Asset specificity, relational governance, firm adaptability and supply chain integration

Abstract

PurposeThis study investigates how asset specificity, relational governance and firm adaptability relate with supply chain integration (SCI), considering selected food processing firms (FPFs) in Uganda.Design/methodology/approachThis study applies a quantitative research methodology. This research draws on a sample of 103 FPFs that have been selected from a population of 345 FPFs located in Kampala district. Hypothesis testing was done using Smart PLS version 3.FindingsAsset specificity has a significant positive relationship with SCI, and firm adaptability partially mediates this relationship. Also, there is a full mediation impact of firm adaptability on the relationship between relational governance and SCI.Research limitations/implicationsThis study focused on perceptual measures to get responses from managers on the level of integration with key suppliers and customers, yet firms deal with a number of suppliers and customers.Originality/valueThis study contributes to existing literature on SCI by applying the transaction cost theory. The study focuses on the influence of asset specificity, relational governance and firm adaptability on SCI in the food processing sector. Literature on relational governance in supply chain using the transaction cost theory remains scanty. Few studies have also focused on firm adaptability as a mediator in the FPS with specific focus on Uganda, yet the sector is highly faced with uncertain events. The uncertain events in the sector and in developing countries call for adaptive strategies. Additionally, this study is the first to use firm adaptability to mediate the influence of asset specificity and relational governance on SCI more so in a developing country like Uganda where the FPS is one of the most important in the economy.