The Effects of Strategic and Structural Supply Chain Orientation on Operational and Customer‐Focused Performance

Abstract

ABSTRACTSupply chain orientation (SCO), or the implementation of a supply chain management philosophy, consists of two distinct, yet interdependent elements, namely strategic SCO and structural SCO. Strategic SCO involves integrating an SCM philosophy into the firm's strategy development, while structural SCO encompasses operational‐level behaviors and actions that reflect such a philosophy. This study extends the research on SCO by developing hypotheses on the contingent effects of strategic SCO and structural SCO on a firm's operational and customer‐focused performance. Drawing on the strategy‐structure‐performance framework, the study proposes that strategic SCO and structural SCO positively affect different dimensions of performance and that structural SCO plays a mediating role in the relationship between strategic SCO and performance. These relationships are tested using primary survey data and archival data from 183 manufacturers in the Midwestern US. Results confirm that strategic SCO is associated with both operational performance and customer‐focused performance, but structural SCO is only related to operational performance. Structural SCO acts as a mediator in linking strategic SCO with operational performance and customer‐focused performance and mediation effects are strengthened at higher levels of environmental dynamism.