Abstract:
Purpose- The aim of this paper is to propose and empirically investigate the concept of
networking capability (NC) for the management of supplier relationships and their dynamics to
control Ann’s Supply chain (SC)Agility (Firm’s ability to respond successfully to dynamic
activity/ activity impacting on firm’s performance) . NC of supplier relationships is
conceptualized based on dynamic capabilities aimed at relationship beginning, relationship
improvement, and relationship termination. Moreover, the study tests the interaction of NC with
relationship proclivity as an organizational feature, and examines latent classes of NC affecting
firm’s agility (Firm’s ability to respond successfully to dynamic activity/ activity impacting on
firm’s performance).
Design/methodology/approaich- This study assessed prior research on company routines
related to inter-firm networking, the dynamic capability approach to strategy, and literature on
inter-firm innovation. The study utilizes questionnaire based data gathered from 250
professionals/ suppliers operating in the ship’s maintenance industry in Pakistan.
Findings- This research provides proof for the positive influence of NC with respect to
supplier relationships on firm agility (Firm’s ability to respond successfully to dynamic activity/
activity impacting on firm’s performance), as well as overall firm performance. Relationship
proclivity is shown to magnify this impact. At the same time, the research shows that NC may be
applied in different combinations in the context of supplier relationship portfolio management.
Two mechanisms are cautiously identified: firms using “static optimization” focus mainly on
supplier relationship development capabilities, while those using “dynamic optimization” utilize
supplier relationship initiation and ending capabilities.
Research limitations/implications- This research focuses on one setting (i.e. the ship
repair and maintenance industry in Pakistan). Further studies need to broaden these findings to
other industries and countries, specifically those which show a different cultural make-up from
Pakistan. Furthermore, this research indicates the existence of two distinct mechanisms as to how
different aspects of NC impact firm agility (Firm’s ability to respond successfully to dynamic
activity/ activity impacting on firm’s performance) in supply chain (SC). While it is reasonable
to identify these mechanisms as networking “strategies,” this study does not clarify whether this
represents intended strategies by firms or relates to emerging capability patterns.
