Cultivating Focal Firm-s Supply Chain Process Integration Capabilities: The Investigation of Critical Determinants and Consequences

In today-s competitive global business environment, the concept of supply chain management (SCM) continues to become increasingly market-oriented, shifting the primary driver of the value chain from supply to demand. Recent recommendations encourage researchers to focus investigations on the supply chain process integration (SCPI) capabilities that integrate a focal firm with its network of suppliers and business customers to create value for it. However, theoretical and empirical researches pertaining to the antecedents and consequences of a focal firm-s SCPI capabilities have been limited and piecemeal. The purpose of this study is to investigate the critical determinants and consequences of a focal firm-s SCPI capabilities. We test our proposed research framework using a sample of 139 sales managers of manufacturing industries in Taiwan, our research findings show that (1) both perceived business customer-s power and focal firm-s market-oriented culture positively influences a focal firm-s SCPI capabilities, and (2) SCPI capabilities positively influence a focal firm-s SCM performance, both operational and strategic benefits. Implications for practitioners and researchers and suggestions for future research are also addressed in this study.

Authors:

• Chun-Der Chen
• Yi-Wen Fan
• Cheng-Kiang Farn

Keywords:

• Supply chain process integration capabilities
• Perceived business customer's power
• Market-oriented culture
• Supply chain management performance.

References:

