. Several literature streams including systems design,
competency development (e.g., the resource‐based view and relational
view), and change management predict these outcomes. Building on
insights from the literature, we sought to enrich the theory of collabora-
tion via inductive, interview‐driven research. Specifically, we conducted
approximately 50 structured interviews at each of two points in time. Rig-
orous analysis of the interview firms’ experience with collaborative initia-
tives provided insight into the motivations, resistors, enablers, and
outcomes of collaboration. These insights form the foundation for a theo-
retical model to explain collaboration successes and failures as well as to
provide prescriptions for using collaboration to achieve differential firm
and supply chain performance.
Keywords: behavioral supply management; human judgment and decision making;
strategy development; supply chain management; case studies; qualitative data anal-
ysis; structured interviewing
the resources and routines that reside among diverse
INTRODUCTION members of the supply chain (Mahoney and Pandain
Despite intense interest in the collaborative supply 1992; Dyer and Singh 1998). Research has shown that
chain, researchers know relatively little regarding the the ability to identify and link complementary capa-
collaborative process through which companies com- bilities via collaboration does lead to superior perfor-
bine and configure resources across organizational mance (Harrison, Hitt, Hoskisson and Ireland 2001;
boundaries to create distinctive customer value (Ellin- Fawcett, Magnan and McCarter 2008; Mentzer, Stank
ger, Keller and Hansen 2006; Fawcett, Magnan and and Esper 2008). Specifically, collaboration enables
Ogden 2007). In theory, collaboration enables firms faster new product development, enhanced quality,
to achieve differential performance as they tap into lower product and supply chain costs, shorter fulfill-
44 Volume 48, Number 1

2. Peeking Inside the Black Box
ment times, and improved customer service (Cachon tial performance. By looking inside the “collaboration
and Fisher 2000; Frohlich 2002; Ketchen, Tomas, Hult box,’’ we gained a better understanding of the
and Slater 2007; Rinehart, Lee and Page 2008). More dynamic system that is collaboration and are thus
importantly, Holcomb, Holmes and Hitt (2006) argue able to partially explain the motives, enablers, and
that such collaborative advantages are especially diffi- resistors to a successful collaborative strategy.
cult to replicate since competitors must both acquire
the complementary resources and duplicate their
deployment. CONSTRUCTING A COLLABORATION
Unfortunately, relatively few companies have CAPABILITY: A BRIEF BACKGROUND
achieved the high‐level collaboration required to Several theories implicitly inform the development
obtain breakthrough performance (Ellinger et al. and contribution of collaboration. We identified three
2006; Min, Mentzer and Ladd 2007; Nicovich, Dibrell streams of literature as central to understanding the
and Davis 2007). Beth, Burt, Copacino, Gopal, Lee, process through which a collaborative dynamic capa-
Lynch, Morri and Kirby (2003) note that despite years bility is built: (1) systems design, (2) competency
of intense pursuit supported by substantial investment development, and (3) change management. Each
in advanced technology, truly agile and collaborative stream’s relevance derives from insight provided into
supply chains remain an elusive goal. Among the the process of organizing or structuring network
issues that impede collaboration are interfunctional resources to create distinctive value and achieve differ-
and inter‐firm conflict (Moberg, Speh and Freese ential performance in a challenging and uncertain
2003; Barratt 2004), nonaligned goals that lead to environment (Porter 1991). Of particular importance,
opportunistic behavior and diminish trust (William- each perspective helps us understand the transforma-
son 1979; Fawcett, Magnan and Williams 2004; McC- tional tension inherent in cultivating collaborative
arter and Northcraft 2007), and an inability or advantage. Although each perspective yields insight
unwillingness to share sensitive information (Kamp- into the capability‐development process, individually,
stra, Ashayeri and Gattorna 2006; Fawcett, Wallin, All- none paints a holistic picture of the nuanced dynam-
red and Magnan 2009a). Such behavioral constraints ics that promote or hinder a firm’s attempt to exploit
make it difficult to integrate customer and supplier collaboration as a source of competitive advantage.
resources for unique competitive advantage (Eisen-
hardt and Martin 2000). Systems Design
The tension between a strong desire to combine Supply chains are innately complex, adaptive sys-
complementary competencies for distinctive advantage tems (Cooper, Lambert and Pagh 1997; Mentzer, De-
and a persistent inability to build relational advantage witt, Keebler, Min, Nix, Smit and Zacharia 2001).
suggests a need to take a closer look inside the “black They consist of dynamic and nuanced behavioral,
box’’ of collaboration. Sufficient theoretical reasoning organizational, and technology subsystems, which
and anecdotal evidence (e.g., Honda’s supplier devel- must effectively work together to maximize value crea-
opment and Procter & Gamble’s connect‐and‐develop tion (Fawcett, Ellram and Ogden 2007a). Aligning
programs) exist to endorse collaboration as a valuable and structuring these subsystems to achieve firm‐level
dynamic capability (Teece, Pisano and Shuen 1997; goals — e.g., adaptation, survival, and superior perfor-
Nelson, Mayo and Moody 1998; Helfat and Peteraf mance — is the fundamental objective of systems
2003). Yet, research findings concurrently reveal that design (Churchman 1968; Hofer 1975; Luthans and
managers and researchers alike fail to grasp the dyna- Stewart 1977; Senge 2006).
mism and intricacies that delimit the processes within Scott and Davis (2006) discuss three evolutionary
the “collaboration box’’ (Krause, Scannell and Calan- views of systems design theory that merit consider-
tone 2000; Barratt 2004; Petersen, Handfield and Ra- ation for application to collaboration:
gatz 2005; Ellinger et al. 2006; Thomas, Esper and 1. Rational Systems. Rational systems theorists perceive
Stank 2010). organizations as multifaceted collectivities that are
The purpose of this article is to build and enrich designed and maintained to pursue specific goals.
theory regarding how decision makers construct a Organizations therefore devote the majority of
dynamic collaborative capability. To do this, we their energies and resources to the attainment of
employed the tenets of grounded theory and per- these goals.
formed a largely qualitative, inductive study of collab- 2. Natural Systems. Natural systems theorists argue
orative initiatives among leading supply chain that organizations are more than tools designed for
enterprises (Glaser and Strauss 1967; Corbin and goal achievement. Organizations become social
Strauss 1990). We investigated the process of employ- entities. Over time, structure and governance begin
ing collaboration to combine and configure resources to focus on “organizational’’ survival. The ability
across organizational boundaries to achieve differen- to motivate and leverage the commitment, intelli-
January 2012 45

