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Buyer-Supplier and Supplier-Supplier Alliances: Do They Reinforce or Undermine One Another?
Código: WPE – 091
Sergio G. Lazzarini
Danny Pimentel Claro
Luiz F. Mesquita
Research has emphasized the emergence of buyer-supplier (vertical) and supplier-supplier (horizontal) alliances as a way to foster inter-organizational learning and cooperative efforts in production systems. There is some controversy, however, regarding how those distinct alliances interact with each other. Some propose that supplier-supplier alliances reinforce the development of buyer-supplier alliances, or viceversa. For instance, the inter-organizational learning that occurs at the horizontal level generates positive spillovers to the vertical alliance. Others propose instead a negative interplay: when crafting vertical alliances, for instance, buyers may inhibit the formation of horizontal alliances as a way to preserve their bargaining power vis-à-vis suppliers. We empirically test those competing views using survey data from the Brazilian auto-parts industry. In an attempt at reconciliation, we additionally propose that the interaction between buyer-supplier and supplier-supplier alliances will be positive or negative depending on a particular contingency: the extent to which supply components are subject to uncertain technological change. Our data reveal that the existence of vertical alliances inhibits the development of horizontal alliances, but only when technological uncertainty is relatively low. When components are subject to higher technological change, those two types of alliances do not seem to significantly affect one another. We discuss implications for theory and practice.