An evaluation of supply chain integration across multi-tier supply chains of manufacturing-based SMEs in Malawi

Author:Kizito Elijah Kanyoma, Frank Wogbe Agbola, Richard Oloruntoba
DOI:https://doi.org/10.1108/IJLM-10-2017-0277
Pages:1001-1024
Publication Date:13 Aug 2018
An evaluation of supply chain
integration across multi-tier supply
chains of manufacturing-based
SMEs in Malawi
Kizito Elijah Kanyoma, Frank Wogbe Agbola and
Richard Oloruntoba
Newcastle Business School, Faculty of Business and Law,
University of Newcastle, Callaghan, Australia
Abstract
Purpose The purpose of this paper is to explain the interrelationships in internal and external supply chain
integration (SCI) across multiple tiers of manufacturing-based small and medium-sized enterprises (SMEs) in
a developing country, Malawi.
Design/methodology/approach Utilizing the resource-based view, resource-dependence and network
theory perspectives, and drawing on a multiple embedded case-study approach, the researchinvestigated the
internal and external linkages within three-tier supplier, manufacturer and retailer SCs and described varying
perspectives of SCI across supply chain positions.
Findings Firms with strategic intra-firm resources were less committed to external integration, deploying
their resources as a source of power to dominate and exploit their dependent partners. The SCI across
multiple tiers was impaired by dependence but enhanced by interdependence strategies of firms. Although
lack of trust, promotion of non-overlapping self-interests, corruption in sourcing processes and resource
constraints negatively affected SCI, firm commitment to external integration promoted greater commitment
among firms, thus having a positive effect on SCI.
Research limitations/implications Further analysis of SCI of SME triads and a more systematic
longitudinal analysis across other market segments should be explored to generalizet heco nclusionsof this st udy.
Practical implications The external influences on dyadic relationships go beyond the interactions of
heterogeneous firms in the network to encompass interpersonal interactions across the network, where
individuals may potentially prioritize personal connections and sabotage the interests of their firms.
Originality/value The research explored the internal and external dimensions of SCI in multi-tier SCs of
SMEs, and provided for the first time new evidence to show that firm commitment to engaging with partners
complements the mechanisms of SCI within a developing country context. It highlights the need to develop
trust, eliminate corruption, promote greater commitment of SC partners and encourage greater investment in
firmsresource capabilities to enhance SCI among SMEs.
Keywords Africa, Supply chain integration, Buyersupplier relationships, Qualitative interviews
Paper type Research paper
1. Introduction
Supply chain management (SCM) has become an increasingly important strategy for firms,
and organizational competitiveness is greatly dependent on the extent to which companies
engage in supplychain integration (SCI) (Schoenherr and Swink, 2012). Several theories, such
as the resource-based view (RBV) and the resource-dependence theory (RDT), haveemerged
over the past few decades to explain the competitive benefits ofinternal resource integration
within firms (Barney, 1991) and externally across firms (Dyer and Singh, 1998; Pfeffer and
Salancik, 1978), respectively. However, empirical evidence suggests that, in practice, supply
chains (SCs) are not oftenintegrated in the manner theorized in the literature (Jin et al., 2013) .
Traditionally,the RBV explains the importanceof internal integration by underscoringthe
role of intra-firm resources in building a sustainable competitive advantage (Barney, 2012).
The International Journal of
Logistics Management
Vol. 29 No. 3, 2018
pp. 1001-1024
© Emerald PublishingLimited
0957-4093
DOI 10.1108/IJLM-10-2017-0277
Received 27 October 2017
Revised 21 February 2018
Accepted 5 April 2018
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0957-4093.htm
This paper forms part of the regular section.
1001
Supply chain
integration
Intra-firm resources are at the heart of internal integration (Kotzab et al., 2015) and influence
the effectivenessof external integration(Horn et al., 2014; Kotzab et al., 2011). However, despi te
its traditional focuson intra-firm resources, the RBV has often been used to explain external
integration (Holcomb and Hitt, 2007; Kotzab et al., 2015). However, the RDT emphasizes the
importance of external integration and encourages firms to collaborate with others to access
externally controlled critical resources (Hillman et al., 2009). The RDT explains how control
over critical intra-firm resourcescan influence the balance of power in inter-firm relationships
(Davis and Cobb,2010; Pfeffer and Salancik, 2003),and was relevant in this researchin which
small and medium-sized enterprises (SMEs) with limited resources interacted with larger
firms. However, the intra-and inter-firm dynamics of the RBV and RDT are inadequate in
explaining dyadiclinkages since inter-firm interactions may be affected by other connections
or nodes outsidea dyad (Choi and Wu, 2009b).In this regard, network theorycomplements the
RBV and RDT in explaininginter-firm interactions in SCI (Choiand Wu, 2009a). The research
contributes by drawing upon insights from the RBV and the RDT to explain SCI from a
developing countrys perspective.
SCI is often practiced as the buyersupplier dyad, with limited evidence of SCI at or
beyond the SC triad(Childerhouse et al., 2011). Contraryto the literature that SCI occursacross
firms and against theRDT, which considers that the dyad or network is the unit of analysis,
the majority of SCIresearch has been conducted from the perspective of a focal firm (Mentzer
et al., 2008; Van Weele and Van Raaij, 2014). In addition, many studies have collected data
from a single node in the SC (e.g. Kotzab et al., 2015), and the research on SCI has been
predominantlyconducted from the perspectiveof large multinational enterprises in developed
economies (e.g. Alfalla-Luque, Medina-Lopez and Schrage, 2013; Huo et al., 2014).
Recently, some investigators have called for more research that focuses on SCI in SMEs
and on SC dyads or networks to fully understand the philosophy of SCI in an SCM
theoretical context (e.g. Frankel et al., 2008; Kotzab et al., 2011). Jin et al. (2013) called for
research to be conducted across various environments, such as developing countries to
reflect the cultural, political and infrastructural issues that affect SCI, given the global
nature of SCs. Likewise, many scholars have emphasized the importance of context and
perspective in SCM research (Sousa and Voss, 2008; Sweeney et al., 2015). In this study, we
aimed to address these gaps by taking the SC triad as a unit of analysis, and by
investigating SCI in practice in the SCs of manufacturing-based SMEs in Malawi, to offer a
developing countrys perspective on the research on SCI in practice. In addition, the study
results reflected multiple perspectives on SCI across three tiers of participating SCs. On the
basis of insights from the RBV, the RDT and network theories, we attempted to answer the
following research questions (RQs):
RQ1. Why are SCs not well integrated?
RQ2. How integrated are the SCs of manufacturing-based SMEs in Malawi?
1.1 Malawian context
Malawi is a small landlocked and developing country in southern Africa, and is ranked
among the poorest countries in the world. The state of the Malawian economy has continued
to worsen over the years, forcing firms into unconventional competitive strategiesMalawi
was ranked 136 out of 144 countries in the 20142015 Global Competitiveness Index
(African Development Bank Group, 2015). Among the leading barriers to performing
business in Malawi are problems with access to finance, lack of infrastructure and
corruption (World Bank, 2014). In total, 70 percent of the manufacturing firms in Malawi are
owned and controlled by Malawians of Chinese or Indian origin. The concentration of the
ownership of the manufacturing industries in Malawi, thus, offers a unique research context
with important implications for inter-firm relationships and SCI. In Malawi and most
1002
IJLM
29,3

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