Making firm supply chain arrangement fit business contingency: an empirical study

Using the primary data gathered by a nation-wide survey of US textile industry, this study analysed firm supply chain arrangement from a business contingency perspective. In analysis, supply chain arrangement was measured by the focus of a firm on leanness, hybrid, or agility, while environmental characteristics as business contingency were captured by the degrees of environmental diversity, complexity, dynamism, and hostility. Factor analysis and structural equation modelling were utilised to construct the statistical analysis. The results revealed that the supply chain arrangements in response to business environment by high and low performers were significantly different. High performers better fit business environment than low performers, and maximised the benefits of interaction with business environment. A dissonance between supply chain arrangement and business environment could only result in conflicting capabilities and wasted resources, consequently, lower performance.