Help or hindrance? Supplier involvement and causal ambiguity within inter-organisational NPD teams

Suppliers are increasingly involved in buyer firms’ interorganizational new product development (NPD) teams. Yet the transfer of knowledge within this context may be subject to varying degrees of causal ambiguity, potentially limiting the effect of supplier involvement on performance. We develop a theoretical model exploring the effect of supplier involvement practices on the level of causal ambiguity within interorganizational NPD teams, and the subsequent impact on competitor imitation, new product advantage, and project performance. Our model also serves as a test of the paradox that causal ambiguity both inhibits imitation by competitors, but also adversely affects organisational outcomes. Results from an empirical study of 119 R&D intensive manufacturing firms in the United Kingdom largely support these hypotheses. Results from structural equation modeling show that supplier involvement orientation and long-term commitment lower causal ambiguity within interorganizational NPD teams. In turn, this lower causal ambiguity generates a new product advantage and increases project performance for the buyer firm, but has no significant effect on competitor imitation. Instead, competitor imitation is delayed by the extent to which the firm develops a new product advantage within the market. These results shed light on the causal ambiguity paradox showing that lower causal ambiguity during interorganizational new product development increases both product and project performance, but without reducing barriers to imitation. Product development managers are encouraged to utilize supplier involvement practices to minimise ambiguity in the NPD project, and to target their supplier involvement efforts on solving causally ambiguous technological problems to sustain a competitive advantage.