Collaborative innovation with suppliers in a turbulent market

Abstract

This study investigates benefit sharing practices in supplier networks as a new incentive scheme that manufacturers can use to gain suppliers’ active participation in collaborative innovation. Based on observations from the case study, Samsung’s benefit sharing practices are analysed and their featured characteristics and the requisite conditions extracted. The findings illustrate the operating mechanisms of benefit sharing practices. The findings also demonstrate the requisite infrastructure that manufacturers should build to ensure the success of benefit sharing. This study, the first examination of the mechanisms of benefit sharing in the context of a rapidly changing industry, not only enriches inter-organisational learning research but also provides new insights into collaborative-innovation for companies and government authorities.

ORCiD

Gyeong Mook Kim http://orcid.org/0000-0002-3760-3695

Notes

1. It should be also noted that measuring the financial value of the supplier development outcomes is not easy because they are too broad to grasp and highly latent. This is why Samsung gives 100% of the development benefits to the supplier for first two years.

2. Profit improvements realized through GSDP are mostly accrued to the supplier in the short term and shared with the manufacturer over the long term.

3. To encourage innovative ideas and suggestions from employees, as well as the rapid implementation of benefit sharing practices, Samsung materially rewards employees who perform well and produce good benefits. For example, Samsung awards employees who successfully accomplish particular benefit sharing projects with $5000 and recognition (presidential citations).

Additional information

Funding

This Research was supported by the Duksung Women's University Research [Grants 2015-3000002403].