Developing strategic supplier networks: An institutional perspective

This study examines the exposure of the members of supplier networks to two layers of social influences. First, as the network connects an actor to a foreign constellation, the actor faces influences of a global character. Second, each individual actor experiences different forces emanating from its indigenous institutional environment. The exposure to two institutional practices presents a conundrum for each network member. In this duality they alter their behavior in order to resolve the contrast and clashes of layered forces. By drawing upon institutional theory and in-depth study of a global retailer, IKEA, this study shows how the retailer handles this duality. The study increases understanding of how a supplier network can be socially transformed into an idiosyncratic asset which is costly to imitate for rivals and thus offers a unique competitive advantage to the firm. The framing which is used for IKEA's strategy under institutional theory in this article underscores the regulative, cognitive, and normative socialization as part of a company's strategic process to align relationships with its partners.