3. Journal of Supply Chain Management
gence, and initiative of the collective’s participants 1979). As firms are designed around functions to
determines the probability of surviving in a hostile obtain deep skills, efforts to protect turf can be
environment. expected to be strong and entrenched (Anderson
3. Open Systems. Open systems theorists perceive 1982; Ellinger et al. 2006). Open systems theory
organizations as reciprocally related to the surround- notes, however, that if the external environment dic-
ing environment and stress the complexity of an orga- tates collaborative change and offers valuable
nization’s discrete component parts. Organizations resources beyond the firm’s organizational bound-
depend on the environment for resources and for aries, then active structuring can enhance collabora-
markets. They must also respond to it as it evolves. tion (Lawrence and Lorsch 1967). But, successful
Therefore, attention shifts from structure to process — transformation depends on inculcating the appropri-
the process of organizing, adapting, and changing to ate organizing process; otherwise, collaborative adap-
both survive and to improve performance. tation is immensely difficult.
These views each emphasize three core, enduring
Competency Development
features of organization design that influence the cul-
Collaborative supply chains develop the processes
tivation of collaboration: the relationship between the
needed to organize (i.e., identify, integrate, and
organization and its environment, the nature of the
exploit) resources that reside across organizational
design process, and the rationale for the organiza-
boundaries to create unique customer value. This pro-
tion’s existence (see Table 1).
cess‐building imperative is consistent with and builds
From a rational systems view, once management
on the resource‐based view (RBV) of the firm, which
determines that collaboration is a desired organiza-
argues that a firm consists of “a collection of produc-
tional capability and therefore a vital goal, a con-
tive resources’’ that can be exploited to create value
scious, calculated design process will develop such a
and competitive advantage (Penrose 1959; Rubin
capability. Many organizations operate under rational
1973; Wernerfelt 1984). The more valuable and rare
systems principles and are frustrated when collabora-
the resources, the greater the advantage the firm may
tion does not readily materialize from their design
obtain (Dierickx and Cool 1989; Barney 1991). More
efforts (Fawcett et al. 2007). Natural systems theory
recent RBV research has emphasized that how a firm
helps us understand that because interfunctional and
configures its resources is a better indicator of distinc-
inter‐firm collaboration increases the possibility of
tive performance (Teece et al. 1997; Eisenhardt and
opportunistic behavior and thus vulnerability, tension
Martin 2000; Barney 2001). The RBV has thus “evolved
should be expected in the design process. Managers
into a dynamic recipe explaining the process by which
will resist any collaborative behavior (e.g., sharing
these ingredients [a firm’s resources] must be utilized’’
information or resource commitment) that threatens
to achieve competitive advantage (Newbert 2007,
their specific “organizational’’ survival (Williamson
TABLE 1
Essential Components of Systems Theory
Role of Environment Nature of System Goals; i.e.,
System Design Desired Outcome
Rational Largely overlooked; i.e., Conscious, Obtain specified goals
systems the system is closed calculated
design
Natural Human systems view: Adaptive, Mix between specific
systems Ignored; i.e., system is spontaneous goals and organizational
closed Institutional View: evolution survival
Perceived as enemy; i.e.,
a source of pressures
and problems
Open The source of Proactive Improve performance in
systems (1) resources and process midst of environmental
constraints and of organizing or dynamism
(2) change, diversity, structuring to
and variety adapt
46 Volume 48, Number 1

4. Peeking Inside the Black Box
p. 124). Of note, the current view holds that the orga- tend to persist in a steady state until an external force
nizing process must extend beyond the firm’s own dictates change (see Figure 1). Influenced by this driv-
boundaries because vital resources are often found out- ing force, the firm enters a transition phase during
side the firm — ’’embedded in inter‐firm resources and which adaptation is pursued. However, resisting forces
routines’’ (Dyer and Singh 1998, p. 650). act as counterweights to the environmental forces that
The dynamic‐capabilities branch of the RBV litera- dictate change. If the resisting forces are more preva-
ture informs a firm’s quest to cultivate a collaborative lent or stronger than the driving forces, the change
organizing process in two ways. First, by definition, a initiative stalls and the organization reverts to and is
capability is “the firm’s ability to integrate, build, and frozen in its entrenched behavior. Resisting forces
reconfigure internal and external competencies’’ (Teece may thus debilitate the strategy‐implementation and
et al. 1997, p. 517). Terms such as “coordinate,’’ organizational‐transformation processes required to
“combine,’’ and “integrate’’ describe the process of build a dynamic collaborative capability (Kotter 1995;
capability development (Eisenhardt and Martin 2000; Dent and Goldberg 1999). Collaborative transforma-
Ettlie and Pavlou 2006; Barreto 2010). For example, tion occurs only when management strengthens driv-
Prahalad and Hamel (1990, p. 4) described Honda’s ing forces and/or mitigates resisting forces.
engine development as the model core competency, Forces resisting collaboration vary in strength and
saying, “core competencies are the collective learning influence, might exist anywhere within an organiza-
in the organization, especially how to coordinate tion or supply chain, and may include people, poli-
diverse production skills and integrate multiple cies, or processes (Kotter 1995; Dent and Goldberg
streams of technologies.’’ The nature of a distinctive 1999). For example, threat‐rigidity theory suggests that
capability suggests that practices that bridge organiza- an individual’s tendency to react to threatening events
tional boundaries — such as goal alignment, frequent with psychological stress and anxiety produces a rigid
and open communication, high levels of managerial and maladaptive response (Staw, Sandelands and Dut-
interaction, the exchange of expertise and resources, ton 1981; Moon and Conlon 2002). By contrast,
and a willingness to share risks and rewards — are structural‐inertia theory maintains that firms are slow
the essential elements from which a collaboration to change because established norms, routines, proce-
capability is built (Morgan 1997; Rai and Bajawa dures, and other structural features restrict adaptation
1997; Gulanic and Rodan 1998; Stonebraker and Afifi (Hannan and Freeman 1984; Barnett and Carroll
2004; Eng 2006; Green, McGaughey and Casey 2006; 1995). Long‐established behaviors and structures are
De Luca and Atuaghene‐Gima 2007). particularly resistant to change (Barron, West and
Second, the word “dynamic’’ implies the ability to Hannan 1994). Unfortunately, when firms are unable
rapidly change or reconfigure a firm’s resource base in to change faster than the external environment or col-
response to a changing environment (Zahra, Sapienza laborate more effectively than agile rivals, they risk
and Davidsson 2006; Teece 2007; Barreto 2010). To irrelevance (Grove 1996; Lee 2004).
the extent that managers pursue local goals (see natu- Because our understanding regarding the dynamic
ral systems theory) to the exclusion of other concerns, interplay among organizational design, capability
conflict or tension arises across inter‐functional and development, and adaptation is incomplete, we strug-
inter‐firm boundaries (Walton, Dutton and Cafferty gle to explain collaborative successes and failures. We
1969; Ruekert and Walker 1987; Barclay 1991; Xie, are thus limited in our ability to provide prescriptions
Song and Stringfellow 1998). Perceived goal incongru- for cultivating a dynamic collaboration capability to
ence increases safeguarding behavior and the tendency achieve differential performance. We sought to redress
to resist change, impeding both collaboration and a this shortcoming by building theory on how compa-
firm’s ability to rapidly reconfigure resources (Kumar, nies inculcate a collaborative business model.
Schee and Steenkamp 1995; Duarte and Davies 2003;
Gulati and Nickerson 2008; Rossetti and Choi 2008;
Groznik and Heese 2010). The prevalence of these RESEARCH METHODS
structure‐driven counterproductive behaviors makes As we began the project, supply chain collaboration
dynamic capabilities rare and suggests a need to better had emerged as a topic of interest in the literature;
understand the nature of change management (Fawc- however, it was evident that collaboration strategies
ett, Andraski, Fawcet and Magnan 2009). and processes were not well understood. Three preli-
minary steps were therefore taken to firmly ground
Change Management the research:
To understand why the adaptive, proactive process 1. An extensive literature search going back to the early
of reorganization predicted by open systems theory 1980s was conducted. Key word searches using the
seldom emerges we turn to force field analysis (Lewin words “supply chain’’ in combination with “integra-
1951). Force field analysis argues that organizations tion,’’ “coordination,’’ and “collaboration’’ were
January 2012 47

