The nexus between organisational culture and differentiation-based competitive advantage in garment firms in Vietnam: does supply chain collaboration matter? Open Access

Although supply chain collaboration has received considerable research attention in the last few decades, relatively few companies have achieved genuine collaboration with their supply chain partners to obtain the desired performance due to various influencing factors (Maskey et al., 2020). Among the explored antecedents of this practice, organisational culture has emerged as a controversial factor, with notable inconsistency persisting in previous studies regarding the relationship between organisational culture and supply chain collaboration (Porter, 2019; Taha et al., 2022). For example, based on the competing value framework (CVF) Quinn and Rohrbaugh (1983), prior studies informed a range of different findings. While Cao et al. (2015) and Porter (2019) show the positive association of development and group culture types with three aspects of supply chain collaboration, Braunscheidel et al. (2010) and Taha et al. (2022) show no relationships of these variables. As such, extant research pays less attention to continue exploring the impact of organisational culture on supply chain collaboration, and further to competitive advantage.

Supply chain collaboration in the garment industry is essential due to the complex and intricate structure of its supply chain, as numerous intermediaries exist between fibre producers and consumers, requiring extensive collaboration for smooth operations (Köksal et al., 2018). In this connection, several studies addressed the issues of supply chain collaboration in the garment industry. For example, while Bari and Park-Poaps (2020) studied the impact of supply chain collaboration on competitive advantage in Bangladesh, Phan et al. (2020) investigated how supply chain integration impacts supply chain performance in Vietnam. Recently, Tran et al. (2024a) qualitatively explored the impact of supply chain collaboration on the competitive advantage of the garment industry in Vietnam. In addition, while Baihaqi and Sohal (2013) stated that external information sharing fosters supply chain partners' collaboration and operational performance, and internal knowledge sharing has less impact, several knowledge management studies highlighted that inter-department information and knowledge sharing create an internal knowledge base, which facilitates external knowledge sharing (Yadav et al., 2020; Pham et al., 2025). It is particularly important in the case of many developing countries like Vietnam, when technologies facilitating internal knowledge and communication processes are not sufficiently harnessed (Pham et al., 2025). However, prior studies did not examine the full spectrum of collaboration in the supply chain by including internal collaboration as a dimension or examining such antecedents as organisational culture as part of supply chain collaboration.

The extant literature has investigated the impact of organisational culture on firm performance or competitive advantage (Azeem et al., 2021; Zeb et al., 2021). In the modern business landscape, competition occurs not between individual organisations but across entire supply chains (Teng et al., 2022), highlighting the role of supply chain collaboration (Tran et al., 2025). Therefore, it is essential to examine if supply chain collaboration can transform the impact of organisational culture on competitive advantage.

Previous studies conceptualised supply chain collaboration as a mediating factor between antecedents and outcomes. For example, Alfalla-Luque et al. (2015) illustrated that supply chain integration serves as a mediator in the relationship between employee commitment and the operational performance of manufacturing plants on an international scale. In the same vein, Feng et al. (2017) identified a fully mediating effect of supply chain integration in linking interpersonal relationships to operational performance, based on survey data collected from automotive manufacturers in China. Furthermore, Alzoubi et al. (2020) observed the mediating influence of supply chain collaboration in the association between sustainable supply chain strategies and competitive priorities in pharmaceutical companies in Jordan. Meanwhile, Koç et al. (2022) found that the link between environmental uncertainties and competitive advantage is mediated by supply chain integration in the manufacturing sector in Turkey. More recently, Le et al. (2024) also highlighted the supply chain integration mediating function in the relationship between digital supply chain and sustainable supply chain performance in emerging economies in Latin America. To the best of the authors' knowledge, there has, so far, been no research that examines the mediating role of supply chain collaboration, which includes both internal and external dimensions, on the relationship between group and development culture types and differentiation competitive advantage. To this end, although Osei et al. (2023) analysed the mediating role of customer and supplier integration (i.e. only the external dimension of supply chain collaboration) on the relationship between the four types of organisational culture and sustainable supply chain performance in the food manufacturing industries in the United Kingdom and Greece, the current study is different from Osei et al. (2023) that by examining the mediating role of supply chain collaboration from both internal and external aspects and analysing their impact on firm's differentiation competitive advantage in the garment industry in Vietnam.

Accordingly, the study aims to address the following research question:

The remainder of the article is structured as follows. Section 2 introduces the research context. Section 3 presents a review of relevant literature. Section 4 outlines the conceptual framework, and research hypotheses development. Section 5 then details the research methodology. Followingly, Section 6 presents study's analysis and findings, and the discussion is covered in Section 7. Finally, Section 8 concludes the article with a summary of findings, implications, limitations and suggestions for future research.

Vietnam is a major player in the global textile industry, ranked the third largest exporter of clothing worldwide (Royal Europe Textile, 2024). The garment industry contributes approximately 16% of Vietnam's GDP (TradeImeX, 2024). Vietnam's textile export accounted for USD40.3 billion in 2023 and, continues to increase 6.3% to reach USD20.2 billion in the first seven months of 2024 (TradeImeX, 2024). This industry employs a workforce exceeding three million, making it a vital source of employment (VITAS, 2022). However, most Vietnamese companies are primarily focused on the manufacturing stage, which offers low value-added and incurs high unit costs in the apparel commodity chain (Lopez-Acevedo and Robertson, 2016).

