In search of paradox management capability in supplier–customer co-development

Abstract

Companies increasingly involve their customers in development and innovation activities (i.e. co-development). This happens particularly in business-to-business markets, where customers provide the requisite knowledge for the development of complex product and service systems that help to solve customers' problems. Existing literature indicates that co-development involves inherent challenges, contradictions and tensions in the relationship between suppliers and their customers. Many of these take a form of paradox – a persistent contradiction between different alternatives in the co-development context. However, suppliers' capability to manage such paradoxes remains poorly understood. To address this gap, the framework proposed here elucidates paradox management capability in terms of two key dimensions — polarizing and juxtaposing — that occur in temporal and spatial contexts. Polarizing means focusing on one side of the paradox; juxtaposing addresses both sides simultaneously. We empirically analyze three co-development paradoxes related to 1) contractual and relational governance, 2) knowledge sharing and protection and 3) customer-specific and general development goals, and suggest specific management approaches that help solve these paradoxes via polarizing and juxtaposing. The results provide theoretical and practical insights for managing paradoxes that occur in co-development.