The purpose of this paper is to explain the interrelationships in internal and external supply chain integration (SCI) across multiple tiers of manufacturing-based small and medium-sized enterprises (SMEs) in a developing country, Malawi.
Utilizing the resource-based view, resource-dependence and network theory perspectives, and drawing on a multiple embedded case-study approach, the research investigated the internal and external linkages within three-tier supplier, manufacturer and retailer SCs and described varying perspectives of SCI across supply chain positions.
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. The SCI across multiple tiers was impaired by dependence but enhanced by interdependence strategies of firms. Although lack of trust, promotion of non-overlapping self-interests, corruption in sourcing processes and resource constraints negatively affected SCI, firm commitment to external integration promoted greater commitment among firms, thus having a positive effect on SCI.
Further analysis of SCI of SME triads and a more systematic longitudinal analysis across other market segments should be explored to generalize the conclusions of this study.
The external influences on dyadic relationships go beyond the interactions of heterogeneous firms in the network to encompass interpersonal interactions across the network, where individuals may potentially prioritize personal connections and sabotage the interests of their firms.
The research explored the internal and external dimensions of SCI in multi-tier SCs of SMEs, and provided for the first time new evidence to show that firm commitment to engaging with partners complements the mechanisms of SCI within a developing country context. It highlights the need to develop trust, eliminate corruption, promote greater commitment of SC partners and encourage greater investment in firms’ resource capabilities to enhance SCI among SMEs.
