The paper examines the dynamics arising from the adoption of supplier performance measurement systems along the supply chain, specifically considering: (1) the way the buyer company communicates the performance information to the supplier and (2) the way the supplier reacts to the performance reported. The empirical investigation consists of multiple case studies, including nine big multinational companies within three tiers of the automotive supply chain: Elaborating on the theoretical nuance of Signalling Theory, four different communication modes from the buyer side (measuring actor – the Signaller) and three different reactions from the supplier side (measured actor – the Receiver) have been identified, each emerging under different circumstances. The relationship among the communication and reaction modes along the supply chain is critically discussed.
Over the years, due to the growing trends towards outsourcing, offshoring, and the generalized focus on core competences, companies have been increasingly dependent upon external supply chain (SC) partners (e.g., Choi & Hartley, 1996; Kannan & Tan, 2002; Ploetner & Ehret, 2006; Wynstra, Weggeman, & van Weele, 2003). Consequently, the more firms entrust suppliers with a greater share of activities, the more an extended control beyond the company boundaries becomes necessary (Kannan & Tan, 2002). To this aim, supplier performance measurement systems (SPMSs), defined as a as a set of metrics used to quantify the efficiency and effectiveness of suppliers' actions (Hald & Ellegaard, 2011; Neely, Gregory, & Platts, 1995) have become critical. There is a large body of literature on the topic, mostly addressing the SPMS design phase, thus studying which performance dimensions to tackle and how to define the set of metrics (Luzzini, Caniato, & Spina, 2014; Maestrini, Luzzini, Maccarrone, & Caniato, 2017). This focus on the SPMS design features has prevented thoroughly addressing the other phases of the SPMS lifecycle (i.e., implementation, use, and review), which, instead, play a fundamental role in determining the overall effectiveness of the system itself (Bourne, Mills, Wilcox, Neely, & Platts, 2000). Furthermore, in most cases, the SPMS investigation focuses on the buyer's perspective, while it seems relevant to analyse also how suppliers perceive and react to the SPMS, especially when it comes to the use of the system. Indeed, factors like misinterpretations, insufficient communication and lack of trust might greatly affect suppliers (and buyer's) performances, (Jain, Khalil, Johnston, & Cheng, 2014), if not the quality of the relationship (Hald & Ellegaard, 2011; Purdy, Astad, & Safayeni, 1994). Finally, extant literature looks just at first-tier suppliers (FrancoSantos, Lucianetti, & Bourne, 2012; Melnyk, Bititci, Platts, Tobias, & Andersen, 2014). On the base of these premises, this research focuses in particular on the use of SPMS, analysing the flow of information between buyer and supplier dyads along the SC. This dynamic process is read through the theoretical lens of the Signalling Theory, which seems to be very suitable for interpreting contexts in which managerial tools are used to communicate information and drive behaviours. Indeed Signalling Theory (Spence, 1973) analyses the behaviour of two parties, with information asymmetry, and one (the Signaller) needs to decide if and how communicating the information to the other (the Receiver), who in turns needs to decide how to interpret the communication (Connelly, Certo, Ireland, & Reutzel, 2011).