Strategic Supplier Selection, Supplier Integration and Buyer Outcomes: Direct and Indirect Effects?

This research examines whether the strategic selection of suppliers based on certain criteria directly and/or indirectly enhances the buyer's competitive performance capabilities in the corresponding domains. Two supplier integration mechanisms -- relational exchanges and supplier development -- are modeled as mediators for evaluating the indirect paths. The hypotheses concern direct or indirect matching: (1) selecting suppliers based on new product development capability with buyer product innovation, (2) selecting suppliers based on quality capability with buyer quality, and (3) selecting suppliers based on cost capability with buyer competitive pricing. The results indicate that the direct effects are supported, but that the indirect effects of domain-specific strategic supplier selection through supplier integration are not. These results suggest that additional firm investments in supplier development and relational exchanges are not efficacious; rather, any additional firm resources should be devoted to investment in initial strategic selection of suppliers.