5. Journal of Supply Chain Management
FIGURE 1
The Change Management Process
performed via ABI Inform and ProQuest data- 5. Given the high transformation costs/risks, can col-
bases. This review identified 159 articles that were laboration lead to sustained competitive success?
used to inform the design a meaningful interview Simply stated, is it worth it to invest in a collabora-
guide. tive inventory capability?
2. A series of half a dozen preliminary, informal man-
The prefield work also instilled context to interpret
agerial interviews were conducted to refine the
our findings about the construction of a dynamic col-
interview guide and ensure managerial relevance.
laborative capability. Because our interest was in the
3. An advisory board consisting of managers and aca-
process of constructing a collaborative capability, we
demics was assembled to provide feedback on the
replicated the study after 6 years — an interval of time
research content and process.
long enough to yield insight into collaborative strat-
This stepwise approach led to an open‐ended, semi‐ egy and capability emergence.
structured interview guide that asked questions regard-
ing five themes that permeate the design of collabora- Sample and Context
tive systems. Table 2 links these research themes to the To build theory related to the process of developing
core elements of systems design. The five themes are: a collaboration capability to achieve relational advan-
1. Why should managers be motivated to adopt col- tage and differential performance, we sought a context
laborative practices that are difficult, demand new that could serve as an “extreme case’’ (Eisenhardt
skills, require technology investment, and expose 1989a; Pettigrew 1990). Extreme cases are useful in
the organization to new risks? theory building since the dynamics under investiga-
2. What are the enablers of a collaborative capability? tion are often better defined and more easily docu-
3. What process factors make it so difficult to develop mented than in other scenarios (Pratt, Rockmann and
collaborative capabilities? Kaufmann 2006). We therefore selected companies
4. Given the rarity of successful collaborative pro- largely on the basis of their reputation for supply
grams, what is the nature of the resistors that make chain collaborative excellence. Potential participants
the transformation to collaborative management so were often mentioned in the trade press or included
difficult? as presenters on the programs of professional
48 Volume 48, Number 1

6. Peeking Inside the Black Box
TABLE 2
The Linkage between Systems Theory, the Literature, and Facets of the Design Process
Elements of Literature‐Driven Research Themes Facets of Systems
Systems Theory Design Process
Relation between Why should managers be motivated to adopt Motives
organization collaborative practices?
and its environment
Nature of systems design Why have so few companies developed Resistors
process effective collaborative practices?
What is the nature of the resistors that
impede the collaborative transformation?
What are the enablers of a collaborative Enablers
capability?
Organizational goals Can collaboration lead to sustained Outcomes
competitive success?
associations’ annual meetings. As the research pro- suppliers, or both at the time of the interviews. A total
gressed, we asked managers at interview companies of 49 interviews were conducted in Period 1. For Per-
and other discipline key informants to identify addi- iod 2, 57 interviews were performed. Fifteen compa-
tional companies of interest based on the their reputa- nies participated in both rounds of interviews. Table 3
tion for excellence or unique collaboration experience. shows the overall demographic statistics for the inter-
Given our focus on the collaboration process, we view companies. By design, the interview companies
conducted interviews across four core channel posi- in the two panels possess similar characteristics. The
tions — retailers, finished‐goods assemblers, direct findings from the Period 1 interviews led us to
materials suppliers, and service providers. This seg- include several smaller suppliers and service providers
mentation maximized our ability to evaluate differ- in the Period 2 panel.
ences in strategy and behavior across several
dimensions thought to influence collaboration: cus- Case Study Process
tomer contact, resource access, source of power, and We employed a multicase, interview‐driven method-
perceived know how. Each company was involved in ology to explore the intricate what, why, and how ques-
one or more collaborative initiatives with customers, tions associated with collaboration (Yin 1981;
TABLE 3
Qualitative Sample: Channel, Ownership, Sales, Profits, and Employee Levels
Period 1 Period 2
Channel Position
Number Number
Retailer 14 15
Finished‐goods assembler 13 19
Direct‐materials supplier 13 12
Service provider 9 11
Descriptive Sales Profits Employees Sales Profits Employees
Statistics (US$M) (US$M) (US$M) (US$M)
Mean 28,751 1,704 124,706 24,077 2,168 94,408
Median 9,045 589 44.750 4,954 679 16,300
Minimum 103 705 2,701 3 4,183 35
Maximum 285,222 10,267 1,700,000 378,799 12,731 2,100,000
All monetary amounts are in US dollars.
January 2012 49

