The Role of Top Management in Supply Chain Management Practices

University dissertation from Institutionen för ekonomisk och industriell utveckling

Abstract: Supply chain management (SCM) has been discussed by researchers as well as business practitioners for more than two decades now, but still surprisingly little of this philosophy can be seen in today’s business practices. One important enabler for taking the SCM philosophy from theory into practice that is often mentioned, but not investigated in-depth, is top management support. The role top management plays in a company’s SCM practices could be an important piece of research that is not yet in place in the big SCM puzzle. The purpose of this dissertation is therefore to describe and explain the role of top management in a company’s supply chain management practices. The purpose is approached with the aid of two studies, where the second is partly built upon the findings from the first. The first study is an explorative, broad survey study aimed at investigating how companies’ SCM practices, here limited to include a focal company’s logistics collaboration with suppliers and customers, are performed. In the second study, which is an explanative, multiple case study, the role of top management is investigated more in detail.The empirical foundation for the survey study is a questionnaire that was constructed based on SCM literature. The questionnaire was sent in November 2004 to 482 logistics managers at Swedish manufacturing companies and a response rate of 177 usable questionnaires (37.8%) was achieved. Apart from purely descriptive statistics such as mean values, standard deviation and frequencies, other tests were used such as factor analysis, cluster analysis, analysis of variance (ANOVA), and cross tabulations with ?-square tests. The results are summarised into five major findings, concluding that (1) existing collaborations are mainly performed at an operational level in the companies, (2) there are differences in the focal company’s attitude and behaviour depending on if the collaboration partner is situated downstream or upstream in the supply chain, (3) increased intensity in the collaboration results in more positive effects, (4) top management involvement is an important driver for increased intensity of the collaboration, and (5) top management involvement in a dyadic collaboration is an important driver for increased collaboration with supply chain members on the other side of the focal company.The empirical basis for the multiple case study is three companies considered to be best practice within SCM. In total 15 focused, open-ended interviews with members of the top management teams were conducted during winter 2006-2007. All interviews were typed and transcribed, and objective case descriptions with citations were thereafter written. The analysis includes separate analysis of each case as well as cross case analysis. The SCM framework that was used in the first study was complemented with a framework on business strategy theory in the second study. More specifically, the analysis incorporates the positioning perspective, the resource based view, and Mintzberg’s view on the strategy formation process.The theoretical contribution of this dissertation is mainly given to the SCM field. In short, the results include a more thorough explanation of top management’s role in a company’s SCM practices. Six archetypes of this role are presented; the supply chain thinker, the frame setter, the process designer, the relationship manager, the controller, and the organiser for the future. Other implications for SCM literature being discussed in the conclusions are that (1) a systems approach should be considered separate from collaborative thinking, (2) the interdependencies in the investigated supply chains are mainly serial, (3) a systems approach is not the same as having a pure process orientation, (4) the responsibility for logistics issues is shared among members of the top management team, and (5) top management is not directly involved in the company’s distinctive logistics capabilities.