The dual role of supply base knowledge in organizational integration and competitive performance

Abstract

While prior research has established the instrumental role of supply base knowledge (SBK) –a buying firm's internally accumulated knowledge of its suppliers' capabilities, resources, and performance – in decision-making, its potential to elevate the strategic influence of the purchasing function through symbolic value remains underexplored. This study introduces a novel dual-role framework, positioning SBK both as an instrumental resource that enhances purchasing's purchasing's impact on strategic decision-making and as a symbolic asset that legitimizes its role within the organization. Using data from 229 manufacturing plants across 15 countries, we apply PLS-SEM analysis to examine these mechanisms. Our findings reveal that SBK not only enhances purchasing's strategic involvement and firm performance but also serves as a key enabler for supplier integration in NPD. By distinguishing between instrumental and symbolic knowledge use, this study extends prior literature on purchasing knowledge and internal integration, offering a more nuanced perspective on how firms can leverage SBK for both competitive advantage and organizational legitimacy.