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Journal of Business Venturing 20 (2005) 403 436
Small business and supply chain management: is there a fit?

Richard J. Arend*, Joel D. Wisner1
College of Business, University of Nevada, Las Vegas, 4505 Maryland Pkwy, Box 456009, Las Vegas, NV 89154-6009, USA Received 30 December 2002; received in revised form 30 November 2003; accepted 30 November 2003
Abstract Conflict exists over how supply chain management (SCM) affects small- and medium-sized enterprises (SMEs). On one hand, SCM can provide quality, cost, customer service, leverage and even risk reduction benefits for the SME. On the other hand, SCM exposes the SME to greater management and control hazards while reducing its private differentiation advantages. We test hypotheses relevant to the performance effects of SCM on SMEs using data collected from a recent survey of senior production managers. We find that SCM is negatively associated with SME performance after controlling for self-selection bias. We discuss several explanations for the result. D 2004 Elsevier Inc. All rights reserved.
Keywords: Supply chain management; Small business; Survey
1. Executive summary The question remains open on how well supply chain management (SCM) fits with the small- and medium-sized enterprise (SME). Many firms with 500 and fewer employees, SMEs here, choose to make SCM part of their strategy implementation, while many other SMEs shun it. SCM is a way of obtaining vertical integration benefits without its formal ownership costs. SCM, the integration of key business processes among industry partners to add value for customers, tightly links together several consecutive elements of the industry value chain, from
* Corresponding author. Tel.: +1-702-895-1622; fax: +1-702-895-4370. E-mail addresses: Richard.Arend@ccmail.nevada.edu (R.J. Arend), wisner@ccmail.nevada.edu (J.D. Wisner). 1 Tel.: +1-702-895-3272; fax: +1-702-895-4370. 0883-9026/$ see front matter D 2004 Elsevier Inc. All rights reserved. doi:10.1016/j.jbusvent.2003.11.003
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R.J. Arend, J.D. Wisner / Journal of Business Venturing 20 (2005) 403436
upstream suppliers to subassembly manufacturers to final manufacturers to distributors to retailers to end-customers to make the process more efficient and the products and services more differentiated. However, the current relevant literatures do not consider the effect of firm size as a primary issue relevant to the question of whether the form of business implied by supply chain partnering is optimal. We address this issue through an empirical analysis. The empirical analysis is based on a survey of 421 senior managers, including 200 senior managers in SMEs, from the American Production and Inventory Control Society (APICS) and the Institute for Supply Management (ISM), who ran strategic business units in the United States, Mexico and Europe (mostly United States, 319 of the 421) in the late 1990s. The survey provides information on the possible motivations and performance effects of SCM on SMEs, in addition to information on controls for alternative explanations and information on how SCM was implemented at the SME versus the large enterprise (LE; >500 employees). As a result, we can use a self-selection model (Heckman, 1979; Masten, 1993; Shaver, 1998) to tease out the effects of SCM on SME performance, independent of the firm, and the contextual characteristics that are directly related to performance, yet, also related to choosing SCM. This is fortunate because without the self-selection correction, the negative and significant association of SCM with SME performance would not emerge. It appears that, in general, the SMEs more likely to have good performance chose to engage in SCM, which was a choice that hurt SME performance. This result adds a new challenge to the technology management of the transaction set of entrepreneurs. We offer several explanations for the result below. The SMEs implemented SCM differently than the LEs did, and, apparently, this difference in implementation had a significant association with SME performance. SMEs did not implement SCM with the same focus on physical proximity to partners, on improving the chains performance and on extending the chain; SMEs did not appear to implement SCM as deeply as LEs did. Without such deep involvement in the supply chain, SMEs received fewer advantages from the partnership. Thus, one explanation for the poor fit between SCM and SMEs is that SMEs are not suited to implementing SCM effectively. Another possible explanation lies with SME strategy. Curiously, SMEs that did not place relatively high importance on strategic focus areas on new product development, quality and customer service were more likely to engage in SCM, yet, these same strategic focus areas were positively associated with SME performance. On one hand, it would appear that, in general, SMEs did not practice SCM as a way to compensate for weaknesses in strategic focus areas where they should be strong, such as in new product design. On the other hand, the same results support the argument that SMEs did not practice SCM to complement strategic focus areas because such areas were negatively associated with the choice to do SCM. The stronger SMEs engaged in SCM, and this hid the negative correlation of SCM on SME performance in a regular regression analysis. The results raise the question of how SMEs expected to benefit from SCM, given that they were not using SCM as a substitute or complement, at least in the areas of strategic focus associated with SMEs. Thus, another explanation for the poor fit between SME and SCM is that SMEs did not in general act to use SCM in an obviously strategic way. The other possible explanation we explored concerns context. SMEs chose to pursue SCM when it was easier, when SMEs put high importance on their suppliers using electronic data
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interchange (EDI) and being willing to integrate the supply chain relationship. SME performance was positively associated with the greater relative importance of a set of partner selection criteria as well, indicating, not surprisingly, that partner characteristics influence SME performance. These results lead to the possibility that the poor fit between SMEs and SCM may stem from partner selection criteria focusing on shortsighted easy SCM initiation rather than on a longer sighted and more comprehensive SCM relationship. The empirical analyses raise further explanations. The main one stems from the significance of the SME as a key supplier to its customers in both the choice to pursue SCM and the performance of the SME. The better SME may have been bullied into the supply chain relationship by the more powerful partners that it is key to. In exchange for staying a key supplier to its customers and reaping the performance benefits, the SME suffers the performance loss involved in participating in the supply chain partnership. However, the benefits more than compensate for the costs, in general. Thus, SMEs and SCM fit poorly when SMEs have a truly independent choice, but fit better when a key partner forces the choice. Regardless of the explanation, further research into how new ventures can cooperate with large incumbents to create value and still appropriate a fair share of that value is needed.
2. Introduction The question remains open on how well SCM fits with the SME. Many firms with 500 and fewer employees, SMEs here, choose to make SCM part of their strategy implementation while many other SMEs shun it (Magretta, 1998; Notman, 1998; Kaufman et al., 2000; Tulip, 2000; Hayward, 2001; Quayle, 2002). SCM is a way of obtaining vertical integration benefits without its formal ownership costs. SCM, the integration of key business processes among industry partners to add value for customers, tightly links together several consecutive elements of the industry value chain, from upstream suppliers to subassembly manufacturers to final manufacturers to distributors to customers, to make the process more efficient and the end products and services more differentiated (Lummus et al., 1998; Tan, 2001; Wisner, in press). Growth in SCM has been rapid since its formalization in the mid-1980s and continues at its rapid pace (e.g., Bradley et al., 1998; Ayers, 2000; Miller, 2001). Recent growth is based on a number of factors including the decrease in costs of underlying technological requirements like software, the early reports of benefits and the industry-wide learning of best practices, and the greater probability of having to compete against rivals enjoying the advantages of SCM (e.g., Trebilcock, 2002). To the entrepreneur, SCM has many potential benefits; chiefly, it gives the SME the ability to leverage its scalable competences (e.g., in product design and radical process innovation) in a cooperative network through fast and feasible access to complementary partner assets. However, SCM introduces new challenges in technology management to the SME because it is a much closer and technically intense and complex transaction set (Venkataraman and Van de Ven, 1998) than most alternatives are. SCM and its downstream-oriented twin, relational marketing (e.g., Buttle, 1996; Day et al., 1998; Hingley, 2001), are built on the idea of relation-based rents (Dyer and Singh, 1998). These are rents derived through a cooperative interfirm network that is based on trust,
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reputation and the pursuit of mutual benefit. The risks of such reliance on other firms for each firms rents garners much less attention than do the potential gains from the leverage of relative specialization in a network (Sravistava et al., 1999). While SCM is one method of generating relation-based rents, it is a method based in a specific transactional form of vertical integration. As such, SCM draws from transaction cost economics (TCE; Coase, 1937; Williamson, 1975, 1979), as well as vertical integration economics. However, neither TCE nor the relational view of the firm (Dyer and Singh, 1998) nor the vertical integration literature consider the effect of firm size as an exogenous primary issue relevant to the question of whether the transactional form of business implied by SCM is optimal (Nooteboom, 1993; Venkataraman and Van de Ven, 1998). The research into the SCMSME fit not only confronts this gap in theory, but also faces an empirical challengeone common to exploring the performance effects of any self-selected strategy. The problem lies within the self-selection itself; an empirical analysis must control for factors that not only affect the choice of the strategy but simultaneously affect the performance outcome as well. Failure to control for self-selection effects is a form of model misspecification that could lead to spurious outcomes where, for example, a benign strategy is empirically (and mistakenly) supported as important, simply because most firms choosing it were going to perform better regardless of it. Summarizing, the SCMSME fit question considers three problems: (1) the vulnerability inherent in the reliance on SCM partners for relation-based rents, especially for SMEs; (2) the lack of modification of the underlying SCM theories to account for the effects of firm size; and (3) the self-selection effects in the relevant strategychoice, strategyoutcome link. The purpose of the paper is to address these problems by exploring the SCMSME fit to determine (1) whether the vulnerability has an effect; (2) how the theories can be modified in the SCM context; and (3) whether controlling for self-selection generates different outcomes in empirical analysis of the fit. The empirical analysis is based on a survey of 421 senior managers200 SMEsfrom APICS and ISM who ran strategic business units in the United States, Mexico and Europe (mostly United States, 319 of the 421) in the late 1990s. The survey provides information on the possible motivations and performance effects of SCM on SMEs, in addition to information on controls for alternative explanations and information on how SCM was implemented at the SME versus the LE (>500 employees). As a result, we can use a selfselection model (Heckman, 1979; Masten, 1993; Shaver, 1998) to tease out the effects of SCM on SME performance, independent of the firm, and the contextual characteristics that are directly related to performance, yet, also related to practicing SCM. This is quite fortunate, as it turns out, because without the self-selection correction, the negative and significant association of SCM with SME performance would not emerge. It appears that, in general, the SMEs more likely to have good performance chose to practice SCM, which was a choice that hurt SME performance. The data also allow us to recognize that SMEs implemented SCM in some significantly different ways, which may help explain why the SMEs faired more poorly with SCM than LEs did. Below, we follow the path from theory to hypotheses to testing to discussion as we try to understand the fit between SCM and the SME.
