IDEAS home Printed from https://ideas.repec.org/a/eee/proeco/v164y2015icp1-13.html
   My bibliography  Save this article

Supply management capabilities, routine bundles and their impact on firm performance

Author

Listed:
  • Day, Marc
  • Lichtenstein, Scott
  • Samouel, Phillip

Abstract

Despite the generally positive contribution of supply management capabilities to firm performance their respective routines require more depth of assessment. Using the resource-based view we examine four routines bundles comprising ostensive and performative aspects of supply management capability – supply management integration, coordinated sourcing, collaboration management and performance assessment. Using structural equation modelling we measure supply management capability empirically as a second-order latent variable and estimate its effect on a series of financial and operational performance measures. The routines-based approach allows us to demonstrate a different, more fine-grained approach for assessing consistent bundles of homogeneous patterns of activity across firms. The results suggest supply management capability is formed of internally consistent routine bundles, which are significantly related to financial performance, mediated by operational performance. Our results confirm an indirect effect of firm performance for ‘core’ routines forming the architecture of a supply management capability. Supply management capability primarily improves the operational performance of the business, which is subsequently translated into improved financial performance. The study is significant for practice as it offers a different view about the face-valid rationale of supply management directly influencing firm financial performance. We confound this assumption, prompting caution when placing too much importance on directly assessing supply management capability using financial performance of the business.