The garment industry in Vietnam relies heavily on manual processes. Despite productivity improvements, it still lags behind other nations in the region (Harrison et al., 2014). Additionally, more than 70% of the raw materials used in Vietnam's garment industry are sourced from China, Taiwan and Korea (VITAS, 2022). The main export markets for Vietnamese garment companies are the United States (49%), the EU (10%) and Japan (9%) (VITAS, 2022). The issues of inadequate or insufficient connections among supply chain partners are frequently highlighted in the public media (Trang, 2020). Therefore, enhancing collaboration with suppliers and customers is proposed as a strategy for the success of Vietnam's garment industry (Pham et al., 2020; VITAS, 2022).

The majority of Vietnamese garment companies (65%) participate in “Cut-Make-Trim” (CMT) contracts, followed by OEM/FOB (Original equipment manufacturer/Free on board) at 25%. Meanwhile, Original Design Manufacturing and Original Brand Manufacturing hold minimal shares (Duy Quang, 2023; Tran et al., 2024b). The CMT model provides the least added value, as manufacturers are responsible only for the production stages and rely on clients for all key materials. In comparison, FOB manufacturers source their own materials and oversee the entire production and packaging process (Frederick and Daly, 2019). Therefore, the contribution of Vietnamese garment industry to the whole value chain is relatively low. This is due to limitations in sourcing raw materials, weak management capabilities and capital constraints (Harrison et al., 2014).

Garment production is similar to other commodity industries that are prevalent in developing countries, as these countries benefit from low labour costs and the tangible value of the products, resulting in low profit margins (Chowdhury et al., 2018; Nguyen et al., 2023). Hence, research to enhance the competitive edge through differentiation for the garment industry in developing countries such as Vietnam would be significant.

Organisational culture encompasses norms, beliefs, workplace interaction and values (i.e. innovation, adaptability, collaboration and ethical practices), which significantly impact business operations and performance (Ouellette et al., 2020; Belay et al., 2023; Tadesse Bogale and Debela, 2024). Among several cultural-oriented frameworks, e.g. Hofstede's model, organisational culture profile (OCP) model and competing values framework (CVF), the latter highly aligns with this study when it is split into external aspects (external businesses and environment) and internal aspects (internal organizational structure) (Cameron et al., 2022; Tadesse Bogale and Debela, 2024). With the success of utilizing this CVF framework in several studies such as (Cao et al., 2015; Porter, 2019; Hong et al., 2020; Rizzi et al., 2022; Taha et al., 2022), this study follows this path and uses CVF as a research lens.

There are four quadrants in CVF, which include group (clan or collaborate) culture, development (create or adhocracy) culture, hierarchy (control) culture and rational (compete or market) culture typologies (Cameron et al., 2022). According to CVF, group culture focuses on commitment and communication in a group/team. Development culture is driven by innovative output, transformation, and constant change toward producing effectiveness. Hierarchy culture aims to enhance the control of processes, structure and control for efficiency and consistency. Rational culture focuses on external market share, goal achievement and profitability.

Prior studies have found that development and group culture have an impact on both external and internal collaboration (Cao et al., 2015), while hierarchy and rational culture typologies have a partial or insignificant or negative impact on internal and customer collaboration (Cao et al., 2015) and financial performance (Fekete and Bocskei, 2011). Following the contextual research in Asian collectivist and Western individualistic cultures and vibrant innovative growth in developing countries, prior studies highlighted that group and development cultures support supply chain integration (Tran et al., 2024a). Hence, development and group culture typologies are utilised to explore the impact on collaborations in the supply chain context.

To some extent, inherited from other Asian cultures diffused from countries in the region, Vietnam is featured for having similar cultural characteristics of the Confucian philosophy (Nguyen et al., 2010, 2024). Organisations and society highlight the power distance dimension, which encompasses the existence of authority, power differences, status-based privilege and social inequality. Power, hence, is viewed as a means of maintaining social order and stability rather than being equally divided (GLOBE, 2020).

Collaboration is a common term that is used interchangeably for others such as “partnership”, “coordination”, “cooperation”, and “integration” (Chang et al., 2016). Nevertheless, it is observed that “collaboration extends beyond integration, involving long-term commitments to technology sharing and tightly coordinated planning and control systems” (Harrison et al., 2014). The term “collaboration” is commonly used as it enables different organisations to collaborate among multiple functions/departments, and chains in the supply chain (Singh et al., 2018). It is particularly critical when businesses cannot compete individually but need intra-firm and inter-firm integration (Singh et al., 2018).

Although supply chain collaboration has different forms, activities and dimensions are two common classification-oriented approaches (Tran et al., 2024a). Collaborative activities have several levels which range from (1) coordination for information sharing towards planning and forecasting, (2) collaborative planning regarding risks and rewards that can be equally distributed for all partners, (3) cooperation for goal congruence and decision synchronisation and lastly, (4) long-term supply chain enquires strategic alliance for a common goal, incentive alignment and even joint venture for joint ownership (Ma et al., 2019; Huang et al., 2020). In general, from a collaborative dimension perspective, these activities are classified under internal and external collaboration (i.e. cross-department versus buyer-supply relationships) (Porter, 2019; Shukor et al., 2021; Sudusinghe and Seuring, 2022; Zhou et al., 2023). Collaborative dimension perspective is more aligned with the cultural impact discussed in this study.

