Supply chain risk management and operational performance: The enabling role of supply chain integration

Abstract

The academic community and practitioners widely recognize the significance of risk management and integrative practices in supply chains to deal with complexity and uncertainties faced. Firms strive to manage risk, handle unexpected disruptions and improve performance in ever changing uncertain business environments. This paper builds upon the information processing view of risk management and explores the association between supply chain integration (SCI) and supply chain risk management (SCRM) to improve operational performance. Subsequently, the mediating role played by SCRM between SCI and firms’ operational performance is examined. In this paper, covariance-based structural equation modeling is applied to test the developed hypotheses using data of 931 manufacturing companies obtained from the sixth version of International Manufacturing Strategy Survey (IMSS VI). The findings of the study suggest that internal, supplier and customer integration positively effects SCRM whereas the impact of internal integration is also partially mediated by supplier and customer integration. Additionally, the results present that SCRM partially mediates the relationship between internal integration and operational performance and fully mediates the association between supplier and customer integration and operational performance. This paper contributes to research by proposing and empirically testing a holistic framework demonstrating the effects of SCI on SCRM, and consequently on performance outcomes to develop theoretical and managerial implications.