The impact of the core company’s strategy on the dimensions of supply chain integration

Abstract

Purpose Nowadays, supply chain integration (SCI) is considered as an enabler of competitive firm performance. It has three important dimensions: internal, supplier and customer integration. Understanding the interaction between these dimensions and organisational strategy would pave the way for effective implementation of SCI. The famous Miles et al. (1978) strategy typology classifies firms into four strategy types: defenders, prospectors, analysers and reactors. The purpose of this paper is to explore the impact of the core company’s product-market innovation strategy on the dimensions of SCI, and to investigate the comparative strength of each dimension of SCI in defenders and prospectors. Design/methodology/approach Primary data were collected through an online survey of 112 firms in 24 countries across Africa, Asia, Europe and North America. Direct and mediated relationships were assessed by conducting structural equation modelling on the dimensions of SCI and product-market innovation strategy variables. Cluster analysis was conducted on organisational strategy variables to group the firms into different strategy types. Next, a one-way analysis of variance was applied to assess the impact of organisational strategy on each dimension of the SCI. Finally, a post hoc analysis was conducted to compare the strength of each dimension of the SCI against the different strategy types. Findings The results indicate that internal integration (II) mediates the positive effects of the core company’s product-market innovation strategy on supplier and customer integration. Furthermore, the results indicate that prospectors have stronger internal, supplier and customer integration as compared to defenders. Research limitations/implications This study had two main limitations. One limitation is the lack of consideration of possible differences in the strengths of the investigated relationships across different geographical locations and cultures. The second limitation is the inability of the cross-sectional research design to capture the dynamics in the process of adopting SCI and organisational strategy. Practical implications The present study highlights to executives the need for understanding the implications of specific strategies on the SC linkages and relationships that are required to implement those strategies. Thus, it could serve as a preliminary clue in decision-making for establishing integrated SC that is compatible with the organisational strategy. Furthermore, it could serve as a guidance to managers in steering their firms in the organisational adaptive cycle, by indicating that the implementation of product-market innovation strategy requires adopting strong SCI, and by highlighting the importance of adopting II prior to external integration. Originality/value This paper tests relationships that explain how the core company’s strategy influences each dimension of SCI.

The value of supply chain integration in the Latin American agri-food industry: trust, commitment and performance outcomes

“…The breadth of the integration refers to its nature: external integration occurs between customers and/or suppliers (Huo, 2012; Ataseven and Nair, 2017), whereas internal integration transpires between departments (Braunscheidel and Suresh, 2009; Turkulainen and Ketokivi, 2012). Internal integration specifically pertains to the collaboration between various functions of an organization, such as operations, logistics, marketing and sales, to achieve the objectives of the supply chain (Chang et al , 2016; Feyssa et al , 2019). By contrast, external integration denotes the degree to which a company can partner with the key members of the supply chain to structure its interorganizational strategies, practices, procedures and behaviors in integrated, synchronized and manageable processes (e.g.…”

“…Richey et al , 2011; Alfalla-Luque et al , 2013; Leuschner et al , 2013; Zhao et al , 2013; Mora-onge et al , 2019) and an extensive discussion of the links between SCI and performance (e.g. Fabbe-Costes and Jahre, 2008; Zhao et al , 2015; Ataseven and Nair, 2017; Feyssa et al , 2019).…”

The Mediation Effects of Purchasing Strategy and Supplier Integration on the Relations Between Purchasing Skills and Corporate Performance

“…Supplier integration has great impacts on corporate performance. Integrating their resources and capabilities helps corporates to enhance their competitive position and reach sustainable performance (Danese, 2013;He et al, 2014;Abrahamsen and Håkansson, 2015;Yang et al, 2017;Feyissa, Sharma and Lai, 2019). Therefore, supplier integration has significant roles to influence corporate financial performance (Lawson et al, 2009;Huo et al, 2013;Li et al, 2016;Huang and Huang, 2019).…”

“…A number of empirical studies confirm that supplier integration significantly positively effects corporate performance (Flynn, Huo and Zhao, 2010;Perols, 2013;Prajogo and Olhager, 2012;Feyissa, Sharma and Lai, 2019). Nevertheless, supplier integration can adversely influence the purchasing process, leading to reduced corporate profitability as a result of distance from buyers (Demeter, 2013).…”

A Orientação Estratégica em PMEs: A relação entre Estrutura Organizacional e Geração de Conhecimento

“…Entretanto, a partir de sua revisão crítica acerca dos modelos propostos para a EO em estudos anteriores, Dalton et al (1980) indicam os fatores mais pertinentes na literatura: formalização, centralização e departamentalização. Estes fatores vem sendo replicados em estudos de diversas áreas até os dias atuais (por exemplo, Chu, Feng, & Lai, 2018;Feyissa, Sharma, & Lai, 2019), o que revela a sua robustez. A seguir, ao explicarmos cada uma delas, individualmente, formulamos as hipóteses do nosso estudo.…”