Impact of psychological safety on supply chain operational performance

Abstract

ABSTRACT This study examines the relationship between psychological safety and operational performance in the context of supply chain partners, i.e. an inter-organisational setting. While collaboration among supply chain partners enables effective problem solving and generates innovation, such collaborations may result in superior performance improvements when a psychologically safe business environment is created along the supply chain. The analysis of this study is based on data collected from 241 manufacturing companies in China using a survey questionnaire. A confirmatory factor analysis (CFA) was conducted to assess the validity of the measures, and an ordinary least squares (OLS) regression was used to test the hypotheses. Study results indicate that there is a significant positive association between psychological safety and operational performance in the context of supply chain partners. The results further show the relationship to be moderated by the learning orientation and inter-functional coordination. While the effect of psychological safety on performance has been studied in intra-organisational settings, studies on the psychological safety – performance relationship in an inter-organisational setting are scant. This study contributes to the literature in psychological safety and supply chain management as it extends the relationship to the context of supply chain partners.