The internal aspect of supply chain collaboration refers to cross-functional department relationships within the organisation (Slåtten et al., 2017). This process includes teamwork across functional units to address conflicts, and exchange resources or information to better organisational performance, knowledge generalisation and innovation (Salas et al., 2015). Effective internal collaboration hinges on the sharing of operational data between departments (Yunus and Tadisina, 2016; Shukor et al., 2021), collaborative planning (Ganbold and Matsui, 2017), a clear understanding of shared responsibilities and regular communication across internal teams (Yunus and Tadisina, 2016; Hendijani and Norouzi, 2023).

Meanwhile, external collaboration encompasses the relationships of the firm with its suppliers and customers. In such relationships, the firm shares operational, financial and strategic knowledge with suppliers and customers (Tseng, 2014; Kim and Wemmerlöv, 2015; Zhong et al., 2023). Specifically, operations information sharing is one indicator for supplier and customer collaboration, where manufacturing firms can share operational information for their business parties about market information, production plan and demand forecast, inventory level, delivery and logistics status (Ganbold and Matsui, 2017). Joint planning with suppliers and customers could support decision-making in quality improvement, product design, and production process (Chaudhuri et al., 2018; Shou et al., 2018). Supplier collaboration can also be developed in areas such as cost control, risk/revenue-sharing and long-term agreements with key suppliers (Shou et al., 2017; Chaudhuri et al., 2018).

Many studies on supply chain collaboration in the literature explore the external collaboration activities between participating firms, such as supplier and customer collaborations (Shukor et al., 2021; Sudusinghe and Seuring, 2022; Taha et al., 2022). However, internal collaboration among the functional departments within a firm received less research attention compared to that of external collaboration, despite its significant impact on supply chain integration and performance (Ganbold et al., 2021; Tarigan et al., 2021). Given the importance of internal relationships within a firm, this research investigates supply chain collaboration from all the perspectives of internal, supplier and customer collaborations.

Competitive advantage refers to the organisation's ability to establish a defensible position over its competitors in the industry (Porter, 1985; Ford, 2020). Porter's framework of generic strategies is further developed from its early version in 1980, which includes three aspects of Cost Leadership, Differentiation and Focus. A firm pursuing a cost leadership strategy aims to foster the market share by creating a low-cost position and earn above-average profits over its peers. A differentiation strategy achieves a competitive advantage by making products or services with desirable quality for customers, allowing the company to introduce a price premium (Liu and Atuahene-Gima, 2018). Focus strategy achieves advantages from rivalry restraint through horizontal differentiation and niche market, where businesses can compete with competitors in a similar way, relating to cost leadership strategy or the focused differentiation strategy (Hitt et al., 2019; Lee et al., 2021).

Previous studies, based on a different classification approach, have identified six key dimensions of competitive advantage: price/cost, quality, delivery speed, product innovation, time to market and process flexibility (Liao et al., 2017; Teng et al., 2022). These dimensions are more likely to represent such aspects as cost leadership or differentiation of competitive advantage (Porter, 1985; Demeter et al., 2016).

With the above-mentioned competitive advantage approaches, cost strategy and leadership tend to lock businesses in a vicious cycle by cutting prices and reducing the existing high fixed costs, which is very temporary (Banker et al., 2014). On the opposite, the differentiation strategy focuses on R&D development, reputation and special supplier and customer networks, which is more durable and long-lasting than the temporary gain from cost leadership (Banker et al., 2014). Also, the differentiation strategy is more commonly applied. When businesses react to market signals such as threats or opportunities, they change their product strategy to meet market needs (Wei et al., 2014). In this connection, the garment industry has low labour and tangible capital, and profit margins, competing based on cost leadership is deemed not a suitable approach (Chowdhury et al., 2018; Nguyen et al., 2023). Therefore, this study measures competitive advantage with differentiation due to its significant value for the garment industry.

Organisational culture and supply chain collaboration are key resources to better supply chain performance towards competitiveness, which has been viewed through various theoretical lenses. Due to the specification of culture and supply chain structures in different regions, regional and national contexts are embedded in these studies. Specifically, resource-based view, knowledge-based view and transaction cost theory are commonly used to depict collaborative advantages to foster business performance, reflecting the impact on the supply chain of the United Kingdom (Cousins, 2005), the United States (Cao and Zhang, 2011), Korea (Bae and Grant, 2018) and India (Yadav et al., 2020). Kumar et al. (2018) also applied dynamic capability theory to explore the impact of antecedents such as collaboration of resources and joint planning, and its collaborative culture on supply chain performance. Additionally, knowledge management and business working processes are antecedents to explore knowledge collaboration for better supply chain performance in France (Samuel et al., 2011), Vietnam (Lei et al., 2017), Thailand (Pradabwong et al., 2017) and Pakistan (Zhang et al., 2025). Other conceptual frameworks exploring collaboration-culture-performance in other contexts such as Jordan (Alzoubi et al., 2020), Turkey (Koç et al., 2022), Latin America (Le et al., 2024). Collaborative culture, knowledge sharing and collaborative relationships are extended from the inter-organisational collaboration in these studies.

