External supply chain flexibility and product innovation performance: A study of small- and medium-sized UK-based manufacturers

Ko, Wai Wai Joyce; Liu, Gordon; Ngugi, Isaac K. and Chapleo, Chris (2018). External supply chain flexibility and product innovation performance: A study of small- and medium-sized UK-based manufacturers. European Journal of Marketing, 52(9/10) pp. 1981–2004.

DOI: https://doi.org/10.1108/EJM-07-2017-0466

Abstract

Purpose – This paper aims to examine the effect of external supply chain (SC) flexibility on the product innovation performance of small- and medium-sized enterprises (SMEs) and the contingent role of informal control mechanisms in moderating such an effect.
Design/methodology/approach – This study conducts a cross-sectional questionnaire survey of 236 UK-based SME manufacturers.
Findings – Inbound supplier flexibility (ISF) has a stronger positive effect on SMEs’ product innovation performance than outbound logistics flexibility (OLF), and that the strength and direction of both effects depend on informal control mechanisms. Lead supplier influence negatively moderates the relationship between ISF and product innovation performance but positively moderates the relationship between OLF and product innovation performance. Normative integration positively moderates the relationship between ISF and product innovation performance.
Research limitations/implications – This study enriches SC flexibility studies by focusing on understanding the differential effects of ISF and OLF on product innovation performance, as well as the role that contingency factors play in these relationships in the SME context.
Practical implications – To promote product innovation performance, SME managers should focus on building good relationships with their suppliers rather than their logistics service providers. SME managers should be particularly aware of the different types of informal control mechanisms that govern their SC relationships and adjust their managerial approaches accordingly.
Originality/value – This study distinguishes between ISF and OLF and examines their impacts on SMEs’ product innovation performance. This study investigates the differential effects of lead supplier influence and normative integration on the relationship between external SC flexibility and SMEs’ product innovation performance.

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