Guanxi and operational performance: the mediating role of supply chain integration
| DOI | https://doi.org/10.1108/IMDS-06-2016-0198 |
| Pages | 1650-1668 |
| Date | 11 September 2017 |
| Published date | 11 September 2017 |
| Author | Mengying Feng,Wantao Yu,Roberto Chavez,John Mangan,Xumei Zhang |
| Subject Matter | Information & knowledge management,Information systems,Data management systems,Knowledge management,Knowledge sharing,Management science & operations,Supply chain management,Supply chain information systems,Logistics,Quality management/systems |
Guanxi and operational
performance: the mediating role
of supply chain integration
Mengying Feng
School of Management, Chongqing Jiaotong University, Chongqing, China
Wantao Yu
Kent Business School, University of Kent, Chatham, UK and
Business School of Henan University, Kaifeng, China
Roberto Chavez
Facultad de Economía y Empresa, Universidad Diego Portales, Santiago, Chile
John Mangan
School of Marine Sciences and Technology, Newcastle University,
Newcastle upon Tyne, UK, and
Xumei Zhang
School of Economics and Business, Chongqing University, Chongqing, China
Abstract
Purpose –The purpose of this paper is to extend prior supply chain research by empirically exploring the
relationship among guanxi, supply chain integration (SCI), and operational performance. More specifically,
this study investigates the mediating role of SCI.
Design/methodology/approach –Ordinary least square regression is used to analyze survey data
collected from 126 automobile manufacturers in China.
Findings –The results reveal a significant positive relationship between guanxi and SCI, and that SCI is
significantly and positively related to operational performance. The authors’findings further suggest that
guanxi indirectly affects operational performance through SCI.
Practical implications –The empirical findings imply that it is vital for managers to recognize the
important mediating role of dynamic SCI capabilities.
Originality/value –As a fundamental Chinese cultural norm, guanxi can be critical in a supply chain
context. Although previous research has identified the importance of guanxi and SCI in improving firm
performance, far less attention was given to the study of the mediating effect of SCI on the guanxi-
performance relationship. This study thus fulfills the research gap by providing an initial empirical
examination of the mediating role of SCI in China’s automotive industry.
Keywords China, Guanxi, Operational performance, Supply chain integration
Paper type Research paper
1. Introduction
In recent years, therehas been an increasing interest in examining the importance of supply
chain integration (SCI) capabilities in improving firm performance of manufacturers in China
(e.g. Flynn et al., 2010; Huo, 2012; Yu, 2015; Yu et al., 2013). However, previous research has
yielded conflicting findings on the relationship between SCI and firm performance, which
indicates an important research gap that demands further investigation (Flynn et al., 2010).
The SCI literature (e.g. Zhao et al., 2008, 2011) suggests that SCI patterns, in the context of
Chinese manufacturing industry,are greatly dependent on antecedent aspects suchas guanxi,
Industrial Management & Data
Systems
Vol. 117 No. 8, 2017
pp. 1650-1668
© Emerald PublishingLimited
0263-5577
DOI 10.1108/IMDS-06-2016-0198
Received 4 June 2016
Revised 17 December 2016
Accepted 29 December 2016
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0263-5577.htm
This study was supported by National Planning Office of Philosophy and Social Science
(Grant No. 16XGL003). The authors would like to thank Dr Tao Huang for his help in performing 2SLS
regression analysis.
1650
IMDS
117,8
relationship commitment, and trust. Chinese national culture is very specific and failing to
understand its nuances may lead to supply chain problems (Lyles et al., 2008). As one
of the key elements to successful business relationships in China (Fan, 2002; Luo et al., 2012;
Su et al., 2007), guanxi can be defined as interpersonal and inter-organizational relationships
and the granting of preferential treatment to business partners in exchange for favors and
obligations( Fan,2002; Lee et al., 2001; Park and Luo, 2001; Zhaoet al., 2006). However, studies
that demonstrate a relationship between guanxiand SCI are lacking. Accordingly, our study
seeks to understand the importance of guanxi in a supply chain context.
In a supply chain context, respecting and using guanxi appropriately can be critical
(Lee and Humphreys, 2007;Lyles et al., 2008). A ccording to the resource-based view (RBV ) of
the firm, it has been widely acknowledged that guanxi constitutes a key strategic resource
influencing firm performance (Chen et al., 2011; Peng and Luo, 2000). The RBV suggests that
sustainable competitive advantage stems from firm resources and capabilities (Corbett and
Claridge, 2002). While studies on the role of guanxi in Chinese inter-organizational business
practiceshave emerged (e.g. Cai et al., 2010; Chenget al., 2012; L ee and Humphreys, 2007), none
of these studies haveempirically investigated the effectof guanxi on SCI from a supply chain
perspective. Further, previous research has argued that guanxi, as a fundamental Chinese
cultural norm,appears to offer an interesting vehiclefor exploring the antecedent factorsthat
influence the development of SCI to accommodate cultural considerations in the Chinese
context (Cheng et al., 2012; Lee and Humphreys, 2007).Despite this argument, researchon the
effect of guanxi in supplychain relationships in China is still in itsinfancy (Cheng et al., 2012;
Zhao et al., 2006), and previous studies that have examined the importance of guanxi in
developingSCI are fairly rare (Cheng et al., 2012; Leeand Humphreys, 2007). Thus,the present
study has the aim of fulfilling the research gap by empirically investigating the effect of
guanxi on SCI and operational performance.
Although empirical studies (e.g. Lee et al., 2001; Luo et al., 2012; Luo and Chen, 1997;
Park and Luo, 2001)have identified the importanceof guanxi in improving firm performance,
the relationship between guanxiand firm performance has notbeen fully explored (Fan, 2002;
Luo et al., 2012; Nie et al., 2011), and the focus has primarily been on firm performance as a
direct outcome of guanxi. Yet, there are a number of variables (such as building strategic
collaboration with trading partners) that may lead to performance differentials (Zhao et al.,
2008, 2011). Further, some researchers haveargued that with China’s economic developme nt
and modernization, and great changes in China’s social structure since the early 1980s, the
importance of guanxi has gradually diminished (Cai et al., 2010; Fan, 2002; Nie et al., 2011).
China’s manufacturing industry has become increasingly competitive, and to address the
rapidly changing business environments, manufacturers in China became increasingly
focused on developing dynamic SCI capabilities such as cross-functional integration and
strategic cooperation with customers and suppliers (Huo, 2012; Yu, 2015; Yuet al., 2013; Zhao
et al., 2011). Accordingly, we draw upon the dynamic capability view (DCV) (Eisenhardt and
Martin, 2000;Teece et al., 1997) to examineSCI and its meditating role. TheDCV suggests that
firms need todevelop new organizationalcapabilities to identify businessopportunities and to
respond quickly in order to survive in dynamic and competitive environments (Eisenhardt
and Martin, 2000). Previous research (e.g. Luo et al., 2012; Standifird and Marshall, 2000) has
argued that guanxi-based business practices provide certain transaction cost advantages in
China, but there is no convincing evidence to support how and to what extent (such as
mediation effect) guanxi is beneficial to firm performance (Fan, 2002), especially in a supply
chain context. According to the DCV, it canbe argued that guanxi is a necessary,but largely
insufficient resource for enabling firms to achieve superior performance. Thus,
complementing the RBV, our study uses the DCV to explore whether the effect of guanxi
on operational performance is mediated by the development of SCI, which will provide an
initial empirical examination of the mediating effect of dynamic SCI capabilities.
1651
The mediating
role of SCI
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