The effects of inter-firm power and supply partner assessment on supply chain integration

Abstract

With rapid changes in technology and globalization of markets, it has become very difficult for firms to “go it alone”. World-class companies, therefore, seek to enhance competitive performance by effectively linking them with the external operations of supply chain members. Several factors are critical to effective integration. Supplier’s power is one of the major factors influencing supply chain integration. Supplier’s characteristics determined its power. Inter-firm power affects buyers and suppliers' decision and subsequently the performance of the buyer. The relationships among supplier's assessment, power, cooperative attitude and supply chain integration are hypothesized and investigated based on empirical data collected from companies in semiconductor component manufacturing supply chain. The results demonstrate that both power structure and suppliers’ characteristic influence supply chain integration. Managerial insights are provided accordingly for companies to achieve better supply chain integration in nowadays highly competitive environments. Key words: Supply chain integration, power, supplier assessment, cooperation.