Suggested Citation

  • Day, Marc & Lichtenstein, Scott & Samouel, Phillip, 2015. "Supply management capabilities, routine bundles and their impact on firm performance," International Journal of Production Economics, Elsevier, vol. 164(C), pages 1-13.
  • Handle: RePEc:eee:proeco:v:164:y:2015:i:c:p:1-13
    DOI: 10.1016/j.ijpe.2015.02.023
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0925527315000572
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.ijpe.2015.02.023?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Teppo Felin & Nicolai J. Foss & Koen H. Heimeriks & Tammy L. Madsen, 2012. "Microfoundations of Routines and Capabilities: Individuals, Processes, and Structure," Journal of Management Studies, Wiley Blackwell, vol. 49(8), pages 1351-1374, December.
    2. Gregory G. Dess & Richard B. Robinson, 1984. "Measuring organizational performance in the absence of objective measures: The case of the privately‐held firm and conglomerate business unit," Strategic Management Journal, Wiley Blackwell, vol. 5(3), pages 265-273, July.
    3. Betsch, Tilmann & Haberstroh, Susanne & Glockner, Andreas & Haar, Thomas & Fiedler, Klaus, 2001. "The Effects of Routine Strength on Adaptation and Information Search in Recurrent Decision Making," Organizational Behavior and Human Decision Processes, Elsevier, vol. 84(1), pages 23-53, January.
    4. J. Nollet & R. Calvi & E. Audet & M. Cote, 2008. "When Excessive Cost Saving Measurement Drowns the Objectives," Post-Print halshs-00365171, HAL.
    5. Christoph Zott, 2003. "Dynamic capabilities and the emergence of intraindustry differential firm performance: insights from a simulation study," Strategic Management Journal, Wiley Blackwell, vol. 24(2), pages 97-125, February.
    6. John A. Pearce & D. Keith Robbins & Richard B. Robinson, 1987. "The impact of grand strategy and planning formality on financial performance," Strategic Management Journal, Wiley Blackwell, vol. 8(2), pages 125-134, March.
    7. Blois, K J, 1972. "Vertical Quasi-Integration," Journal of Industrial Economics, Wiley Blackwell, vol. 20(3), pages 253-272, July.
    8. Liao, Shu-Hsien & Kuo, Fang-I, 2014. "The study of relationships between the collaboration for supply chain, supply chain capabilities and firm performance: A case of the Taiwan׳s TFT-LCD industry," International Journal of Production Economics, Elsevier, vol. 156(C), pages 295-304.
    9. Jeffrey H. Dyer, 1997. "Effective interim collaboration: how firms minimize transaction costs and maximise transaction value," Strategic Management Journal, Wiley Blackwell, vol. 18(7), pages 535-556, August.
    10. Olinsky, Alan & Chen, Shaw & Harlow, Lisa, 2003. "The comparative efficacy of imputation methods for missing data in structural equation modeling," European Journal of Operational Research, Elsevier, vol. 151(1), pages 53-79, November.
    11. Armstrong, J. Scott & Overton, Terry S., 1977. "Estimating Nonresponse Bias in Mail Surveys," MPRA Paper 81694, University Library of Munich, Germany.
    12. Brian T. Pentland & Martha S. Feldman, 2005. "Organizational routines as a unit of analysis," Industrial and Corporate Change, Oxford University Press, vol. 14(5), pages 793-815, October.
    13. David J. Teece & Gary Pisano & Amy Shuen, 1997. "Dynamic capabilities and strategic management," Strategic Management Journal, Wiley Blackwell, vol. 18(7), pages 509-533, August.
    14. Klein, Benjamin & Crawford, Robert G & Alchian, Armen A, 1978. "Vertical Integration, Appropriable Rents, and the Competitive Contracting Process," Journal of Law and Economics, University of Chicago Press, vol. 21(2), pages 297-326, October.
    15. Asanuma, Banri, 1989. "Manufacturer-supplier relationships in Japan and the concept of relation-specific skill," Journal of the Japanese and International Economies, Elsevier, vol. 3(1), pages 1-30, March.
    16. Mike W Peng & Anne S York, 2001. "Behind Intermediary Performance in Export Trade: Transactions, Agents, and Resources," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 32(2), pages 327-346, June.
    17. Akira Takeishi, 2001. "Bridging inter‐ and intra‐firm boundaries: management of supplier involvement in automobile product development," Strategic Management Journal, Wiley Blackwell, vol. 22(5), pages 403-433, May.
    18. J. Nollet & R. Calvi & M. Cote, 2008. "When Excessive Cost Saving Measurement Drowns the Objectives," Post-Print halshs-00323711, HAL.
    19. Sidney G. Winter, 2003. "Understanding dynamic capabilities," Strategic Management Journal, Wiley Blackwell, vol. 24(10), pages 991-995, October.
    20. Shaker A. Zahra & Harry J. Sapienza & Per Davidsson, 2006. "Entrepreneurship and Dynamic Capabilities: A Review, Model and Research Agenda," Journal of Management Studies, Wiley Blackwell, vol. 43(4), pages 917-955, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jiatong Yu & Jiajue Wang & Taesoo Moon, 2022. "Influence of Digital Transformation Capability on Operational Performance," Sustainability, MDPI, vol. 14(13), pages 1-20, June.
    2. Wong, Wai Peng & Soh, Keng Lin & Chong, Chu Le, 2016. "Differentiated service consumption and low cost production: Striking a balance for a sustainable competitive advantage in Malaysia," International Journal of Production Economics, Elsevier, vol. 181(PB), pages 450-459.
    3. Täks, Viire & Vadi, Maaja, 2019. "Who and how do participate strategic planning?," Discourses in Social Market Economy 2019-03, OrdnungsPolitisches Portal (OPO).
