Academic journal article Journal of Supply Chain Management

Environmental Uncertainty and Strategic Supply Management: A Resource Dependence Perspective and Performance Implications

Academic journal article Journal of Supply Chain Management

Environmental Uncertainty and Strategic Supply Management: A Resource Dependence Perspective and Performance Implications

Article excerpt

INTRODUCTION

The rapid escalation in outsourcing activities across diverse industries has led to the increased recognition and implementation of strategic supply management, which specifically focuses on the strategic management of interorganizational relationships. The notion of strategic supply management has thus been studied from different theoretical paradigms (Contractor and Lorange 1988). Specifically, the effect of environmental uncertainty on supply management is the focal point of transaction cost economics (TCE) (Williamson 1985) and the resource dependence perspective (Pfeffer and Salancik 1978). Proponents of TCE contend that even modest levels of environmental uncertainty will entice firms for vertical integration (e.g., Williamson 1985; Helfat and Teece 1987). On the other hand, resource dependence theory asserts that firms facing substantial environmental uncertainty will attempt to stabilize it by imposing interorganizational ties (Pfeffer and Nowak 1976; Pfeffer and Salancik 1978). In the modern business era, many firms strive to focus on their core competencies and outsource the rest and, thus, vertical disintegration has become a common practice. Accordingly, the resource dependence perspective is adopted in this study to examine the relationships between environmental uncertainty and strategic supply management.

Despite the instrumental role that environmental uncertainty plays in the implementation of strategic supply management initiatives, empirical studies incorporating environmental uncertainty and strategic supply management (or strategic relationships) under the theoretical lenses of resource dependence are nonexistent. The few studies that have attempted to explore this relationship have considered uncertainty as a moderator of The authors would like to thank the Institute for Supply Management[TM] (ISM) for its administrative and financial support of this research. interorganizational relationships and performance (e.g., Fynes, Burca and Marshall 2004). Therefore, the current study proposes to extend this stream of research by focusing on the following gaps in the literature. First, the resource dependence theory is invoked to examine the direct relationship between supply chain uncertainties (demand, supply and technology) and strategic supply management. Realizing that strategic supply management is a broad and complex phenomenon characterized by the interactions of multiple constructs, it is conceptualized to embrace the key theoretical constructs of strategic purchasing, long-term relationship orientation, interfirm communication, cross-organizational teams and supplier integration from extant literature (e.g., Cousins and Spekman 2003; Chen and Paulraj 2004b). Second, this conception is further extended using the strategic management theory of collaborative advantage (Kanter 1994; Dyer 2000) to illustrate that the implementation of strategic supply management initiatives in the face of environmental uncertainty, as suggested by the resource dependence theory, can ultimately lead to a sustained competitive advantage for buyer firms and their suppliers.

The remainder of the paper is structured as follows. The next section presents a synthesis of the resource dependence, collective strategy and collaborative advantage literatures to provide a theoretical foundation for the hypothesized model. Then, the logic of the substantive relationships among the theoretical constructs and appropriate hypotheses are developed. The following section explains the research methodology including data collection procedure, construct operationalization and measurement, hypothesis testing and results. The subsequent section offers discussion and implications of the study findings. In the concluding section, the limitations of the study along with suggestions for future research are highlighted.

THEORY DEVELOPMENT

Resource Dependence and Competitive Advantage

Extending seminal work in the social exchange theory (e. …

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