However, these theories overlook supply chain integration complexity and organisational culture internally (Porter, 2019). Particularly, we seek the unification of knowledge learning and communication from intra-organisational collaboration and aligned corporate culture attained through absorbing external knowledge and information from inter-organisational collaboration (Porter, 2019; Wei et al., 2024). Given the gap in theoretical usage for cultural collaboration for business performance, Tran et al. (2025) proposed using OCT to depict internal business culture, which harmonises and sharpens knowledge exchange as a foundation for external knowledge sharing across the supply chain. Tran et al. (2025) also applied relational view (RV) theory to interpret the inter-relationship between internal and external collaboration in supporting business operations and competitiveness in the supply chain. However, their study does not explicitly examine the role of internal and external collaboration for each individual type of organisational culture, nor its impact on business competitiveness as a form of performance. Building on Tran et al. (2025), when exploring the same business context of Vietnam – an important hub in the global garment supply chain, our study continues to apply the same theoretical lenses to further address the gap in this field.

Organisational culture encompasses values, belief and behavioural standards of employees as they establish the way in which groups and individuals work together for business tasks (Fareed et al., 2016). By getting familiar with the workplace, individuals' behaviours form their habits that embed the day-to-day teamwork environment, making the workplace enjoyable, thereby shaping their unique organisational culture (Goffee and Jones, 1996; Roscoe et al., 2019). With the open culture and friendly working environment, employees are happy to exchange ideas for innovation (Bani-Melhem et al., 2022). A similar approach is found in connected supply chains, where friendly knowledge exchange among stakeholders enhances supply chain operations. Hence, due to the impact of culture on collaboration, the organisational culture theory is used in this study to explain internal and external collaboration.

This study examines the relationship between supply chain collaboration and competitive advantage. The prior discussion of internal and external collaboration for business performance highlights that the internal business structure and supply chain network establish various forms of connections and relationships. As such, RV is regarded as the relevant theory in this study as it explains the intangible value of collaborative relationships, which foster a special way of doing business and create competitive advantages (Dyer and Singh, 1998). Specifically, with the nature of collaboration, such relationships become unique assets (i.e. routine of knowledge exchange among business parties, complementary resources and governance structure) for the performance of firms in the supply chain. Therefore, this study utilises RV theory to explain internal and external collaborations for complementary capabilities, where their uniqueness makes it difficult for competitors to imitate, resulting in market competitive advantages.

While both OCT and RV have the same focus on internal and external collaboration, OCT highlights the role of culture (for knowledge exchange) as antecedents for collaboration, whereas RV discusses the consequence of collaboration (i.e. intangible value), specifically on competitive advantages. Based on these theories and the literature review, a conceptual framework was developed to assess how group culture and development culture impact internal and external collaboration and differentiation-based competitive advantage, as illustrated in Figure 1. Further explanation about hypotheses is presented in the next section.

Several empirical studies have been conducted to investigate the direct effect of group culture on firm performance and its competitive advantages (Braunscheidel et al., 2010; Acar and Acar, 2014; Azeem et al., 2021; Osei et al., 2023). It is found that group culture is positively related to the delivery performance of manufacturing firms (Braunscheidel et al., 2010). Similarly, Acar and Acar (2014) indicated that group culture significantly impacts perceived performance in the Turkish healthcare sector. Azeem et al. (2021) also demonstrated that group culture enhances the competitive advantage of textile organisation in Punjab, Pakistan. Recently, Osei et al. (2023) confirmed that group culture positively influences the sustainable supply chain performance of the food manufacturing industries in the UK and Greece.

Furthermore, Cao et al. (2015) found that group culture is positively related to internal collaboration, using data collected from manufacturers across ten countries. Similarly, Lee et al. (2016) indicated that group culture is positively associated with knowledge sharing within organisations, as demonstrated in their study on software process improvement implementation using data from Taiwanese firms. In addition, Taha et al. (2022) showed that group culture positively influences internal collaboration in the hotel sector in Egyptian cities.

Internal collaboration has also been found to positively influence various aspects of performance across industries and contexts (Maiga et al., 2015; Zhang et al., 2018; Liu and Jayaraman, 2019; Ruzo-Sanmartín et al., 2023). With harmonised internal collaboration, businesses can perform unique characteristics and generate lasting competitive advantages for the organisation (Zhong et al., 2023). For example, Maiga et al. (2015) demonstrated that internal information systems integration is positively associated with quality performance. Zhang et al. (2018) indicated that internal integration positively influences the performance of manufacturing firms, while Liu and Jayaraman (2019) also found a positive relationship between internal integration and service outsourcing performance. Recently, the positive connection between internal integration and supply chain performance was also evidenced in the research of Ruzo-Sanmartín et al. (2023) in a sample of Egyptian companies across different industries.

From the above, it can be seen that internal collaboration may play a role in the relationship between culture and performance. Interestingly, little empirical research has paid attention to combining the key concepts of group culture and internal collaboration with performance. As mentioned previously, both group culture and internal collaboration have been considered as antecedents and practices of improving performance. Moreover, the influence of organisational factors, such as organisational culture, on internal and external collaborations can be viewed by OCT (Tran et al., 2025). Therefore, it is proposed that group culture is positively associated with competitive edge based on differentiating features through internal collaboration, considering that firms operate in the Confucius national culture, characterised by power distance. Thus, the following hypothesis was proposed:

Meanwhile, the impact of development culture on performance has also been investigated in previous research (Azeem et al., 2021; Zeb et al., 2021; Osei et al., 2023). For example, Azeem et al. (2021) revealed that development culture positively impacts the competitive advantage of textile firms in Punjab, Pakistan. Zeb et al. (2021) showed that development culture has a positive effect on the performance of Pakistan electric power company. Recently, Osei et al. (2023) confirmed that developmental culture has a positive relationship with the sustainable supply chain performance of the food manufacturing industries in the United Kingdom and Greece, which has arguably led to a competitive advantage (Hong et al., 2018).

