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Examining Absorptive Capacity in Supply Chains: Linking Responsive Strategy and Firm Performance

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  • David D. Dobrzykowski
  • Rudolf Leuschner
  • Paul C. Hong
  • James J. Roh

Abstract

type="main" xml:id="jscm12085-abs-0001"> Information management is a core supply chain activity that is increasing in importance as firms strive to become more responsive to growing customer demand for innovative products. However, effective processing of information from customers and suppliers remains a struggle for most firms. Absorptive capacity provides a useful view of information processing activities, but the current understanding of how firms use it to improve performance and why some firms seem to develop it while others do not remains unclear. This study is grounded in information processing theory, and examines the role of absorptive capacity in linking a firm's responsive strategy and performance. We test a structural equation model on data from 711 manufacturing firms, and validate our results on a second sample of 677 firms. Our study makes three major contributions by providing evidence that: (1) absorptive capacity is motivated by a firm's responsive strategy; (2) it fully mediates the relationship between responsive strategy and firm performance, indicating that absorptive capacity is a necessary competence for firms that aim to deliver innovative products to customers; and (3) the relationship between responsive strategy and absorptive capacity is U-shaped, indicating that when firms attempt to blend efficient and responsive strategies, their ability to develop absorptive capacity is diminished.

Suggested Citation

  • David D. Dobrzykowski & Rudolf Leuschner & Paul C. Hong & James J. Roh, 2015. "Examining Absorptive Capacity in Supply Chains: Linking Responsive Strategy and Firm Performance," Journal of Supply Chain Management, Institute for Supply Management, vol. 51(4), pages 3-28, October.
    • Handle: RePEc:bla:jscmgt:v:51:y:2015:i:4:p:3-28
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    File URL: http://hdl.handle.net/10.1111/jscm.2015.51.issue-4
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    Citations

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    Cited by:

    1. Lineth Rodríguez & Mihalis Giannakis & Catherine da Cunha, 2018. "Investigating the Enablers of Big Data Analytics on Sustainable Supply Chain," Post-Print hal-01982533, HAL.
    2. Tarifa Fernández, Jorge & de Burgos Jiménez, Jerónimo & Céspedes Lorente, José Joaquín, 2018. "Absorptive capacity as a confounder of the process of supply chain integration," MPRA Paper 120125, University Library of Munich, Germany, revised 2018.
    3. Takahiro Fujimoto & Mitsuhiro Fukuzawa & Young Won Park & Paul Hong, 2022. "Developing Effective Measures of Organizational Capability of Manufacturing Firms: An Exploratory Case Study of Japanese Manufacturing Firms," Sustainability, MDPI, vol. 14(22), pages 1-20, November.
    4. Chahal, Hardeep & Gupta, Mahesh & Bhan, Namrita & Cheng, T.C.E., 2020. "Operations management research grounded in the resource-based view: A meta-analysis," International Journal of Production Economics, Elsevier, vol. 230(C).
    5. Martínez-Sánchez, Angel & Vicente-Oliva, Silvia & Pérez-Pérez, Manuela, 2020. "The relationship between R&D, the absorptive capacity of knowledge, human resource flexibility and innovation: Mediator effects on industrial firms," Journal of Business Research, Elsevier, vol. 118(C), pages 431-440.
    6. David C. Hall & Tracy D. Johnson-Hall, 2017. "Learning from Conformance Quality Failures That Triggered Product Recalls: The Role of Direct and Indirect Experience," Journal of Supply Chain Management, Institute for Supply Management, vol. 53(4), pages 13-36, October.
    7. FeCheng Ma & Farhan Khan & Kashif Ullah Khan & Si XiangYun, 2021. "Investigating the Impact of Information Technology, Absorptive Capacity, and Dynamic Capabilities on Firm Performance: An Empirical Study," SAGE Open, , vol. 11(4), pages 21582440211, November.
    8. Hong, Paul & Jagani, Sandeep & Kim, Jinhwan & Youn, Sun Hee, 2019. "Managing sustainability orientation: An empirical investigation of manufacturing firms," International Journal of Production Economics, Elsevier, vol. 211(C), pages 71-81.
    9. Jon Bokrantz & Jan Dul, 2023. "Building and testing necessity theories in supply chain management," Journal of Supply Chain Management, Institute for Supply Management, vol. 59(1), pages 48-65, January.
    10. Paul F. Skilton & Ednilson Bernardes & Mei Li & Steven A. Creek, 2020. "The Structure of Absorptive Capacity in Three Product Development Strategies," Journal of Supply Chain Management, Institute for Supply Management, vol. 56(3), pages 47-65, July.
    11. Jung Seung Lee & Soo Kyung Kim & Su-Yol Lee, 2016. "Sustainable Supply Chain Capabilities: Accumulation, Strategic Types and Performance," Sustainability, MDPI, vol. 8(6), pages 1-16, May.
    12. Magaly Gaviria-Marin & Jorge Matute-Vallejo & Hugo Baier-Fuentes, 2021. "The effect of ICT and higher-order capabilities on the performance of Ibero-American SMEs," Computational and Mathematical Organization Theory, Springer, vol. 27(4), pages 414-450, December.
    13. Christopher W. Craighead & David J. Ketchen Jr. & Matthew T. Jenkins & Mary C. Holcomb, 2017. "A Supply Chain Perspective on Strategic Foothold Moves in Emerging Markets," Journal of Supply Chain Management, Institute for Supply Management, vol. 53(4), pages 3-12, October.
    14. Singh, Nitya P. & Hong, Paul C., 2020. "Impact of strategic and operational risk management practices on firm performance: An empirical investigation," European Management Journal, Elsevier, vol. 38(5), pages 723-735.
    15. Cheng, Yang & Farooq, Sami, 2018. "The role of plants in manufacturing networks: A revisit and extension," International Journal of Production Economics, Elsevier, vol. 206(C), pages 15-32.
    16. Arunachalam, Deepak & Kumar, Niraj & Kawalek, John Paul, 2018. "Understanding big data analytics capabilities in supply chain management: Unravelling the issues, challenges and implications for practice," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 114(C), pages 416-436.
    17. Virpi Turkulainen & Morgan L. Swink, 2017. "Supply Chain Personnel as Knowledge Resources for Innovation—A Contingency View," Journal of Supply Chain Management, Institute for Supply Management, vol. 53(3), pages 41-59, July.

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