Effects of supply chain orientation on firm performance: insights from a Malaysian case study of halal-certified small and medium-sized enterprises

Abstract

This research aims to investigate the relationship between supply chain orientation (SCO) and firm performance (FP) in the context of halal-certified small and medium-sized enterprises (SMEs). The proposed SCO model incorporates three factors, namely top management support, commitment, and credibility, for the determination of firm performance. A total of 512 halal-certified SMEs was surveyed, in which 284 responses were received and analysed using structural equation modelling with partial least squares (SEM-PLS). The credibility of supply chain partners was shown to have a major effect on firm performance in the context of halal-certified SMEs. On the other hand, top management support and commitment demonstrated a lesser influence, despite having statistically significant effects on firm performance. This study provides a framework for halal practitioners to refine their business operations based on the implementation of SCO elements to improve firm performance.

RÉSUMÉ

Cette recherche avait pour objectif d’explorer la relation entre l’orientation de la chaîne d’approvisionnement (SCO) et les performances des entreprises dans le contexte des petites et moyennes entreprises (PME) certifiées halal. Le modèle proposé de SCO intègre trois facteurs, à savoir le soutien à la Direction générale, l’engagement et la crédibilité, pour la détermination des performances des entreprises. Un total de 512 PME certifiées halal ont été interrogées, pour lesquelles 284 réponses ont été reçues et analysées par la modélisation par équations structurelles avec moindres carrés partiels (SEM-PLS). La crédibilité des partenaires de la chaîne d’approvisionnement s’est révélée comme ayant un effet majeur sur les performances des entreprises dans le contexte des PME certifiées halal. En outre, le soutien à la Direction générale et l’engagement ont eu une moindre influence, malgré leurs effets statistiquement significatifs sur les performances des entreprises. Cette étude fournit un cadre permettant aux praticiens du halal d’affiner leurs opérations commerciales en se basant sur la mise en oeuvre d’éléments de SCO en vue d’améliorer les performances des entreprises.

Keywords:

• Supply chain orientation
• halal
• small and medium-sized enterprises
• firm performance

Mots-clés:

• orientation de la chaîne d’approvisionnement
• halal
• petites et moyennes entreprises
• performances des entreprises

Disclosure statement

No potential conflict of interest was reported by the authors.

Additional information

Notes on contributors

Ariff Azly Muhamed

Ariff Azly Muhamed is a post doctoral researcher of Engineering Management at Universiti Kebangsaan Malaysia. His research interests include supply chain management, halal suppliers, small and medium-sized enterprises, and quantitative research.

Norhuda Salim

Norhuda Salim is a doctoral candidate of Engineering Management at Universiti Kebangsaan Malaysia. Her research interests include supply chain management, green practices, small and medium-sized enterprises, and quantitative research.

Mohd Nizam Ab Rahman

Mohd Nizam Ab Rahman is a Professor of Engineering Management at Universiti Kebangsaan Malaysia. He received his doctorate in Engineering from Nottingham University, United Kingdom. His research interests include supply chain management, green practices, total quality management, and strategic decision research.

Firdaus Mohd Hamzah

Firdaus Mohd Hamzah is an Associate Professor of Engineering Education at Universiti Kebangsaan Malaysia. He received his doctorate in Engineering from University of Glasgow, United Kingdom. His research interests include supply chain management, environment statistic, and quantitative research.

Mohd Helmi Ali

Mohd Helmi Ali is an Associate Professor in Operational Research at Universiti Kebangsaan Malaysia. He received his doctorate in Engineering from Nottingham University, United Kingdom. His research interests include supply chain management, food security, and sustainable practices.