Size Matters: A Comparative Study of Supply Chain Integration between SMEs and MNEs

University essay from Högskolan i Jönköping/IHH, Centre of Logistics and Supply Chain Management (CeLS); Högskolan i Jönköping/IHH, Centre of Logistics and Supply Chain Management (CeLS)

Abstract: Background: Supplier integration is becoming increasingly important due to the increased globalisation in the business world nowadays. Today’s focal firm does not operate independently, but as a part of its supply chain which competes with other supply chains in the market. The number of the focal SMEs in Europe comprises 99% of companies operating throughout the continent. However, the vast majority of the existing literature is investigating supplier integration from MNEs’ perspectives. Purpose: The purpose of this thesis is to generate a new supplier integration theory for SMEs. The study aims to compare how SMEs and MNEs conduct supplier integration, spotting the similarities and differences in their approaches and finding out the reasons behind these varying approaches. Method: We choose a relativist ontology and a constructionist epistemology. Within the boundaries of these research assumptions, we follow an inductive multiple case study approach with exploratory characteristics. The case study consists out of 12 cases, six out of the plant engineering industry and six from the mechanical engineering industry. Each industry is represented by three SMEs and three MNEs. Our findings are gathered through coded and categorised interview transcripts, based on which a critical comparative discussion is done. Conclusion: Through our study we find size and industry related differences in conducting supplier integration. Next to obvious circumstances such as limited resources, we identify personal contact, trust creation and industry specifics as main drivers for variation in supplier integration approaches. Furthermore, we conclude that SMEs fit in particular cases better into the reviewed supplier integration literature, since their focus in relationships leads to a more sustainable interest into the partner’s economic well-being. Finally, our findings show mimetic behaviour in SMEs adopting MNEs’ managerial approaches, characterised by classification, evaluation and strategizing.

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