Effect of Supply Chain Relational Capability on Supply Chain Agility of Manufacturing Firms: A Relational View Approach

Abstract

Supply chain agility is defined as a firm’s ability to respond nimbly to market changes. Although existing studies examine the diverse antecedents of supply chain agility, most of them primarily focus on the firm’s internal capabilities as antecedents of supply chain agility, and the scope of research is limited to a single country. Based on the relational view of a firm, in this study, we illustrate that the external capability of the firm created by cooperation with supply chain partners can be an important antecedent of supply chain agility. We hypothesize that relational norms (i.e., trust) and cooperative behaviors between supply chain partners (i.e., two-way information sharing with supplier/buyer firms, supply chain coordination) are the sources of supply chain agility. To test the hypotheses, we employ survey data collected from 219 manufacturing firms in the electronics, transportation, and machinery industries in 15 countries. The structural equation modeling indicates that trust has a significant effect on both two-way information sharing and supply chain coordination, which, in turn, positively impacts supply chain agility indirectly. In addition, supply chain coordination directly affects supply chain agility, whereas two-way information sharing indirectly leads to supply chain agility via supply chain coordination.