    4. Päivi Karhunen & Svetlana Ledyaeva, 2021. "Is Chain Affiliation a Strategic Asset or Constraint in Emerging Economies? Competitive Strategies and Performance in the Russian Hotel Industry," Management International Review, Springer, vol. 61(3), pages 403-427, June.
    5. Graça Miranda Silva & Paulo J. Gomes & Helena Carvalho & Vera Geraldes, 2021. "Sustainable development in small and medium enterprises: The role of entrepreneurial orientation in supply chain management," Business Strategy and the Environment, Wiley Blackwell, vol. 30(8), pages 3804-3820, December.
    6. Sreedevi, R. & Saranga, Haritha, 2017. "Uncertainty and supply chain risk: The moderating role of supply chain flexibility in risk mitigation," International Journal of Production Economics, Elsevier, vol. 193(C), pages 332-342.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Pinho, José Carlos & Prange, Christiane, 2016. "The effect of social networks and dynamic internationalization capabilities on international performance," Journal of World Business, Elsevier, vol. 51(3), pages 391-403.
    2. Waleczek, Peter & von den Driesch, Till & Flatten, Tessa C. & Brettel, Malte, 2019. "On the dynamic bundles behind operations management and research and development," European Management Journal, Elsevier, vol. 37(2), pages 175-187.
    3. Schriber, Svante & Löwstedt, Jan, 2015. "Tangible resources and the development of organizational capabilities," Scandinavian Journal of Management, Elsevier, vol. 31(1), pages 54-68.
    4. Bing Bai & Byungjoon Yoo & Xiuquan Deng & Iljoo Kim & Dehua Gao, 2016. "Linking routines to the evolution of IT capability on agent-based modeling and simulation: a dynamic perspective," Computational and Mathematical Organization Theory, Springer, vol. 22(2), pages 184-211, June.
    5. Schriber, Svante & Löwstedt, Jan, 2020. "Reconsidering ordinary and dynamic capabilities in strategic change," European Management Journal, Elsevier, vol. 38(3), pages 377-387.
    6. Bindu Singh & M.K. Rao, 2017. "To Gear Up Firm Performance in Banking Industry: The Role of Dynamic Capability," Global Business Review, International Management Institute, vol. 18(4), pages 1019-1040, August.
    7. Maren Schlömer & Hendrik Wilhelm & Indre Maurer & Frank Wallau, 2013. "Die Wirkung dynamischer Fähigkeiten auf die Effektivität und Effizienz operativer Prozesse," Schmalenbach Journal of Business Research, Springer, vol. 65(3), pages 214-243, May.
    8. Van Wijk, Raymond & Nadolska, Anna, 2020. "Making more of alliance portfolios: The role of alliance portfolio coordination," European Management Journal, Elsevier, vol. 38(3), pages 388-399.
    9. Dominik M. Wielgos & Christian Homburg & Christina Kuehnl, 2021. "Digital business capability: its impact on firm and customer performance," Journal of the Academy of Marketing Science, Springer, vol. 49(4), pages 762-789, July.
    10. Quan Anh Nguyen & Gillian Sullivan Mort, 0. "Conceptualising organisational-level and microfoundational capabilities: an integrated view of born-globals’ internationalisation," International Entrepreneurship and Management Journal, Springer, vol. 0, pages 1-23.
    11. Adomako, Samuel & Amankwah-Amoah, Joseph & Donbesuur, Francis & Ahsan, Mujtaba & Danso, Albert & Uddin, Moshfique, 2022. "Strategic agility of SMEs in emerging economies: Antecedents, consequences and boundary conditions," International Business Review, Elsevier, vol. 31(6).
    12. Michael Sheppard, 2020. "The relationship between discretionary slack and growth in small firms," International Entrepreneurship and Management Journal, Springer, vol. 16(1), pages 195-219, March.
    13. Hafeez, Salima & Rana, Asif Mehmood & Chaudhry, Rashid Mehmood & Khan, Muhammad Aslam & Ahmad, H.Mushtaq & Rehman, Kashif Ur, 2011. "Perspectives of entrepreneurial orientation with the quality of life," MPRA Paper 53860, University Library of Munich, Germany.
    14. Richard Arend, 2013. "Ethics-focused dynamic capabilities: a small business perspective," Small Business Economics, Springer, vol. 41(1), pages 1-24, June.
    15. Cleverton Rodrigues Fernandes & André Gustavo Carvalho Machado, 2019. "Technology Transfer Capability: development dynamics in higher education institutions," Brazilian Business Review, Fucape Business School, vol. 16(1), pages 1-15, January.
    16. Heimeriks, K. & Duysters, G.M. & Vanhaverbeke, W.P.M., 2004. "The evolution of alliance capabilities," Working Papers 04.20, Eindhoven Center for Innovation Studies.
    17. Lin, Yini & Wu, Lei-Yu, 2014. "Exploring the role of dynamic capabilities in firm performance under the resource-based view framework," Journal of Business Research, Elsevier, vol. 67(3), pages 407-413.
    18. Desirée Knoppen & Louise Knight, 2022. "Pursuing sustainability advantage: The dynamic capabilities of born sustainable firms," Business Strategy and the Environment, Wiley Blackwell, vol. 31(4), pages 1789-1813, May.
    19. Engelen, Andreas & Kube, Harald & Schmidt, Susanne & Flatten, Tessa Christina, 2014. "Entrepreneurial orientation in turbulent environments: The moderating role of absorptive capacity," Research Policy, Elsevier, vol. 43(8), pages 1353-1369.
    20. Yu-Shan Chen & Yu-Hsien Lin & Ching-Ying Lin & Chih-Wei Chang, 2015. "Enhancing Green Absorptive Capacity, Green Dynamic Capacities and Green Service Innovation to Improve Firm Performance: An Analysis of Structural Equation Modeling (SEM)," Sustainability, MDPI, vol. 7(11), pages 1-19, November.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:proeco:v:164:y:2015:i:c:p:1-13. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ijpe .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.