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3. The analysis framework and generation of hypotheses A self-selection framework (see Fig. 1) provides the basis for analysis of SCMSME fit because SCM is a strategic choice of the SME and because some of the factors that affect the choice are also likely to affect SME performance directly. The basic self-selection framework requires three elements: (1) consideration of the factors that affect the strategic choice, (2) consideration of factors that affect the performance outcome and (3) consideration of the outcomes, both in terms of whether the choice is chosen and in terms of what the ultimate performance is. This framework alone is sufficient to ascertain whether there is a fit between SCM and SME (i.e., whether, controlling for self-selection, SCM has a positive, negative or nil effect on SME performance). To this basic framework, we add one further elementthe characterization of how the choice is implemented. This addition allows an exploration of why the fit is the way it is. We develop a set of hypotheses below to address how these elements affect each other, ultimately focusing on the performance outcomes of SMEs. We explore a set of subjects to provide a perspective and background on the arguments used to generate the hypotheses. The set of subjects is SCM (i.e., the benefits, costs, challenges), SMEs (i.e., the characteristics and modelling) and the SCMSME relationship (i.e., how SCM theories can be modified to address SME firm size). Like other strategic choices, there are not only many potential theoretical benefits, but also many potential practical hazards and challenges for any firm contemplating SCM. SCM is a melding of logistics (i.e., of distribution and production), procurement, industrial organization economics, marketing and strategy, which emerged as a distinct area of research in the mid1980s (London and Kenley, 2001). Activities in the SCM process include screening vendors, purchase, set up and maintenance of production technologies, pricing, order processing and internal order communication, cost control, production, order fulfilment and service, distribution and delivery, and payment administration (Sravistava et al., 1999). The motives
Fig. 1. Illustration of the relationships between SCM and the SME.
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for SCM consider (1) transaction costs (e.g., lower contracting costs; improved coordination, control and communications; improved resource allocation); (2) strategic effects (e.g., increased collusion, vertical foreclosure); (3) input and output price discrepancies (e.g., removal of successive monopoly type inefficiencies, increased price discrimination opportunities); and (4) uncertainties about costs and prices (e.g., reduced information asymmetries, assurance of supply, reduced technological uncertainty and appropriation of R&D spillovers within the chain; Mahoney, 1992). Another motive is greater potential for innovation in products, services and processes. As such, potential benefits from SCM include improved customer focus, networked rivalry, increased leverage of specialization across scale and scope, and accelerated, enhanced and risk-reduced cash flows (Sravistava et al., 1999). The theoretical basis supporting these potential benefits from SCM include three relevant primary streams of literature: vertical integration, TCE and relation-based rents. SCM is a form of vertical integration (Larson, 1992; Boyle, 1994). The choice for vertical integration proper is influenced by three issues: technological economies, transactional economies and market imperfections (Perry, 1998). Technological economies are based on potential gains in production efficiencies such as the better use of capacity in common production technologies, the reduction of redundant technologies and the sharing of overhead common to the vertical technologies. Transactional economies are based on TCE issues (discussed in more detail below), here focused on the potential relative savings when entities combine vertically, such as savings related to the more efficient investments in specific assets and in complementary assets (Teece, 1986, 1992). The elimination of bilateral-monopoly-type inefficiencies (Spengler, 1950; Machlup and Taber, 1960) through vertical integration may also increase the benefits to stakeholders. TCE (Coase, 1937; Williamson, 1975, 1979) focuses on a few characteristics of the transaction that determine how it is best pursued. Increasing asset specificity, increased requirements for synchronization, increased costs of contracting and increased frequency of contracting all move the transaction away from spot markets. Increased uncertainty, increased returns from specialization, increased managerial scope diseconomies and increased monitoring costs all move transactions toward the spot markets. Relation-based rents occur in the network form of transaction, as in SCM (Skjoett-Larsen, 1999). Partnering firms in a supply chain are no longer either independent or dependent, they are interdependent. It is no longer the assumption that any outcome generated by one transaction form is possible using another transaction form, but at a different cost; now, some transaction forms produce unique outcomes. More importantly, some of these unique outcomes are proposed as possible bases of sustained competitive advantage (Dyer and Singh, 1998; Mahoney, 2001). While the network form of transaction involves a number of hazards, trust, reputation, hostage exchange and initiation fees help resolve many of the competitive and coordination problems that can lead to jointly suboptimal outcomes (e.g., Garvey, 1995; Gulati, 1995; Johnson et al., 1996; Dollinger et al., 1997). As with most strategic choices, SCM has its costs, hazards and challenges. That explains both a performance level that lags expectations (Schmitz et al., 1995) and a significant failure rate in these vertical alliances (Stuart, 1997; Mol, 2001). Transaction costs are both ex ante (e.g., search, screen, bargaining) and ex post (e.g., monitoring, enforcement, adaptation).
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Hazards include those based on information asymmetries, as well as hold up and resource misappropriation. Challenges to SCM partners include having the ability to execute and evaluate the project and the knowledge in the specific domain to contribute to the project (Schmitz et al., 1995; Fawcett and Magnan, 1998; Parker and Anderson, 2002). The second subject we discuss is the SME, to understand whether it is up to those challenges. SMEs, as a group, made up 98.7 percent of manufacturers in the 1993 U.S. census. We look at how SMEs have been modeled in the literature, with both positive and negative attributes relative to LEs. SME advantages tend to be behavioral, stressing qualitative differentiation and innovation (Nooteboom, 1993; OGorman, 2001). SMEs are also relatively opportunistic and in contact with relatively few rivals (Coviello and McAuley, 1999; OGorman, 2001). SMEs are more cash focused, short term and instill better communications and incentives for exploiting internal knowledge (Brynjolfsson, 1994). Compared with LEs, SMEs have traditionally been modeled with some significantly worse characteristics including having few products, few customers and low volume, lacking economies of experience and learning capacity, being boundedly rational, having higher capital and transaction costs, having a reactive nature, being technologically focused with weak marketing skills, having limited resources and high strategic reliance on CEO perceptions of market forces and, generally, being more vulnerable (see Nooteboom, 1993; Coviello and McAuley, 1999 for reviews; OGorman, 2001; Lefebvre et al., 1997). Such characteristics, directly or indirectly, imply a number of conclusions: true vertical integration is generally not an option for the SME; SMEs are unlikely to need to consider antitrust implications in their alliances; SMEs are more vulnerable to holding specific assets and more sensitive to contract costs; SMEs are usually in a worse bargaining position; SMEs have less reputation, instilling less trust, due to newness; SMEs face greater spillover problems as their advantages are more knowledge and product based and, there are likely to be cultural differences between SMEs and LEs. To determine the fit of SME with SCM, prior to arguing specific hypotheses, we consider two areas in this third subject of discussion. First, we look at how the literature has portrayed the fit. Second, we look at how the theory underlying SCM should be adapted for size. The literature has portrayed the fit as both positive and negative, as well as significant. On the positive side, SCM and other SME alliance and network activity is supposed to help the SME overcome size and resource constraints through increased innovation and reduced costs and uncertainties (Lipparini and Sobrero, 1994; Coviello and McAuley, 1999), generally leading to higher survival rates (Gartner et al., 1999). On the negative side, SMEs not only have higher transaction costs in such linkages, but also increase those costs to larger partners, to the point where the LEs may require compensation from the SMEs (Nooteboom, 1993). Additionally, the LEs, rather than the SMEs, are more likely to benefit from any process innovations and R&D generated in the supply chain (Cohen and Klepper, 1996). Given that the literature appears unresolved regarding the SCMSME fit, we take the approach of modifying the theories underlying SCM to accommodate firm size to address that fit. We do so by pointing out several issues that small firms are more likely to face under each theory given the analysis of the three background subjects above.
