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EJM
45,3 Supply chain commitment and
business process integration
The implications of Confucian dynamism
358
Mohammad Asif Salam
University of the Fraser Valley, Abbotsford, Canada

Abstract
Purpose – Despite intense research interest in supply chain management (SCM) over two decades,
there is still uncertainty as to what SCM is and how behavioural determinants have an impact on it.
The purpose of this study is to explore the linkages between the behavioural and marketing
determinants of SCM and their impact on commitment and process integration.
Design/methodology/approach – The approach takes the form of descriptive research leading
into causal research, using survey data and testing relationships with Structural Equation Modelling.
Findings – The study found that there are significant behavioural dimensions in SCM and identified
the impact of those dimensions on supply chain commitment and process integration. One noticeable
finding of this study was the nature of supply chain commitment within Confucian culture.
Research limitations/implications – Data for the study were drawn from one single industry, so
the findings are indicative but not representative of all supply chains. Also, the results cannot be
generalised to other countries and industries. However, this study acts as a starting-point to
understand how behavioural and marketing determinants may impact supply chain commitment and
business process integration. A series of future studies may follow this study to develop a
comprehensive understanding of the nature, structures and strategies of supply chain commitment in
Confucian culture.
Practical implications – This study will enable supply chain managers to understand the role of
behavioural and marketing factors in managing supply chains. The root of Confucian culture lies in
Asia, and Asia is an integral part of global supply chains. An understanding of Confucian dynamics
will enable practitioners to manage these supply chains efficiently.
Originality/value – This paper contributes to an understanding of the behavioural/soft
determinants in managing supply chains, particularly in Asia. This study also highlights the role
of Confucian dynamism in shaping supply chain commitment. Both these areas had previously been
under-researched.
Keywords Marketing, Supply chain management, Confucianism
Paper type Research paper

European Journal of Marketing
Vol. 45 No. 3, 2011
pp. 358-382
q Emerald Group Publishing Limited
0309-0566
DOI 10.1108/03090561111107230
Introduction
Many previous studies have been conducted into the use of information technology to
improve the effectiveness of supply chain management (SCM) (Holland, 1995; Hill and
Scudder, 2002; Lancioni et al., 2000; Roberts and Mackay, 1998; Sahay and Gupta,
2003; Murillo, 2001), while only few studies have concentrated on a behavioural
perspective to identify the impact of behavioural aspects of SCM on commitment and
business process integration. One such study by Wu et al. (2004) explored the
relationship between commitment and business integration and SCM. The study
revealed that different management, marketing and behavioural determinants
influence commitment to SCM, and SCM business integration. Business process
integration is one of the three elements (Cooper et al., 1997) in the framework of SCM Supply chain
and it is essential for a firm to understand how to operate and integrate these commitment
elements.
The present study attempts to explain the behavioural perspectives of SCM in an
Asian context. Most previous research has focused on technological, marketing, and/or
financial performance, but very few studies have been dedicated to understanding the
behavioural aspects of SCM. Cooper et al. (1997) mentioned three elements in the SCM 359
Framework – supply chain structure, management components, and business
processes. In order to achieve better SCM performance, a firm needs to learn how to
operate and integrate these elements in a more effective way. Hence, the current
research attempts to answer the research question: “What is the impact of behavioural
and marketing determinants on supply chain commitment, and business process
integration?”
The paper is organised as follows: first, paradigms from supply chain commitment
and business process integration are used to delineate a conceptual framework to link
marketing and behavioural determinants. Next, the researcher applied the conceptual
framework to the specific setting of supply chain commitment and business process
integration. The purpose of this step was to ensure that a clear supply chain identity is
established in the broader supply chain arena, which may guide development in the
discipline. The framework posits testable hypotheses which were then tested using
structural equation modelling (SEM). Finally, the researcher presents conclusions and
implications for future research and teaching.

Literature review and research hypotheses

Supply Chain Management (SCM)
Supply chain management encompasses more than the activities of any individual
corporate function. SCM encompasses the planning and management of all activities
involved in sourcing and procurement, conversion, and all logistics management
activities. Importantly, it also includes coordination and collaboration with channel
partners, who may be suppliers, intermediaries, third-party service providers, and
customers. In essence, SCM integrates supply and demand management within and
across companies (CSCMP, 2006). Wisner and Tan (2000) argued that SCM includes all
value-adding activities from the extraction of raw materials through the
transformation processes to delivery to the end-user. Based on their perspective,
SCM has a broader goal, namely managing inventory and relationships to achieve a
higher level of customer service rather than accomplishing specific marketing
objectives. The SCM approach attempts to manage both upstream and downstream
processes within the supply chain, while marketing tends to focus only on downstream
processes. Thus, how to augment the supply chain members’ commitment to increase
integration in SCM is becoming an ever greater issue.
The adoption of SCM in terms of managing relationships is a strategic decision for
each organization, made by senior management. The way the company responds to or
cooperates within and across firms are critical interfaces in the chain. The goal is to
achieve a seamless integration through streamlining business processes within and
across firms.
EJM Business process integration in SCM
45,3 Cooper et al. (1997) pointed out three elements in the framework of SCM – supply chain
structure, management components, and business processes. To achieve superior SCM
performance, a firm has to understand how to operate and integrate these elements.
Many business processes within a company, are, by nature, involved in supply chain
relationships with other companies (Cooper et al. 1997). Concerning business process
360 integration in SCM, consideration must be given to how many functions or activities
should be included in SCM. There is a consensus in the literature that it should include
information systems integration, as well as planning and control activities. Bowersox
(1997) includes cooperative efforts among supply chain members in such areas as
marketing research, promotion, sales and information collecting, research and
development, product design, and total system/value analysis. In an exploratory study
involving successful supply chain redesign practitioners, Hewitt (1992) finds that most
companies have identified the importance of two internal processes, namely order
fulfilment and product development. In the present study, the author adopted the
framework proposed by the members of The Global Supply Chain Forum (www.
ssaglobal.com, 2005), who select customer relationship management (CRM), demand
management, and new product development as the foundations of business processes.
Those selections are reasonable because they represent the sequence of all services a
business could provide for their customers, starting by identifying key customers and
developing them (CRM), management of flow of raw material needed to meet customer
demand (demand management) and introducing new products quickly and launching
them into the market (new product development). The details of those three processes
are as follows:
(1) Customer relationship management involves identifying key customers and
target markets, and developing and implementing programs with key
customers. This process also provides the customer with product information
(www.ssaglobal.com, 2005). The generally accepted purpose of CRM is to
enable organizations to manage their customers better through the introduction
of reliable systems, processes and procedures for interacting with those
customers.
(2) Demand management recognises that the flow of materials and products is
intertwined with customer demand. Forecasting and reducing variability are
the key concerns of this process (www.ssaglobal.com, 2005).
(3) New product development is a critical part of a firm’s success, and key
customers and suppliers are integrated into the development process to reduce
time to market (www.ssaglobal.com, 2005).

