Abstract for: Ambidextrous Effects of Relational-specific Investments in the OEM Transactions

This study interprets why does Original Equipment Manufacture (OEM) suppliers choose to invest in relational-specific assets dedicated for foreign brand buyers without economic safeguards. By combining the case study method and inductive causal-loop modeling approach, this study model the ambidextrous strategies adopted by interviewing five Taiwanese OEM suppliers to initiate simultaneous both exploration and exploitation effects on their capability and transaction value in vertical transaction structure by exerting relation-specific investments in dependency-asymmetric OEM-supplier transactions. The study results theorize that the relation-specific investments made by weak contractual party can exert the ambidextrous effect on those specific assets with the dominant exchange partners for changing its bargaining position. The causal-loop diagrams highlight the managerial implications and strategic logics behind the unilateral asset-specific investments along the transaction dynamics.