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SME–supplier alliance activity in manufacturing: contingent benefits and perceptions
Author(s) -
Arend Richard J.
Publication year - 2006
Publication title -
strategic management journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 11.035
H-Index - 286
eISSN - 1097-0266
pISSN - 0143-2095
DOI - 10.1002/smj.538
Subject(s) - alliance , business , perception , upstream (networking) , selection (genetic algorithm) , marketing , industrial organization , psychology , computer science , computer network , neuroscience , artificial intelligence , political science , law
We address the following two questions: how upstream vertical alliance (UVA) activity affects the performance of small and medium‐sized enterprises (SMEs); and how SME perceptions of that relationship influence the choice to engage in UVA activity. Using responses from a recent survey of business unit managers representing 200 SMEs, we find that UVA activity benefits SME performance when self‐selection effects are controlled. Instead of being a source of differentiation advantages, UVA activity leverages the SME's existing advantages. And, while SME perceptions appear to drive the self‐selection of UVA activity, those perceptions are inaccurate; the result is that the SMEs likely to benefit less from such activity engage in it more. Copyright © 2006 John Wiley & Sons, Ltd.