The antecedents of business process integration in SCM

Drawing on previous studies (Wu et al., 2004), there are three different categories of
factors that have an influence on business process integration in SCM. They are SCM
commitment, marketing determinants of SCM, and behavioural determinants of SCM.

Supply chain commitment

SCM commitment is a promise or agreement to do something in the future in supply
chain relationships. Commitment is defined as the desire on the part of each party to a
business relationship to maintain and strengthen that relationship (Morgan and Hunt, Supply chain
1994). The understanding that commitment is crucial to the long-term success of a commitment
business relationship is central to understanding organizational success (Andaleeb,
1996). Commitment plays a significant role in inter-firm relationships. The nature of
commitment in inter-organizational, intra-organizational, and interpersonal
relationships is stability and sacrifice (Anderson and Weitz, 1992). This means that
members are willing to make short-term sacrifices to maintain their long-term and 361
stable relationships. According to Allen and Meyer (1990), commitment is a
multi-faceted construct and should be viewed from three aspects:
(1) affective;
(2) normative; and
(3) continuance.

Affective commitment refers to the feeling of belonging and the sense of attachment to
the organization. Affective organizational commitment is defined as, “active
relationships with the organization such that individuals are willing to give
something of themselves in order to contribute to the organization’s well-being”
(Mowday et al., 1979, p. 226). An alternative definition provided by Allen and Meyer
(1990, p. 2) is, “An affective or emotional attachment to the organization such that the
strongly committed individual identifies with, is involved in, and enjoys membership
in the organization.”
Normative commitment is concerned with the obligation that members feel to
remain with an organization and build on generalised cultural expectations. This
aspect of commitment is based on initial work by Wiener (1982) who had argued that
individuals also are committed to organizations because of strong ethical or moral
obligations. However, normative commitment seems to involve expectations and, to a
greater extent, ideals. For this reason, normative commitment is not included in the
present study, as its inclusion might result in the description of actual processes being
contaminated by expectations.
Continuance commitment relates to the perceived cost, both the financial and
non-financial, of leaving the organization, and is perceived to be caused by a lack of
alternatives. Employees whose primary link to the organization is based on
continuance commitment remain because they need to do so.
In summary, commitment provides the basis for a cooperative spirit in marketing
channel relationships and leads to an overall stronger partnership (Anderson and
Weitz, 1992).
In practice, many international firms are moving towards a business partnership
strategy linking to all their supply chain partners, in order to achieve long term
competitiveness, aiming to create win-win situations and mutual benefit for all parties
in a fast moving, competitive, global arena. One of the important factors that is always
discussed is the business commitment. Once commitment between the supply chain
partners is established, it normally creates co-operation between the firms. For
example, in commodities, firms that are committed will honour their earlier
agreements, even though prices may be fluctuating in the market. This would benefit
the downstream parties when prices go up, but the supplier would hope to benefit in
turn in the opposite case. Also, committed partners frequently share market
information so as to update one another in order to make sure that each partner will be
EJM able to adjust/plan for themselves. Sometimes they may be able to take advantage of
45,3 opportunities or to prevent future negative outcomes.
Commitment plays a significant role in inter-firm relationships. Hence, the following
hypothesis is posited:
H1. SCM commitment will have a direct impact on the integration of the SCM
business process.
362
The marketing determinants of SCM
In accordance with the study of Goodman and Dion (2001), this study includes three
marketing determinants to explore how these factors affect the business process
integration in SCM. They are idiosyncratic investment, product saleability, and
dependence.
Idiosyncratic investments refer to the investments specific to a channel relationship.
They may be expenditures of time, effort, or funds, directed mainly at marketing
initiatives for a specific manufacturer’s product offering. Williamson (1985) suggested
that idiosyncratic investments stabilise relationships by adjusting the firm’s own
incentive structure. In order to make idiosyncratic investments in a relationship, a
channel member creates an incentive to maintain the relationship. Once committed,
idiosyncratic investments are of substantially less value outside the particular trading
relationship.
Idiosyncratic investment also constitutes a “pledge” (Anderson and Weitz, 1992) or
“credible commitment” (Williamson, 1985) which signals a firm’s sincerity (Anderson
and Weitz, 1992; Ganesan, 1994; Provan and Gassenheimer, 1994). Empirical studies
on channel relationships (Anderson and Weitz, 1992; Ganesan, 1994; Provan and
Gassenheimer, 1994) have found that investment in a relationship by one side serves
to signal sincerity and long term intentions to the other (Gundlach et al., 1995). Over
time, idiosyncratic investment transforms an economic exchange into a socially
embedded relationship (Galaskiewicz and Shatin, 1981; Granovetter, 1985; Ring and
Van de Ven, 1994). Goodman and Dion (2001), and Anderson and Weitz (1992)
described idiosyncratic investments as investments that are specific within
a channel relationship. Because idiosyncratic investments are essential to certain
channel relationships, and are difficult or impossible to redeploy to another channel
relationship, the nature of these investments is to serve specific business objectives.
Some examples of idiosyncratic investments in channel relationships are training or
recruitment of dedicated personnel to service a specific manufacturer’s products,
adopting a common order processing system, or building specialised facilities to
handle a specific manufacturer’s product line. The investments are a necessary part
of achieving strategic outcomes because they enhance efficiencies in coordination
(Williamson, 1984) and have several important relationship stabilizing properties.
They facilitate expectations of continued exchange into the future (Heide and John,
1990) and represent credible commitments to the relationship that are useful in
minimizing opportunistic behaviour.
Product saleability is defined as the downstream firm’s perception of the product as
having value, and being useful, well serviced, and good quality (Goodman and Dion,
2001). Generally the distributor would be able to assess the saleability of the product.
The distributor would assess whether it is more technically advanced than a
competitor’s, provides better value for money for the customer, is useful for customers,
is of high quality, and is accompanied by good after sales service. The core purpose of Supply chain
the existence of the distributor-manufacturer partnership is to sell the manufacturer’s commitment
product. Thus, the saleability of the product will be a major concern in the development
of commitment in the partnership.
Dependence in marketing channels has been identified by Emerson (1962) and can
be viewed as the extent to which a partner provides their valuable resources in case
there are few alternative sources of supply. The willingness of middlemen to accept 363
supplier authority is mainly dependent upon the number and value of alternatives the
former has (Bucklin, 1973). Goodman and Dion (2001) claimed that dependence is the
degree of difficulty that distributors would encounter if they did not have access to the
supplier’s product. Skarmeas and Katsikeas (2001) defined dependence as the extent to
which a trade partner provides important and critical resources for which there are few
alternative sources of supply. Dependence exists because trade partners offer resources
that enable the firm to cope more effectively with critical contingencies (Hickson et al.,
1971).
Hibbard et al. (2001) explain that as total dependence increases; both channel
members have greater stakes in the relationship. Higher levels of total dependence
enhance the dealer’s awareness of the supplier’s need to keep the relationship intact. In
addition, higher total dependence means that the dealer also needs the supplier,
because disengagement is not an attractive option as there are few, if any, valued
alternatives. Also, dealers that are relatively dependent on their supplier believe they
need to maintain the relationship to achieve their goals (Frazier, 1983). They are
unlikely to respond in ways that may result in escalation or, ultimately, the dissolution
of the relationship (Kumar et al., 1995). Furthermore, a relatively dependent dealer may
believe or observe that venting or constructive discussion is an ineffective mechanism
against the more powerful supplier, because, given the imbalance dependences, the
supplier can afford to ignore the dealer. Therefore, relatively dependent dealers may
have little recourse but to respond more passively, hoping that conditions improve
(Frazier et al., 1989). Geyskens et al. (1996) argued that the effects of trust and
interdependence on relationship commitment are more complex than revealed by
previous findings. Geyskens et al. (1996) examined the jointed impact of the dealer’s
perceptions of the channel interdependence structure and its trust in the supplier on
affective and calculative commitment. Their research found that deepening
interdependence within a channel relationship will tend to increase the calculative
commitment for both parties. Andaleeb (1996) claimed that if a distributor perceives
him- or herself to be dependent on a particular manufacturer, s/he will display a greater
level of commitment to that manufacturer’s products and programs.
All the above marketing determinants have been shown to have a theoretical impact
on commitment and are expected to have a relation with business integration as well.
Hence, the following hypotheses are posited:
H2. Marketing determinants of SCM will have a direct impact on SCM
commitment.
H3. Marketing determinants of SCM will have a direct impact on the integration of
the SCM business process.
EJM The behavioural determinants of SCM
45,3 A review of the relevant literature shows that there are four behavioural factors that
are found to be highly influential in business process integration in SCM:
(1) continuity;
(2) communication;
364 (3) power; and
(4) trust.