7. Journal of Supply Chain Management
Meredith, Raturi, Amoako‐gyampa and Kaplan 1989; 1996). First, each case was viewed as a “stand‐alone
McCutcheon and Meredith 1993). Interviews provide a entity’’ to help describe the process and identify the
robust opportunity to explore collaboration since they issues encountered by each firm as it pursued a col-
enable managers to elaborate on the challenges they laboration capability. Importantly, following the
encounter — as well as the solutions they employ — as inductive process, we allowed ideas and themes to
they seek to create deep functional skills while simulta- emerge from the data. Although we noticed similari-
neously fostering collaboration capabilities (Dyer and ties and differences among the cases, we refrained
Wilkins 1991; Eisenhardt 1991). Multiple cases enable from further analysis until we had completed the
a replication logic, allowing researchers to confirm or interview process so that we could maintain the inde-
disconfirm inferences drawn from each case and yield pendence of the replication logic.
more generalizable results (Yin 1981). Second, only after we completed all of the write‐ups
Once a company agreed to participate, a brief over- did we begin the cross‐case analysis. Our goal was to
view of the research objectives and a copy of the inter- identify and match patterns in order to develop a
view protocol were provided (Spradley 1979). A more robust and complete theoretical picture (Eisen-
semistructured interview guide populated with open‐ hardt 1991). Because of the varied and nuanced
ended questions was used to (1) allow managers to answers as well as the diversity of language and terms
describe events and processes, (2) assure comparabil- used by the interview managers, we determined that a
ity of findings, and (3) provide flexibility in pursuing careful manual evaluation process would provide the
insight into unique practices and programs that best interpretation of the interviews. This analysis con-
became evident during the interview. The typical inter- sisted of three major steps.
view lasted two to four hours (the longest interview 1. Using the literature as background, we pursued an
lasted 16 hours) and involved senior managers who iterative, open‐coding process — i.e., we traveled
had responsibility for their company’s collaborative back and forth among the case write‐ups and
supply chain initiatives. Because of the crossfunctional emerging constructs. As we began to identify com-
nature of the research, the contact manager often mon statements, we formed provisional categories
invited other managers to participate in the interview and first‐order codes. We developed a spreadsheet
process. For example, IT managers, logisticians, new to help us to track and compare results across the
product managers, purchasers, and project leaders case studies.
were often involved in the interviews. Multiple infor- 2. The three‐person analysis team used a process of
mants mitigate subject biases and provide nuanced individual coding, collaborative discussion, and
insight into complex processes such as the building of concurring to derive theoretical meaning from the
a collaborative capability (Schwenk 1985; Golden cases. The team consisted of one of the original
1992; Miller, Cardinal and Glick 1997). interviewers as well as two new researchers. The
During each interview, extensive notes were made for new researchers were brought in to avoid data pro-
later reflection. In addition, secondary sources such as cessing bias (Pagell and Wu 2009). We repeated
company presentations, new releases, process docu- this process for every ten cases until all of the cases
mentation, program descriptions, and performance were coded. As new concepts were discovered, the
scorecards were used to supplement interview findings. researchers returned to the previously coded cases
Together, the interview notes and background materials to look for evidence of the newly identified phe-
were used to (1) create rich and reliable structured case nomena. This process forced 100 percent inter‐rater
write‐ups (Graebner and Eisenhardt 2004) and (2) reliability among the researchers.
avoid “data asphyxiation’’ from the large amounts of 3. Because the provisional categories were tightly
data (Pettigrew 1990). The typical write‐up was over defined, their number expanded greatly. For each
five pages and 2,000 words long. The notes from the facet of system design, over 20 categories emerged.
Period 2 interviews alone consisted of almost 340 sin- To focus our findings on the most critical issues, we
gle‐spaced pages and 145,000 words. As the interview employed two decision rules as part of the axial cod-
process continued, the researchers spoke often to com- ing process. First, phenomena that were infrequently
pare notes regarding both the process and the content. encountered (in under ten percent of the compa-
This iterative discussion‐based process was used to nies) were deleted. Second, we consolidated specific,
improve research reliability and validity as well as but related codes into broader, more theoretical cat-
derive a consensus regarding their meaning (Eisenhardt egories (Strauss and Corbin 1990). For example,
1989a, 1989b; Corbin and Strauss 1990; Seidel 1998). financial performance, revenue growth, profitability,
and pressure from Wall Street became need to
Data Analysis improve financial performance. Similarly, teaming,
Each case write‐up was used for two analyses: cross‐functional meetings, co‐locating managers,
within‐case and cross‐case (Eisenhardt 1989a; Ellram and use of advisory councils became intra/interorga-
50 Volume 48, Number 1

8. Peeking Inside the Black Box
nizational teaming structures. The resulting meta several areas. Not surprisingly, globalization is per-
matrices that reveal the data structure for both time ceived as a preeminent source of cost pressure. One
periods are shown in Appendix A. manager summarized a common perception, saying,
“There is a huge, giant sucking sound coming out of
The analysis process lasted four months. From this
China.’’ Increasing customer demands were also iden-
process, we gained greater insight into key facets of
tified as a pervasive force raising cost consciousness.
system design identified in Table 2. Ultimately, a sys-
One manager pointed out that customers find them-
tems model emerged describing the dynamic tension
selves in a similar cost squeeze, noting, “More of the
involved in building a collaboration capability. As the
customers we are dealing with are making decisions
framework emerged, we reevaluated the data’s fit/mis-
based strictly on costs and short‐term profitability.’’
fit with our new theoretical understanding (Glaser
Macro‐economic changes such as exchange rates were
and Strauss 1967; Pratt et al. 2006). We found that
also viewed as raising cost consciousness. The need to
the balance between the desire to establish a collabo-
lower costs has been and will continue to be a pri-
rative capability and the forces resisting organizational
mary reason to pursue more effective collaboration.
change is influenced by management’s ability to iden-
Second, managers concurred that customers are
tify and employ the correct enabling mechanisms. We
increasingly powerful and their demands are elevating.
continue with a brief overview of our findings, which
One manager complained, “Customers have changed
are organized using the four facets of systems design
and are spoiled rotten and too demanding. It’s crazy
identified in Table 2. We follow this discussion by
out there.’’ Another described the power differential
proposing a more general theoretical model of collab-
that often exists in buyer/supplier relationships, say-
oration capability construction.
ing, “As a supplier, we realize that our customers have
the big cannons and we only have BB guns.’’ Manag-
FINDINGS AND DISCUSSION ers consistently noted that rising customer expecta-
tions require a collaborative response. One succinctly
Motivation to Build a Collaboration Capability
summarized the competitive necessity: “We have to be
Open systems theory postulates that a changing envi-
connected to customers to survive.’’ Viewed over time,
ronment provokes a conscious, contingent response to
the trend is for customers to exert more power — cus-
maintain or improve performance (Lawrence and Lors-
tomer pressure almost matches price pressure as a dri-
ch 1967). Force field analysis similarly argues that envi-
ver of collaboration. The reality that the downstream
ronmental forces drive companies to build new
shift in customer power has been enabled by
capabilities (Lewin 1951). The interviews confirmed
enhanced information availability and expanded sup-
this environment‐response relationship, highlighting
ply options suggests that the collaborative imperative
the fact that they perceive today’s environment as tur-
will increase.
bulent and threatening as well as the reality that collab-
As managers discussed these two driving forces, they
oration is critical to both change and competitiveness.
often expressed frustration that lower costs and better
For example, one manager noted, “Collaboration is the
service stand in opposition to one another. From a
enabler of strategic transformation, . . . Our goal is to
traditional systems design perspective, higher service
generate 50% of ideas outside the organization (we are
levels require higher costs via increased investments in
now at 15‐20%).’’ Another manager reiterated the com-
inventory, premium transportation, better technology,
petitive benefit, saying, “Our customers are getting big-
and greater operating responsiveness. Managers high-
ger. Key suppliers are getting more powerful.
lighted this cost/service tradeoff as one of their most
Companies in the middle like us are getting squeezed.
daunting challenges, arguing that collaboration is
Collaboration is the key to reducing the squeeze.’’
needed to reconcile these drivers. One manager sum-
Among the forces driving managers to reevaluate
marized the role of collaboration in helping compa-
their organizations’ value propositions and value‐crea-
nies simultaneously reduce costs and increase service,
tion capabilities are globalization, compressed tech-
“The low‐hanging fruit is long gone; more sophisti-
nology cycles, and constant bottom‐line pressure.
cated, collaborative solutions will be required.’’
Managers noted these forces combine to create two
Managers in Period 2 frequently identified four
prevalent competitive imperatives — (1) the need to
other forces driving collaboration. Three of these
reduce costs and (2) the need to raise service levels —
forces focus on the supply chain network design: the
that increase the need to build a collaboration capa-
need to establish global reach, the need to secure the
bility (see Table 4).
company’s strategic position in the supply chain, and
First, almost all of the managers identified greater
the desire to build a winning team. These forces have
competitive pressure and a resulting need to reduce
strengthened over time, indicating that managers feel
costs as a critical driving force in today’s economy.
a greater need to collaborate effectively to bring
Managers perceive that cost pressure is emerging from
worldwide resources together to meet global custom-
January 2012 51