Additionally, Pinho et al. (2014) found that development culture positively impacts organisational commitment, which reflects internal collaboration. Similarly, Cao et al. (2015) also illustrated that development culture is positively related to internal collaboration, a finding further supported by Taha et al. (2022). Combining with the previous discussion, the following hypothesis is thus put forward:

On another aspect, several studies have investigated the impact of internal collaboration on external collaboration. For instance, Maiga et al. (2015) found a positive association between internal information system integration and external information system integration. Alfalla-Luque et al. (2015), using a sample of 266 mid-to-large-size manufacturing plants in nine countries, illustrated a direct and positive relationship between internal collaboration and both supplier and customer integration. Similarly, Demeter et al. (2016), based on an international survey, found that internal integration in product and process-related knowledge flows positively impacts external integration with supply chain partners. Furthermore, Moyano-Fuentes et al. (2016) demonstrated that internal integration leads to a higher level of external integration in implementing advanced manufacturing technology within Spanish industrial companies. The mediating role of internal collaboration in the relationship between employee commitment and external integration was also reflected in Alfalla-Luque et al. (2015). Reflecting the discussion above, the following hypotheses are proposed:

Several studies have also highlighted the positive impact of external collaboration on firm performance. For example, Kumar (2018) found that information sharing with suppliers and customers on issues like inventory status, order tracking, product development, and sales forecasting has a significant impact on the performance of Indian organizations. Um and Kim (2019) similarly showed that collaboration with suppliers and customers leads to better firm performance. Al-Doori (2019) demonstrated the positive effect of information sharing and joint decision-making with trading partners on the operational performance of the automotive industry in Pakistan. Recently, Zhou et al. (2023) indicated that customer collaboration has a positive effect on third-party logistics firms' service performance in China. Those mentioned external collaborations lead to a significant operational value that is difficult for competitors to replicate and create competitive advantages (Reklitis et al., 2021). Therefore, it is proposed that group and development culture types positively influence competitive edge based on differentiation through external collaboration in garment manufacturing firms in Vietnam. Thus, the following hypotheses are proposed:

The mediating role of supply chain collaboration as a whole has been investigated in the extant literature (Alfalla-Luque et al., 2015; Feng et al., 2017; Alzoubi et al., 2020; Koç et al., 2022). For instance, Alfalla-Luque et al. (2015) found that supply chain integration acts as a mediator, linking employee commitment and operational performance in a study of 266 medium-to-large manufacturing firms across nine countries. Additionally, the effect of guanxi on operational performance is fully mediated by supply chain integration with a sample of 126 automobile manufacturers in China (Feng et al., 2017). Besides, Alzoubi et al. (2020) confirmed the mediating role of supply chain collaboration in the relationship between sustainable supply chain strategies and competitive priorities in pharmaceutical companies in Jordan. Likewise, Koç et al. (2022) found that supply chain integration mediates the connection between environmental uncertainties and competitive advantage in manufacturing firms in Turkey. More specifically, the sequential mediating effect, first collaboration of internal functions and departments, then collaboration with suppliers and customers, was also highlighted by Moyano-Fuentes et al. (2016). Building on the above discussion, the following hypotheses are suggested:

This study utilised a survey-based research approach to explore the relationships among variables in the conceptual model. Survey research, characterised as the process of gathering information from a sample of individuals based on their responses to questions (Check and Schutt, 2011), is widely recognised across academic disciplines. This approach enables the collection of standardised data from a relatively large and geographically dispersed population in a highly cost-effective manner (Quinlan et al., 2015). It represents a useful technique that offers clear advantages in describing and predicting phenomena and their relationships (Zikmund et al., 2013). Given the research objective of examining the mediating role of supply chain collaboration on the relationship between organisational culture and differentiation-based competitive advantage, survey research was considered a suitable method.

The research population comprises garment manufacturers as they are the key players in Vietnam's garment supply chain. In the context of garment firms in Vietnam, the respondents from focal firms understand the business relationship in their supply chain. The sampling frame consists of organisations from the Vietnamese Textile and Apparel Industry Directory 2020 (VITAS, 2020), as well as various official websites, including Vietnamese Ministry of Industry and Trade and Vietnamese Ministry of Planning and Investment. The survey questionnaire was distributed to the listed company email addresses, along with a link to the Qualtrics platform.

The measurement constructs were developed based on the existing literature. These items were frequently referenced in connection with the corresponding constructs in numerous studies. The measurement items for group culture and development culture were derived from the studies of Cameron and Quinn (2011) and Cao et al. (2015). Internal and external collaboration were measured using items adapted from Flynn et al. (2010), Zhao et al. (2013), and Thai and Jie (2018). Meanwhile, the indicators of differentiation-based competitive advantage were adapted from Wiengarten et al. (2014) and Demeter et al. (2016).

A survey questionnaire was developed based on the conceptual framework. The survey consisted of four sections: demographic information, organizational culture, supply chain collaboration and differentiation-based competitive advantage. The survey employed a five-point Likert scale, with “1” signifying “Strongly Disagree” and “5” indicating “Strongly Agree”. The survey instrument underwent a forward-backward translation process to ensure equivalence (Brislin, 1970). This entailed translating the content from English to Vietnamese and subsequently back-translating the Vietnamese version into English, which was then compared to the initial English version (Chen et al., 2010).

