The effects of integrated supply management practices and environmental management practices on relative competitive quality advantage

Abstract

Superior quality continues to be central to a manufacturing company's success, and firms are constantly striving for quality advantage over their competition. It is therefore crucial for companies to ensure the sound practice of quality management principles. However, companies must also seek additional avenues to enhance the relative competitive quality advantage of their product offerings. In this context, we examine the role of integrated supply management practices (SMP) and environmental management practices (EMP) as drivers of actual and perceived quality. We suggest that these groups of practices, in addition to quality management practices, are crucial in an increasingly transparent, competitive and global business environment. As such, SMP can be leveraged with suppliers providing expertise, capabilities and high quality inputs for the final product, resulting in higher actual quality, but also via the suppliers’ more intangible reputation, generating higher perceived quality. Similarly, EMP can result in process improvements impacting actual quality, but can also create a favourable image of the company among customers, enhancing the perceived quality of the firm's products. Overall, we suggest SMP and EMP as key strategic drivers aiding in the further differentiation of firms. Our hypotheses are grounded in the resource-based view of the firm, and are tested with survey data collected from 434 manufacturing plants.

Keywords:

• integrated supply management
• environmental management
• relative competitive quality advantage
• resource-based view of the firm