9. Journal of Supply Chain Management
TABLE 4
Forces Driving SC Collaboration—Period 1 vs. Period 2
Driving Force P1 (%) P2 (%) Representative Quotes
Competitive pressure 80 79 “Strong focus on cost‐cutting and efficiency
to reduce costs maximization’’; “The belief that ‘you can find it
cheaper in China’’’; “Managers are constantly
being asked to reduce costs’’
Customer demands for 67 75 “Relationships are driving SCM initiatives’’;
higher service levels “Stock‐outs are unacceptable’’; “Price point,
discontinued items, and replenishment’’;
“What can we do to make customers happier’’
Secure the company’s 24 37 “The goal is to experiment with alternative
strategic position in channels’’; “Companies come to us because of our
the supply chain global reach’’; “Globalization has changed the
rules of the game’’; “Global competition has
changed the rules’’
Desire to build a 24 25 “Logistics and sourcing of SCM are viewed as
winning SC team critical components’’; “If the internal chain isn’t
robust, we become the weakest link in the chain’’;
“Our focus has swung inward and outward based
on where the weak link in the supply chain was’’
Need to improve 18 28 “There is a constant push/pull pressure to hit
financial performance financial numbers’’; “Materials are the second
largest expense after payroll’’; “Every effort must
be supported by proven financial results’’
Need to establish 16 47 “The spirit of collaboration is part of our daily
global reach culture’’; “Desire to work together rather than
squeeze the small player for everything they have’’;
“We are starting to build a culture of SCM’’
ers’ needs. As companies build strong SC teams, they managers perceive collaboration as a required
are better positioned to respond to the fourth impera- capability.
tive — the need to improve financial performance.
To summarize, managers perceive that the competi-
Resistors to a Collaboration Capability
tive environment is changing in ways that require
Though managers identified collaboration as an
more effective collaboration. They realize that becom-
appropriate contingent response, the RBV literature
ing a contributing member of a strong, collaborative
notes that combining and configuring skills and tech-
supply chain enables their companies to create greater
nologies across boundaries is hard work and rarely
customer value at lower costs and thus mitigate inten-
occurs (Stalk, Evan and Schulman 1992; Barney
sifying competitive forces. Based on the preceding dis-
2001). Because the behavior of individuals must
cussion, we postulate the following.
change in collaborative relationships — often substan-
Proposition 1a: Intense price pressure initiates and
tially — the change management literature argues that
influences the development of a collaborative capabil-
resistance will be strong (Staw et al. 1981). Manager
ity. Although the initial response to price pressure is a
responses during the two sets of interviews confirm
reduction in the desire to collaborate, when price
these expectations and identified a variety of resistors
pressure reaches the point that firms can no longer
including interfunctional and interorganizational con-
resort to traditional cost‐cutting measures, managers
flict, misaligned metrics, lack of leadership, an inabil-
perceive collaboration as a required capability.
ity to embrace change, misused power, and limited
Proposition 1b: Intense customer pressure initiates
information sharing. Table 5 shows that these
and influences the development of a collaborative
entrenched resistors have prevailed across Periods 1
capability. When customers demand service levels that
and 2. Moreover, inadequate alliance practices, com-
cannot be met via traditional behaviors and practices,
plexity, poorly defined roles and responsibilities, and
52 Volume 48, Number 1

10. Peeking Inside the Black Box
TABLE 5
Resistors to Collaboration: Period 1 versus Period 2
Resistors P1 (%) P2 (%) Representative Quotes
Organizational structure & 73 75 “Major challenge is turf battles’’; “Functional
functional conflict silos’’; “Internal credibility with internal
functions’’; “Each of the cooperatives focuses on
it own little ‘garden’’’; “Our technicians want to
be purchasers’’
Poor strategic alignment: 53 68 “Our structure is not prepared to share or
goals & measures change’’; “Conflicts over delivery frequency and
service levels’’; “We don’t have the same goals,
structures or systems’’; “No one knows what the
whole thing looks like’’
Lack supply chain 39 63 “Lack of decision making at upper levels’’; “Lack
leadership & know‐how of leadership’’; “Primarily a back‐office
operation’’; Short‐term thinking and tactical
decision making’’; “Leadership is not modeling
correct behaviors’’
Resistance to change 59 61 “That’s the way we’ve always done it’’;
“Convincing doctors that lean SCM would not
compromise healing’’; “Resistance to changed
roles and responsibilities’’; “You can’t change
90 years of history in only 8 years’’
Insufficient trust/abuse 47 53 “Culture has reduced trust and collaboration’’;
of power “We are the two‐ton gorilla and we wield
tremendous leverage’’; “Over committing
beyond capabilities’’
Inadequate information: 73 53 “Communication!’’; “Suppliers are frustrated
Connectivity & sharing that we do not share strategic information’’;
“Information and technology systems are not as
refined as they need to be’’; “We have plenty of
data, but we can’t get it to decision makers so
they can use it’’
Inadequate alliance 12 35 “Dealing with main supplier’’; “Lack of buying
management practices power’’; “Most of our vendors lack the
capabilities to collaborate effectively’’;
“Structuring contracts in a ‘one‐size‐fits‐all’
approach’’; “Defining ‘partnering’ is
a challenge’’
Inaccurate forecasting & 29 33 “Forecasts are ‘garbage’’’; “Poor forecasting
excess complexity makes it difficult to pass accurate information
upstream’’; “Complexity will be tomorrow’s
constraint’’; “. . . difficult to manage multiple
systems’’
Poorly defined roles and 10 32 “Resistance to the loss of power and to changed
responsibilities roles and responsibilities’’; “Who really owns the
responsibility?’’ “We are struggling to define our
role’’
Gap in education skills and 18 30 “Teaching internal users the sourcing process’’;
human resources “Lack of education of buyers’’; “We don’t have
the talent we need for today’’; “Employee
development is a real challenge’’; “Worker
turnover and loss of talent’’
January 2012 53