The questionnaire was evaluated through pre-testing and pilot testing for clarity (Hair et al., 2018). The feedback was used to make appropriate revisions. The finalised Vietnamese version of the questionnaire was distributed to the potential participants via the Qualtrics platform.

Reliability analysis was conducted using SPSS 28.0 to assess the internal consistency of the attribute combination. The PROCESS macro, developed by Hayes (2017), which includes both a normal theory approach and a bootstrap approach, was used to facilitate the estimation of indirect effects. In our analysis, to ensure 95% confidence intervals in bootstrapping, this study set n = 5,000 for bootstrapped samples.

A total of 1,919 emails with the Qualtrics survey link were sent to potential participants, but 451 were undeliverable, reducing the initial sample size to 1,468. From this group, 709 responses were received. After addressing issues such as missing data, outliers, non-normality and multicollinearity, 192 valid responses were retained for further analysis.

An independent sample t-text was conducted to assess the non-response bias. Assuming that late respondents are most likely to be similar to non-respondents, comparing early and late respondent groups provides information on non-response bias in the sample (Armstrong and Overton, 1977). The early responses were defined to be those received in the two weeks between the first email and the first reminder, resulting in 72 useable responses. The remaining 120 useable responses were considered late responses. These two groups were compared based on demographic characteristics, including year of establishment, type of ownership, major market, and respondents' positions. The results showed no significant differences (p > 0.05), indicating that non-response bias was not a concern in this study.

When using single informants from focal firms for data collection, the potential issue of common method bias needs to be considered. In this study, the common latent factor method was adopted to test for such bias. First, a confirmatory factor analysis was conducted on a model comprising all items used for hypothesis testing. The model fit indices were as follows: IFI = 0.923; TLI = 0.910; CFI = 0.922 and RMSEA = 0.058. Subsequently, a common method factor was added to the model as a latent variable. The revised model yielded the following fit indices: IFI = 0.930; TLI = 0.917; CFI = 0.929; and RMSEA = 0.056. The two fitting results were compared. The changes in IFI, TLI, and CFI do not exceed 0.1, and the change of RMSEA does not exceed 0.05 (Zhu et al., 2022). These results indicated that common method bias is not a concern in this study.

Regarding the sample demographics, 57% of respondents were middle and senior managers, while staff accounted for 36%, with the remainder not specifying their roles.

Around half of the participants had over five years of experience in their respective companies. Most participants were from departments related to supply chain management, such as production (24%), sales and marketing (15%) and research and development (12%). Therefore, it can be concluded that the participants were qualified for this research.

The results of the measurement model are summarised in Table 1, which shows the factor loadings of the items on their corresponding constructs. Except for one item (IC1) with a factor loading of 0.499 being slightly below the threshold of 0.5, all other factor loadings exceed this cut-off value. Item IC1, which refers to the utilisation of joint operations meetings among internal departments, has been popularly used to assess the internal collaboration in previous studies (Yunus and Tadisina, 2016; Hendijani and Norouzi, 2023). Therefore, this item was retained in the measurement model due to its theoretical importance (Birasnav and Bienstock, 2019). Additionally, the Cronbach's alpha values for all constructs exceed the threshold of 0.7 (Hair et al., 2018).

CFA was conducted to assess the overall model fit. The fitting results were acceptable with Chi-square/df = 1.652; IFI = 0.923; TLI = 0.910; CFI = 0.922; RMSEA = 0.058, according to the suggested threshold values (Hu and Bentler, 1999).

The model fit indices for the structural equation model (SEM) were also acceptable with Chi-square/df = 1.951; IFI = 0.888; CFI = 0.886; RMSEA = 0.071, following the recommended threshold values (Hu and Bentler, 1999). Standardised path coefficients for the SEM analysis are presented in Table 2.

The results of the mediation analyses for all hypotheses are summarised in Table 3. Internal collaboration serves as a mediator between group culture and differentiation-based competitive advantage, and a similar effect is observed for development culture. Internal collaboration also mediates the relationship between group culture and external collaboration, as well as between development culture and external collaboration. In contrast, external collaboration does not significantly mediate the relationship between these organisational culture types and differentiation-based competitive advantage. Furthermore, the relationship between group culture and differentiation-based competitive advantage is sequentially mediated by internal and external collaboration.

The findings revealed the crucial role of internal collaboration in mediating the relationship between group culture and differentiation-based competitive advantage, which supports H1. Group culture in an organisation builds up the communication and commitment of team/groups, leading to loyalty, shared objectives, dedication and group values/traditions (Cameron and Quinn, 2011). When employees feel comfortable sharing their thoughts, it becomes easier for them to discuss operational issues and make decisions collaboratively. Moreover, in an environment where employees feel their ideas are valued, they are likely to speak up about concerns and participate in joint planning among departments, which leads to enhanced flexibility and deliveries. This finding aligns with that of Azeem et al. (2021), who revealed that organisational culture, including group culture, reinforces competitive advantage by positively affecting knowledge sharing within the organisation. This result further complements the findings of Alfalla-Luque et al. (2015), who found that internal integration acts as a mediator in the relationship between employee commitment and operational performance.

