Risk management on joint product development with power asymmetry between supplier and manufacturer

• Developed a causes-risks model for analyzing the influence of power asymmetry on joint product development
• Showed that power asymmetry significantly influences the risk occurrences in joint product development
• Found that additional efforts are required in risk management when suppliers are advantaged
• Proposed implications for supplier selection and project management in terms of power asymmetry

Risk management is a critical issue in complex product development, especially when suppliers are integrated. The power asymmetry between the supplier and manufacturer may largely influence the development process and affect the occurrence and interaction of risks, and it should be systematically examined. In this paper, we establish a structural model to study the impact of power asymmetry on risk occurrence in the joint product development (JPD). Empirical data collected from engineers in airspace industries show that path coefficients of the risk structural model are significantly different between the manufacturer-advantaged situation and the supplier-advantaged situation. The results indicate that power asymmetry has significant effects on risk occurrence and interaction. Furthermore, we provide managerial insights into customized risk-reduction measures from the perspective of the discovered relationship difference.