Achieving Financial Performance in Uncertain Times: Leveraging Supply Chain Agility

Abstract:To extend previous research, this study focuses on how a firm's supply chain agility affects performance through the lens of resource orchestration theory. We offer an additional extension to theory by examining the impact of environmental uncertainty in the resource orchestration process. Research indicates that a firm's capabilities must be considered within the context of larger uncontrollable and environmental factors. While the Fisher model focuses explicitly on a product's demand volatility, the contemporary environment for many firms can be portrayed as rapidly changing with turbulent markets, rapid product life cycles, and a changing competitive landscape. Focusing on three underlying dimensions of environmental uncertainty, namely dynamism, munificence, and complexity, we theorize that this uncertainty facilitates market orientation and moderates the mediating relationship between the firm's market orientation and supply chain orientation and a firm's supply chain agility. In short, orchestrating resources for a firm's supply chain agility may or may not be as significant to achieving financial performance, depending on environmental uncertainty. Therefore, our overall contribution rests in the understanding that firms must determine the appropriate level of supply chain agility.