The dark side of customer participation

Fierce competition in many industries has prompted many firms to participate in supplier development by sharing information or improving suppliers’ capabilities. However, managers are unsure about how much to participate to avoid opportunism behaviour and narrow down relationship value gap in exchanges between two firms. From an analysis of 116 matched buyersupplier dyads, this study reveals that both customer participation as information sharer (CPI) and customer participation as capability developer (CPD) have U-shaped links with relationship value gap. The results of this study provide important theoretical implications and specific managerial guidelines as to how to manage customer participation in order to balance relationship value for both customers and suppliers.