Continuity is defined as the perception of bilateral expectation of future interaction

(Heide and John, 1990). In many partnerships it has been shown that higher levels of
commitment will produce a corresponding increase in continuity. Long-term
relationships are more likely to promote strategic integration in an inter-firm
relationship for several reasons. Older relationships have passed through and have
survived phases of adjustment and accommodation (Anderson and Weitz, 1989).
Partner firms are far more familiar with relationships of longer duration and are more
comfortable operating within the historical context of an older relationship (Doney and
Cannon, 1997). By virtue of their survival, longer relationships provide a stable
situation for strategic integration.
Communication (both informal and/or formal) is defined as the sharing of
meaningful and timely information between firms (Anderson and Narus, 1990). Mohr
and Spekman (1996) identified communication as the “key to vitality” of a partnership.
Three communication aspects of a vibrant partnership have been highlighted. These
are joint effort in setting goals and market planning, the quality of communications,
and the extent of the sharing of information in a partnership. Mohr and Nevin (1990)
found that channel members achieve coordination by sharing information through
frequent two-way interchanges. Communication also boosts confidence in the
continuity of the relationship and reduces dysfunctional conflict (Anderson and Narus,
1990; Anderson and Weitz, 1989). Therefore, this research suggests that channel
members or supply chain members will be motivated to commit to a relationship
characterised by an open sharing of information. Such relationships stimulate a high
level of communication which should enhance commitment.
Power is the ability of one individual or group to get another unit to do something
(Dahl, 1957). El-Ansary and Stern (1972) applied this concept to distribution channels
by defining power as the ability of a channel member to control the decision variables
in the marketing strategy of another member at a different level in the channel of
distribution. Frazier and Rody (1991) and Scheer and Stern (1992) found that inter-firm
power can play a positive role in promoting the effective coordination of channel
relationships for both the relatively powerful and the relatively dependent channel
member.
Trust is defined as the willingness to rely on an exchange partner in whom one has
confidence due to the ability of that partner to provide expertise, dependability, and
direction (Moorman et al., 1993). Trust is a critical component in the present day
distributor-manufacturing partnership and is likely to last long into the future (Dwyer
et al., 1987 and Schurr and Ozanne, 1985). Trust reduces the likelihood that the other
party will act opportunistically (Bradach and Eccles, 1989). This is because, through
trust, trading partners develop confidence that over the long-term, short-term
inequities will be corrected to yield long-term benefit (Alvesson and Lindkvist, 1993). Supply chain
While trust can substitute for contracts in many exchanges and serve as an alternative
control mechanism (Bradach and Eccles, 1989), Driscoll (1978) and Scott (1980) found
commitment
that only specific situational trust predicts organizational outcomes. This is in keeping
with previous empirical work (Gulati, 1995; Morgan and Hunt, 1994) on trust and
commitment which suggests that when managers perceive mutual trust between
themselves and their trading partners, they are more likely to commit to a partnership. 365
Other studies suggest that the confidence on the part of the trusting party results from
the firm’s belief that the trustworthy party is reliable and has high integrity. Both are
associated with such qualities as consistency, competence, honesty, fairness,
responsibility, helpfulness, and benevolence (Dwyer and LaGace, 1986; Larzelere and
Huston, 1980; So and Sculli, 2002):
Behavioural determinants involve the behavioural traits firms’ exhibit while
dealing with one another. The behavioural determinants might be described as
the company position in the market. This interacts with company performance
and company policy. If company performance turns out to be positive, it is likely that
commitment and business process integration will be more attractive or grow naturally
among firms. At the same time, if company policy is to consider their supply chain as a
partnership, the sharing of information (communication) among firms will be
considered a necessary obligation that each firm would have towards other firms.
All the above behavioural determinants have been shown to have a theoretical link
to commitment and are expected to have a relationship with business process
integration as well. Thus, the following hypotheses are posited:
H4. Behavioural determinants of SCM will have a direct impact on SCM
commitment.
H5. Behavioural determinants of SCM will have a direct impact on SCM business
process integration.
The main purpose of this study is to find the interrelationships among SCM
determinants, SCM commitments, and SCM business process integration. Thus, the
research constructs will include the marketing determinants of the supply chain,
behavioural determinants of the supply chain, SCM commitment, and SCM business
process integration. Based on the above discussion the conceptual framework shown in
Figure 1 is derived. The Appendix summarises the operationalization of latent
variables as presented in the conceptual framework.

