Optimizing Firm Performance: Alignment of Operational Success Drivers on the Basis of Empirical Data

189 Pages·2014·2.86 MB·English

by  Christian Faden (auth.)

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Herausgegeben von/edited by
Roland Berger School of Strategy and Economics –
Academic Network,
München
Herausgeberrat/Editorial Council:
Prof. Dr. Th omas Bieger Prof. Dr. Kurt Reding
Universität St. Gallen Universität Kassel
Prof. Dr. Rolf Caspers (†) Prof. Dr. Dr. Karl-Ulrich Rudolph
European Business School, Universität Witten-Herdecke
Oestrich-Winkel
Prof. Dr. Klaus Spremann
Prof. Dr. Guido Eilenberger Universität St. Gallen
Universität Rostock
Prof. Dr. Dodo zu Knyphausen-Aufseß
Prof. Dr. Dr. Werner Gocht (†) Technische Universität Berlin
RWTH Aachen
Prof. Dr. Burkhard Schwenker
Prof. Dr. Karl-Werner Hansmann Roland Berger Strategy Consultants
Universität Hamburg
Prof. Dr. Alfred Kötzle
Europa-Universität Viadrina,
Frankfurt/Oder
Christian Faden
Optimizing Firm
Performance
Alignment of Operational Success
Drivers on the Basis of Empirical Data
Christian Faden
Universität Hohenheim
Stuttgart, Germany
Dissertation Universität Hohenheim, 2013
D 100
ISBN 978-3-658-02745-2 ISBN 978-3-658-02746-9 (eBook)
DOI 10.1007/978-3-658-02746-9
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I would like to express my gratitude to my doctoral supervisor Prof. Dr. Dirk Hachmeister for
his great support during my research. Further I thank my employer, in particular Oliver
Knapp and Thomas Rinn as well as all people who contributed to this study. For their
patience and encouragement I would like to thank my lovely wife and son. I appreciate very
much the numerous advises my brother has given to me. Lastly, I thank my parents for their
everlasting support in all my pursuits which is why I dedicate this thesis to them.

