Impact of business environmental uncertainty and supply network characteristics on performance of business organisations

© 2019 Buddhika Chathurangani Mannaperuma Mannaperuma MudiyanselageIn uncertain business environments, businesses can improve their performance by being deeply embedded in their supply networks and also by leveraging knowledge of their supply chain partners. However, existing literature does not provide clear guidance on how this can be achieved. Indeed, the literature provides opposing views on the impact of supply network embeddedness and knowledge leveraging practices on business’ performance. Also, it is ambiguous as to how business uncertainty affects the above relationship. This thesis addresses these knowledge gaps through three separate but related studies by invoking the literature on supply chain management, environmental uncertainty, business performance and context specific theories. These studies investigated the impact of either internal or external dimensions of environmental uncertainty and the business’ network embeddedness/knowledge leveraging practices on performance. Each study proposed a conceptual model with eight hypotheses. The first cross-sectional, survey-based study explored the impact of supplier and customer knowledge leveraging practices on manufacturing plants’ financial performance by invoking the knowledge-based view of the firm. The second cross-sectional study explored the impact of suppliers’ structural embeddedness in a buyer network on suppliers’ relational performance with the focal buyer by applying social network theories. The third longitudinal study examined the impact of suppliers’ contractual embeddedness on the suppliers’ sales probability in the supply network by applying the complex adaptive system and social network theories. Each of these studies involved empirical data from different sources, including the fifth edition of the Global Manufacturing Research Group’s survey (first study), Toyota corporate-level buyer network data obtained from Bloomberg and Marketline databases (second study), and Open Food Network and IBISworld database (third study). Appropriate data analytical methods using suitable software packages were employed to test the hypotheses presented in each study. Overall, the three studies revealed that stronger network embeddedness and knowledge leveraging practices generally improve business performance. Also, the environmental uncertainty dimensions of dynamism, munificence and complexity moderate the above relationship. Supply and contractual networks exhibit different network patterns when moving across the tiers of the networks, while geographically remote network clusters embedded in these networks exhibit local optimisation behaviour and evolve into different network patterns over time to adapt to environmental uncertainty. The findings of these studies are consistent, although they were carried out in different theoretical, methodological, substantive, and temporal contexts. In conclusion, this thesis refines and extends theories on knowledge leveraging, social network and complex adaptive systems. The thesis also adds nuanced empirical findings to the literature on supply networks, environmental uncertainty and performance