Does supply chain management strategy mediate the association between market orientation and organizational performance?

Abstract

Purpose

The purpose of this research was to examine the link between supply chain management (SCM), market orientation, and organizational success, and to develop a model that describes the relationship among the three.

Design/methodology/approach

A survey of sales managers within large US manufacturers was used to collect data about market orientation, SCM strategy, and organizational performance. Five hypotheses were tested using structural equation modeling.

Findings

The resulting model suggests that a manufacturing firm's SCM strategy mediates the relationship between its market orientation and organizational success.

Research limitations/implications

Perhaps the most serious limitation of this study was its narrow focus on US manufacturing companies, thus precluding the generalization of findings to other sectors such as service and government sectors that may benefit from a market orientation and sound SCM strategy.

Practical implications

The study findings reinforce the importance of a market orientation for firms in the manufacturing sector, and likewise the importance of a sound SCM strategy. The success of firms depends on their ability to satisfy customers. Since market orientation is positively related to organizational success, and SCM strategy helps facilitate market orientation, top managers should view effective SCM as key in meeting customer needs to achieve long run success.

Originality/value

This paper examines the relationships among SCM strategy, market orientation and organizational success and is the first empirical research to propose a model of those relationships. Researchers can use the findings herein to generate ideas for future studies, and top managers can glean important knowledge about how effective SCM impacts organizational performance.

Citation

Green, K.W., McGaughey, R. and Casey, K.M. (2006), "Does supply chain management strategy mediate the association between market orientation and organizational performance?", Supply Chain Management, Vol. 11 No. 5, pp. 407-414. https://doi.org/10.1108/13598540610682426