The role of affective leadership in improving firm performance through the integrated internal system and external integration FMCG Industry

Abstract

The manufacturing industry always tries to improve performance amid the trade globalization. Demand and supply uncertainty, and increasingly the intense competition, prosecute the presence of an affective leadership to integrate the company's internal and external resources in improving company performance. This research investigates the role of affective leadership in firm performance through an internally integrated system and external integration in FMCG companies. Data collection used questionnaires, designed with a five-point Liker scale, were distributed to 55 fast-moving consumer goods (FMCG) manufacturing companies. The data analysis used the PLS technique utilizing smart PLS software to assess the validity and reliability of the outer model and to examine the hypotheses developed. The results of the hypothesis testing found that affective leadership can improve internal system integration, external integration, and firm performance. Internal system integration has an impact on external integration but is not strong enough to have a direct effect on firm performance. The internally integrated system has an influence on firm performance through external integration. The company's ability to share information with external partners can improve firm performance through demand fulfillment. The study provides a managerial implication on how to enhance firm performance in the context of internal and external system integration. The finding of this research enriches the current studies in supply chain management.

Supply Chain Integration Enables Resilience, Flexibility, and Innovation to Improve Business Performance in COVID-19 Era

“…The results show that supply chain integration improves the innovation system in the company (H1). This result agrees with a previous study that supply chain management integration could improve innovation systems [11,13,19,33,58]. By sharing complete information with partners, supply chain integration enables the organization to perform innovations such as new product development, process innovation, and information technology application.…”

“…SCM integration between companies and partners can synchronize the supply chain flow [18,58]. SCM integration with suppliers and customers can increase manufacturing flexibility because it provides accurate information in reducing external environmental uncertainty [19,28].…”

“…SCM integration between companies using information technology can share data or information in real-time [59]. Internal integration integrates all internal functions enabling better communication and quick decision-making processes [34,58]. As in a study done in Taiwan, internal integration and customer integration significantly improve supply chain resilience in third-party logistics providers (3PLs), but logistic collaborator integration on supply chain resilience does not significantly affect [47].…”

Impact of Internal Integration, Supply Chain Partnership, Supply Chain Agility, and Supply Chain Resilience on Sustainable Advantage

“…Internal integration is an information technology system applied to companies capable of being integrated with SC partnerships to form SC integration [22]. It is defined as the company's ability with its partners to produce SC agility that can respond quickly to a change.…”

“…Information sharing and supplier relationships in increasing supplier innova-tiveness in manufacturing companies can impact the increase in SC agility [21]. Internal integration and external integration can improve company performance and generate sustainable advantages for fast-moving consumer goods companies [22]. SC integration and SC agility improve organization performance by producing new products and improving customer satisfaction as a sustainable advantage [14].…”