The Influence of Initiators on Supply Chain Value Creation

J Jayaram
V. R. Kannan
K. C. Tan


Value creation in the supply chain has attracted considerable attention in the literature. It has typically been characterized as being the result of either external or organization spanning, or internal efforts to improve supply chain performance. Few studies have examined the simultaneous effects of internally and externally focused efforts to improve supply chain performance. Moreover, there is no discussion in the literature of the precursors or initial conditions that lead to successful supply chains. Drawing from different theoretical perspectives, two key motivators or initiators of value creation in supply chains are identified: structural mechanisms and relationship building. It is proposed that these initiators have a positive influence on value creation efforts, operationalized by the improvement of supply processes and responsiveness to customer needs (external focus), and internal production processes (internal focus). A structural equation model linking initiators and value creation mechanisms to performance is proposed and tested using data from a large sample of firms. Results suggest that firms that pay attention to initiators may derive greater benefit from their value creation efforts and thus yield improved performance.