Organizational context, supplier management practices and supplier performance: A case study of a multinational company in Malaysia

Abstract

Purpose

This paper aims to examine the relationships among supplier management practices, organizational context and supplier performance. The contexts selected for supplier management practices are economics transactional practices and high involvement work practices (HIWP); while power asymmetry and competition intensity are considered within the organizational context.

Design/methodology/approach

A questionnaire survey was conducted on a multinational semiconductor company. A two‐phase statistical analysis, which comprised phase one (reliability and factor analysis), and phase two (hierarchical multiple regression analysis), was used to analyze the data.

Findings

The study provides empirical evidence to support the conceptual and prescriptive statements in the literature regarding the impact of supplier management practices and the dynamics between organizational context and supplier management towards supplier performance. The results show that high involvement work practices (HIWP) mediate the impact of competition intensity on suppliers' quality performance and partially mediate the effect of competition intensity on suppliers' flexibility. The limitation of this study is that it does not use longitudinal data, which would be more useful to examine changes in variables that affect performance; nevertheless, as this study was conducted in‐house, it was able to control the extraneous factors.

Originality/value

The study provides important insights for managers to understand the disposition of the firm to better leverage organizational context by exploiting relationships with suppliers. The paper has extended organizational theory and marketing theory into a supply chain context. Moreover, it is among the first empirical work that specifically investigates the relationship between organizational context and supplier management practices; thus the paper fills an important gap in the supply chain literature.

Citation

Chuah, P., Peng Wong, W., Ramayah, T. and Jantan, M. (2010), "Organizational context, supplier management practices and supplier performance: A case study of a multinational company in Malaysia", Journal of Enterprise Information Management, Vol. 23 No. 6, pp. 724-758. https://doi.org/10.1108/17410391011088619