The findings of this study also confirmed the mediation role of internal collaboration on the relationship between development culture and differentiation-based competitive advantage, which supports H2. Development culture provides an innovative environment in the organisation, highlighting creativity, growth and dynamism capabilities of employees (Cameron et al., 2022). This finding is consistent with that of Azeem et al. (2021), who revealed that organisational culture, including development culture, enhances competitive advantage by fostering knowledge sharing within the organisation. This finding adds to the existing knowledge about the mediating role of internal collaboration, as identified in prior studies. For example, Alfalla-Luque et al. (2015) found that internal integration acts as a mediator in the relationship between employee commitment and operational performance. Besides, Bettiol et al. (2023) inform that the relationship between Industry 4.0 technology adoption and knowledge creation for innovation among Italian manufacturing firms is positively mediated by functional collaboration.

Meanwhile, the results also revealed the crucial role of internal collaboration in mediating the relationship between group culture and external collaboration, supporting H3. In this connection, group culture builds up an environment where organisations nurture internal cultural aspects, i.e. group/team communication and commitment (Cameron et al., 2022). From there, standards for internal collaboration, such as data, processes and policies for knowledge transferring, are well established (Spraggon and Bodolica, 2012). As such, knowledge is available to facilitate external organisational collaboration (Moyano-Fuentes et al., 2016).

Internal collaboration was also found to mediate the relationship between development culture and external collaboration, supporting H4. This result implies that the dominant attributes of development culture, namely, entrepreneurship, creativity and adaptability, would enhance supply chain collaboration. Those cultural values enable the sharing of operational information, joint planning among functional departments, and collaboration with suppliers and customers to address operational challenges.

These findings further support the study of Alfalla-Luque et al. (2015), which identified internal integration as a mediator in the relationship between employee commitment and both supplier and customer integration.

The results show that external collaboration does not significantly mediate the relationship between group culture and differentiation-based competitive advantage. A similar result is observed for development culture. Thus, H5 and H6 are not supported. These results can be explained by the characteristics of manufacturing contracts of the garment industry in Vietnam. In CMT contracts, accounting for 65% of garment firms (Duy Quang, 2023), manufacturers get necessary material inputs that are supplied directly by their clients (Harrison et al., 2014; Tran et al., 2024a). This means the CMT manufacturers are entirely dependent on their major customers and do not work directly with major suppliers.

This result supports previous studies' finding that group culture and development culture are not significantly associated with supplier integration (Taha et al., 2022). However, this finding contradicts those of Osei et al. (2023), who confirmed that supplier and customer integration mediate the relationship between development culture as well as group culture and sustainable supply chain performance of food manufacturing industries in the United Kingom and Greece.

The result that external collaboration is not a mediator is inconsistent with the findings of previous studies (Koç et al., 2022; Bettiol et al., 2023; Le et al., 2024). For instance, Koç et al. (2022) confirmed that integration with business partners is crucial for overcoming environmental uncertainties in the supply chain and increasing competitive advantage. In addition, Bettiol et al. (2023) found that external collaboration with knowledge-intensive business services positively mediates the relationship between Industry 4.0 technology adoption and knowledge creation for innovation in the context of Italian manufacturing firms. Recently, Le et al. (2024) revealed that integration with suppliers has a significant mediating effect between the digital supply chain and sustainable supply chain performance of SME in some Latin American countries.

The findings revealed the crucial role that internal collaboration and external collaboration play jointly as mediators in the relationship between group culture and differentiation-based competitive advantage, which supports H7. This means that the combined internal and external collaboration is essential for leveraging group culture to enhance competitive advantage, which is different from competitors.

The sequential mediating effect, where the initial collaboration among internal functions and departments is followed by that with suppliers and customers, was also emphasised by Moyano-Fuentes et al. (2016). This result complements the finding regarding the mediating role of supply chain collaboration evidenced in previous research (Alfalla-Luque et al., 2015; Feng et al., 2017; Alzoubi et al., 2020). Particularly, supply chain integration acts as a mediator between operational performance and employee commitment (Alfalla-Luque et al., 2015), the effect of guanxi (Feng et al., 2017), or as a mediator between sustainable strategies and competitive priorities (Alzoubi et al., 2020).

Surprisingly, internal and external collaboration were found not to mediate the relationship between development culture and differentiation-based competitive advantage, thus not supporting H8. Again, this result is inconsistent with the findings regarding the mediating role of supply chain collaboration reported in previous research (Alfalla-Luque et al., 2015; Feng et al., 2017; Alzoubi et al., 2020), as discussed previously. This finding may be explained based on the context of this research, where a majority of Vietnamese garment firms adopt the CMT practice, i.e., relying on supplies from their customers. In this connection, it may not be that significant to practise external collaboration initiatives to boost competitive edge based on differentiating features, given the long-term, strategic nature of development culture. The same observation can also be seen in H5 and H6, where external collaboration plays the prospective mediating role. This role is only significant in conjunction with internal collaboration, which seems to be the focus of Vietnamese garment firms, given the certainty of their customers' supplies.

This research aims to examine how organisational culture impacts supply chain collaboration and differentiation-based competitive advantage in Vietnam's garment industry. It analyses organisational culture in terms of group culture and development culture while investigating supply chain collaboration in internal collaboration within a firm and external collaboration with suppliers and customers. The results demonstrate that internal collaboration mediates the relationship between group culture and differentiation-based competitive advantage. A similar finding was observed for development culture. However, the mediation role of external collaboration on the relationship between the two organisational culture types and differentiation-based competitive advantage was not statistically significant, constrained by the context of this research, i.e. the dominant CMT manufacturing type in the Vietnamese garment industry.

