Supplier development strategies for small high technology firms

Abstract

Today’s global conditions and rapidly changing technology demands innovative management strategies. Interorganizational collaboration is often considered the new frontier of management and a vital component in the survival and success of firms in the new millennium. There is, however, considerable debate over how small businesses should manage and organize their relationships in order to maximize performance. While many firms have developed closer collaborative inter-organizational relationships (IORs) to find and maintain competitive advantage, and these relationships often contribute to higher profitability and greater competitive advantage, there is evidence of a high degree of failure of these relationships. It is becoming clear that IORs are not a universally desirable strategy. The focus of this article is on small firms and their supplier relationships. The thesis is that supplier development will only be successful when the supplier is of strategic importance to the firm and there is a high level of trust in the relationship. The factors underlying these conditions, stages of IOR development, critical success factors and case studies of successful small firm IORs are illustrated.