Methodology
Measurement
The conceptual framework used in this study consists of four constructs i.e. Marketing
Determinants, Behavioural Determinants, Supply Chain Commitment, and Business
Process Integration. Each of these constructs was measured by multiple dimensions to
explore the domain of study adequately. Marketing Determinants were measured
using three dimensions: Idiosyncratic Investment, Product Saleability, and
Dependence. Behavioural Determinants were measured using four dimensions:
Continuity, Communication, Power, and Trust. Supply Chain Commitment was
measured using two dimensions: Affective Commitment and Continuance
Commitment. Finally, Business Process Integration was measured using three
EJM
45,3

366

Figure 1.
Conceptual framework

dimensions: Customer Relationship Management, Demand Management, and New

Product Development. The items designed to measure each of these constructs are
listed in the Appendix.

Sampling
A combination of mail, e-mail, and telephone survey was used for collecting the data.
A draft questionnaire, based on measures identified in the literature, was translated
into Thai by a bilingual research associate and refined and verified for its translation
accuracy by two Logistics and Supply Chain professors. They were asked to review the
questionnaire for readability and ambiguity (Dillman, 2000). The Thai version was
then examined by two supply chain managers for content and face validity, resulting
in some minor modifications of the wordings of some survey items. This technique is
frequently applied by management researchers (Matsumoto, 1994; Hwang et al., 1996).
Questionnaires were mailed to the logistics and supply chain managers of 360 Thai
companies in different industrial sectors (Agriculture, Hunting and Forestry,
Manufacturing, Wholesale and Retail Trade, Automotives, Personal and Household
Goods) according to the sample size criteria suggested by Hair et al. (1998). Firms were
randomly selected from the list of 1,000 registered companies in the Thailand Business
Directory published by Teleinfo Media Public Co. Ltd, in 2005-2006.
As the information targeted was strategic in nature, the survey instrument was sent
to the highest ranking officials within targeted firms. This is supported by a study by
Phillips (l981) that indicates high ranking informants tend to be more reliable sources
of information than low ranking ones. Respondents were asked to evaluate the extent,
on a seven-point Likert scale, to which their firms practice the various constructs in Supply chain
this study. Owing to the need for a relatively large sample size, while keeping the commitment
research costs down, this study relied upon the data collected from either logistics or
supply chain managers, depending on their availability. Although the use of single
informants may result in method variance as well as informant bias, the logistics or
supply chain manager is most likely to be the most knowledgeable informant on the
issue (Huber and Power, 1985). Consequently, 285 effective responses (79 per cent 367
response rate) were collected. The response rate of 79 per cent is reasonably acceptable
when compared to that of recent studies in operations management (Tan, 2001) and the
case is also similar in marketing. To get such a response rate, repeated contact was
made by phone and e-mail following the original distribution of the questionnaires.

Non-response biases
Careful non-response analyses were applied to ensure the absence of non-response
biases. Specifically, 30 of the survey items used for analysis were randomly selected.
The data set was split into two groups based on return time, which consisted of 56
from the early waves of return and 53 from the late waves of return. The mean scores of
the data groups were compared using t-tests. The results yield no differences among
the questionnaire items, which strengthen the validity of this study (Tan, 2001). In
addition, respondents and non-respondent corporations were compared for annual
sales and company assets to test for non-response bias. No difference between
respondents and non-respondents for annual sales (t ¼ 0:179, p . 0.05) or for company
assets (t ¼ 0:435, p . 0.05) was found. Thus, the tests show that non-response bias
was not a problem in this study.

Reliability and validity test

Reliability and validity tests were then conducted on the constructs with multivariate
measures. Cronbach’s alpha reliability estimate was used to measure the internal
consistency of the multivariate scales (Nunnally, 1978). In this study, the Cronbach’s
alpha of all the constructs were greater than 0.7, which shows that there was good
reliability of the survey instrument (Cuieford, 1965). Meanwhile, to ensure that the
instrument had reasonable construct validity, convergent and discriminant validity
was analyzed following Campbell and Fiske’s (1959) criteria. The results show that the
correlations are all higher than zero and large enough to ensure discriminant validity.
Furthermore, discriminant validity was examined by counting the number of times an
item correlates more strongly with items of other variables than with items of its own
variable (Aldawani and Palvai, 2002). Campbell and Fiske (1959) suggest this number
should be less than 50 per cent. The results also show adequate discriminant validity.
Jointly, these constructs demonstrate both convergent and discriminant validity in this
study.