11. Journal of Supply Chain Management
a lack of employees with key skills are emerging as decision that creates vulnerability to others’ misuse of
serious collaboration resistors. Together, these resistors asymmetrical power. For example, managers are reluc-
have essentially frozen companies in noncollaborative tant to share vital decision‐making information. This
business models. unwillingness to share information was observed at
A careful evaluation of manager comments reveals both the interfunctional and interfirm levels. In fact,
that structure and culture underlie much of the one manager shared a common sentiment, saying, “It is
observed resistance. Focusing on structural resistors, easier to get information from suppliers than from
interview managers explained that the desire to build other groups within our firm.’’ Simply stated, managers
deep functional skills creates conflict and impedes col- equate the sharing of proprietary information with giv-
laboration. One manager shared a prevailing thought ing away power. Collaboration is perceived as too risky.
that, “too many managers are functionally obsessed.’’ Overall, the interviews reveal that no single resistor
Another described the outcome of this mindset, say- impedes progress toward high‐level collaboration. The
ing, “We have good people who do not accept that collaborative challenge is one of accrual. As the
others do great work.’’ A third manager summarized diverse resistors reinforce each other, managers
the dilemma, noting, “People are more concerned become overwhelmed. One manager highlighted this
about who will get the glory or the blame rather than reality, saying, “You have to understand what you are
evaluate whether or not a decision will benefit the up against. You need to understand all the different
entire company.’’ These functional mindsets are rein- things that can kill you!’’ Because the entrenched
forced by poorly aligned goals and metrics — the sec- resisting forces permeate organizational structure and
ond most frequently observed resistor. Another culture, they are intrinsically difficult to mitigate.
manager connected these two resistors, explaining, Moreover, the existence of the entrenched resistors
“You’ve got to measure what you want to happen. tends to mask the need for new managerial skills and
You can’t change without measurement.’’ organizational routines
Turning to culture, interview managers identified two Proposition 2a: Traditional, functional organiza-
core collaboration resistors: (1) an unwillingness to tional structures are likely to impede the creation of a
adopt collaborative behavior and (2) a lack of trust. collaboration capability.
Managers at interview companies reiterated repeatedly Proposition 2b: Traditional, functional organiza-
that their colleagues firmly resist collaboration initia- tional cultures are likely to impede the creation of a
tives — largely because they perceive collaboration as collaboration capability.
threatening. Interview managers stressed that they and Proposition 2c: The interplay among structural and
their colleagues lack collaborative experience and spe- cultural resistors is re‐enforcing. When both types of
cific skills such as those related to alliance building. resistors are simultaneously found within a firm,
Consistent with structural‐inertia theory, they also the degree of collaborative resistance increases
pointed out that resistance to change is often rational- monotonically.
ized by past success. Managers shared statements like,
“It’s worked! Why should we change now?’’ and “That’s
Enablers of a Collaboration Capability
the way we’ve always done it’’ to explain this phenome-
The critical juncture in the change management pro-
non. Interview managers expressed frustration with
cess occurs when the desire to transform collides with
senior leadership’s lack of comprehension that change
resistance to change. Lewin (1951) proposed that
and collaboration are needed as well as with colleagues’
management should proactively intervene to (1)
resistance to change. In some cases, frustration has
strengthen driving forces or (2) mitigate resisting
transformed to despair. Managers lament that resistance
forces. His notion of intervention is consistent with
to change is so ingrained in organizational culture, it
contingency theory’s view that managers must
threatens to permanently freeze a company in noncol-
respond to a changing environment by adopting an
laborative behavior. One manager pointed out that
appropriate contingent response. Lawrence and Lorsch
existing organizational culture is contagious, stating,
1967 emphasized the need to fit the response to the
“The old mindsets convert the new people to their way
exigencies of the new situation. We would thus expect
of thinking.’’
the managerial response to target specific resistors.
A lack of trust contributes to managers’ unwillingness
Further, given the nature of a dynamic capability, we
to risk changed behavior and collaborative practice. At
would expect managers to employ enablers to
over half of the interview companies, managers noted
strengthen interfunctional and interorganizational
that trust is missing within their organization as well as
interaction and relational quality (Teece et al. 1997;
among important SC relationships. Managers described
Eisenhardt and Martin 2000; Barney 2001). Analysis
a need to believe that others will not take advantage of
of the interviews confirmed these dynamics. However,
them before they will engage in the behavior required
the interview findings reveal a need to pay particular
to achieve relational rents. Absent trust, they avoid any
54 Volume 48, Number 1