V
Contents
Contents .............................................................................................................. VII(cid:2)
Table of figures .................................................................................................... XI(cid:2)
List of abbreviations ......................................................................................... XIII(cid:2)
1(cid:2) Introduction and purpose ............................................................................... 1(cid:2)
2(cid:2) Working capital management: a review of performance
measurement and its drivers ........................................................................... 3(cid:2)
2.1(cid:2) Introduction ............................................................................................... 3(cid:2)
2.2(cid:2) Introduction to the concept of working capital ......................................... 5(cid:2)
2.2.1(cid:2) Evaluation of the working capital concept over time ...................... 5(cid:2)
2.2.2(cid:2) Static and dynamic measurements ................................................... 9(cid:2)
2.3(cid:2) Theoretical basis: Configurational Theory .............................................. 17(cid:2)
2.4(cid:2) Data and methodology............................................................................. 20(cid:2)
2.5(cid:2) Review of the literature ........................................................................... 25(cid:2)
2.5.1(cid:2) Working capital management and firm performance .................... 25(cid:2)
2.5.2(cid:2) Identified drivers of working capital performance ........................ 31(cid:2)
2.5.2.1(cid:2) Production-related variables ............................................ 31(cid:2)
2.5.2.2(cid:2) Company characteristics ................................................. 35(cid:2)
2.5.2.3(cid:2) Competitive position ....................................................... 41(cid:2)
2.5.2.4(cid:2) Industry factors ................................................................ 44(cid:2)
2.5.3(cid:2) Related research topics interfacing with working capital
management ................................................................................... 45(cid:2)
2.5.3.1(cid:2) A literature review of supply chain risk .......................... 45(cid:2)
2.5.3.1.1(cid:2) Supply chain risk drivers versus risk sources ............. 45(cid:2)
2.5.3.1.2(cid:2) Risk drivers and risk source items .............................. 51(cid:2)
2.5.3.2(cid:2) A literature review of manufacturing performance ......... 59(cid:2)
2.5.3.3(cid:2) A literature review of supply chain performance ............ 68(cid:2)
VII
2.6(cid:2) Discussion ............................................................................................... 73(cid:2)
2.7(cid:2) Conclusion ............................................................................................... 76(cid:2)
3(cid:2) Driving firm performance based on an integrated operations
approach consisting of manufacturing, supply chain management,
working capital management and supply chain risk steering ................... 78(cid:2)
3.1(cid:2) Relevance ................................................................................................ 78(cid:2)
3.2(cid:2) Research model and hypotheses .............................................................. 81(cid:2)
3.2.1(cid:2) Manufacturing performance........................................................... 81(cid:2)
3.2.2(cid:2) Supply chain performance ............................................................. 83(cid:2)
3.2.3(cid:2) Working capital management ........................................................ 84(cid:2)
3.2.4(cid:2) Supply chain risk............................................................................ 85(cid:2)
3.3(cid:2) Methodology ........................................................................................... 87(cid:2)
3.3.1(cid:2) Data collection and descriptive statistics ....................................... 87(cid:2)
3.3.2(cid:2) Questionnaire design and measurement items ............................... 90(cid:2)
3.3.2.1(cid:2) Questionnaire design ....................................................... 90(cid:2)
3.3.2.2(cid:2) Measurement items ......................................................... 91(cid:2)
3.3.3(cid:2) Construct reliability and validity ................................................... 93(cid:2)
3.4(cid:2) Results of the structural equation model ............................................... 102(cid:2)
3.5(cid:2) Discussion ............................................................................................. 104(cid:2)
3.6(cid:2) Conclusion ............................................................................................. 109
VIII
4(cid:2) Boosting firm performance: working capital management & supply
risk chain steering as drivers ...................................................................... 111(cid:2)
4.1(cid:2) Competitive pressure on operations ...................................................... 111(cid:2)
4.2(cid:2) What are the operational drivers for your company? ............................ 114(cid:2)
4.3(cid:2) Supply chain risk steering – a tool to boost firm performance ............. 120(cid:2)
4.4(cid:2) Four consecutive steps to a successful supply chain risk steering ........ 128(cid:2)
4.5(cid:2) Managerial implications ........................................................................ 139(cid:2)
5(cid:2) Coverage of the analysis .............................................................................. 141(cid:2)
6(cid:2) Summary ....................................................................................................... 143(cid:2)
Appendix 1: Questionnaire of the empirical survey ............................... 145(cid:2)
Appendix 2: Participants expert interviews............................................. 151(cid:2)
Bibliography ....................................................................................................... 153(cid:2)
IX
Table of figures
Table 1: Number of publications over time ........................................................... 22(cid:2)
Table 2: Publications in top journals over time ..................................................... 23(cid:2)
Table 3: Number of publications per word stem ................................................... 24(cid:2)
Table 4: Working capital performance and firm performance .............................. 26(cid:2)
Table 5: Indicators of working capital performance ............................................. 33(cid:2)
Table 6: Literature review of supply chain risk management ............................... 53(cid:2)
Table 7: Literature review of manufacturing performance ................................... 61(cid:2)
Table 8: Literature review of supply chain performance ...................................... 69(cid:2)
Table 9: Breakdown of participants by industry sector ......................................... 88(cid:2)
Table 10: Firm size, respondent's job title and function ........................................ 89(cid:2)
Table 11: Average NTC per industry cluster......................................................... 92(cid:2)
Table 12: Rotated component matrix .................................................................... 95(cid:2)
Table 13: Component transformation matrix ........................................................ 96(cid:2)
Table 14: Evaluation of reflective constructs ........................................................ 97(cid:2)
Table 15: Descriptive statistics and variable correlations ................................... 101(cid:2)
Table 16: Direct effects of the structural equation model ................................... 103(cid:2)
Table 17: Coefficients of determination .............................................................. 104
Figure 1: Illustration of the cash conversion c#ycle .............................................. 15(cid:2)
Figure 2: Conceptual model .................................................................................. 80(cid:2)
Figure 3: Results of the structural equation model .............................................. 103(cid:2)
Figure 4: Drivers of supply chain risk ................................................................. 113(cid:2)
Figure 5: Participants experience years, industry cluster and firm size .............. 115(cid:2)
Figure 6: Participating companies in the study ................................................... 115(cid:2)
Figure 7: Study results correlations of constructs ............................................... 116(cid:2)
Figure 8: The changing focus of management attention over time ..................... 120(cid:2)
Figure 9: The supply chain risk trade-off ............................................................ 121(cid:2)
Figure 10: Strategic operational options .............................................................. 122(cid:2)
Figure 11: Average performance for each strategic option ................................. 123(cid:2)
Figure 12: Strategic working capital management .............................................. 125(cid:2)
Figure 13: Derivation of supply chain risk policy ............................................... 130(cid:2)
Figure 14: Three organizational options for supply chain risk steering .............. 131(cid:2)
XI