Aligning the risk hedging strategy with supplier collaboration and manufacturing competitiveness: a resource-based and contingency approach

Abstract

PurposeThe purpose of this study is to examine the alignment between the risk hedging strategy and supplier collaboration and its effect on manufacturing competitiveness.Design/methodology/approachBuilding on the resource-based view (RBV) and contingency theory (CT), this study is guided by a positivist philosophy and employs a survey strategy to investigate both the direct relationship between the risk hedging strategy and manufacturing competitiveness and the moderating role of supplier collaboration using data collected from 397 respondents of manufacturing firms. Partial least squares structural equation modeling (PLS-SEM) technique is used to analyze collected data and to present the research findings.FindingsConsistent with the RBV and CT, study findings indicate that a significant positive relationship exists between the risk hedging strategy and manufacturing competitiveness and that this relationship becomes stronger when supplier collaboration is interactively aligned. Study findings provide important insights on the role of the risk hedging strategy in promoting manufacturing competitiveness. Furthermore, supplier collaboration as a moderator accounts for a significant proportion of the relationship between the risk hedging strategy and manufacturing competitiveness.Research limitations/implicationsInternal resources provide an explanation of the competitive differences among firms employing the risk hedging strategy. However, the environment presents opportunities for firms to acquire additional resources to fulfil the unique collaborative requirements of the risk hedging strategy. This study has used the moderation perspective to explain the interaction between the risk hedging strategy and supplier collaboration and its effect on manufacturing competitiveness. Future studies could incorporate other alignment concepts such as mediation and systems approach and compare the results to improve the theory.Originality/valueThis study can be considered as its kind in the supply chain management literature and both practitioners and researchers can benefit from the experience of resource-based and contingency analysis research and the results of aligning the risk hedging strategy with supplier collaboration for higher levels of manufacturing competitiveness.

Supply chain risk factor assessment of Indian pharmaceutical industry for performance improvement

“…key supplier failure and lack of appropriate technology level, with risk values almost equal to 3. Key suppliers for an industry provide the right resources to the manufacturer, resulting in improved competitiveness potential and risk hedging (Myamba and Nguni, 2022). The IPI, which imports around 70% of bulk drugs such as APIs from China (CII, 2020), has a moderate probability of key supplier failure; however, if failed, its impact and urgency to manage are high.…”

Allocation of resources for risk management activities by business organisations in developing countries: Evidence from Zambia

“…Several factors impact a firm's performance, including environmental uncertainty, competition within and outside the industry, company scale, and the existence of the Board of Directors (Ahmad & Muslim, 2022;Florio & Leoni, 2017;Gordon et al, 2009). According to the resource-based view (RBV) theory, the ability of resources in risk management may be able to contribute positively to the company (Myamba & Nguni, 2022;Penrose, 1959). The company should, therefore, use its best resources in implementing ERM to achieve the best business process to create the company's value (Andersen, 2008;Bailey, 2019).…”

Enhancing supply chain resilience in SMEs: a deep Learning-based approach to managing Covid-19 disruption risks

“…Barney (1991) believed that the resources should be sustained to provide competitive advantages in the long-term. Arguing on this, Myamba and Nguni (2022) claimed that the processes like SCI and SCRM practices of a firm were the most crucial capabilities for supply chains to apply resources to promote their performance. Moreover, RBV further explains the essential role of SCRM practices that exert the key effect on firms' restructuring, leverage and application of resources or capabilities to cope with the DI and maintain SCRE (El Baz and Ruel, 2021).…”

“…In this context, SCRM practices can be conceptualized as the processes or resources that a firm develops, shares, deploys and learns from. However, critics of the Resource-Based View (RBV) theory have pointed out its weaknesses, such as not giving enough consideration to outer sources of resources, which is becoming increasingly vital in the context of SC (Myamba and Nguni, 2022). Thus, this study aims to incorporate the concept of information processing theory, which considers both internal and external information, to address the challenges companies face, so that a more comprehensive understanding of SCRM's mechanism can be observed (Birkel and Hartmann, 2020).…”