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Consider vertical integration. A small firm does not have the option of initiating a true vertical integration nor does it appear a worthwhile option if not capital constrained due to its implied low market share (Buzzell, 1983); it either uses the spot markets or the networks. A small firm does not generally need to consider antitrust issues when pursuing networks and alliances. A small firm is more sensitive to the assurance of supply issues. A small firm may have invested in specific assets to better serve a supply chain partner and, thus, be at a potentially devastating financial risk if the partnership dissolves. Consider TCE. A small firm is unlikely to create sizeable specific asset issues to a larger partner, but would be more sensitive to such issues if it had to invest in the specific assets. A small firm is more sensitive to contract costs because it is generally in a worse bargaining position. A small firm will expect the fast and direct communications in the network because of its own shorter hierarchical distance to decision makers. Consider relation-based rents. A small firm is less likely to have the history to build reputation and trust to mitigate transactional hazards. A small firm is likely to have the knowledge-based advantages that are easily spilled over and less likely to have the firewalls that would mitigate such losses. A small firm is less likely to have the managerial experience to handle the complexity of network transactions. A small firm may have organizational culture differences with larger partners that can create problems in relationships that are based on shared, often tacit coordination and adaptation. Finally, a small firm is less likely to have the longer term time frame required to build and reap the rewards of relationships. Summarizing the impact of the SME characteristic of size alone on these basis theories provides a generally less optimistic projection of SCM for these firms. While there are a few benefits, there are likely more potential troubles. SMEs can benefit from the legitimacy, the access to complementary resources, the additional leverage, and the assured supply that networked vertical partnerships provide. However, SMEs expose themselves to numerous problems including adverse selection, moral hazard and hold-up, but do so without the same mitigating factors held by LEs, like reputation, trust and an appreciable threat to retaliate. Additionally, SMEs are exposed to two further potential problems that lie outside these theories when they consider entering into long-term cooperative relationships with supply chain partners. The first is that SMEs become potential acquisition targets of larger firms when the supply chain works well. This is not necessarily bad, but when the SME has not negotiated the acquisition ex ante, then, it is likely that the larger firm will have an advantage in valuing the target better after SCM and, with its operations intertwined, make the target look less attractive to other buyers; all of which means a worse price for the SME (Bleeke and Ernst, 1995). The second potential problem is that the choice to do SCM may not be a fully voluntary one for the SME, at least in the following way. The choice may be made as an ultimatum by a larger supplier or customerjoin in our SCM efforts or we will find another partner. This may be one method for a larger firm to bully a smaller partner into a closer relationship, where the larger firm can more easily exploit the smaller partner, e.g., by learning its innovative methods. While the arguments above have provided a good basic examination of the potential relative costs and benefits of SCM to SMEs, this has been done at a general level. It has provided an evaluation of the alternatives to SCM, such as spot contracts and true vertical integration. It is now time to take a more applied approach to analyzing the fit of the SME to
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SCM. To do so requires a discussion of strategy, of implementation, of contextual and of firm-specific issues. SMEs are most likely to differ in strategy than LEs do, and that difference is likely to have an effect on how SCM influences SME performance. SMEs are more likely to have a differentiation advantage than a cost advantage does, most often due to the existence of scale, scope and learning economies in the industry (Covin et al., 1990; Porter, 1980; Dowling and McGee, 1994). The better the SME can differentiate, the better it can compete against the cheaper products of LEs, and the better its performance will be. Superior features and quality, as well as superior customer service, are ways that SMEs often use to differentiate their products and services from those of the more commoditized LEs (Porter, 1985a). However, SCM aims precisely to provide LEs with such differentiationto increase innovation and customer service by integrating the customers needs with the firms production processes and to increase quality while reducing costs by coordinating and collaborating with suppliers. SCM appears to be a method for LEs to decommoditize their products to reap a price premium from the market and, as an unfortunate side effect, to shrink the differentiated product territory of smaller firms (Hult et al., 2000; Elmuti, 2002). The question then remains why SMEs wish to engage in supply chain partnerships given that their strategies become less privately valuable in the SCM environment. One reason may be to use SCM as a substitute to obtain the differentiation advantage that is supposed to emerge from the firm itself (Gentry and Vellenga, 1996; Lee et al., 1999), this is the weak SME assumption. Another reason may be to use the SCM to complement the differentiation advantage by giving it scale, efficiency and leverage through partner firms (Green et al., 1991; Cachon and Fisher, 2000; Hartley, 2000), this is the strong SME assumption. Either the SME is using SCM to create differentiation through SCM relationships or the SME creates differentiation itself without needing to rely on others and uses the SCM for other reasons such as long-term market guarantees. A weak SME will choose SCM to interact heavily with partners to create differentiation and to learn from them; it seeks to take value from the relationship. A strong SME will choose SCM, with little importance placed on interacting with partners over strategic differentiation activities, instead using the relationship to add and leverage its differentiation value while increasing its bargaining position in the network by having other partners rely on it for the value-adding differentiation. The first hypotheses follow: H1a: SMEs are more likely to engage in SCM either when the SME puts great importance on interaction with partners over the differentiation dimensions (e.g., innovation, quality, customer service) or when the SME puts very little importance on such interactions. H1b: SMEs with a greater emphasis on a differentiation strategy (i.e., on innovation, on quality, on customer service) are more likely to perform better (e.g., in returns, in productivity, in competitive position). While it is important for the SME strategy to fit the SCM concept to enable the SME to improve its performance, it is also important that these formulated goals are implemented appropriately for the firm to actually realize intended benefits. We now consider what SCM implementation entails. Like most relational transactions, SCM may entail significant up-front
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fixed and contracting costs (Van Mieghem, 1999; Starbird, 2001). Such initial investments include due diligence on partners, complex negotiations to outline partner responsibilities and rewards, possible investment in specific or semispecific assets (Teece, 1986; Benaou and Anderson, 1999; Buvik and Reve, 2001) to coordinate interfirm cooperation (e.g., EDI, compliance with ISO 9000, etc.) and organizational changes that allow the permeation of the firm boundaries by partners to ensure integration along the multifirm chain. Additionally, there are ongoing fixed costs for sustaining coordination in the chain and for evaluating and updating the chain. These commitments raise three potential problems for SMEs. First, the shift to fixed costs may not fit well with the typical SME. Fixed costs are covered by volume, which means either a scale expansion by the SME, possibly entailing further investment, or a long-term outlook when many SMEs focus on short-term survival. Second, the shift to reliance on a few key partners may not fit well with an SME (Macdonald, 1995). While some risk is reduced (e.g., there is greater assurance in the SME being supplied and in the SME selling its good), other risk is increased (e.g., hold-up, resource misappropriation, unintended spillover, etc.). Third, SMEs are likely to have significant opportunity costs beyond the monetary costs of the initial expenses (Gifford, 1992). To have entered a market successfully and survived, the SME is likely to have some advantage that it may not have yet fully exploited, while also being relatively efficient without the scale. Thus, SMEs are likely to have growth opportunities and little slack, in other words, relatively high opportunity costs versus LEs. SCM does not only entail initial fixed costs that may impact the performance effects on SMEs, SCM also likely entails some strong interdependency in implementation. To use an old analogy, a chain is only as strong as its weakest link. Thus, implementation may approximate a CobbDouglas form, where one poorly performing step has repercussions for the whole process (Munson and Rosenblatt, 2001; Perez and Sanchez, 2002). For example, one delay in a tightly coupled production chain can cause a significant delay in the final delivery, even when all other steps are working well. SCM generates benefits from the tight coupling by reducing production costs through more coordinated processes, allowing partners to save on inventory and on quality testing, for example. Under the assumption of a weakest link functional form of SCM, it is important for firms to implement the system fully to benefit; partial implementation is unlikely to provide acceptable returns (Milgrom and Roberts, 1990). Relative to LEs, the SMEs do not have the slack resources, capital and effort that may be needed for such full implementation. In fact, compared with LEs, SMEs are more likely to have relatively higher opportunity costs (i.e., require higher returns from investments due to higher inherent risks of newness and smallness) and seek ways of staging investments to retain flexibility and liquidity, all of which makes SMEs less willing to fully implement SCM, even if an equal ability were present. The second hypotheses follow: H2a: SMEs and LEs are likely to differ in their implementation of SCM; LEs are likely to more completely implement SCM. H2b: SMEs with a greater emphasis on complete implementation of SCM are more likely to perform better (e.g., in returns, in productivity, in competitive position).
