Interorganizational Information processing and the contingency effects of buyer-incurred uncertainty in a supplier’s component development project

Supplier integration into new product development (NPD) necessitates effective information exchange and absorption between a buyer and a supplier. While prior research has emphasized the buyer’s ability to manage the supplier’s interface, this research takes a supplier perspective and investigates under which circumstances a supplier’s interorganizational information processing capability (IIPC) drives the supplier’s component development performance. We take a contingency view and theorize that the effect of the supplier’s IIPC is either amplified or dampened by three sources of buyer-incurred project uncertainty: a buyer’s component novelty, a buyer’s design changes, and a buyer’s knowledge protectiveness. The hypotheses are tested with data collected from 103 supplier component development projects in South Korea. As a result, this study empirically demonstrates the significant effects of a supplier’s IIPC in enhancing the supplier’s component development performance. In addition, we substantiate that the buyer’s magnitude of design changes positively enhances the benefits of the supplier’s IIPC, while the buyer’s knowledge protectiveness significantly hampers it. Academic and managerial implications are presented, and future research directions are discussed.