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 engineering change orders (ECOs), 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 magnitude of a buyer's ECOs positively amplifies 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.