This study is interdisciplinary in nature, linking organisational behaviour and supply chain management. Specifically, it expands the knowledge in these fields by considering organisational culture in the supply chain context. In fact, far less attention was given to the mediating effect of supply chain collaboration, investigating both internal and external dimensions, on the relationship between organisational culture and competitive advantage. Thus, this study has filled the research gap by empirically demonstrating that supply chain collaboration mediates the relationship between group culture and differentiation-based competitive advantage. These findings suggest that the impact of group culture on competitive edge based on differentiation is fully realised when both internal and external collaboration practices are implemented. While prior research suggested that external information sharing intensity can foster collaboration among partners, and overlooked the internal knowledge sharing settings in enhancing supply chain performance (Baihaqi and Sohal, 2013), this study is one of a few to highlight the critical role of internal collaboration and organisational group culture in the context of Vietnamese garment industry. In the digital era, although Industry 4.0 facilitates digital platforms for internal and external information and knowledge sharing, Vietnamese firms, constrained by limited human and financial resources, continue to rely heavily on internal communication and a uniquely collaborative culture (Pham et al., 2025). Our study further extends that this optimisation of internal organisational cohesion facilitates effective supply chain information sharing, ultimately supporting supply chain performance (particularly in the Vietnamese CMT garment sector). These findings could be of interest and importance to scholars and researchers in the fields of organisational behaviour and supply chain management. Moreover, this study extends the application of the RV and OC theories in explaining these relationships in a new research context, which is the garment industry of a developing country, i.e. Vietnam.

Similar to other Asian cultures, Vietnamese value is subtly influenced by the Confucious Asian culture (GLOBE, 2020), which is dominantly illustrated by hierarchical relationships (Nguyen et al., 2010, 2023, 2024). This study shows empirical evidence that the group and development culture may also be associated with creating competitive edge which are different from competitors via supply chain collaboration, especially its internal collaboration dimension. Such interesting findings suggest that Confucian-oriented culture in organisations, featured by hierarchy patterns, may be beneficial for a “paradigm shift” towards implementing policies relating to group and development culture types. This is because it is evidenced in this research that organisations with group and development culture – which seems not to strongly focus on hierarchies – may also enhance their differentiation-based competitive advantage even though they are operating in a business environment centred on power distance.

First, this study found that internal collaboration mediates the relationship between group culture and development culture and differentiation-based competitive advantage. This finding implies that senior management should establish and implement measures to promote group culture and development culture so that their firm's competitive advantage based on differentiation can be enhanced. Specifically, managers should emphasise values such as teamwork, innovation, and long-term orientation to implement supply chain collaboration practices and achieve a competitive edge based on differentiating features.

Second, the full potential of these practices would be further realised by strengthening various collaboration activities within the firm, such as understanding mutual responsibility and conducting joint planning to anticipate and resolve operational issues. This requires open communication among employees, fostering transferrable skills, where employees are not only highly skilled within their own departments but also possess a broad understanding of the entire business to provide support to others if required.

Third, the empirical findings suggest that firm managers need to acknowledge the important mediating role of supply chain collaboration. Nurturing group culture to establish a competitive advantage based on differentiation is most apparent when both internal and external collaboration practices are put into action. Therefore, supply chain managers should focus on collaboration within the supply chain, first internally and then externally, to gain differentiation-based competitive advantage by enhancing delivery services and flexibility (Moyano-Fuentes et al., 2016).

Fourth, given the context of Industry 4.0 and the characteristics of the CMT garment sector, Vietnam may benefit from emerging technologies and their strong potential for innovation. This context also presents opportunities for CMT transformation or strategic shift. Policymakers and top management can proactively prepare by developing a solid technology foundation, establishing knowledge management systems and fostering a harmonised culture for both internal and external supply chain collaboration, thereby creating uniqueness and a differentiated competitive advantage. For such a strategic shift, external knowledge and a willingness to innovate are essential for top management to drive change–not only to create unique value, but also to achieve the sustainable goals that the garment industry is striving for (Pham et al., 2025).

Future research should address the limitations of this study. First, the current research relied on data collected from the focal firms. Therefore, gathering more extensive data from the dyadic relationships, including suppliers and customers, could offer deeper insights into how organisational culture impacts supply chain collaboration and differentiation-based competitive advantage. Secondly, this research did not attempt to analyse differences in supply chain collaboration subject to firm characteristics such as firm ownership, processing types (i.e. CMT/FOB) or time in the market. Hence, future research should be conducted to explain, for instance, whether FOB will differ from CMT, in relation to the role of external collaboration and organisational culture on performance. Furthermore, this research investigates the topic within the specific context of Vietnam's garment industry. Subsequent studies could enhance the reliability and validity of the findings by investigating this topic in other settings, such as different industries and countries.

This research was approved by the Human Research Ethics Committee of RMIT University under approval No. BL CHEAN 23329.

This paper forms part of a special section “Advancing Sustainable Connectivity: Innovations in Logistics and Supply Chain Integration (ISL 2024)”, guest edited by Ruth Banomyong and Kamrul Ahsan.