PhD Artur Swierczek

University of Labour Safety Management, Katowice (Poland)

THE RELATIONAL SOURCES OF THE COMPETITIVE ADVANTAGE OF SUPPLY CHAINS

 

There is a growing need to create supply chains  which would react in a more efficient way to the fast-changing market environment, and at the same time are more coherent and reliable in this process (Christopher, 2010). For the purpose of this paper, the supply chain is defined as the network of organizations involved, through upstream and downstream relationships, in value-adding processes to manufacture and deliver products and services requested by customers. The major source of the competitive advantage of supply chains comes from the relations established between the companies. However, the issue of competitive advantage originating from the supply chain relationships has not yet been fully addressed in the field of supply chain management. So far, in order to investigate the sources of the competitive advantage, Resource Based View (RBV) was commonly used (McHugh et al., 2003). In line with this approach, the formation of relationships is the way to building own key competences, which constitute the source of competitive advantage (Das and Teng, 2000). The participation of companies in the relationships in supply chains is often one-sided and is characterized by an antagonistic zero-sum game (win-lose situation). The winner in this game is usually the supply chain leader (focal firm) who is able to protect its own resources (Jarillo and Ricard, 1987). In other words, the relationships are treated instrumentally and formed to provide mainly a strong and secure competitive position for a single firm – the  supply chain leader. Therefore, there was a necessity to articulate the reciprocal benefits drawn from the supply chain relationships. Consequently, the Authors noticed that  the main source of competitive advantage of supply chains is the formation of true partner relationships enabling companies to cooperate (O’Leary-Kelly and Flores, 2002). The first full conceptualization of this research stream is embodied in the approach of relational competitive advantage. In this concept, the subject of the strategic analysis is relation treated from a multilateral perspective. In other words, relational rent as a result of applying the relational approach is not obtained by defeating another company (Zacharia et al., 2009; Bowersox et al., 2003). On the contrary, the relational approach refers to a non-zero sum relationship (Jarillo 1988), characteristic for the game theory, where multiple participant of a supply chain can be a winner (win-win) (Dyer and Nobeoka, 2000; Joshi and Campbell, 2003). However, though relational competitive advantage highlights the significance of reciprocal relationships and symmetrical exchange of the resources between two firms, it is still anchored in bilateral arrangements established between dyads. Therefore, despite its novelty, in order to make full use of relational approach in supply chains, there is a need to look beyond the dyad (Kannan and Tan, 2010; O’Leary-Kelly and Flores, 2002). Wasserman and Faust (1994) argue that a dyadic perspective cannot fully explain relational behaviors of two firms in the network. In other words, the companies in supply chains establish relationships not only with each other, but also with the same third parties. Consequently, many companies are linked indirectly by third parties.

This triadic research perspective becomes imperative to further comprehend network dynamics in supply chains (Choi and Wu, 2009) and is instrumental when investigating their competitive advantage. Clearly, the network competitive advantage may be achieved and sustained through superior cross leverage of interorganisational resources (Levy, 1995). This means the necessity of rejecting the short-sighted way of perceiving competitive advantage as a temporary benefit, with the supply chain leader being its only beneficiary, frequently at the expense of other partners. Instead, the network competitive advantage calls for covering the aspirations and goals of all companies involved in achieving and sustaining the competitive advantage. The advantages originating from network relationships may include mitigating uncertainty, decreasing transaction cost, facilitating social learning, providing more adaptive response to the changes of environment etc. (Tallman and Chacar, 2011). Thus, we assume that the intensity of leveraging external resources among companies may lead to perceived inequity in a short term, but in the long run it may have a positive effect on the strength of network competitive advantage of supply chains. Therefore, nowadays establishing the network relationships as the source of competitive advantage appears to be the most appropriate way to investigate the capability of a supply chain to sustain and develop its market position from the strategically holistic perspective.   

 

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