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Strategy and implementation are dependent on context (McDougall et al., 1992; Carter et al., 1994; Li, 2001). SCM will only be beneficial to an SME when the characteristics of its environment fit well. Context, generally, influences the costs and benefits of an application relative to its alternatives. For example, when raw materials are commodities provided by a competitive supply market, it makes little sense to have a supply chain extend upstream. Alternatively, when the entry barriers to connected industries include many of the fixed costs required for SCM, such as EDI and ISO certification, then, supply partnerships are more likely to occur (Porter, 1985b; Han et al., 2001). We focus on the contextual factors that make SCM easier and more feasible to implement for the SME. These factors are contextual in the sense that they are out of the SMEs control (e.g., they depend on the SMEs suppliers actions) but are relevant to the SME in that they have a potential interaction with SCM choice and with SME performance (Heriot and Kulkarni, 2001; Park and Krishnan, 2001; Guimaraes et al., 2002). The less costly this strategic activity SCMis, the more likely it will be chosen. In making this assertion, we assume that the effects of these factors on SME costs and benefits differ whether the SME chooses to do SCM or an alternative. Additionally, the less costly a primary activity like SCM is, the more likely firm performance will improve. In making this assertion, we assume that the factors leading to cost reductions for the SME choosing SCM or its alternatives do not simultaneously entail a similar or larger reduction in benefits for the SME; in fact, such factors will often also entail increased benefits (e.g., a more suitable vertical partner reduces costs, like transaction hazards, while increasing benefits, like reliability). The third hypotheses follow: H3a: SMEs are more likely to engage in SCM when initiating SCM is more feasible (e.g., EDI is present) and when they are already close to a business partner (e.g., they are a key supplier to a customer). H3b: SMEs are more likely to perform better when the pursuit of vertical business activities with partners is more feasible (e.g., there is relatively great importance placed on selecting and evaluating key suppliers in terms of EDI and order entry processes, willingness to share information, similarity of culture, etc.). To complete the picture, the choice of SCM and its impact on firm performance are also dependent on the specific characteristics of the SME (Heriot and Kulkarni, 2001; Park and Krishnan, 2001; Wagner and Boutellier, 2002; Kimura, 2002). Such characteristics are considered controls here, as they are not, by our definition, indicative of a particular strategic focus or method of SCM implementation. These characteristics can influence SCM choice and firm performance because they describe a firms previous choices relevant to SCM but are not directly connected to it. For example, a firms choice to be ISO 9000 certified is relevant to SCM, as it can make partnering easier as a signal of quality, but was not necessarily pursued with only SCM in mind. We present no formal hypotheses for how the many firm characteristics influence SCM choice and firm performance, as that is not the focus of this paper; instead, we use them as controls in the empirical analysis because we assume they will have some significant influence, nonetheless.
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We can now summarize the basic model depicted in Fig. 1. Strategy has both an indirect and a direct effect on performance (e.g., Shaver, 1998, for entry strategy); the indirect effect is through influencing the choice to do SCM. Context also has both effects in a similar fashion (e.g., Dahl, 2002, for context effects on a returns-type performance). The implementation of SCM influences performance directly. The SME characteristics, assumed independent of these other issues, also have indirect and direct effects on firm performance. Specific alternatives to SCM, besides the implied general one of not doing it formally outside this model, are yet another consideration. The figure defines the empirical methodology: When variables affect a choice, as well as its outcome, and when the choices separate effect on the outcome is of focus, then, a self-selection model is justified. This self-selection approach is discussed in its section below (that those readers uninterested in the detailed empirical methodology may wish to skip). We can now also summarize the overall fit of SCM to SMEs given our discussion above and the model assumed. The relevant theory provides both benefits and costs for SMEs doing SCM. There are possible leverage, resource access and risk benefits, but they come at possible increased transaction hazard costs that the SME is ineffective in mitigating. SCM appears to overlap SME strategy for the SME; it provides possible differentiation where the SME is already likely to have differentiation. SMEs appear ill suited to the effective implementation of SCM as well. The high initial fixed costs (Dyer et al., 1998) and possible requirement to implement the process fully to obtain positive (Milgrom and Roberts, 1990) outcomes is burdensome on small and resource-stretched SMEs. Additionally, there is the possibility that an SME may be bullied into a supply chain partnering by existing LEs, using the issue as an ultimatum (Watson, 2001), with the ulterior motive of wishing to misappropriate the SMEs competencies (New, 1996; Baiman et al., 2002) or acquire the SME outright at a bargain price. Altogether, it appears that SCM does not fit SMEs in general. The last hypothesis follows: H4: Controlling for self-selection, SMEs that choose to engage in SCM will experience worse performance (e.g., in returns, in productivity, in competitive position) than do SMEs that do not choose SCM. 4. A note about self-selection and SCM Self-selection arises because firms make strategic decisions, such as engaging in SCM, not randomly, but based on a fit between firm characteristics (e.g., strategy, activities, business processes) and external conditions. When researchers compare alternative strategic choices without self-selection controls, they implicitly assume that firms randomly choose strategies. If this assumption does not hold and if researchers cannot incorporate the complete set of performance-affecting factors into models that compare strategic choices, then, empirical findings supporting a particular decisions effects may be misleading (Masten, 1993; Shaver, 1998). For example, when only high-performing SMEs choose to engage in SCM, then, SCM alone is likely to be a misleading indicator of performance if such selection is not controlled for. SCM will appear to explain firm performance instead of the true causethe underlying firm characteristics that produced both the decision to initiate SCM and the level of firm
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performance that would have occurred without SCM. Thus, to truly assess the performance effects of the strategic choice to engage in SCM, we must control for self-selection. The self-selection model is based on Heckman (1979) and Greene (1981): Y bVX dC e 1 C * CVW u where: C 1 if C * > 0 and C 0 if C *V0 3 For Eq. (1), Y indicates a vector of firm performance measures, X indicates a matrix of explanatory and control variables influencing firm performance, C indicates a vector of 0 1 dummy variables for alliance activity and e indicates the error vector. Eq. (2) describes the selection process, where W is a matrix of explanatory variables and accounts for alliance activity and u indicates the error vector. The correction for self-selection is required due to the ex ante indeterminacy of whether OLS will over- or underestimate d. On one hand, ineffective firms may disproportionately choose SCM to compensate for their shortcomings in innovation and may thus give the appearance that SCM is detrimental to performance. On the other hand, effective firms may disproportionately choose SCM to leverage their innovation, giving the appearance that SCM is overly beneficial to performance because such firms would perform relatively well. The two-stage estimation model of Heckman (1979) provides self-selection control. A standard maximum likelihood probit model estimates Eq. (2), with OLS estimating Eq. (1). LAMBDA, the variable that adjusts for the self-selection bias, is calculated from the probit model and is included in the regressors of Eq. (1). LAMBDA estimates the correlation between e and u; it is the ratio of the standard normal density function to the cumulative distribution function (see Greene, 1990). The heteroscedasticity introduced by using LAMBDA in Eq. (1) is adjusted for in the OLS estimation through methods explained by Greene (1990, pp. 744748). There are two concerns when using the self-selection methodology: (1) an identification problem and (2) a sensitivity problem. To reduce the identification problem, we selected variables so that most of the explanatory variables differed between the first stage probit model and the second stage selection model (see Maddala, 1983). The second concern is the models sensitivity to alternative specifications. The consistency of the results across different performance measures reveals that this concern is not problematic either. 2
5. Data and variables The database is constructed from responses to a survey of U.S., Mexican and European managers. The survey was pretested, validated and revised using 30 senior U.S. managers of supply and production. The APICS and ISM databases provided the identities of senior U.S., Mexican and European managers, to whom the survey was circulated between December 1998 and October 1999. The survey was distributed in three phases of three mailings each (i.e., one
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Table 1 Explanatory variables in the self-selection probit model ID Q8a Q9f Explanation This is a { 1,0,1} choice response for a decrease, no change or increase, respectively, in the firms number of key and preferred suppliers over the previous three years. This is a five-point Likert scale assessment of the importance that the firm puts on the use of electronic data interchange (EDI) when evaluating key and preferred supplier performance (1 = low, 5 = high). This is a five-point Likert scale assessment of the importance that the firm puts on the willingness to share sensitive information when evaluating key and preferred supplier performance (1 = low, 5 = high). This is a five-point Likert scale assessment of the importance that the firm puts on the willingness of the supplier to change products and services to meet the firms changing needs when evaluating key and preferred supplier performance (1 = low, 5 = high). This is a five-point Likert scale assessment of the importance that the firm puts on the willingness of the suppliers to participate in the firms new product development and value analysis when evaluating key and preferred supplier performance (1 = low, 5 = high). This is a 1 0 response to whether the firm has a supplier certification program. This is a five-point Likert scale assessment of the importance that the firm puts on whether the supplier complies with all the requirements of the firm when assuring that suppliers products and services conform to the firms specifications (1 = low, 5 = high). This is a five-point Likert scale assessment of the importance that the firm puts on the cultural match between the companies when selecting key and preferred suppliers (1 = low, 5 = high). This is a five-point Likert scale assessment of the importance that the firm puts on the past and current relationships between the companies when selecting key and preferred suppliers (1 = low, 5 = high). This is a five-point Likert scale assessment of the importance that the firm puts on the strategic importance of the supplier to the firm when selecting key and preferred suppliers (1 = low, 5 = high). This is a five-point Likert scale assessment of the importance that the firm puts on the suppliers willingness to share confidential information when selecting key and preferred suppliers (1 = low, 5 = high). This is a five-point Likert scale assessment of the importance that the firm puts on the suppliers order entry and invoicing system when selecting key and preferred suppliers (1 = low, 5 = high). This is a five-point Likert scale assessment of the importance that the firm puts on the firms annual orders as a percentage of the suppliers overall business when selecting key and preferred suppliers (1 = low, 5 = high). This is a five-point Likert scale assessment of the importance that the firm puts on the suppliers willingness to integrate the supply chain management relationship when selecting key and preferred suppliers (1 = low, 5 = high). This is a 1 0 response to whether the firm is ISO 9000 certified. This is a five-point Likert scale assessment of the importance that the firm puts on early supplier involvement in the firms new product design and development activities (1 = low, 5 = high). This is a five-point Likert scale assessment of the importance that the firm puts on reducing its supplier base when considering the JIT (just-in-time) principles in the firm (1 = low, 5 = high). This is a five-point Likert scale assessment of the importance that the firm puts on buying from JIT suppliers when considering the JIT (just-in-time) principles in the firm (1 = low, 5 = high). This is a 1 0 response to whether the firm is considered a key/preferred supplier to its customers.
