Effects of firm and environmental characteristics on supplier integration in new product development

Abstract

In this paper, we explore how environmental and firm characteristics affect supplier integration in new product development, i.e. timing and depth of supplier integration. We examine such environmental and firm characteristics as market and technological turbulence, supplier innovativeness, and supplier knowledge intensity. Using the data from surveys of Korean Small- and Medium-Sized Enterprises (SMEs), we conduct a structural equation modelling. The results indicate that the market turbulence speeds up the supplier integration, but the technological turbulence delays it. Knowledge intensity makes the depth of supplier integration greater. Finally, integration timing and depth affect the performance of new product development differently. Rapid supplier integration affects the performance negatively, whereas deep supplier integration improves it. We explain the logic behind the analysis result and suggest managerial implications.