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Direct and mediation effect of supply chain complexity drivers on supply chain performance: an empirical evidence of organizational complexity theory

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Chand, Pushpendu, Kumar, Anil, Thakkar, Jitesh and Ghosh, Kunal (2022) Direct and mediation effect of supply chain complexity drivers on supply chain performance: an empirical evidence of organizational complexity theory. International Journal of Operations and Production Management, 42 (6). pp. 797-825. ISSN 0144-3577

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Abstract

Purpose:
In today's globalized business environment, growing supply chain complexity (SCC) is arguably a major threat to the firm's business continuity with an adverse impact on the firm's competitive advantage and business performance. Researchers, though, investigated the impact of SCC drivers on a firm's operational performance, but the key question "Which supply chain complexity drivers severely impact the supply chain performance (SCP)?" remains largely unanswered from empirical research. The present study decomposes the SCC into four major constituting sub-categories (upstream, operational, downstream, and external) to explore the causal impact of SCC drivers on SCP in direct and mediated manner.

Design/methodology/approach:
The indicators applied for measuring constructs in the 'Measurement model' are obtained from existing literature to increase the validity and reliability of the model. First, a pilot survey involving 25 SC managers from various manufacturing firms was conducted for indicator refinement and content validation. Second, the large-scale response data was collected through extensive surveys. This research explores the causality by testing the hypothesis applying Structural Equation Modelling (SEM) based on the responses received from 246 firms.

Findings:
The study investigates the impact of SCC drivers on SCP through direct and mediation effect. The results indicate that upstream and operational SCC drivers play a mediating role in managing SCP. The findings reveal that upstream and operational SCC drivers adversely impact the SCP. Further, the impact of downstream complexity on SCP is moderated through operational complexity drivers. The result explains the theoretical relation among SCC drivers supported by empirical validity.

Practical implication:
The outcome offers practical relevance to SC managers in SCC and SCP management. Knowing the effect of SCC drivers among themselves and on SCP will facilitate the SC managers in devising the right strategies. Our study provides a framework for prioritizing the resource in addressing the SCC issues among many.

Originality/value:
The study addresses the apparent gap in the literature by modeling the impact of SCC drivers on SCP, which remained largely unexplored. First, it contributes to developing complex relationships among SCC drivers. Second, the direct and mediated causal effect of the SCC drivers individually and combinedly on SCP are explicated.

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