Leveraging supply chain orientation for global supplier responsiveness: The impact of institutional distance
The International Journal of Logistics Management
ISSN: 0957-4093
Article publication date: 4 December 2018
Issue publication date: 12 February 2019
Abstract
Purpose
The purpose of this paper is to utilize middle-range theorizing to examine whether a US manufacturer can leverage supply chain orientation (SCO) to garner responsiveness from a global supplier. To capture the interplay of macro-level institutional environments, the authors examine the moderating effect of institutional distance on the SCO–supplier responsiveness relationship.
Design/methodology/approach
Primary survey data collected from US manufacturers are utilized to measure SCO and supplier responsiveness. Two secondary data sets (EIU and GLOBE) capture formal and informal distance at the institutional level and are used to test the moderating effect of institutional distance.
Findings
The research finds that SCO can facilitate global supplier responsiveness. A post hoc exploratory analysis reveals a three-way interaction, where the SCO–supplier responsiveness relationship is strengthened when formal and informal institutions are either very similar or very different.
Research limitations/implications
The research offers a more nuanced understanding of manufacturer–supplier relationships in global supply chains by demonstrating how country-level (macro) characteristics can influence firm-level (micro) supply chain phenomena. It extends research on SCO by illustrating how institutional distance interacts with a manufacturer’s ability to leverage SCO to enable supplier responsiveness.
Practical implications
Manufacturers should increase their attentiveness to institutional distance. When both formal and informal distances are different (i.e. high distance), SCO can create a powerful lever to improve global supplier responsiveness. Likewise, when formal and informal institutions are similar (i.e. low distance), SCO reinforces joint efforts and collaboration to create additive benefits, whereby suppliers are incentivized to be responsive to unexpected environmental changes.
Originality/value
This research addresses the growing call for more empirical studies that examine how country-level institutions influence firm-level phenomena. It also utilizes secondary data to serve as a proxy for formal and informal institutional distance.
Keywords
Citation
Davis-Sramek, B., Omar, A. and Germain, R. (2019), "Leveraging supply chain orientation for global supplier responsiveness: The impact of institutional distance", The International Journal of Logistics Management, Vol. 30 No. 1, pp. 39-56. https://doi.org/10.1108/IJLM-09-2017-0225
Publisher
:Emerald Publishing Limited
Copyright © 2018, Emerald Publishing Limited