Structural equation model approach

The structural equation modeling approach is a multivariate statistical technique for
testing structural theory (Tan, 2001). This approach incorporates both observed and
latent variables and is usually separated into measurement models and a structural
model. A two-step modeling approach was conducted in the present study. The
measurement models (or confirmatory factor models) were tested prior to the structural
EJM model. The maximum likelihood estimation method was employed (Bagozzi and Yi,
45,3 1988).

Analysis of the measurement models

Although the Cronbach alpha and item-to-total correlations showed that each construct
was reliable and valid, the independence among the factors of each construct still
368 required examination and verification. Hence, confirmatory factor analysis was
performed, as suggested by Byrne (1994), to assess the measurement models of
Marketing Determinants, Behavioural Determinants, Supply Chain Commitment and
Business Process Integration (Tan, 2001). To establish the scale for each latent variable
in the model, the first regression path in each measurement model was fixed at 1
(Maruyama, 1998). The results of confirmatory factor analysis for each dimension are
shown in Table I, which reveal that all parameter estimates of the factors for each
dimension are rather large and statistically significant, with t-values greater than 1.96
and factor loading values greater than 0.5. Hence, the models fit the sample data well
for all dimensions.

Analysis of the structural model

After incorporating the modifications prompted by the analysis of the measurement
models described above, the structural equation modelling approach was applied to
test the proposed hypotheses. The scale items of each measure were aggregated into a
composite scale by averaging the items. The research model was then constructed, as
shown in Figure 2. The absolute indexes (GFI ¼ 0:921; AGFI ¼ 0:909; IFI ¼ 0:924;
CFI ¼ 0:922; RMSEA ¼ 0:057; and RMR ¼ 0:045) indicate that the results of the
analysis of the structural model reveal a satisfactory fit for the sample data. It is
reasonable to conclude that the proposed model has good construct validity. As
Figure 2 shows, of the five hypothesised relationships, three were statistically
significant (P . 0.05; one-tailed test).

Standardised t- Mean
Constructs Items loadings value Reliability scorea SD

Marketing determinants MD1 0.57 5.05 0.72 5.26 0.60

MD2 0.73 5.80 0.90
MD3 0.61 5.55 0.70
Behavioural determinants BD1 0.58 8.09 0.78 5.23 0.78
BD2 0.84 16.30 0.71
BD3 0.81 17.36 0.85
BD4 0.84 16.20 0.88
SCM commitment SC1 0.96 9.51 0.86 4.87 0.55
SC2 0.57 8.59 0.75
SCM business process
integration SB1 0.54 11.94 0.91 5.04 0.71
SB2 0.84 13.29 0.85
SB3 0.81 11.21 0.85
Table I.
Construct measurement Notes: aBased on a seven-point Likert scale ranging from “Extremely Low” (1) to “Extremely High” (7);
summary: confirmatory Fit statistics for measurement model are as follows: (x 228 ¼ 338.85, p , 0.05; RMSEA ¼ 0.057;
factor analysis RMR ¼ 0.045; GFI ¼ 0.921; AGFI ¼ 0.909; IFI ¼ 0.924; CFI ¼ 0.922
 Supply chain
commitment

369

Figure 2.
Path coefficients and
t-values for the structural
model
EJM Findings
45,3 Sample profile
From Table II, the findings indicate that 35 per cent of the participant firms were
between five and 15 years old and their business was in average represented by three
industries: agricultural, hunting and forestry (32 per cent), manufacturing (36 per cent)
and wholesale and retail trade (32 per cent). Their main business objectives were
370 responsiveness to the competitive pressure (mean ¼ 3:47) and profitability
(mean ¼ 3:33) while the pressure on the business was mainly influenced by the
competitive intensity (mean ¼ 3:47) and buyer power (mean ¼ 3:35). On average,
almost half of the participant firms were small and medium size enterprises (SMEs) (43
per cent) and the rest (57 per cent) large firms. Almost 35 per cent of the participant
companies had an annual turnover of 11 to 100 Million Baht[1].

Discussion
The hypotheses were tested using a structural equation modelling (SEM). SEM is an
appropriate statistical technique for testing a model that is hypothesised a priori and
which assesses the relationships among latent constructs that are measured by
multiple scale items, where at least one construct is both a dependent and independent
variable (Hair et al., 1995). In addition, SEM allows researchers to estimate the strength
of relationships among scale items and latent constructs, while giving the researcher
an indication of overall model fit.
The model’s overall fit must be established before examining the study’s
hypotheses (Bollen and Long, 1993). The results of the structural model’s estimation

Characteristic Frequency (n ¼ 285) %

Business activity
Agriculture, Hunting and Forestry 90 32
Manufacturing 104 36
Wholesale and Retail Trade 91 32
Company size
, ¼ 200 122 43
201-500 50 18
501-2,500 95 33
2,500-10,000 15 5
. 10,000 3 1
Age of business
, 5 years 77 27
5-15 years 100 35
16-35 years 56 20
36-70 years 24 8
Over 70 years 28 10
Size of business
, million Baht 10/year 10 4
Million Baht 11-100/year 99 35
Million Baht 101-250/year 29 10
Million Baht 251-500/year 8 3
Table II. Million Baht 501-1,000/year 61 21
Sample profile Over 1 billion Baht /year 78 27
are shown in Figure 2. The model’s chi-square statistic was significant (x 228 ¼ 338:85; Supply chain
p ¼ 0:05). However, the chi-square estimate has been shown to be oversensitive to commitment
small model discrepancies when the sample size that can be achieved is as low as 285
respondents, rather than the desired 380 respondents. Therefore, the researcher used
other indices to test the model fit;, e.g. GFI, AGFI, RMSEA, shown in Table I and
concluded that the model is a good fit.
The hypothesised model permits an examination of the direct effects of marketing 371
(MD) and behavioural determinants (BD) on SCM commitment (SC) and SCM business
process integration (SB) as well as the indirect effect of MD and BD as mediated by SC
on SCM business process integration (SB). Thus, the test of the proposed hypotheses is
based on the direct and indirect effects in the structural model. All measures are
presented in their standardised forms.
The standardised path coefficients, together with the corresponding t-values of the
structural model, are presented in Figure 2. Out of the total five hypothesised paths,
three were supported and in the expected direction, while two were not supported. The
R 2-value indicates that direct paths between Marketing Determinants and Behavioural
Determinants on Supply Chain Commitment explained 57.8 per cent of the variance. On
the other hand, the direct paths between Marketing Determinants, Behavioural
Determinants, and Supply Chain Commitment explained 46.9 per cent variance.
Results in Figure 2 suggest that Behavioural Determinants (BD) has a direct influence
on both Supply Chain Commitment (H4) and Business Process Integration (H5). Also,
Behavioural Determinants (BD) has an indirect effect on Business Process Integration
which is mediated through Supply Chain Commitment. On the other hand, Marketing
Determinants (MD) has a direct effect on either Supply Chain Commitment (H2) or
Business Process Integration (H3). Also, Marketing Determinants does not have any
indirect effect on Business Process Integration. Finally, Supply Chain Commitment
does have a significant direct effect on Business Process Integration (H1).

