How to Complete Supply Chain Integration and Improve Supply Chain Performance Through Relationship Governance in the Digital Age

How to Complete Supply Chain Integration and Improve Supply Chain Performance Through Relationship Governance in the Digital Age

Yan Zhou, Yi Xu, Qifeng Wang
Copyright: © 2024 |Pages: 29
DOI: 10.4018/JGIM.344042
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Abstract

In the process of manufacturing supply chain development, because appropriate governance mechanisms are lacking, manufacturing supply chain stability, integration and other aspects face many challenges. Such as opportunism, “free riding” and data leakage affect supply chain development. Thus, many manufacturing firms are adopting supply chain relationship governance (SCRG) as a strategic to enhance performance. Using data collected from a survey of 295 manufacturing firms, this paper confirms the influence of SCRG on supply chain performance (SCP). The mediating effect of supply chain integration (SCI) and the moderating effect of digital capabilities (DCs) are explored. The results show that SCRG has a beneficial effect on SCP. SCI plays a partial mediating role in SCRG and SCP. DCs positively moderate the relationship between SCRG and SCI. This study is one of the first to explore the role of DCs in the relationship between supply chain partners and the impact on performance. It provides fresh perspectives and real-world evidence for determining the importance of SCRG strategies.
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Introduction

As the competitive environment has become more complex, enterprises have come to rely on the supply chain as a primary driver of their competitive advantage (Feizabadi et al., 2019; Walker et al., 2000). Within the supply chain, various partners, such as suppliers, manufacturers, distributors, retailers, and customers, assume distinct roles to collectively contribute to its functioning. To effectively and efficiently maintain normal supply chain operations, it is imperative to establish several stable relationships and sustainable cooperation patterns among supply chain enterprises (Govindan et al., 2016) to increase the competitive advantage of the supply chain. Therefore, to manage such relationships and collaborations, organizations need to develop numerous effective governance mechanisms (Gimenez & Tachizawa, 2012; Formentini & Taticchi, 2016). Sound governance mechanisms can reduce the risk of opportunistic behavior, eliminate the uncertainty associated with conflict (Dolci et al., 2017; Govindan et al., 2016), help gain competitive advantages, and improve organizational performance (Dolci et al., 2017; Lee & Choi, 2021). Different from supply chain management, which focuses on direct activities, supply chain governance places a stronger emphasis on implementing mechanisms and rules to minimize uncertainty and guarantee the smooth operation of supply chain activities (Dolci et al., 2017).

Embedded within corporate structures and processes, governance is a multidimensional phenomenon, and it is a fundamental approach to analyzing interorganizational relationships. In recent years, scholars have focused on how to enhance the competitive edge within supply chains, and a wide range of definitions and concepts have been proposed (Ahola et al., 2014; Bonatto et al., 2020; Poppo & Zenger, 2002; Roehrich et al., 2020). Governance is mainly categorized into contractual governance and relational governance (Poppo & Zenger, 2002). Contractual governance essentially consists of written contractual terms that set out the roles, obligations and responsibilities between the parties involved in a collaborative relationship (Roehrich et al., 2020; Schepker et al., 2014). Relationship governance pertains to less formal and spontaneous mechanisms that rely on trust and collaborative arrangements derived from social interactions. This approach emphasizes the establishment and maintenance of trust, cooperation, and long-term relationships between partners to enable collective action and effectively respond to unexpected circumstances (Poppo & Zenger, 2002; Bonatto et al., 2020). Unlike contractual governance, relationship governance focuses more on building cooperative relationships based on mutual trust and synergy rather than just relying on explicit contractual terms to regulate cooperation. The two are complementary, not mutually exclusive (Cao & Lumineau, 2015).

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