Examining the relationship between the dimensions of supply chain integration, operational performance and financial performance, evidence from an emerging country

Purpose

The study aims to examine the relationship between dimensions of supply chain integration (SCI), operational performance and firm performance of firms. The study proposes that internal integration serves as the basis for supplier integration and customer integration and all three dimensions directly enhance operational performance and firm performance. Additionally, operational performance is proposed to mediate the effect of dimensions of SCI on firm performance.

Design/methodology/approach

A research model grounded on the resource-based view and the extended resource-based view was developed to examine the proposed relationships between the dimensions of SCI, operational performance and firm performance. A survey of manufacturing and service firms in Ghana was conducted, with 120 usable responses received. The research model was analysed by using partial least squares structural equation modelling. Robustness tests were conducted by using logistic regression and the Kruskal Wallis test.

Findings

The findings showed that internal integration had positive and significant effects on customer integration and supplier integration. Internal integration had a positive and significant effect on firm performance whilst customer integration had positive and significant effects on operational performance and firm performance. Additionally, operational performance mediated the effect of customer integration on firm performance.

Originality/value

This is one of the few studies that examine the interrelationships between dimensions of SCI. Additionally, to the best of the researchers’ knowledge, this is the first study to empirically examine the mediating role of operational performance in the relationship between dimensions of SCI and firm performance.