Research implications
The current study has demonstrated that marketing determinants have no impact on
SCM commitment, implying that a Thai business has its roots in the Confucian culture
as it relates to conducting business. The rationale for such implications can be
understood from the following discussion.
Hofstede and Bond (1988) developed a fifth dimension, also known as Confucian
Dynamism, which is designed to assess a culture’s tendency toward certain Confucian
traits such as the concept of time. The essential purpose of Confucian Dynamism is to
identify the time orientation of cultures, and is based in part on the work of the great
Chinese philosopher Confucius. A high score along this dimension reflects a culture’s
tendency toward a future minded mentality (Robertson and Hoffman, 2000, p. 36).
Hofstede and Bond (1988) contend that people in nations that have a high Confucian
Dynamism scores tend to associate more with the values of persistence, respect for
status, thrift, and having a sense of shame. Empirical results (Hofstede and Bond, 1988)
indicate that people from Hong Kong, Thailand, and Japan are high in Confucian
Dynamism values.
Low scores along this dimension reveal a culture’s orientation toward the present
and past. Members of low Confucian Dynamism cultures value the relative importance
of personal steadiness and stability, saving face, respect for tradition, and reciprocation
EJM of greetings, favours, and gifts. Nations that scored low along this dimension included
45,3 Canada, Pakistan, and the United States (Hofstede and Bond, 1988).
According to Hofstede (1991), the fifth dimension deals with “time orientation” and
consists of two contrasting poles: “long-term orientation” versus “short-term
orientation”, as shown in Table III.
Hofstede (1991) postulates long-term orientation refers to a positive, dynamic, and
372 future-oriented culture linked with four “positive” Confucian values: “persistence
(perseverance)”; “ordering relationships by status and observing this order”; “thrift”;
and “having sense of shame”. Short-term orientation, however, represents a negative,
static, traditional and past-oriented culture associated with four “negative” Confucian
values: “personal steadiness and stability”; “protecting your face”; “respect for
tradition”; and “reciprocation of greetings, favours and gifts”. Chinese societies (China,
Hong Kong, Taiwan, Singapore), Japan, Korea, Thailand, etc., are ranked as more
future and long-term oriented cultures, whereas Pakistan, Nigeria, the Philippines,
Canada, Zimbabwe, the UK, the USA, New Zealand, Australia and Germany are more
past and short-term oriented cultures.
In line with the concept of Confucian dynamism, Usha and Haley (2006) specifically
identified some of the differences in cognitive styles between Eastern and Western
managers. First, Easterners process information in holistic fashion, and Westerners in
a particularistic fashion. Easterners also emphasise interdependent relationships
between variables to generate possible solutions to problems. Western managers, in
contrast, distinguish the problem from its surroundings to generate possible solutions.
Eastern managers often accept and inhabit multiple realities and truths, while Western
managers generally concentrate on one or two. Predominant realities, such as
investment choices, often become accepted truths for Western managers, limiting their
strategic options. In contrast, Easterners rarely completely discard plausible realities;
less-favourable investment choices, for instance, often linger as plausible options.
Second, effective Eastern managers emphasise their unique experience and
empirical evidence over the formal explanatory models that Western managers prefer.
In contrast, Western managers develop rigorous decision rules to aid their strategic
decision-making. These rules tend to generate universal solutions that the managers
then have to fit to situations. Finally, Eastern managers tend to deny their ability to
control, though not to influence, situations.
Hence, Usha and Haley (2006) further argued that the Western industrialised
countries dominate on market research expenditure, while the emerging East-Asian
markets incur miniscule expenditures per capita. For Example in 2001 per capita
market research expenditures in the UK was $US 27 and in China less than $1.

