More or complex actions? Effects of supply networks on firms’ competitive aggressiveness

More or complex actions? Effects of supply networks on firms’ competitive aggressiveness
Yang S. Yang, Xiaojin Sun, Mengge Li, Tingting Yan
International Journal of Operations & Production Management, Vol. 45, No. 1, pp.33-61

This study investigates the extent to which a firm’s centrality and autonomy in its supply network are associated with the intensity and complexity of its competitive actions.

Utilizing social network analysis and dynamic panel data models, this study analyzes a comprehensive panel dataset with 10,802 firm-year observations across various industries between 2011 and 2018 to test the hypotheses.

Our findings show that a firm’s level of centrality in its supply network has an inverted U-shaped relationship with both competitive intensity and competitive complexity. In addition, the turning points of these two inverted U-shaped relationships differ in that firms with a lower level of centrality tend to compete aggressively by launching more actions within fewer categories, while firms with a higher level of centrality tend to compete aggressively by launching fewer actions that cover a larger range of categories. Finally, we find that a firm’s structural autonomy has a positive relationship with competitive complexity.

This study bridges the gap between the supply chain management literature and strategic management literature and investigates how supply networks shape competitive aggressiveness. In particular, this research investigates how a firm’s structural position in its supply network affects its competitive actions, an important intermediate mechanism for competitive advantage that has been overlooked in the supply chain management literature.

​This study investigates the extent to which a firm’s centrality and autonomy in its supply network are associated with the intensity and complexity of its competitive actions. Utilizing social network analysis and dynamic panel data models, this study analyzes a comprehensive panel dataset with 10,802 firm-year observations across various industries between 2011 and 2018 to test the hypotheses. Our findings show that a firm’s level of centrality in its supply network has an inverted U-shaped relationship with both competitive intensity and competitive complexity. In addition, the turning points of these two inverted U-shaped relationships differ in that firms with a lower level of centrality tend to compete aggressively by launching more actions within fewer categories, while firms with a higher level of centrality tend to compete aggressively by launching fewer actions that cover a larger range of categories. Finally, we find that a firm’s structural autonomy has a positive relationship with competitive complexity. This study bridges the gap between the supply chain management literature and strategic management literature and investigates how supply networks shape competitive aggressiveness. In particular, this research investigates how a firm’s structural position in its supply network affects its competitive actions, an important intermediate mechanism for competitive advantage that has been overlooked in the supply chain management literature. Read More