Improving Product Quality through Conflict Management: A Study of Hong Kong ODM Suppliers

Client‐supplier collaboration in new product development (NPD) has been a strategy in response to fierce global competition. Traditionally, Hong Kong suppliers collaborate with worldwide clients through original equipment manufacturing (OEM) arrangement in which suppliers manufacture products according to clients’ design. In recent years, a growing number of Hong Kong suppliers have transformed to original design manufacturing (ODM) in which they are assigned a design responsibility other than manufacturing products. The ODM arrangement necessitates a close interaction between clients and supplier, which brings about intense conflict. Conflict has been recognized as an important factor affecting NPD performance including product quality. This paper studies the conflict handling practices of Hong Kong ODM suppliers based on 87 survey data. The results show tha tthe suppliers frequently adopt effective conflict handling practices by which they can develop products of good quality through better design decisions. The results also suggest that the use of ineffective conflict handling behaviors, particularly avoiding, should be reduced for better product quality.