[1] R. P. Bagozzi and Y. Yi, "Multitrait-multimethod matrices in consumer
research," Journal of Consumer Research, 17(4), 1991, pp: 426-439.
[2] J. R. Brown, R. F. Lusch, and C. Y. Nicholson, "Power and relationship
commitment: their impact on marketing channel member performance,"
Journal of Retailing, 71(4), 1995, pp: 363-392.
[3] W. W. Chin, "Issues and opinion on structural equation modeling," MIS
Quarterly, 22(1), 1998, pp: 7-16.
[4] R. Deshpande, J. U. Farley, and F. E. Webster, "Corporate culture,
customer orientation and innovativeness in Japanese firms," Journal of
Marketing, 57(1), 1993, pp: 23-37.
[5] J.H. Dyer and H. Singh, "The relational view: cooperative strategy and
sources of interorganizational competitive advantage," Academy of
Management Review, 23(4), 1998, pp: 660-679.
[6] O. A. El Sawy, A. Malhotra, S. Gosain, and K. M. Young, "IT-intensive
value innovation in the electronic economy: insights from Marshall
Industries," MIS Quarterly, 23(3), 1999, pp: 305-335.
[7] A. E. Ellinger, J. C. Taylor, and P. J. Daugherty, "Automatic
replenishment programs and level of involvement: performance
implications," The International Journal of Logistics Management, 10(1),
1999, pp: 25-36.
[8] E. Feitzinger and H. L. Lee, "Mass customization at Hewlett Packard: the
of postponement," Harvard Business Review, 75(1), 1997, pp: 116-121.
[9] C. Fornell and D. F. Larcker, "Evaluating structural equation models with
unobservable variables and measurement error," Journal of Marketing
Research, 18(3), 1981, pp: 39-50.
[10] G. L. Frazier, and R. C. Rody, "The use of influence strategies in interfirm
relationship in industrial product channels," Journal of Marketing, 55,
1991, pp: 52-69.
[11] J. R. French and B. Raven, "The bases of social power," in Dorwin
Cartwright, Ed., Studies in social power, Ann Arbor: University of
Michigan Press, 1959.
[12] J. D. Goldhar and D. Lei "The shape of twenty-first century global
manufacturing," Journal of Business Strategy, 12(2), 1991, pp: 37-41.
[13] S. P. Gudergana, C. M. Ringleb, S. Wendeb, and W. Alexander,
"Confirmatory tetrad analysis in PLS path modeling," Journal of Business
Research, 61(12), 2008, pp: 1238-1249.
[14] D. C. K. Ho, K. F. Au, and E. Newton, "Empirical research on supply
chain management: a critical review and recommendations,"
International Journal of Production Research, 40(17), 2002, pp:
4415-4430.
[15] R. D. Ireland and J. W. Webb, "A multi-theoretic perspective on trust and
power in strategic supply chains," Journal of Operations Management,
25(2), 2007, pp: 482-497.
[16] A. H. Kirca, S. Jayachandran, and W. O. Bearden, "Market orientation: a
meta-analytic review and assessment of its antecedents and impact on
performance," Journal of Marketing, 69(2), 2005, pp: 24-41.
[17] R. A. Lancioni, M. F. Smith, and H.J. Schau, "Strategic Internet
application trends in supply chain management," Industrial Marketing
Management, 32(3), 2003, pp: 211-217.
[18] D. Lavie, "The competitive advantage of interconnected firms: an
extension of the resource-based view," Academy of Management Review,
31(3), 2006, pp: 638-658.
[19] S. Li, B. Ragu-Nathan, T. S. Ragu-Nathan, and S. S. Rao, "The impact of
supply chain management practices on competitive advantage and
organizational performance," Omega, 34(2), 2006, pp: 107-124.
[20] M. Maloni, and W. C. Benton, "Power influences in the supply chain,"
Journal of Business Logistics, 21(1), 2000, pp: 49-73.
[21] T. Mukhopadhyay and S. Kekre, "Strategic and operational benefits of
electronic integration in B2B procurement processes," Management
Science, 48(10), 2002, pp: 1301-1313.
[22] J. C. Narver and S. F. Slater, "The effect of a market orientation on
business profitability," Journal of Marketing, 54(3), 1990, pp: 20-34.
[23] J. Nunnally, Psychometric Theory, New York, McGraw-Hill, 1978.
[24] A. Ordanini and G. Rubera, "Strategic capabilities and internet resources
in procurement: a resource-based view of B-to-B buying process,"
International Journal of Operations & Production Management, 28(1),
2008, pp. 27-53.
[25] R. Patnayakuni, A. Rai, and N. Seth, "Relational antecedents of
information flow integration for supply chain coordination," Journal of
Management Information Systems, 23(1), 2006, pp: 13-49.
[26] A. Rai, R. Patnayakuni, and N. Seth, "Firm performance impacts of
digitially enabled supply chain integration capabilities," MIS Quarterly,
30(2), 2006, pp: 225-246.
[27] L. K. Scheer and L. W. Stern, "The effect of influence type and
performance outcomes on attitude toward the influencer," Journal of
Marketing Research, 29, 1992, pp: 128-142.
[28] H. Shin, D. A. Collier, and D. D. Wilson, "Supply management
orientation and supplier/buyer performance," Journal of Operations
Management, 18(3), 2000, pp: 317-333.
[29] D. Simchi-Levi, P. Kaminsky, and E. Simchi-Levi, Designing and
managing the supply chain: concepts, strategies, and case studies,
Irwin/McGraw-Hill, New York, 2000.
[30] S. F. Slater and J. C. Narver, "Does competitive environment moderate
the market orientation-performance relationship?" Journal of Marketing,
58(1), 1994, pp: 46-55.
[31] L. R. Smeltzer, "The meaning and origin of trust in. buyer-supplier
relationships", International Journal of Purchasing and Materials
Management, 33(1), 1997, pp: 40-48.
[32] M. Subramani, "How do suppliers benefit from information technology
use in supply chain relationships?" MIS Quarterly, 28(1), 2004, pp:
45-73.
[33] M. R. Subramani and N. Venkatraman, "Safeguarding investments in
asymmetric interorganizational relationships: theory and evidence,"
Academy of Management Journal, 46(1), 2003, pp: 46-62.
[34] A. Vereecke and S. Muylle, "Performance improvement through supply
chain collaboration in Europe," International Journal of Operations &
Production Management, 26(11), 2006, pp: 1176-1198.
[35] E. T. G. Wang, J. C. F. Tai, and H. L. Wei, "A virtual integration theory of
improved supply-chain performance," Journal of Management
Information Systems, 23(2), 2006, pp. 41-64.
[36] Q. Wang, K. Bradford, J. Xu, and B. Weitz, "Creativity in buyer-seller
relationships: the role of governance," International Journal of Research
in Marketing, 25, 2008, pp: 109-118.
[37] W. Y. Wu, C. Y. Chiag, Y. J. Wu, and H. J. Tu, "The influencing factors
of commitment and business integration on supply chain management,"
Industrial Management & Data Systems, 104(4), 2004, pp: 322-333.