The inverted U-shaped relationship between the network profile and the competitive advantage of supply chains. Chasing the perfect network setting

Pages1379-1400
DOIhttps://doi.org/10.1108/IJLM-06-2017-0161
Date30 July 2018
Published date30 July 2018
AuthorArtur Swierczek
Subject MatterLogistics,Management science & operations
The inverted U-shaped
relationship between the network
profile and the competitive
advantage of supply chains
Chasing the perfect network setting
Artur Swierczek
Department of Business Logistics,
University of Economics in Katowice, Katowice, Poland
Abstract
Purpose The purpose of this paper is twofold. First, the author aims to explore if there is a curvilinear
relationship between the network rent, generated as a combination of the relational performance of two dyads
and the network profile of the triadic supply chains. Second, the author seek to recognize the ideal network
profile, consisting of the properties at the node and relationship level, that provides the highest network rents,
and thus enables to increase the competitive advantage of supply chains.
Design/methodology/approach The paper opted for an exploratory study using a survey of triads
forming supply chains. In order to reveal the capability of yielding the network rent in the examined triads,
multiple regression analysis with interaction effects was employed. Having confirmed the existence of
supernormal profit, the author investigated the relationship between the network rent and the network index.
Finally, a cluster analysis was conducted to compare the network profile in the group of triads generating
higher network rents with the cluster yielding relatively lower network rents.
Findings The obtained findings show that a combination of the relational performance of two dyads
contributes to generating the network rent, and thus ensures a more favorable competitive position of supply
chains. The results of the study also indicate that there is a significant curvilinear, inverted U-shaped
relationship between the network profile and the competitive advantage of triadic supply chains. In addition,
the following network properties appear to be particularly important for yielding higher network rents:
network centrality, betweenness, network density and network size.
Originality/value The study contributes to the theory by testing if the network rent can be yielded as a
combination of the relational performance of two dyads in the triadic supply chains. The research also
indicates that there is a curvilinear relationship between the network rent and the network profile of
examined supply chains. Moreover, the study also addresses the link between the network profile, consisting
of the multiple network properties simultaneously, in relation to the competitive advantage of supply chains.
Keywords Competitive advantage, Supply chain, Triad, Network rent, Network profile
Paper type Research paper
1. Introduction
The issue of gaining and sustaining the competitive advantage of companies has received
widespread attention over the last few decades. However, more recently the studies dealing with
the competitive advantage have shifted the focus from individual firms to interorganizational
arrangements, such as supply chains. This new research perspective was aptly addressed by
Christopher (2016) who posits that nowadays not only is the real competition run between
individual companies, as suggested within the traditional strategic management literature, but
mostly between the whole supply chains. This catchy phrase underscores the role of
relationships in gaining and sustaining the competitive advantage of supply chains. For
instance, Melnyk et al. (2010) argue that the concept of supply chain management expands the
reach of the company beyond its immediate grasp to the other links where the competitive The International Journal of
Logistics Management
Vol. 29 No. 4, 2018
pp. 1379-1400
© Emerald PublishingLimited
0957-4093
DOI 10.1108/IJLM-06-2017-0161
Received 9 July 2017
Revised 11 January 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
The study was financed by the National Science Centre, Poland as a research project no. 2015/18/M/
HS4/00388.
1379
Chasing the
perfect
network
setting
advantage may be derived. Similarly, as there are myriads of overlapping supply chains
forming networks, other studies show that the competitive advantage is achieved through the
network of direct and indirect relationships established with other links (Harland, 1996; Hines
and Rich, 1998). The role of external actors in building network capabilities is critical and
capabilities of a firm may be influenced by interaction in relationships. Therefore, as advocated
by Walter et al. (2006), possessing certain network properties enables companies to initiate,
maintain and exploit relationships, based on the commitment of various external partners.
Similarly, Christopher (1996) underscores that the ability to derive the competitive advantage is
a major motivation for the companies to commit to the network.
Although knowledge about the role of relationships in obtaining the competitive advantage
has recently increased, there are still a few research gaps to fill in. First, extant studies,
highlighting the importance of relationships for the competitive advantage, are usually
conducted within strategic alliances whose structures are distinct from those in supply chains
(Das and Teng, 1998). Supply chains are formed by legally separated firms that strive for
achieving common goals through the mutually derived competitive advantage (Bowersox et al.,
2000), and as such, in contrast to strategic alliances, they do not involve equity ties and
ownership of the companies. Second, there is also a paucity of research that investigates benefits
reaped by all companies forming a network. A vast majority of studies employ the resource-
based view and focus on the possibility of gaining and sustaining the competitive advantage
from the perspective of individual (usually focal) companies embedded in a network (Dyer and
Singh, 1998). Moreover, to date, network properties such as density (Kim et al., 2011), intensity
(Wincent et al., 2010) and centrality (Kim, 2014) have been investigated in isolation and usually
in reference to the benefits reaped by a certain echelon in the network. It simplifies the concept of
competitive advantage by treating network instrumentally as a means of bringing benefitsonly
for a sole company (Rowley et al., 2000). In order to fill in the above gaps, at least partially, we
aim to explore the concept of network rent that denotes the ability of yielding benefits for all
actors involved in a triad. In our study, we refer to a triad as the smallest unit of the network that
forms a basic supply chain consisting of two dyads a central company and its immediate
supplier, and customer directly linked by one or more of the upstream and downstream flows of
products, information and finances (Mentzer et al., 2001). This is compliant with the structural
approach that captures the aspect of configuration or architecture of a network in which a focal
company and its partners within triads develop patterns of connections (Polidoro et al., 2011).
As the network can be characterized by many varied properties that are closelyrelated to
each other,the isolated effect of one propertycould be very different when the other properties
are analyzed as well. Consequently, as advocated by Phelps et al. (2012), in order to properly
comprehend the role of various network properties and conclude on the relative contribution
of each of them for performance, the effects of several properties should be taken into
consideration. Therefore, the study contributes to the existing theory by addressing the link
between thecompeting effects of multiplenetwork properties simultaneously in relationto the
network rent that enables to increase the competitive advantage of supply chains.
The paper starts with an overview of the network rent and its relationship to the network
properties. This is followed by a discussionof the methodology usedfor gathering data within
the triadic context. The next section introduces the analysis of scale measurement validation.
We then develop necessary methods to analyze empirical data and discuss research findings in
relation to the research hypotheses. Finally, we conclude with a discussion of the findings,
demonstrating limitations of the study and implications for future research.
2. Literature review and hypothesis development
2.1 Network rent as indicative of the competitive advantage of supply chains
The concept of supply chain has experienced a noticeable shift in the research focus from
dyadic arrangements to the network perspective (Dubois and Fredriksson, 2008; Kim, 2014;
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