This paper studies how buyers’ technical expertise and supplier governance skills shape their satisfaction with suppliers' performance i.e. price, quality, and cooperativeness of products or services bought.
There is little research that compares and contrasts how a buyer's supplier governance skills and technical skills influence different aspects of supplier performance.
"As out-sourcing becomes an increasing important part of firms' production strategies, it is important to understand whether firms can use governance skills to ensure strong supplier performance or whether they need to retain their own technical skills even as they increase their reliance on external suppliers. The study examines buyer/supplier relationships among 182 firms in the U.S. metal forming industry in 2002. Our arguments and results suggest that firms cannot rely solely on governance skills to maintain superior out-sourcing performance, but need to complement management capabilities with technical expertise."