Q9g
Q9l
Q9m
Q13 Q18k
Q19s Q19t
Q19v
Q19w
Q19y Q19z
Q19bb
Q21 Q23b Q24c Q24e Q26
R.J. Arend, J.D. Wisner / Journal of Business Venturing 20 (2005) 403436 Table 1 (continued) ID Q27g Explanation
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Q27s
Q27w
This is a five-point Likert scale assessment of the importance that the firm puts on the geographic proximity of the suppliers facility when considering the firms attempts to improve customer service (1 = low, 5 = high). This is a five-point Likert scale assessment of the importance that the firm puts on the use of EDI communications when considering the firms attempts to improve customer service (1 = low, 5 = high). This is a five-point Likert scale assessment of the importance that the firm puts on the interaction with customers to set reliability, responsiveness and other standards when considering the firms attempts to improve customer service (1 = low, 5 = high).
mailed survey with cover letter, one reminder postcard and one second survey with cover letter). The first phase mailing targeted the supply manager of each of 1500 U.S. manufacturing firms, selected at random from the ISM database. The second phase mailing targeted the production manager of each of 1000 U.S. manufacturing firms and 2000 U.S. service firms, selected at random from the APICS database. The third phase mailing targeted the production manager of each of 970 Mexican and European manufacturing firms, selected at random from the APICS database. We considered 556 of the 5470 surveys useable, for a 10.2 percent response rate. This was a reasonable response rate considering the survey length, complexity and focus. The surveys with useable performance data reduced the sample down to 421, of which 319 were from U.S. managers. Of the 421, 200 were responses from SMEs, firms with 500 or less employees. The database was checked for nonresponse bias and nonredundancy; neither issue was problematic.2 We describe the dependent and independent variables below. When the variable is a scaled response, we provide the reliability test result. The dependent variables are as follows: Q28a: this is a five-point Likert scale assessment of the firms level of performance compared with its major industrial rivals in terms of market share (1 = low, 5 = high). Q28b: this is a five-point Likert scale assessment of the firms level of performance compared with its major industrial rivals in terms of return on assets (1 = low, 5 = high).
We examined the nonresponse bias by testing for statistically significant differences between early and late waves of returned surveys (Armstrong and Overton, 1977; Lambert and Harrington, 1990). In each phase, the final wave surveys were considered the proxy for the nonrespondents, while early wave surveys were considered the proxy for respondents. The t tests based on differences between the two groups yielded no statistically significant results for the survey items used in the analysis. There were no statistically significant differences at the 2-tailed, P < .05 levels for any of the dependent or independent variables of early and late respondents for either the APICS or ISM surveys or for both taken together. Nonredundancy was checked ex ante by deleting all firms with multiple listings in APICS and ISM databases.
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Table 2 Explanatory variables in the self-selection corrected OLS model ID Q9 Explanation This is a scaled response, measuring the average of 13 scale measures (Q9a to Q9m) measuring how important several issues were to the firm when evaluating its key/preferred suppliers performance; the importance was measured in a five-point Likert scale. The Cronbach alpha is .81 for this scale measure. This is a scaled response, measuring the average of 15 scale measures (Q18a to Q18o) measuring how important several issues were to the firm when assuring that suppliers products and services conformed to the firms specifications; the importance was measured in a five-point Likert scale. The Cronbach alpha is .95 for this scale measure. This is a scaled response, measuring the average of 30 scale measures (Q19a to Q19dd) measuring how important several issues were to the firm when selecting a key/preferred supplier; the importance was measured in a five-point Likert scale. The Cronbach alpha is .94 for this scale measure. This is a scaled response, measuring the average of eight scale measures (Q23a to Q23h) measuring how important several issues were to the firm in its new product design and development activities; the importance was measured in a five-point Likert scale. The Cronbach alpha is .89 for this scale measure. This is a scaled response, measuring the average of eight scale measures (Q24a to Q24h) measuring how important several JIT issues were to the firm in its operations; the importance was measured in a five-point Likert scale. The Cronbach alpha is .91 for this scale measure. This is a scaled response, measuring the average of 13 scale measures (Q25a to Q25m) measuring how important several issues were to the firm in its quality practices; the importance was measured in a five-point Likert scale. The Cronbach alpha is .92 for this scale measure. This is a scaled response, measuring the average of 24 scale measures (Q27a to Q27x) measuring how important several issues were to the firm in its attempts to improve customer service and satisfaction; the importance was measured in a five-point Likert scale. The Cronbach alpha is .94 for this scale measure. This is a 1 0 response to whether the firm has a partnership or strategic alliance program with any of its suppliers. This is a 1 0 response to whether the firm has a supplier certification program. This is a 1 0 response to whether the firm uses specific written quality plans and policies. This is a {0,1,2} response to whether the firm is neither ISO 9000 nor ISO 14000 certified, is only ISO 9000 or ISO 14000 certified, or has both certifications, respectively. This is a 1 0 response to whether the firm is considered a key/preferred supplier to its customers. This is a summed response of three separate { 1,0,1} responses to whether a firm has had a decrease, no change or increase, respectively, in the last three years of: (i) primary materials, components and subassembly outsourcing; (ii) primary materials, components and subassembly suppliers; (iii) key/preferred suppliers. This is a summed response of three separate { 1,0,1} responses to whether a firm has had a decrease, no change or increase, respectively, in the last three years of: (i) maintenance, repairs and operating supplies outsourcing; (ii) maintenance, repairs and operating supplies suppliers; (iii) general/provisional suppliers. This is a 1 0 response to whether the firm practices supply chain management. This is the self-selection control variable resulting from the probit analysis of the SCM dependent variable.
Q18
Q19
Q23
Q24
Q25
Q27
SA Q13 Q20 Q2122 Q26 Q678a
Q678b
SCM LAMBDA
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Q28c: this is a five-point Likert scale assessment of the firms level of performance compared with its major industrial rivals in terms of average selling price (1 = low, 5 = high). Q28d: this is a five-point Likert scale assessment of the firms level of performance compared with its major industrial rivals in terms of overall product quality (1 = low, 5 = high). Q28e: this is a five-point Likert scale assessment of the firms level of performance compared with its major industrial rivals in terms of overall competitive position (1 = low, 5 = high). Q28f: this is a five-point Likert scale assessment of the firms level of performance compared with its major industrial rivals in terms of overall customer service (1 = low, 5 = high). LNPROD: this is the natural logarithm of the reported firms most recent annual gross sales, in U.S. dollars, divided by the most recent employee count of the firm. PERF: this is a scaled response, measuring the sum of the six performance-related scale measures, Q28a to Q28f, and one third of the productivity measure, LNPROD. The manipulation to LNPROD made its distributional characteristics approximate to that of any of the other six elements of the scale. The Cronbach Alpha is .73 for this scale measure. SCM: this is a 10 coded variable used as the selection dependent variable in the selfselection model, indicating whether the firm practices SCMthe integration of key business processes from end user to original suppliers to provide products, services and information that add value for customers. The independent variables are provided as follows. The explanatory variables used in the self-selection modelthe probit model explaining the choice of SCMare provided in Table 1. The explanatory variables used in the self-selection corrected OLS model, explaining performance, are provided in Table 2. The additional explanatory variable used in the restricted model (i.e., using only SMEs that chose SCM) is provided in Table 3, as is the control variable used in all models, firm size. In the first stage of the self-selection processthe probit model explaining the choice of SCMthere are three types of independent variables. There are strategy-related variables (i.e., Q9m, Q18k, Q23b, Q24e and Q27w). These indicate how the firm ranks the importance of involving a partner (supplier or customer) in a particular strategy (i.e., differentiation on quality, product design, customer service; efficiency through just-in-time). There are contextTable 3 The implementation explanatory and the size control variables ID Q4XX Explanation This is a scaled response, measuring the average of eight scale measuresQ4f, Q4g, Q4j, Q4k, Q4l, Q4t, Q4u, Q4wmeasuring how important several issues were to the firm in its supply chain management efforts; the importance was measured in a five-point Likert scale. The Cronbach alpha is .74 for this scale measure. This is the natural logarithm of the reported firm size in employees.
