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As buyers and suppliers seek to create value, they face the challenge of creating an environment that promotes coordination and information sharing and discourages opportunism. While the literature suggested dyadic mechanisms to create such an environment, this study focuses on ties beyond the buyer–supplier dyad. Specifically, close connections to one's partner's partners (CPP) are crucial in the realization of benefits for buyers and suppliers.

Drawing from embeddedness theory and governance theory, the authors developed a contingency framework to examine when CPP are beneficial or counterproductive considering two dyadic attributes – relational capital (RC) and partner dependence. Analyses were conducted using data from a dyadic survey complemented with archival data on 106 buyer–supplier relationships (BSRs).

The study reveals that CPP both help and hurt in the realization of benefits. Stark asymmetries exist between the impact of CPP on the buyer and supplier sides. For buyers, CPP exert a direct positive effect on operational and innovation benefits. For suppliers, the effect of CPP on operational and innovation benefits is contingent on buyer dependence and RC – CPP serves as a substitute for buyer dependence and RC. There are no such contingency effects for buyers. Further analysis identifies situations for suppliers when CPP hurt the realization of benefits.

The study highlights the importance of CPP to foster efficiency and innovation within BSRs and illustrates how their impact varies across contingency conditions and across the parties within a dyad.

This study aims to investigate purchasing manager’s core competencies during supplier collaboration and explain the mechanism through which these competencies can affect purchasing firm’s innovative performance.

The authors conducted 22 semidirective interviews with managers in diverse functions such as purchasing, supply-chain management and product development across industries and across nations (mostly India and France), which allow to formulate the propositions.

Through open coding, the authors identify three path-dependent, causally ambiguous and socially complex core competencies of purchasing managers: relational and emotional, communicational and creative and cognitive competencies; and through axial coding, the authors explain how these intangible core competencies support implementation of market orientation. To provide supporting arguments for the propositions, the authors use the resource-based view of the firm and dynamic capability theory.

The first theoretical contribution of this study is focusing on the impact of competency–capability dyad in terms of performance. The second theoretical contribution of this study is to identify market orientation as a flexible and dynamic managerial capability.

The first managerial contribution is that the authors have identified and described three sets of a purchasing manager’s core competencies during supplier collaboration that affect the firm’s performance: relational and emotional, communicational and creative and cognitive competencies. The second managerial contribution relates to the mechanism through which purchasing managers’ core competencies during supplier collaboration affect firms’ outcomes.

The value of the results is in the explanation of the mechanism, i.e. market orientation dynamic capability, through which the competencies of purchasing managers can affect purchasing firm’s innovative performance.