12. Peeking Inside the Black Box
attention to the role and importance of managerial only a small group of companies have really
commitment as an antecedent to investments in spe- overcome.
cific enabling mechanisms. As managers in the Period 2 interviews described
Commitment as a Superordinate Enabler. In each their satisfaction with their companies’ collaboration
interview, we asked managers to specifically assess initiatives, the pattern associated with commitment
their company’s commitment to collaboration. maturity reemerged. Among companies with low lev-
Although the companies were known to be partici- els of commitment maturity, managers expressed a
pants in various collaborative initiatives, managers desire to collaborate, but elaborated on the challenge
described different levels of commitment maturity of getting there. One manager noted, “We are making
(see Figure 2). Their responses can be categorized as progress but you can’t change the direction of a super
follows. tanker in a short distance. We have years of hard work
1. On a scale of 1–10, our commitment to collabora- ahead of us.’’ Among emerging and growing commit-
tion is a 5. We do not know how to collaborate ment companies, the overwhelming sentiment was,
well. Collaboration requires a different skill set we “We are happy, but not satisfied.’’ At collaboration
do not have time to build. leaders, managers were delighted, but cautious. This
2. We know that collaboration is important. It repre- feeling was shared as follows, “In today’s environment
sents a new way of doing business and we are you can never be satisfied with where you are! We are
beginning to learn how do to it effectively. getting better, but our business strategy will demand
3. Our commitment to collaboration is growing. We more.’’ Ultimately, managers recognize that commit-
have documented its benefits and are building ment among senior executives is needed to open
momentum for deeper, more strategic collaboration. mindsets and mobilize resources, but acknowledge
4. We are absolutely committed. Collaboration is crit- that enduring commitment in today’s volatile environ-
ical to our competitive strategy. ment is difficult to obtain.
Proposition 3: Managerial commitment enables (a)
The descriptions of commitment maturity emphasize
resources to be dedicated to collaborative mecha-
two realities. First, many companies remain function-
nisms, (b) the mitigation of resistors, and (c) the
ally frozen — they are committed to functional excel-
development of a collaborative capability. The greater
lence and lack both the collaborative “know why’’
the managerial commitment — as measured by locus,
and “know how.’’ Without the vision or right skills,
breadth, intensity, and duration — the greater the
managers neither understand nor embrace high‐level
emergent collaborative capability.
collaboration. Second, progress is being made among
firms that have made the decision to pursue develop- Cultural and Structural Enablers. Commitment
ment of a collaborative capability. Pilot projects are maturity influences a manager’s perspective regarding
yielding results and performance improvements are their firm’s ability to cultivate specific enablers. Man-
being documented. Even so, the sustained effort and agers at low‐commitment firms expressed concern that
investment required to transform organization culture the strength of the resisting forces was amplified by a
and structure remains a substantial impediment that lack of willingness on the part of leadership to invest
in needed enablers. They noted that intensive collabo-
ration strategies were out of their reach. These manag-
FIGURE 2 ers did, however, agree with their peers at more
Commitment to Collaboration: Period 1 versus committed companies regarding the type of enablers
Period 2
that needed to be established.
By contrast, managers at high‐commitment firms
were optimistic that they had a plan to establish
needed enablers and felt that given time they would
achieve collaborative goals. These managers’ sense of
direction was evidenced by a strong emphasis
throughout the interviews on core enablers. Table 6
reveals that companies are engaged in the process of
enabler development and indicates that managers
identified each core enabler more frequently in Period
2 than in Period 1, indicating a convergence of aware-
ness regarding the importance of core enablers. That
managers are targeting investments to mitigate the
influence of specific resistors is evidenced by Table 7,
which pairs the most frequently identified enablers
January 2012 55

13. Journal of Supply Chain Management
TABLE 6
Enablers of Collaboration: Period 1 versus Period 2
Enablers P1 (%) P2 (%) Representative Quotes
Trust‐dominant 41 86 “Open books to get to true costs’’; “Transparency
collaborative culture is the key success factor’’; “You help me here and
I’ll help you there’’; “Philosophy of open
communication. We have been very honest with
suppliers’’
Accurate, timely 49 79 “Frequent meetings to go over jointly defined
information sharing metrics’’; “Manage the information flow’’; “I’d like
to see our partners share more information’’;
“Technology continues to improve real‐time
decision‐making’’
Aligned SC measures & 51 70 “Benchmark best practices’’; “Monthly meeting to
more accurate costing establish production plans, performance
expectations, and measures’’; “Overriding
philosophy is to use measures that communicate’’
Intra/inter‐organizational 31 68 “Multi‐disciplinary, center‐led organization’’;
teaming structures “Cross‐functional meetings are more effective’’
“Co‐locating personnel at O&M facilities’’;
“Management teams to manage internal accounts
in other divisions’’
Supplier development & 49 67 “Vendor compliance’’; “Willingness of supplier to
integration change their paradigm’’; “Meet on a regular basis
with suppliers to communicate expectations’’;
“Suppliers participate in classes designed to help
them’’
Employee buy‐in and 43 63 “Small victories enable further collaboration’’;
empowerment “Need a plan that others can buy into’’; “Let the
lean culture do its work on the docs’’; “Show the
concrete results to capture buy‐in’’
Learning & 41 63 “Change the culture to make experimentation
experimentation safe’’; “Active use of pilot projects’’; “Constant
mechanisms learning through listening, scanning and pilot
projects’’; “It is critical to find a partner willing to
experiment’’; “Theory guides, but experiments
decide’’
Senior‐level managerial 37 61 “CEO present at all meetings’’; “Monthly meetings
commitment with all senior managers present’’; “Senior
leadership — they have to have the vision’’;
“Senior level manager has taken the role of project
leader’’
Process transparency & 39 56 “Identifying the metrics needed to create visibility’’;
supply chain mapping “Mapped out the in‐stock process’’; “Established
standard process and a ‘unified code’’’; “Joint
rapid process improvement workshops’’;
“Choreography is the key’’
Disciplined NA 25 “Built a centralized decision‐making group’’;
decision making & “Execution to plan’’; “Better analysis is being done
follow through to justify and support decision making’’; “Discipline
needed to change culture’’; “The only way to
rationalize the network is through visibility
supported by disciplined actions’’
56 Volume 48, Number 1

14. Peeking Inside the Black Box
TABLE 7
The Relationship Between Enablers and Resistors
Enabler Resistor
Rank % Rank %
1 Trust‐based collaborative culture 85 5 Lack of trust 53
2 Better information availability 79 6 Inadequate information sharing 53
3 Aligned goals & measures 70 2 Poorly aligned goals & metrics 68
4 Team‐based mechanisms 68 1 Functional structure & turf conflict 75
5 Supplier development & integration 67 7 Inadequate alliance management 34
6 Employee buy‐in 63 4 Resistance to change 61
7 Experimentation mechanisms 63 4 Resistance to change 61
8 Top management commitment 61 3 Lack of leadership 63
with the most prevalent resistors. That managers con- Outcomes from a Collaboration Capability
sistently identify enablers more frequently than the As in all strategic initiatives, the desired outcome of
related resistors reiterates a convergence of awareness a dynamic collaboration capability is differential firm
and suggests that documentable successes are being performance (Porter 1991). Interview managers are
obtained. cognizant of this goal; yet, throughout both waves of
Despite the increase in enabler implementation, interviews, they expressed frustration regarding the
managers noted that resistors remain entrenched and constant pressure to quantify the “P&L’’ impact of col-
that change‐management processes need greater com- laboration initiatives. The source of the angst is
mitment, more experimentation, and sustained persis- expressed in two related thoughts, which managers
tence to generate credibility. They expressed the communicated frequently: “So much of what we are
sentiment that building momentum to garner broad‐ trying to do cannot be easily traced to the bottom
based buy‐in is a prerequisite to resistor mitigation. line. How do you quantify the value of a better rela-
Two thoughts that were frequently reiterated are cap- tionship?’’ and “If you don’t have the numbers, it’s
tured by the following quotes, “You have to have just your opinion.’’ Managers often find they must jus-
some quick wins.’’ and “We need to document ‘what’s tify their collaboration efforts with numbers that are
in it for me!’’’ not currently captured by their firms’ measurement
Ultimately, the interview findings indicate that when systems.
it comes to establishing a collaborative culture and Although many companies have yet to document
structure, managers are learning both what to do and collaborative benefits, a few managers were excited to
how to do it. However, managers warned that despite share specific statistics that defined their collaborative
the slow progress, “lip service’’ and hyperbole under- success. They reported 30–35 percent reductions in
mine progress. This sentiment was aptly captured by inventory and up to a 100 percent improvement in
one manager’s exclamation, “Doing is more important inventory turns. Cost benefits ranged from 5 percent
than talking. Talking always results in cynics.’’ per year decrease in acquisition costs to 20 percent
Proposition 4a: Investments is collaboration ena- productivity improvement. One company reported a
blers (e.g., aligned objectives, shared customer‐ori- 10–20 percent reduction in prices to consumers. Like-
ented vision, technological connectivity, relationship wise, time benefits included 25–50 percent decreases
trust) allow companies to mitigate existing collabora- in reorder lead times, 50 percent improvement in
tion resistors. on‐time delivery, a 50–60 percent decrease in order
Proposition 4b: Resistor mitigation is influenced by fulfillment lead times, and achieving a 99 percent
the fit or alignment between a company’s specific col- on‐time delivery. Managers also reported sales and
laboration enablers and existing collaboration resis- profit growth as high as 50–58 percent.
tors. The greater the alignment is, the greater the Most managers, however, described obtained bene-
mitigation effect. fits without sharing the “hard’’ numbers (see Table 8).
Proposition 4c: Resistor mitigation is influenced by The two most frequently identified benefits of collabo-
the ability to generate early or initial buy‐in and ration across the two time periods were (1) improved
momentum. The greater the use of practices that productivity and (2) enhanced customer satisfaction.
document collaborative benefits, the greater the miti- First, increasing globalization, the emergence of low‐
gation effect. cost rivals, and intense competition characterized the
January 2012 57

