Structural Embeddedness and Supplier Management: A Network Perspective (Report‪)‬

INTRODUCTION Supplier management strategies such as supplier evaluation and supplier selection have drawn attention from academia, since Miller, Graham, Freeland, Hottenstein, Maister, Meredith and Schmenner (1981) articulated the importance of supplier management as a key strategic consideration. Studies have focused on suppliers' internal capacities, such as operational capability (e.g., Dickson 1966; Vyas and Woodside 1984); financial stability (e.g., Gentry 1996; Olsen and Ellram 1997); technological superiority (Stuart 1997; Spekman, Kamauff and Spear 1999); and trustworthiness (Barney and Hansen 1994; McCutcheon and Stuart 2000). While this literature has enhanced our understanding of relational assets within the dyadic relationship between a buyer and its supplier, it falls short of addressing the importance of extended networks beyond the immediate dyadic relationship (i.e., how a supplier's relationship with its suppliers or other buying firms affects its performance). Therefore, we posit that when evaluating suppliers, buying firms should consider their extended supply networks--which companies the supplier is connected to and how the connected companies fare in their own businesses. We need to consider how a supplier is embedded in its own networks if we are to truly gauge its performance.