The Effects of Culture and Human Resource Management Policies on Supply Chain Management Strategy

Abstract

Over the past decade, the management of a firm's entire supply chain has become the process for building improved and stronger upstream and downstream business linkages. "Win-win" relationships, that utilize the strengths of other channel members, are created between supply chain partners (Katzorke and Lee 2000). While there are considerable discussions about the importance of supply chain relationships, less emphasis has been allocated to the concept of corporate culture and its role in facilitating or hindering these relationships.Corporate culture is similar to a firm's personality in that it provides an organizational memory that minimizes the need to start over whenever personnel changes occur (Walsch and Ungson 1998). Organizational memory regulates communication flows both within the organization and between channel members by ensuring continuity of norms. In addressing this issue, Mohr and Sohi (1995) state: "shared norms implies that the manufacturer and dealer share the belief that information sharing is important and expected" (p. 398). Conversely, when shared norms are not reinforced by an organizational memory, information sharing appears to be less important and less expected. Research confirms that shared values positively influence both commitment and trust between a firm and its channel members (Morgan and Hunt 1994).Human resource management policies, which directly influence and are influenced by corporate culture, also significantly impact supply chain members. That is, human resource decisions are important because, when firms hire personnel that meld with their company culture, these actions enhance shared social knowledge and increase consistency between employee and firm goals (Wilkins and Ouchi 1983). Shared social knowledge guides employees in making the right decision when confronted with novel situations (Weitz and

Opposites attract: organisational culture and supply chain performance

“…The reported significance of shared values, beliefs and behaviours (cultural fit) on performance in an inter-organisational supply chain setting is becoming more widespread (McAfee et al, 2002;Mello and Stank, 2005). Bates (1995) reported a significant relationship between organisational culture and manufacturing strategy, while Mello and Stank (2005) develop a useful theoretical framework and report that differing cultural dimensions have differing influences on buyer -upplier performance outcomes.…”

“…Further, the authors call for further research, especially empirical research, in this area. McAfee et al, (2002) investigate the role of organisational cultural fit in a supply chain setting. Although the focus of the theoretical study was integrated with developing human resource policies, the study highlighted the influence of cultural fit between supply chain partners in achieving and sustaining successful relationship outcomes.…”

A Review of Behavioral Decision Making in the Newsvendor Problem

“…However, a win-win situation could be achieved when both the players are inequity averse, provided the retailer's ideal allocation to the supplier is within a certain range and demand variability is high. McAfee et al (2002) suggest that culture is an important consideration in developing supply chain strategies. Issue such as organizational culture is of crucial importance to the operations of large organizations (Gino and Pisano 2008).…”

An Evaluation Framework for Supply Chains Based on Corporate Culture Compatibility

“…We may conclude that current simulation approaches lack some modeling capabilities that are required for successful supply chain simulation, because it cannot handle the computational complexity of supply chains. In reality supply chain organizations require to achieve a compatibility level of corporate culture prior to commence their operations (McAfee et al, 2002). Mostly, previous models facilities strongly focus on the operational and tactical levels with few others at the strategic levels, leaving the planning at the organization's cultural level implicit.…”

“…Therefore, there is influence on the supply chain planning decision process that is associated with cultural factors, such as socialization processes, which shape what is regarded as right and wrong in a given organisational situation. There is considerable evidence to suggest that cultural factors understanding have a considerable impact on the supply chain planning decision making (Cooper & Ellram, 1993;Lasser et al, 1995;Cooper et al, 1997;Mentezer et al, 2001;McAfee et al, 2002;Min et al, 2004). However, to date there has been little research investigating how exactly these factors interact together to shape a common understanding of corporate culture between all supply chain organizations.…”