15. Journal of Supply Chain Management
TABLE 8
Benefits of Collaboration: Period 1 versus Period 2
Benefits P1 (%) P2 (%) Representative Quotes
Improved productivity & 88 67 “Lean focus is beginning to take root’’; “Operating
lower costs costs have dropped’’; “50% more profitable over
the past four years’’; “System enhancements have
enabled more work with less labor’’
Continuous process 10 47 “Reduced value stream steps from 45 to 20’’; “SC
improvement collaboration has increased learning in the chain’’;
“Provide lead time for problem solving’’;
“Everything seems to move faster’’; “The
momentum needed to make changes and drive
new initiatives’’
Improved customer 45 46 “Better customer satisfaction’’; “Improved service to
service & satisfaction members’’; “Higher in‐stock percentages at the
store level’’; “All of this leads to better customer
satisfaction’’
Enhanced growth & 29 39 “Enabled 13 new stores in 4 months’’; “An ever
competitiveness growing earning stream’’; “Sustained profitable
growth’’; “It helps us to be more competitive and
keeps us in business’’
More effective 20 37 “Fewer conflicts along the supply chain’’;
communication & “Collaboration allows us to solve issues more
coordination rapidly’’; “We are better able to develop and
deliver solutions’’; “Collaboration is being driven
by both customers and service providers’’
Better supply 37 32 “Becoming a ‘preferred customer’’’; “Ability to
chain relationships leverage supplier resources to run a leaner supply
chain’’; “Increase the learning chain’’; “Supplier
loyalty’’; “Suppliers have helped to successfully
take cost out’’; “We have won back the trust of the
suppliers’’
Improved quality 10 19 “Early quality/reliability of new products’’; “Bar
none, service and quality’’; “Everything we do is to
drive product quality’’; “Price premium for many
products due to quality levels’’
Faster, more responsive 43 14 “Better service levels’’; “Results: cost, quality and
order fulfillment faster delivery/service responsiveness’’; “Benefits
are threefold: lower costs, better service, and
greater responsiveness’’
Better on‐time delivery 27 14 “Better on‐time delivery, higher quality, lower
prices, and happy customers’’; “Achieved 99.6%
second day on‐time delivery’’; “In‐stock % way
up — critical to delivery speed’’; “We finally have
our strategic product delivery process defined’’
Faster inventory turns 43 12 “Inventory and lead time reductions’’; “SCM has led
to higher inventory turns and in‐stock
percentages’’; “Supplier visibility into orders has
improved inventory turns’’; “Inventory turns are
up’’; “Our inventory turns have gone up steadily’’
58 Volume 48, Number 1

16. Peeking Inside the Black Box
decade in which both studies were carried out. Thus, throughout the organization as well as up and down
it is not surprising that managers noted the ability to the supply chain influences future commitment to col-
take costs out of the system as the primary benefit of laboration and thus the firm’s willingness to continue
SC collaboration. Second, managers persistently dis- to invest in an enhanced collaborative capability.
cussed their enhanced customer‐service capabilities.
However, it is difficult to aggressively cut costs and
simultaneously increase customer satisfaction. The fact
TOWARD A DYNAMIC SYSTEMS MODEL OF
that fewer managers reported customer satisfaction
improvements in Period 2 indicates that there may be
COLLABORATION
The concepts and relational dynamics that emerged
limits to balancing this tradeoff.
from our study are portrayed in Figure 3, which sum-
Continuous improvement, a benefit that was seldom
marizes and generalizes our principal findings. This sys-
mentioned in Period 1, became a focal benefit in Per-
tems diagram illustrates the reinforcing and balancing
iod 2 — perhaps as a strategic response to this cost‐
cycles that firms face as they seek to develop a collabo-
service dilemma. Managers talked openly and enthusi-
rative capability (Senge 2006). The momentum cycle,
astically about the intangibles that they are experienc-
indicated by white arrows, involves learning how to
ing from better relationships and improved processes.
leverage early successes to increase commitment and
Intangibles included better communication, more rig-
build capabilities. The balancing cycle, indicated by
orous analysis, greater visibility, higher levels of trust,
gray arrows, depicts the interaction that exists among
enhanced learning, the emergence of a problem‐solv-
collaboration resistors and enablers. The two cycles are
ing environment, and momentum for change. For
inextricably linked. As firms initiate collaborative inter-
many companies, documented “baby steps’’ justify
action — either interfunctional or interorganizational
collaboration as a viable strategy despite the difficulty
— they enter the balancing cycle. Organizations that
of tracing “hard’’ benefits to the bottom line. How-
successfully mitigate resistors are able to loop back into
ever, the interviews evince that benefits are not being
the momentum cycle. Those that do not alleviate resis-
obtained equally.
tors fail to build a collaboration capability.
Proposition 5a: A collaboration capability delivers
The capability‐development process typically starts as
positive supply chain operational and financial perfor-
a strategic response to changes in the competitive envi-
mance benefits.
ronment. The perceived magnitude and permanence of
Proposition 5b: A firm’s ability to document perfor-
the threats drive the strength of the collaborative intent
mance improvements and disseminate success stories
FIGURE 3
Interplay of Momentum and Balancing Cycles in the Construction of a Collaborative Capability
January 2012 59