Long-term orientation Short-term orientation

1. Persistence (perseverance) 1. Personal steadiness and stability

2. Ordering relationships by status and 2. Protecting your face
observing this
3. Thrift 3. Respect for tradition
Table III. 4. Having a sense of shame 4. Reciprocation of greetings, favors, and gifts
Time orientation of
Confucian dynamism Source: Based on Hofstede (1991, pp, 165-6, 2001, pp. 354-5)
Similarly, in 2001 per capita advertising expenditures in the USA and the UK was $US Supply chain
450 and $US 350 while in China it was less than $10 (Haley et al., 2004). The findings commitment
regarding the relationship between marketing determinants and SCM Commitment in
the current study are in line with the findings reported by Haley et al. (2004).
Several emerging markets have what many Western managers would consider
information-void economies. Yet, many Western companies enter these markets
without a coherent and appropriate business plan and disaster results. 373
To succeed in emerging markets, managers build mutually beneficial relationships
with employees, suppliers, and government and facilitating agencies to create value for
their customers (Usha and Haley, 2006). The successful companies in emerging
markets see relationships creating value for their entire supply chain, including
suppliers, distributors, facilitating agencies, employees and sometimes even
government agencies, and not just for customers,
Chinese-Thai merchants mostly base their business on their connections rather than
on the performance-oriented objective (product saleability) of their partners. Anecdotal
evidence suggests relationships are based on how long they have been doing business
and how well their relationship has been maintained. In addition, one possible
assumption would be that the size of business is an important determinant, and small
and medium sized enterprises (SMEs) constituted 43 per cent of total sample. Due to
resource constraints, they may not be able to invest in marketing determinants. Hence,
that may be part of the reason why marketing determinant were not found to be
influential. Most Thai companies, especially SMEs, tend to manage their material
sourcing through systems such as electronic data interchange (EDI), designed for
internal use rather than joining with their supply chain partners (Idiosyncratic
Investment) through investing in supply chain wide systems, e.g. Enterprise Resource
Planning (ERP). Moreover, according to the information provided by the Asian
Development Bank (ADB), as a result of the financial crisis in 1997, many intrinsically
sound companies in Thailand, especially small- and medium-sized firms, face severe
financial difficulties, including a shortage of working capital and long-term debt
burdens. Those companies have little or no access to alternative sources of capital and
generally cannot afford the services of international investment banks (www.adb.org,
2000). Also, global competition could significantly affect the supply chain partners’
dependence, as the product offerings are increasingly available, or, in other words,
products are becoming easier to source in the digital world of today.
It is interesting to note that behavioural determinants have a significant impact on
both SCM commitment and SCM business process integration. Communication and
trust are critical to the behavioural aspects of the exchange relationships, as it is
believed that improving connections among Thai businesses, they will promote
discussion based on trust rather than on formal agreements or the benefits accruing to
each partner. Thai firms often open up discussions involving the marketing
determinants and each other’s business performance. In contrast with this, Thai
business is expected to move forward to a capitalist economy where big firms acquire
small firms, enabling them to operate in a full business cycle scheme. (For example,
Charoen Pokphand[2] Group plc. has been trying to operate its chicken farms with their
indoor operation. Their business covers chicken farming, starting with their own
supplies and going through to selling to market.) Power plays a significant role in
EJM business nowadays, where big firms could control transactions and force supply chain
45,3 partners to commit (continuance commitment) and join the process integration.
SCM commitment is explained to a great extent by affective commitment in this
study. The sample represents firms have, on average, been in business for five to 15
years, which is considered to be moderately new to the market, and the firms’
turnovers are in the range of 11 to 100 Million Baht. It is assumed that at this stage of
374 the business cycle, firms tend to require a strong affective commitment among supply
chain partners in order to build strong relationships towards their firm’s future
co-operation. Thai firms tend to commit to their relationships to satisfy their own
wishes rather than for economic considerations of the hidden cost of leaving.
Finally, both behavioural and SCM commitment have an impact on the SCM
business integration, mainly in terms of demand management and new product
development. Due to the high percentage of SMEs included in the sample profile, CRM
seems to be less affected by the previous two factors, as they involve fewer customers.
Therefore, it is not very common for firms to set up a reliable or formal system,
processes and procedures for interacting with their customers. They often care about
how to deliver the products in accordance with customers’ wishes, as well as how fast
they can develop their products and launch into the markets. SMEs’ main strength is
how quickly and flexibly they can attack their competitors and reach the right line with
the demands of their customers.

Managerial implications
This research identifies an interesting fact, that only behavioural determinants have an
impact on SCM commitment and SCM business process integration in Thai businesses.
This might be the case for businesses across the region, and this should be the subject
of investigation and confirmation. However, the findings of this study differ from those
of previous studies found in the literature in the following ways:
.
Relationships play a vital role. The Confucian cultural influence (as discussed
above) is still prevalent within Thai businesses as firms embrace the influence of
globalization and hence, shift towards a more professional business approach.
Anecdotal evidence suggests economic transitions and shifts observed all over
this region which might be driven by acquisition by larger firms. Business
culture still mainly relies on the connections and relationship among firms in
terms of behaviour rather than marketing aspects.
.
It is likely that marketing determinants might influence Thai businesses in the
long-run as firms pursue more business acquisition and develop efficient
business process integration across supply chains.

From a managerial standpoint, the findings of this study could benefit various parties
with an interest in achieving better SCM business process integration, quite apart from
the quantitative measures. A micro and macro view can be taken of the results, which
can be interpreted as supporting ideas about the determinants that must be addressed
when pursuing SCM business process integration. Supply chain partners should be
aware of important business aspects and support these factors through their policies in
order to achieve a better supply chain performance. At the same time, they need to
focus on marketing determinants which are likely to improve their SCM commitment
and SCM business process integration. The need to focus on marketing aspects will be
critical for the improvement of business process integration which is likely to have a Supply chain
significant impact on future supply chains. commitment
At the macro level, the government and associations involved in SCM at a national
level must be aware of the important behavioural aspects and provide the necessary
guidance to promote efficient business process integration.

Conclusion and future research directions 375

The results of the present study cover areas which have been ignored by earlier
studies, or, in some cases, contradict the findings of earlier studies. The results imply
that Behavioural Determinants play a pivotal role in achieving supply chain
commitment and business process integration. This demonstrates the strategic
importance of behavioural aspects in dealing with suppliers and customers in a supply
chain system. The behavioural dimensions proved to be critical in linking external
market requirements with internal considerations, such as organizational and
technological resources, capacities and competitiveness. In order to enhance supply
chain performance and deliver customer satisfaction, it is imperative for the executives
of companies to understand the behavioural underpinnings, so that they can be
effective in planning the supply chain business process.
Even though the present empirical results largely support the current model, this
study has several limitations. First, since the empirical data were provided by individual
informants, the possible existence of biases cannot be altogether discounted. Second, the
facilitating factors of Behavioural Determinants employed in this study, particularly the
internally aligned factors (continuity, communication, power, and trust), are by no means
exhaustive, even if they have been identified as the critical dimensions in the available
literature. Finally, the data were collected in Thailand, and the distribution of the firms
on the various measures surveyed may be quite different from that in other countries.
Thus, it should not be assumed that the present results represent a more general case.
However, the present study may be a useful reference point for firms located in other
countries whose circumstances are similar to those in Thailand.

