Effect of innovativeness on supply chain integration and performance

Abstract

PurposeThe purpose of this paper is to investigate the potential role of innovativeness in determining supply chain (SC) integration and to foster the SC performance of manufacturing small and medium enterprises (SMEs). The study also proposes that the SC integration–performance relationship is contingent to the degree of environmental uncertainty (EU).Design/methodology/approachThe data were collected from 321 manufacturing SMEs working in Pakistan. Respondents were owners/CEOs/managers of the firms. Considering the formative nature of indicators of SC efficiency and effectiveness, partial least square-based structural equation modeling (SEM) was used to analyze the data.FindingsThe results indicate that innovativeness positively influences the dimensions of SC integration which in turn affects SC efficiency and effectiveness. The results support the presence of moderation for the relationship between the dimensions of both SC integration and performance. The findings suggest that firms should endeavor to accomplish innovativeness and SC integration, as they jointly promote SC performance.Practical implicationsSMEs can use innovativeness as an important tool to increase SC integration and SC performance. For SMEs with a highly volatile and dynamic environment, managers should achieve SC integration and include external integration orientation at the strategic level in order to reap the greatest advantages from SC integration.Originality/valueThis study contributes to the SC literature by exploring the effect of the nascent determinant (innovativeness) of SC practices and performance to expand and deepen current understanding of the potential role of innovativeness in the SC context. Furthermore, considering EU as a moderator opens up new avenues of research to elucidate the SC integration–performance nexus in the emerging market context.