Is more supply chain integration always beneficial to financial performance? |
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| Institution: | 1. School of Management, Xi’an Jiaotong University, No. 28 Xianning West Road, Xi’an, Shaanxi, China 710049;2. School of Management, Northwestern Polytechnical University, No. 127 Youyi West Road, Xi’an, Shaanxi, China 710072;3. Department of Management, Monash University, Room 6.03, Building N, 26 Sir John Monash Drive, PO Box 197, Caulfield East, Melbourne, VIC 3145, Australia;1. Department of Marketing, CERS — Centre for Relationship Marketing and Service Management, Hanken School of Economics, PO Box 479, FIN-00101 Helsinki, Finland;2. Department of Marketing, Stockholm Business School, Stockholm University, Roslagsvägen 101, Building 7, SE-106 91 Stockholm, Sweden;1. University of Paderborn, Marketing Department, Warburger Strasse 100, 33098 Paderborn, Germany;2. Newcastle University Business School, 5 Barrack Road, Newcastle upon Tyne NE1 4SE, United Kingdom;3. University of Paderborn, Marketing Department, Warburger Strasse 100, 33098 Paderborn, Germany;4. University of Bielefeld, Faculty of Psychology and Sport Economics, Universitaetsstrasse 25, 33615 Bielefeld, Germany |
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| Abstract: | While most studies argue that supply chain integration (SCI) has positive effect on financial performance, some literature cautions that SCI may impair financial performance under certain conditions. Our research extends this research stream by considering the adverse effect of SCI. In this study, we examine how supplier integration, internal integration and customer integration contribute to or impede firms’ financial performance and investigate the complementary roles of top management support in this process combining the resource-based view and transaction cost economics. Our findings from a survey of 195 firms in China indicate both favorable and adverse effects of SCI by showing an inverted U-shaped relationship between SCI and financial performance. Thus, either too little or too much SCI can impair financial performance. In addition, top management support can be considered as a complementary asset to SCI. This finding suggests that firms should focus on the important roles of top management support so as to improve financial performance through SCI more effectively. This study opens up new research avenues for SCI and suggests directions for future research and practice by exploring under what conditions SCI can help to improve financial performance. |
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