From Supply Chain Integration to Operational Performance: The Moderating Effect of Market Uncertainty

Abstract

This research examines the moderating effect of market uncertainty on the causal effects from supply chain integration to operational performance of a typical supply chain. Based on an extensive and critical literature review, two exploratory conceptual hypotheses have been developed for the nonlinear relationship between the supply chain integration and operational performance of the original equipment manufacturer, and how may that relationship be moderated by a specific construct of market uncertainty. Empirical survey instrument has been designed and applied to gather the data from a wide spectrum of automotive industry in China. Confirmative factor analysis and threshold regression analysis were used as the primary research methodology to test the hypotheses. We find strong support to the hypotheses from the empirical evidence, which leads to the finding that the relationship between the supply chain integration and operational performance is ‘nonlinear’, and the ‘nonlinearity’ can be significantly moderated by the market uncertainty as one of the key environmental factors for the supply chain. This study extends the current literature by contributing for the first time the discussion of an analytical model that represents the causal effects from supply chain integration to its operational performance with respect to the market uncertainty as a moderating factor.