LNSIZE
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Table 4 Descriptive statistics Variable Q8A Q9F Q9G Q9L Q9M Q13 Q18K Q19S Q19T Q19V Q19W Q19Y Q19Z Q19BB Q21 Q23B Q24C Q24E Q26 Q27G Q27S Q27W SCM Q28A Q28B Q28C Q28D Q28E Q28F LNPROD PERF All SMEs Mean 0.368 2.266 2.990 3.919 3.520 0.528 4.138 2.754 3.457 3.618 3.266 2.724 2.995 3.183 0.503 3.186 3.092 2.990 0.805 2.682 2.875 3.775 0.595 3.467 3.406 3.657 4.177 3.794 3.985 11.910 26.451 S.D. Min Max 1 5 5 5 5 1 5 5 5 5 5 5 5 5 1 5 5 5 1 5 5 5 1 5 5 5 5 5 5 15.019 34.577 Cases 190 199 199 197 198 197 195 199 199 199 199 199 197 197 199 188 196 197 200 198 200 200 200 199 197 198 198 199 198 200 199 0.721 1 1.148 1 1.092 1 0.894 1 1.174 1 0.501 0 0.906 1 1.126 1 0.936 1 1.042 1 1.066 1 1.176 1 1.047 1 1.150 1 0.501 0 1.203 1 1.138 1 1.216 1 0.397 0 1.129 1 1.268 1 1.015 1 0.492 0 1.024 1 0.924 1 0.897 1 0.736 1 0.836 2 0.846 1 1.810 0.511 3.650 16.763 SMEs using SCM Mean S.D. Min Max Cases R.J. Arend, J.D. Wisner / Journal of Business Venturing 20 (2005) 403436
26.611
3.681
17.070 34.531 118
LNSIZE Q9 Q18 Q19 Q23 Q24 Q25 Q27 SA Q13 Q20 Q2122 Q26 Q678A Q678B Q4XX
5.089 3.857 3.697 3.538 3.187 3.335 3.461 3.758 0.505 0.520 0.785 0.560 0.805 0.825 0.165 3.102 PERF
0.940 1.609 0.519 2 0.874 1 0.597 1 0.940 1 0.954 1 0.850 1 0.665 1.667 0.501 0 0.501 0 0.412 0 0.590 0 0.397 0 1.495 3 1.215 3 0.665 1.143 LNSIZE Q9
6.215 5 5 4.733 5 5 5 5 1 1 1 2 1 3 3 4.500 Q18
200 199 196 199 191 199 199 200 200 200 200 200 200 200 200
5.130 3.966 3.830 3.636 3.232 3.441 3.552 3.837 0.580 0.588 0.840 0.630 0.874 0.782 0.193
0.948 1.609 0.489 2 0.816 1.133 0.567 1 0.911 1 0.878 1 0.783 1 0.629 1.667 0.496 0 0.494 0 0.368 0 0.609 0 0.333 0 1.451 3 1.188 3
6.215 5 5 4.733 5 5 5 5 1 1 1 2 1 3 3
119 118 117 119 112 119 119 119 119 119 119 119 119 119 119 119 SCM SA Q13 Q20 Q2122 Q26 Q678A
Q19
Q23
Q24
Q25
Q27
LNSIZE Q9 Q18 Q19 Q23 Q24 Q25 Q27 SCM SA Q13 Q20 Q2122 Q26 Q678A Q678B
0.149 0.285 0.173 0.288 0.185 0.388 0.131 0.291 0.180 0.204 0.261 0.286 0.147 0.498 0.155 0.077 0.111 0.175 0.229 0.035 0.167 0.114 0.230 0.006 0.209 0.394 0.151 0.063 0.092 0.024 0.020
0.539 0.709 0.454 0.541 0.589 0.631 0.263 0.171 0.211 0.176 0.167 0.189 0.110 0.041
0.673 0.537 0.585 0.498 0.653 0.579 0.662 0.528 0.713 0.174 0.202 0.102 0.168 0.398 0.221 0.411 0.253 0.197 0.162 0.144 0.190 0.044 0.130 0.072 0.030
0.560 0.688 0.507 0.099 0.143 0.201 0.185 0.077 0.066 0.225 0.090
0.597 0.560 0.158 0.204 0.272 0.237 0.233 0.172 0.129 0.094
0.737 0.128 0.142 0.237 0.346 0.214 0.262 0.147 0.056
0.152 0.220 0.220 0.285 0.208 0.355 0.127 0.053
0.208 0.182 0.134 0.139 0.201 0.031 0.025
0.230 0.105 0.412 0.082 0.342 0.469 0.260 0.188 0.110 0.112 0.105 0.051 0.067 0.022 0.061 0.033 0.076 0.005 0.023 0.054 0.424
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related variables (i.e., Q9f, Q9g, Q9l, Q19s, Q19w, Q19y, Q19bb, Q27g and Q27s). These indicate how important specific partner attributes areattributes outside its own control but contextually relevant to ease of implementing SCM. There are also the firm attribute control variables (i.e., LNSIZE, Q8a, Q13, Q19t, Q19v, Q19z, Q21, Q24c and Q26). These indicate previous choices of the firm, not toward a specific strategy but possibly strategic in nature, relevant to the attractiveness of the SCM choice. Please refer to Table 1 and Appendix A for further details on the specific measures and survey questions, respectively. The second stage of the self-selection processthe corrected and modified OLS model explaining firm performancealso includes the three types of independent variables, although many of the variables differ. There are the strategy-related variables (i.e., Q18, Q23, Q24, Q25 and Q27), which indicate how the firm rates the importance of a particular strategy (i.e., differentiation on quality, product design, customer service, efficiency through just-in-time). There are the context-related variables (i.e., Q9 and Q19), which indicate how important specific partner attributes areattributes outside its own control. And there are firm attribute control variables (i.e., LNSIZE, SA, Q13, Q20, Q2122, Q26, Q678a and Q678b). These indicate previous choices of the firm, not toward a specific strategy but possibly strategic in nature, relevant to firm performance. The fourth type of variable is the self-selection variable and control, SCM and LAMBDA, that indicate the firms choice to conduct SCM and a measure of the type of firm usually using SCM. Please refer to Table 2 and Appendix A for further details on the specific measures. The OLS analysis of the implementation effect on firm performance includes the same first three variable types as the corrected and modified OLS model explaining firm performance above. There are the strategy- and context-related and firm attribute control variables that are all exactly the same as the corrected and modified OLS model. To this set of variables is added one that measures the type of implementation made by the firm, Q4XX. The construction of this variable is discussed in the next section. Please refer to Table 3 and Appendix A for further details on the specific measures and survey questions, respectively.
