SUPLY CHAIN MANAGEMENT AND ORGANIZATIONAL PERFORMANCE: STRATEGY AND INNOVATION ASPECTS

Abstract

Supply chain strategy is widely recognized as a crucial part of an organizational strategy. Supply chain strategy, organizational functions related to supply chain partners and performance are important issues in supply chain management research. However, the foundation of various aspects of supply chain strategy, such as quality focus and innovation focus, and their relationships with functions of supply chain partners is less known. Similarly, the structure encompassing the supply chain strategy, organizational objectives and functions, and various organizational performance measures requires a better understanding. This dissertation proposes a macro-structured framework to describe the relationships among organizational supply chain strategy, objectives, internal and external functions, as well as performance1. The dissertation limits the scope of empirical inquiry to three complementing theoretical themes that stem from the macro research framework. Firstly, the dissertation seeks to establish and validate a theoretical model linking a multi-aspect supply chain strategy construct, core operational functions (such as process management and product development), and organizational performance. Secondly, the dissertation attempts to establish a relationship extending from supply chain strategies (lean and responsive) to supplier functions (supplier quality, cost effectiveness, flexibility, and delivery reliability), which in turn impact buyer performance. Thirdly, the dissertation proposes a model that links innovation-focused supply chain strategy and performance. The third model argues for a positive impact of supply chain innovation strategy on innovative buyer-supplier relationship (covered by the constructs supplier focus, buyer-supplier innovation intent, and buyer-supplier innovation structure) leading to enhanced product innovation, which in turn has positive impact on business performance.

1 The Chapters 2, 3, and 4 of this dissertation are three stand‐alone research papers. iv

Additionally, the dissertation seeks to explore the linkages between organizational demographics and product innovation. The dissertation collects empirical data using a literature-based research questionnaire from 191 related managers from Pakistan from various industrial sectors of the sampling frame to investigate the theoretical models. In addition, a data set from 105 companies from various industrial sectors of India boosts the sample size to 296. The dissertation also presents the results of the tests of the hypotheses on a collective sample of 296 companies (191 from Pakistan and 105 from India). The dissertation uses structural equation modeling and hierarchical regression on AMOS (Version 18) and SPSS (Version 19) respectively for the data analyses. The data validates the theoretical basis and usefulness of all the constructs. The empirical tests of hypothesized models show that various supply chain strategy dimensions have overall significant relationships with multiple performance areas through internal operations and supplier functions. Firstly, the results of the study find a strong positive impact of supply chain strategy on core internal operations, including product development, production technology, process management, customer focus, and use of information technology. Furthermore, the research finds an overall positive impact of supply chain strategy on performance through core operational functions. Secondly, the study finds strong positive impact of supply chain strategy on related supplier functions including supplier cost-effectiveness, supplier quality practices, supplier delivery, and supplier flexibility, which in turn have an overall positive impact on multiple performance areas of the buyer. Thirdly, the research establishes that supply chain innovation strategy encourages an innovative buyer-supplier relationship leading to enhanced product innovation and business performance. In addition, the hierarchical regression analysis seeks to find relationships of various organizational demographics, including foreign collaboration, age of company, export orientation, and number of employees with product innovation. The regression analyses run on Pakistani and Indian data sets separately find support for positive relationships of age of company and foreign collaboration with product innovation in both data sets. The Pakistani data set supports a positive relationship of export orientation with product innovation and the Indian data set supports a positive relationship of number of employees with product innovation. Fin ally, both data sets do not find a relationship between company revenue and product innovation. The dissertation discusses theoretical and managerial implications of the findings of each theoretical model. The dissertation improves theoretical understanding and removes managerial ambiguity as to what constitutes supply chain strategy and how it impacts organizational operations both in-house and at the supplier end, which in turn impact performance on multiple fronts. The findings suggest that an alignment of supply chain strategy with internal and supplier functions improves cost, quality, delivery, flexibility, and product innovation outcomes, leading to enhanced buyer performance. Hence, it makes good business sense for managers to align supply chain functions with supply chain strategy for performance improvement. Moreover, the relationship of demographic variables with product innovation provides insights into how the organizational context can nurture product innovation. This dissertation provides a platform for several future research endeavors. For example, the future research can extend the empirical investigation of the three theoretical models presented here in another empirical setting using quantitative or qualitative research approach. Moreover, the future research can empirically investigate the contingency effects of the demographic variables on the hypothesized models presented here. Finally, it would be interesting to proceed with an in-depth analysis of any significant differences between the Pakistani and Indian companies.