Notes
1. Approximately $US 1 ¼ 35 Baht.
2. One of the largest industrial conglomerates in Thailand.

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380

Appendix

Latent construct Operationalization/components

Marketing determinants A supply chain member’s tendency to experience: (13 Items)

Definition: A perception of
marketing activities on the
outcomes of exchange
relationships – integration in and
commitment to the relationship
Goodman and Dion (2001)
Measurement: 13 items. Seven-
point Likert scale
Scale sources: Anderson and Weitz
(1992); Goodman and Dion (2001);
Andaleeb (1996)
Behavioural determinants
Definition: A perception of the
behavioural determinants on the
outcomes of exchange
relationships – integration in and
commitment to the relationship
Heide and John (1990); Anderson
and Narus (1990); Dahl (1957) and
Moorman et al. (1993)
Measurement: 11 items. Seven-
point Likert scale
Scale sources: Bucklin and
Sengupta (1993); Frazier and Rody
(1991); Gaski (1984); Hunt and
Nevin (1974); Anderson and Weitz
(1992); Cooper et al. (1997)
Table AI.
Scale items
(a) Idiosyncratic investment (MD1)
Invest to supply chain partner’s product line
Invest to help supply chain partner to sell their product
Invest to assist supply chain partner to develop their business
(b) Product salability (MD2)
Your product is technically advanced
Your product has better value
Your product is useful
Your product has high quality
Your product provides better service
(c) Dependence (MD3)
Your supply chain partner depends on your performance ability
Your supply chain partner depends on your development of new
product
Your supply chain partner depends on your marketing ability
Your supply chain partner depends on your financial support
Your supply chain partner depends on your human resource
support
A supply chain member’s tendency to experience: (10 Items)
(a) Continuity (BD1)
The degree of transactional exchange (i.e. information exchange)
between you and your supply chain partner is very high
The relationship between you and your supply chain partner is
very stable
(b) Communication (BD2)
The degree of dealings between you and your supply chain
partner is very high
The relationship between you and your supply chain partner is
very stable
(c) Power (BD3)
Your firm is powerful enough to ask your supply chain partner to
readjust their price strategy
Your firm is powerful enough to ask your supply chain partner to
readjust their product
Your firm can provide training support to your supply chain
partner
(continued)
Latent construct Operationalization/components
Supply chain
commitment
(d) Trust (BD4)
Your supply chain partner perceives that your firm is perfectly
honest and truthful
Your supply chain partner perceives that your firm has high
integrity
You would like to keep informing your supply chain partner 381
everything about new developments
Supply chain commitment A supply chain member’s tendency to experience: (10 Items)
Definition: Promise or agreement (a) Affective commitment (SC1)
to do something in the future in the Your supply chain partner feels that, if some problems happen in
supply chain relations this supply chain, these problems must be made by them
Measurement: 15 items. Seven- Your supply chain partner feels like “part of the family” in this
point Likert scale supply chain relationship
Scale sources: Allen and Meyer Your supply chain partner feels “emotionally attached” to this
(1990) supply chain relationship
This supply chain relationship has a great deal of personal
meaning for your supply chain partner
Your supply chain partner feels a strong sense of belonging to
this supply chain relationship
(b) Continuance commitment (SC2)
Your supply chain partner is afraid of what might happen if he
leaves this supply chain relationship
It would be very hard for your supply chain partner to leave this
supply chain relationship right now, even if he wants to
It would be too costly for your supply chain partner to leave this
supply chain relationship
Your supply chain partner staying with this supply chain
relationship is a matter of necessity as much as desire
Your supply chain partner feels that it has too few options to
consider leaving this supply chain relationship
Supply chain business process A supply chain member’s tendency to experience: (16 Items)
integration (a) Customer relationship management (CRM) (SB1)
Definition: Many business You and your supply chain partner would like to share the data
processes, which proceed and of customers for each other
coordinate within a company, are You and your supply chain partner work together to develop and
by nature or in some way involved implement programs with key customers
in supply chain relationships with You and your supply chain partner work together to identify key
other companies customer target markets
Hewitt (1992) Your supply chain partner would help you to service the local
Measurement: 16 items. Seven- customers
point Likert scale Your supply chain partner would provide product information to
Scale sources: Davenport (1993); your customers
Lambert et al. (1998); and the You and your supply chain partner use a similar online
practices adopted by IBM, Xerox information system, which is provided for your customer’s use
and British Telecom (b) Demand management (SB2)
Your supply chain partner responds to your order as soon as
possible
You can get what you order from your supply chain partner as
soon as possible

(continued)
Table AI.
EJM
Latent construct Operationalization/components
45,3
Your supply chain partner can provide timely and accurate
delivery of your orders
You and your supply chain partner work together to satisfy
customers’ need
382 You and your supply chain partner work together to cut down
the variation of the inventory
You and your supply chain partner work together to forecast
customers’ need
(c) New product development (SB3)
Your supply chain partner would help your firm to lower your
costing during your new product development procedure
Your supply chain partner would help your firm to increase your
product quality during your new product development procedure
Your supply chain partner would give advice to your firm during
your new product development procedure
Your supply chain partner would provide knowledge and
material to help your firm during new product development
Table AI. procedure

About the author

Mohammad Asif Salam is an Assistant Professor of Marketing and Supply Chain Management
at the University of the Fraser Valley, Canada. He was awarded a PhD in marketing and supply
chain management in 2004. His academic research and teaching focus on interdisciplinary issues
in marketing and supply chain management, corporate social responsibility in purchasing,
healthcare logistics, lean and agile logistics, competitive strategies in logistics and supply chain
management, supply chain integration, and humanitarian disaster logistics. He has published
widely in numerous academic peer-reviewed journals including Journal of Business Ethics,
International Journal of Procurement Management, International Journal of Logistics and
Transport, Sasin Journal of Management, Journal of Supply Chain Management: Research and
Applications. He has acted as consultant to many public and private organizations in Asia and
the Pacific and internationally and has been active in research across a wide number of topics
related to marketing and supply chain management. He has presented papers at numerous
academic conferences. Mohammad Asif Salam can be contacted at: asif.salam@ufv.ca or
mbamas@yahoo.com

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