6. Empirical methods and results Table 4 provides the descriptive statistics for the main sample and the correlation table for the main self-selection corrected regression variables. The majority of the scale variables span their full range (e.g., 1 to 5 for Likert scale variables). Most variables have a reasonable distribution (e.g., around 3+ on a five-point Likert scale, with a standard distribution around 1). The descriptive statistics compare well between those for the full SME and the SCM SME sample variables. While the correlation between PERF and SCM is low, the correlations among many of the independent variables are significant and positive. However, the multicollinearity diagnostics, like VIF scores, were far from significant in any of the empirical analyses run below. As explained in the note above, the first step in the self-selection correction procedure is a probit analysis to determine which factors explain the choice of SCM. The probit maximum likelihood estimate in Table 5 is significant and includes numerous statistically significant
R.J. Arend, J.D. Wisner / Journal of Business Venturing 20 (2005) 403436 Table 5 The self-selection probit Variable Constant LNSIZE Q8A Q9F Q9G Q9L Q9M Q13 Q18K Q19S Q19T Q19V Q19W Q19Y Q19Z Q19BB Q21 Q23B Q24C Q24E Q26 Q27G Q27S Q27W N v2 DoF Significance Coefficient 0.963 0.004 0.012 0.311 0.030 0.227 0.254 0.454 0.304 0.163 0.016 0.086 0.214 0.129 0.036 0.552 0.042 0.125 0.089 0.120 0.936 0.369 0.059 0.318 169 65.975 23 .000 S.D. 0.943 0.142 0.167 0.149 0.167 0.169 0.149 0.281 0.152 0.132 0.163 0.152 0.168 0.148 0.161 0.170 0.284 0.130 0.148 0.141 0.329 0.129 0.119 0.147
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P value .307 .977 .942 .037 .860 .180 .089 .107 .046 .216 .923 .575 .202 .383 .826 .001 .883 .339 .547 .393 .004 .004 .663 .031
variables. There is representation of all three types of independent variable. SMEs engaging in SCM are negatively correlated with strategic focus in product design (Q9m), quality (Q18k) and customer service (Q27w), as measured by how important such strategies are when dealing with supply chain partners. This group is also negatively correlated with the context measuring proximity to partners (Q27g) and, specifically, how it relates to the firms attention to customer service. The SCMSMEs are positively correlated with the context measuring a partners use of EDI (Q9f) and the context measuring the partners willingness to integrate the SCM relationship (Q19bb) when assessing and selecting partners, respectively. Finally, these respondents are positively correlated with the firm attribute measuring whether the firm is a key supplier to its partners (Q26). Thus, there is partial support for H1a and H3a. The second step in the self-selection correction procedure is a modified OLS regression to determine which factors explain SME performance. Most of the modified OLS regressions in Table 6 are significant; the exceptions are when Q28c and LNPROD are the dependent variables. Table 6 presents the self-selection results beside the uncorrected OLS results for the
424 R.J. Arend, J.D. Wisner / Journal of Business Venturing 20 (2005) 403436
Table 6 The self-selection corrected modified OLS analysis (paired with regular OLS analysis for comparison) SELECTION OLS DV Variable Constant LNSIZE Q9 Q18 Q19 Q23 Q24 Q25 Q27 PERF 13.475*** (1.968) 0.372 (0.255) 0.311 (0.637) 0.467 (0.391) 1.505** (0.735) 0.840** (0.347) 0.662** (0.330) 0.858* (0.441) 1.785*** (0.553) PERF 13.781*** (1.976) 0.279 (0.249) 0.270 (0.629) 0.195 (0.377) 1.191* (0.711) 0.879** (0.347) 0.585* (0.339) 1.188*** (0.443) 2.441*** (0.536) SELECTION OLS Q28A 0.941 (0.596) 0.343*** (0.077) 0.132 (0.196) 0.264** (0.123) 0.128 (0.228) 0.237** (0.108) 0.143 (0.101) 0.469*** (0.140) 0.244 (0.171) Q28A 0.854 (0.620) 0.301*** (0.078) 0.150 (0.197) 0.106 (0.118) 0.225 (0.223) 0.222** (0.109) 0.154 (0.106) 0.475*** (0.139) 0.425** (0.168) SELECTION OLS Q28B 1.503** (0.600) 0.032 (0.077) 0.003 (0.196) 0.049 (0.122) 0.304 (0.233) 0.154 (0.113) 0.153 (0.103) 0.164 (0.158) 0.187 (0.180) Q28B 1.505** (0.599) 0.011 (0.075) 0.046 (0.189) 0.005 (0.114) 0.234 (0.218) 0.180* (0.109) 0.136 (0.103) 0.276* (0.149) 0.323* (0.170) SELECTION OLS Q28C 2.360*** (0.575) 0.004 (0.074) 0.129 (0.189) 0.068 (0.119) 0.046 (0.221) 0.217** (0.104) 0.068 (0.098) 0.129 (0.135) 0.110 (0.165) Q28C 2.103*** (0.601) 0.038 (0.076) 0.219 (0.191) 0.023 (0.115) 0.098 (0.217) 0.218** (0.105) 0.073 (0.103) 0.225* (0.135) 0.213 (0.163) SELECTION OLS Q28D 1.990*** (0.413) 0.035 (0.053) 0.088 (0.135) 0.133 (0.084) 0.056 (0.157) 0.007 (0.074) 0.018 (0.070) 0.038 (0.957) 0.499*** (0.118) Q28D 2.306*** (0.432) 0.029 (0.055) 0.093 (0.138) 0.149* (0.083) 0.102 (0.156) 0.032 (0.077) 0.016 (0.074) 0.089 (0.097) 0.539*** (0.118) SELECTION OLS Q28E 1.818*** (0.512) 0.046 (0.066) 0.318* (0.166) 0.023 (0.102) 0.420** (0.191) 0.233*** (0.091) 0.160* (0.086) 0.007 (0.115) 0.328** (0.144) Q28E 1.875*** (0.497) 0.043 (0.063) 0.319** (0.158) 0.014 (0.095) 0.279 (0.179) 0.199** (0.087) 0.137 (0.085) 0.042 (0.111) 0.463*** (0.135)
SA
0.392 (0.460) Q13 0.549 (0.543) Q20 0.349 (0.657) Q2122 0.297 (0.448) Q26 3.161 (0.643) Q678A 0.328** (0.158) Q678B 0.244 (0.185) SCM 2.324** (0.961) LAMBDA 1.470** (0.637) N 168 Adjusted R2 .376 F 6.92 P value .000 * Indicates P < .10. ** Indicates P < .01. *** Indicates P < .05.
0.322 (0.469) 0.752 (0.513) 0.543 (0.664) 0.613 (0.431) 2.674*** (0.602) 0.364** (0.159) 0.209 (0.195) 0.412 (0.461)
185 .353 7.32 .000
0.088 (0.146) 0.223 (0.169) 0.076 (0.207) 0.013 (0.136) 0.845*** (0.194) 0.068 (0.049) 0.084 (0.059) 0.161 (0.291) 0.121 (0.197) 168 .231 3.96 .000
0.088 (0.147) 0.267* (0.161) 0.004 (0.208) 0.058 (0.135) 0.753*** (0.189) 0.057 (0.050) 0.054 (0.061) 0.031 (0.145)
185 .202 3.92 .000
0.168 (0.145) 0.109 (0.166) 0.020 (0.210) 0.046 (0.136) 0.719*** (0.196) 0.035 (0.049) 0.037 (0.059) 0.495* (0.292) 0.257 (0.197) 166 .093 2.00 .015
0.142 (0.142) 0.196 (0.155) 0.119 (0.203) 0.004 (0.130) 0.633*** (0.182) 0.048 (0.049) 0.020 (0.059) 0.148 (0.139)
183 .108 2.38 .003
0.041 (0.141) 0.297* (0.159) 0.081 (0.200) 0.059 (0.132) 0.042 (0.187) 0.034 (0.047) 0.264 (0.057) 0.087 (0.286) 0.087 (0.192) 167 .010 1.10 .363
0.001 (0.143) 0.282* (0.156) 0.177 (0.202) 0.077 (0.131) 0.121 (0.183) 0.039 (0.048) 0.029 (0.059) 0.163 (0.141)
184 .026 1.31 .195
0.015 (0.100) 0.144 (0.114) 0.258* (0.142) 0.113 (0.094) 0.467*** (0.135) 0.021 (0.034) 0.019 (0.040) 0.278 (0.202) 0.182 (0.136) 168 .323 5.68 .000
0.059 (0.103) 0.144 (0.112) 0.295** (0.145) 0.195** (0.095) 0.315** (0.134) 0.022 (0.035) 0.012 (0.043) 0.010 (0.102)
184 .264 5.12 .000
0.027 (0.120) 0.057 (0.141) 0.039 (0.171) 0.006 (0.117) 0.693*** (0.167) 0.093** (0.041) 0.109** (0.048) 0.472* (0.250) 0.378** (0.166) 168 .261 4.46 .000
0.067 (0.118) 0.101 (0.129) 0.021 (0.167) 0.102 (0.108) 0.559*** (0.151) 0.091** (0.040) 0.100** (0.049) 0.011 (0.116)
185 .250 4.85 .000
425
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eight different performance measures. For the main performance measure, PERF, and two others, Q28e and Q28f, the SCM variable is significant and negative. Thus, H4 enjoys partial support. Additionally, as in the first step in the self-selection process, there is representation of all three types of independent variable. All strategy focus variables are significant in multiple regressions. Strategic orientation to new product design (Q23) and to customer service (Q27) was consistently positively associated with good performance. Strategic orientation to efficiency (Q24) was consistently, negatively associated with performance. Strategic orientation to quality (Q18, Q25) was mixed in relation to performance, with the more focused variable (Q25) being more consistently, negatively associated with SME performance. Contextual variables (Q9, Q19) showed sporadic association with performance; the importance of contextual elements involving partner selection criteria was more consistently and positively associated with SME performance. Many firm-specific variables were significantly associated with firm performance. Most consistently, variables describing how preferred the SME is to its customers (Q26) and how well it has reduced its number of suppliers (Q678a) have been positively associated with firm performance. Thus, the results provide partial support of H1b and H3b.
