Supplier strategies to compensate for knowledge asymmetries in buyer-supplier relationships: Implications for economic upgrading

This paper explores a special form of international outsourcing relationship in which suppliers make recurrent discrete transactions with the same buyers over a long period of time without the existence of any original legally binding written agreement. The study examines three research questions: (1) Can suppliers in such relationships access any of their buyers’ tacit knowledge? (2) What implications does their access or the lack thereof have for their economic upgrading? (3) What strategies do suppliers adopt to compensate for existing knowledge asymmetries? The case analysis of three small Bangladeshi garment manufacturers reveals the following key findings: The studied firms only have access to their buyers’ explicit/codified knowledge. Notwithstanding this, they have successfully developed relevant knowledge that has allowed them to engage in process upgrading.