Knowledge integration taxonomy in buyer-supplier relationships: Trade-offs between efficiency and innovation

Based on the knowledge-based view of inter-firm collaboration, this study develops and proposes a parsimonious taxonomy of how buyers and suppliers develop knowledge integration in terms of two mechanisms: joint sense meaning and joint decision making. The first focuses on the interpretation and sense making of knowledge about strategic, relevant issues for the buyer-supplier relationship (BSR). The latter emphasizes joint problem solving related to their interlinked operative routine activities. Using survey data from 130 collaborative BSRs and cluster analysis, the results suggest that buyers that purposely develop a balanced knowledge integration with their suppliers-characterized by managing high levels of both joint sense meaning and joint decision making-show improved efficiency and innovation simultaneously even though they have to deal with the tension of managing the requirements of these two key, albeit competing outcomes. The results also suggest that buyers pursuing focused knowledge integration with their suppliers-characterized by managing high levels of either joint sense meaning or joint decision making-outperform in a specific outcome at the expense of the other. This study thus provides a comprehensive framework that allows organizations to evaluate the knowledge integration strategy that best supports their goals related to their collaborative buyer-supplier relationships.