Antecedents and Consequences of Dynamic Supply Chain Design and Learning Capabilities

Abstract

This study applies Dynamic Capabilities View (DCV) to the study of supply chain capabilities. While the literature in the area of dynamic capabilities (DCs) from supply chain perspective or Dynamic Supply Chain Capabilities (DSCCs) has grown steadily, few important questions have remained unanswered. Specifically, this study seeks to find out the antecedents and consequences of DSCCs. In this study, DSCCs are operationalized based on the framework presented by Teece (2007), as a second-order factor consisting of sensing, seizing, and transforming capabilities. Entrepreneurial Orientation (EO) and Supply Chain Learning (SCL) are proposed as antecedents of DSCCs. The role of Environmental Dynamism (ED) in the process of capability formation is also considered. Finally, direct and indirect relationship between DSCCs and Supply Chain Performance (SCP) is considered. Indirect relationship is studied using the Operational Flexibility (OFL), Operational Improvement (OIM), and Operational Innovation (OIN) as mediating operational capabilities. Survey research was used to test the hypothesized model. Data were collected from 275 managers working in supply chain and related functions in manufacturing sector of Pakistan. Structural equation modelling (SEM) was used to validate the measurement model and test hypotheses. Results of the study showed that the research model was generally supported. Sensing, seizing (supply chain agility), and transforming (supply chain adaptability) provide a parsimonious framework for measuring DSCCs as indicated by fit indices in CFA. Results of the hypotheses tests showed that EO and SCL have a positive impact on DSCCs. Furthermore, DSCCs had a stronger direct impact on SCP compared to the indirect impact. 3 This research contributes to the literature by providing a framework for measuring DSCCs. It provides a better understanding of capability levels by empirically showing that capabilities operate at different levels and capabilities at each higher level modify the next level capabilities. It helps develop an understanding about DC-performance relationship in a better way. The study also showed that environmental dynamism does not play a significant role in the relationship between higher-order and lower-order dynamic capabilities. Finally, for executives and managers who are concerned about better managing their supply chains, this study provides insights for how firms can develop competitive advantage through DSCCs.