Drivers of Supply Chain Integration and the Role of Organizational Culture: Empirical Evidence from Indonesia

• Main Author: Yunus, Erlinda Nusron
• Format: Others
• Published: OpenSIUC 2012
• Subjects: Firm performance; Indonesia; Organizational culture; Structural equation modeling; Supply chain integration
• Online Access: https://opensiuc.lib.siu.edu/dissertations/525; https://opensiuc.lib.siu.edu/cgi/viewcontent.cgi?article=1526&context=dissertations

The increasing emphasis on integration among members of a supply chain has led to new mechanisms to help firms coordinate the flow of products, services, and information through the supply chain. Many studies support the importance and influence of supply chain integration on firm performance but only a few focus on factors driving the integration practices. Moreover, the role of organizational contextual factors that could influence supply chain integration has been largely overlooked. This research examines firms' internal and external drivers of supply chain integration, as well as evaluates the impact of the integration on firm performance. This study further investigates the moderating role of organizational culture, based on the dimensions of control-flexibility orientation and internal-external focus, in strengthening or weakening the relationships between supply chain integration and its antecedents. For the purpose of this study, manufacturing firms were identified as the focal firms in supply chains, and thus data was collected through a survey of 223 Indonesian-based manufacturing firms. Two informants from each firm became the respondents. Structural equation modeling was used to analyze the data, and this study confirmed the positive relationships between supply chain integration and firm performance. The results also indicated that internal driver, or specifically firms' customer orientation, triggered the initiation of supply chain integration. Other factors, such as demand uncertainty, supply uncertainty, technology uncertainty, as well as firms' anticipation of benefits, were not significantly related to the degree of supply chain integration. Furthermore, focal firms with external focus were pursuing a higher degree of supply chain integration than those with internal focus. By investigating the linkages between internal and external drivers, supply chain integration, firm performance, and organizational culture, this study attempts to contribute to the Operations Management discipline, especially to the area of supply chain management. Implications for research and practice are discussed.