Effect Of Manufacturers' Social Control Within Its Supplier Portfolio On Manufacturers' Performance

Supplier network is a key strategic asset of a manufacturer. How to manage suppliers effectively is always an important issue of supply chain management and alliance network management. Supplier portfolio is defined as manufacturer's ego-centric supplier network. The supplier portfolio perspective allowed us to study the effectiveness of manufacturer's social control in the value-creating process of supplier portfolio. This paper took a supplier portfolio as a unit of analysis. From two dimensions of supplier portfolio configuration: relational strength and partner characteristics, this paper studied how a focal manufacturers manages its supplier portfolio through social control to achieve good performance.Given the relational strength dimension, we studied how manufacturers'differential social control among its supplier portfolio affected its performance. Differential social control was defined as differential degree of social means through which the focal manufacturer managed multiple manufacturer-supplier relationships. Based 128 manufacturers in China, this study found that 1) manufacturers'differential social control within its supplier portfolio negatively affects its performance; 2) This negative effect will be strengthened when demand uncertainty is high,3) but be attenuated when technology uncertainty is high. By studying the impact of manufacturer's differential social control on its performance, this study extended social control literature from a dyad analysis level to a portfolio analysis level, and thus responded to the appeal for exploring the effectiveness of social control from a holistic perspective.Given the partner characteristics dimension, first, this paper identified two types of competing institutional logics followed by suppliers, in China, with different institutional attributes:government-dominated institutional logic and market-dominated institutional logic, and then analyzed their exposing conflicting institutional demands on the focal manufacturer. Second, this paper studied how manufacturers'social control across institutions among its supplier portfolio affected its performance.Social control across institutions was defined as developing high quality social control with suppliers with different institutional attributes simultaneously. The higher this variable is, the higher quality social control developed with suppliers with different institutional attributes simultaneously. This study found that 1) manufacturers' social control across institutions within supplier portfolio positively affects its performance; 2) this positive effect will be strengthened when competition intensity is high,3) but be attenuated when unbalanced power of institutional logics is high. By studying the impact of manufacturer's social control across institutions on its performance, this study extended the literature concerning organizational response to conflicting institutional demands from a hybrid organization and organizational identity approach to inter-organizational relationship management approach.