How Informal Exchanges Impact Formal Sourcing Collaboration (and What Supply Managers Can Do about It)

Abstract

The interplay between informal and formal mechanisms has frequently been analyzed in the general management and supply chain management disciplines. The same is true for linkages between past and present events. However, the extant supply management literature largely conceptualizes formal cross-functional sourcing collaborations as free from influences emanating from prior encounters. This compartmentalization is in sharp contrast to sociology and social psychology research, which demonstrates that overlooking previous interactions limits our understanding of team dynamics. Boundary-spanning supply managers continually engage in formal and informal interactions with colleagues from other functions both before and during formal collaborations in sourcing teams. Our research focuses on the effects of informal exchanges that have taken place prior to the formal establishment of the sourcing team. We investigate how a colleague from another function reacts to a supply manager’s rejection of informal advice, and how the supply manager can mitigate the potential negative effects of this reaction on future formal sourcing collaborations. We use social exchange theory and impression management theory to derive hypotheses, a scenario-based experiment to test the hypotheses, and a sequential explanatory strategy based on interviews to delve more deeply into the experimental findings. The results suggest that previous informal advice-rejection reduces both an advisor’s willingness to provide formal advice to the advice-receiving supply manager in an ensuing cross-functional sourcing team and the expected cohesion of such a team, as compared to when the advice was heeded. We differentiate between five types of advisees’ mitigation strategies and find that the negative implications can be mitigated but that the degree of mitigation effectiveness partly depends on the advisor’s expertise level.