As today's firms increasingly outsource their noncore activities, they
not only have to manage their own resources and capabilities, but they
are ever more dependent on the resources and capabilities of supplying
firms to respond to customer needs. This paper explicitly examines
whether and how firms and suppliers, who are both oriented to the same
customer market, enable innovativeness in their supply chains and
deliver value to their joint customer. We will call this customer of the
focal firm the 'end user.' The authors take a resource-dependence
perspective to hypothesize how suppliers' end-user orientation and
innovativeness influence downstream activities at the focal firm and
end-user satisfaction. The resource dependence theory looks typically
beyond the boundaries of an individual firm for explaining firm success:
firms need to satisfy customer demands to survive and depend on other
parties such as their suppliers to achieve customer satisfaction.
Accordingly, the research design focuses on three parties along a supply
chain: the focal firm, a supplier, and a customer of the focal firm
(end user). The results drawn from a survey of 88 matched chains suggest
the following. First, customer satisfaction is driven by focal firms'
innovativeness. A focal firm's innovativeness depends, on the one hand,
on a focal firm's market orientation and, on the other hand, on its
suppliers' innovativeness. Second, no relationship could be established
between a focal firm's market orientation and a supplier's end-user
orientation. Market orientation typically has within-firm effects, while
innovativeness has impact beyond the boundaries of the firm. These
results suggest that firms create value for their customer through
internal market orientation efforts and external suppliers'
innovativeness. [ABSTRACT FROM AUTHOR]