An evaluation of supply chain integration across multi-tier supply chains of manufacturing-based small and medium enterprises in Malawi

This thesis investigates the extent of supply chain integration (SCI) and its inhibitors across multi-tier supply chains (SCs) of manufacturing-based small and medium-sized enterprises (SMEs) in Malawi. SCI has increasingly been considered by scholars and practitioners as a core philosophy of supply chain management (SCM). SCI is an important competitiveness strategy that improves different aspects of firm performance. However, there have been several concerns regarding the low levels of adoption of SCI in practice among firms. Further, contemporary research into SCM has predominantly reflected a focal firm viewpoint, especially the perspective of large multinational manufacturers in developed economies. The perspectives of suppliers and retailers as well as of developing country and SME contexts are not adequately reflected in the literature. A review of the literature shows that capturing a wide range of perspectives and contexts across SC positions could improve SCI scholarship and practice. To provide a wide range of perspectives regarding the extent of SCI and its inhibitors within a developing country context, two qualitative studies involving three SCs of manufacturing-based SMEs in Malawi were undertaken. Each SC comprised a focal manufacturer, a key supplier and a major retailer. Utilising the resource-based view, resource dependence and network theoretical frameworks, the first study evaluated the extent of SCI. The second study utilised transaction cost economics and relational view theories to examine the inhibitors and enablers of SCI. Data for both studies were jointly collected through semi-structured face-to-face interviews with managers across the participating SCs. The analysis revealed that interpersonal relationships influenced the level of trust between SC partners and consequently inhibit SCI. Some employees were willing to sabotage the interests of their firms to benefit their personal connections. Further, firms with strategic intra-firm resources were less committed to external integration, deploying their resources as a source of power to dominate and exploit their dependent partners. SCI across multiple tiers was impaired by over-dependence on SC partners, which encouraged exploitation, but enhanced by interdependence between firms, which fostered the pursuit of mutual benefits. The research further identified interpersonal relationships, supplier cost transparency and joint SCM investments as key enablers of SCI. With respect to the inhibitors of SCI, the research found that a lack of external integration affected internal integration by acting as a source of disruption to intra-firm processes and relationships. Further, the research found higher levels of relationship intensity in upstream manufacturer–supplier dyads than in downstream manufacturer–retailer dyads, suggesting it was more difficult to achieve retailer integration than supplier integration. This constrained the ability to achieve multi-tier supplier–manufacturer–retailer integration. The research also revealed that resource and infrastructural deficiencies, intra-firm cross-functional disintegration, a culture of fear and intimidation within and between firms, rampant corruption in sourcing transactions and relational factors such as lack of trust hurt SCI. The research provides evidence of differences in perspectives about SCI across SC positions and makes several contributions. First, it provides new evidence that a lack of external integration, especially regarding information sharing and communication processes, inhibits internal integration. Thus, a basic level of external integration is necessary to avoid disruptions to and maximise the benefits of internal integration. Second, the research extends network theory by showing that the external influences on dyadic relationships reach beyond the interactions of heterogeneous firms in the network to encompass interpersonal interactions across the network, where individuals may potentially prioritise personal connections and sabotage the interests of their firms. Third, the research shows the importance of contextual factors and that managers in developing countries must overcome a unique set of factors to integrate the SCs.