The mediating role of customer related performance outcomes on the relationship between customer integration and firm performance

Abstract

Purpose Even though supply chain integration (SCI) has been considered as a vital contributor to business performance, the research shows inconsistency in its finding. Accounting for these inconsistencies, researchers (Fabbe-Costes and Jahre, 2007; Van der Vaart and van Donk, 2008) have highlighted the need to relate the level of integration in a single relationship to the performance outcomes of that relationship. The purpose of this paper is to make an effort in this direction and investigate the impact of customer integration (an important dimension of SCI) on customer-related performance outcome (CRPO) and financial performance of the firm. Design/methodology/approach Based on an extensive literature review, a research model has been developed hypothesizing the relationships between customer integration, CRPO and financial performance. The research model is then tested using data collected from 214 Indian manufacturing companies. Structural equation modeling was used to test the hypothesized relationship between constructs of interest. Findings The result showed that there is no direct effect of customer integration on financial performance instead the relationship is fully mediated through CRPO. Originality/value This study conceptualizes and develops scale for the specific performance outcome resulting from a high level of integration between manufacturer and key customers and labels it as CRPOs. It further investigates the mediating role of this immediate performance outcome on the relationship between customer integration and firm performance.

A systematic review of responsiveness to develop future research agenda: a TCCM and bibliometric analysis

“…Step 7 Future Research Agenda Business, Management, and Accounting management (Jerath et al, 2017); flexibility (Shekarian et al, 2020;Chan et al, 2017) and integration (Feizabadi et al, 2019) as antecedents to firm performance (Afshan and Motwani, 2018;Chan et al, 2017;Gorane and Kant, 2017); operational performance (Shin et al, 2015); service performance (Asian et al, 2019;Sajjanit and Rompho, 2019); strategy design (O'Connor et al, 2018;Giannikas et al, 2017); satisfaction (Gonzalez, 2019) and loyalty (Fatima et al, 2018;Gong and Yi, 2018;Milan et al, 2018).…”

Mediating role of immediate performance outcomes between supply chain integration and firm performance

“…This study highlighted the missing link between SCI and financial performance. This gap was addressed subsequently by several studies that showed the relationship between SCI and firm financial performance was mediated through some competitive capabilities (such as customer service or manufacturing capabilities or inter-organizational learning), which in turn impacted on finance of the firm (Vickery et al , 2003; Ayoub et al , 2017; Afshan and Motwani, 2018; Zhu et al , 2018). Further, some of the researchers indicated the possibilities of more complex relationship between SCI and performance such as an inverted U-shape (Das et al , 2006; Zhao et al , 2015).…”

“…Some other researchers advocated that relating SCI (supplier/customer/internal integration) to financial performance of the whole firm was rather optimistic as each dimension led to distinct performance outcomes (Ataseven and Nair, 2017; Zhu et al , 2018; Afshan and Motwani, 2018). Failing to identify these distinctive performance outcomes and their mediating role on SCI and financial performance has resulted in inconsistent findings related to SCI and performance relationship (Chang et al , 2016; Chaudhuri et al , 2018; Zhang et al , 2018).…”

“…This construct facilitates the structure of inter-organizational strategies, processes and practices into collaborative, synchronized processes (Flynn et al , 2010). Customer integration provides manufacturer better understanding of customer's requirement, market changes and opportunities and helps manufacturer become more responsive to customer's request (Afshan and Motwani, 2018; Wong et al , 2011).…”

“…For this reason, several researchers called for greater understanding of SCI and firm performance relationships (Ataseven and Nair, 2017; Afshan et al , 2018; Chaudhuri et al , 2018). Particularly, researchers highlighted the need to identify the distinctive performance outcomes of each dimensions of SCI (Ayoub et al , 2017; Zhu et al , 2018; Afshan and Motwani, 2018) and to investigate the mediating routes through which dimensions of SCI impact firm performance (Chang et al , 2016; Chaudhuri et al , 2018). Immediate performance outcomes will be different for those organizations that are integrated only with its suppliers, from those that are integrated only with their customers.…”