Table 7 The OLS analysis including the implementation variable Variable Constant LNSIZE Q9 Q18 Q19 Q23 Q24 Q25 Q27 SA Q13 Q20 Q2122 Q26 Q678A Q678B Q4XX N Adjusted R2 F P value *Indicates P < .10. ***Indicates P < .01. **Indicates P < .05. 12.791* (3.019) 0.244 (0.340) 0.661 (0.831) 0.495 (0.464) 0.641 (1.061) 0.749* (0.435) 1.497*** (0.511) 2.433*** (0.606) 2.962*** (0.754) 0.691 (0.639) 1.158* (0.650) 0.220 (0.944) 0.699 (0.577) 2.690*** (0.935) 0.343 (0.215) 0.039 (0.268) 1.371** (0.555) 108 .362 4.82 .000
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We now consider how to test the SCM implementation hypotheses. The first step is to delineate good from poor implementation, but without involving the focal dependent variable, performance, directly. By doing so, we can then run a regression, with controls, to determine whether implementation has an association, and not just a simple correlation, with firm performance. We take the first step and delineate good from poor implementation by comparing the SCM implementation of LEs with that of SMEs. Under our main arguments supporting the hypotheses, while SMEs are not well fitted to SCM, LEs are. SCM is truly voluntary to LEs because they have the vertical integration option. LEs have many ways to mitigate the hazards in SCM that SMEs do not, and LEs can benefit from the efficiency, innovation and differentiation often generated by SCM. Thus, we would expect LEs to implement SCM correctly, not only due to the better fit, but also to the better ability of LEs to implement SCM more fully if desired. Under these assumptions, LE implementation will be better. By comparing SME with LE implementation of SCM over a number of measures and recording, where the variables show a statistically significant difference (i.e., P < .10), we can create the measure of good implementation. LEs differed significantly (i.e., under a t test of means assuming different variances) from SMEs in SCM implementation in the following ways: the importance of the proximity of SCM partners (Q4f, Q4g), the importance of formal information sharing (Q4j), the importance of improving the integration in the chain (Q4k) and extending the chain (Q4w), the importance of searching for new ways to integrate the chains activities (Q4l) and to make them more time-efficient (Q4u), and the importance of membership inclusion in the chain management (Q4t). A check of the Cronbach alpha for the measure (Q4XX) shows adequate consistency. This step provided support for H2a. The second step in testing the implementation hypotheses is to run a regression on only the SCMSME sample (i.e., the sample of SMEs engaged in SCM) and include the new variable, Q4XX. Table 7 reveals that the new OLS is significant and relatively consistent with the full sample OLS in Table 6. Table 7 also reveals that the new variable has a significant and positive effect on firm performance, as measured by the main dependent variable, PERF. This provides support for H2b.
7. Discussion of results The most important result is the support of H4, that SCM has a significant negative association with SME performance. This result is not apparent in a regular regression; it is revealed when self-selection is controlled. Apparently, some of the firm and contextual characteristics of the SMEs more likely to engage in SCM are also positively associated with SME performance. Without controlling for this effect, the negative correlation between SCM and SME performance would be greatly understated. Thus, it seems that although better performing SMEs may engage in SCM, SCM is not a good fit for SMEs on several performance measures. The results from testing the other hypotheses provide some clues as to the possible explanations why this is the case. The results of testing the implementation hypotheses,
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H2a and H2b, provide one explanation. The SMEs implemented SCM differently than the LEs did, and, apparently, this difference in implementation had a significant association with SME performance. SMEs did not implement SCM with the same focus on physical proximity to partners, on improving the chains performance and on extending the chain; SMEs did not appear to implement SCM as deeply as LEs did. Without such deep involvement in the supply chain, SMEs received less out of the partnership. Thus, one explanation for the poor fit between SCM and SMEs is that SMEs are not suited to implementing SCM effectively. Another possible explanation lies with the strategy-related hypotheses, H1a and H1b. Curiously, SMEs that did not place relatively high importance on strategic focus areas, such as new product development, quality and customer service, were more likely to engage in SCM, yet, these same strategic focus areas were positively associated with SME performance. On one hand, it would appear that, in general, SMEs did not practice SCM as a way to compensate for weaknesses in strategic focus areas where they should be strong, such as in new product design. On the other hand, the same results support the argument that SMEs did not practice SCM to complement strategic focus areas either because such areas were negatively associated with the choice to do SCM. The stronger SMEs engaged in SCM, and this hid the negative correlation of SCM on SME performance in a regular regression analysis. The results of testing the strategy-related hypotheses raises the question of how SMEs expected to benefit from SCM, given that they were not using SCM as a substitute or complement, at least in the areas of strategic focus associated with SMEs. Thus, another explanation for the poor fit between SME and SCM is that SMEs did not, in general, act to use SCM in an obviously strategic way. The other possible explanation we explored concerns the context hypotheses, H3a and H3b. SMEs chose to pursue SCM when it was easierwhen SMEs put high importance on their suppliers using EDI and being willing to integrate the supply chain relationship. SME performance was positively associated with the greater relative importance of a set of partner selection criteria as well, indicating, not surprisingly, that partner characteristics influence SME performance. These results lead to the possibility that the poor fit between SMEs and SCM may stem from partner selection criteria focusing on shortsighted, easy SCM initiation rather than on a longer sighted and more comprehensive SCM relationship. The empirical analyses raise a few further explanations. The main one stems from the significance of the SME being a key supplier to its customers, indicated by Q26, in both the choice to pursue SCM and the performance of the SME. The better SME may have been bullied into the supply chain relationship by the more powerful partners that it is key to. In exchange for staying a key supplier to its customers and reaping the performance benefits, it suffers the performance loss in partaking in the supply chain partnership. However, the benefits more than compensate the costs, in general (i.e., see the relative sizes of the coefficients of SCM and Q26 in Table 6). Thus, SMEs and SCM fit poorly when SMEs have a truly independent choice, but fit better when the choice is forced by a key partner. There are many possible explanations for the less-than-positive association of SCM with SMEs, and some are consistent with the results of the hypotheses testing above. Future work could consider alternative explanations to those considered here, as well as the combinations
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of these and other explanations. Limitations in the current survey data could be addressed in such future work to confront the explanations and find the best ones.
8. Limitations There are a number of limitations to this study. Characteristics of the data, including missing items and the usual concerns relevant to surveys, limit the range of testing relevant to the research questions here. Applying the results to contexts where the data has not been drawn, e.g., those industries with weak APICS and ISM representation, may not be prudent. Further controls, such as those measuring more variables relevant to SMEs, like founder background (Park and Krishnan, 2001), would help in deepening the results.
9. Conclusions We analyze how SCM, a recent and rapidly growing method of streamlining and enhancing a firms transaction set, fits with the capabilities and goals of new venture entrepreneurial activity and technology management. To do so, we considered three problems: (1) the vulnerability inherent in the reliance on SCM partners for relation-based rents, especially for entrepreneurs; (2) the lack of modification of the underlying SCM theories to account for the effects of small firm size; and (3) the self-selection effects in the relevant strategychoice, strategyoutcome link. We contribute to the entrepreneurship literature by providing a first self-selection corrected test of whether SCM is beneficial to SMEs. We find that SCM and SMEs are not a good fit, and this is not a result that could be obtained with regular regression analysis. Otherwise, stronger SMEs practice SCM and suffer poorer performance than they should. We also explore possible explanations for why the fit is poor. We find some support for the explanation that (1) SMEs do not implement SCM appropriately, (2) SMEs do not use SCM to complement strategic focus and (3) SMEs are not freely choosing to pursue SCM. The results are based on the analysis of a survey of senior managers in production-oriented firms, mostly in the United States. By revealing that SCM is significantly, negatively associated with several SME performance measures, we explain why SMEs have not been as present in supply chains as some current literature had expected. These preliminary results can be elaborated upon in many ways in future research. One way is to explore the actual bargaining that takes place among SCM partners to see how SMEs fare and why. Another way is to use different outcome measures, such as real accounting and market values, survival rates and IPO and acquisition potential. A different approach may be to do in-depth case analyses of the supply chains involving SMEs that were successful from the SMEs perspective and compare that experience to less successful cases. Regardless of the path taken, further research into how new ventures can cooperate with large incumbents to create value and still appropriate a fair share of that value is warranted.
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Appendix A
Q4: How important are the following issues in your firms supply chain management efforts? f) locating closer to your customers g) requiring suppliers to locate closer to your firm j) use of formal information sharing agreements with k) improving the integration of activities across your suppliers and customers supply chain l) searching for new ways to integrate supply chain t) creating supply chain management teams that management activities include members from different companies u) reducing response time across the supply chain w) extending your supply chain to include members beyond immediate suppliers and customers Q9: How important are the following issues when evaluating your key/preferred suppliers performance? a) quality level h) presence of certification or other documentation b) service level i) the flexibility to respond to unexpected demand changes c) correct quantity j) communication skills/systems (phone, fax, email, internet) d) on-time delivery k) quick response time in case of emergency, problem or special request e) price/cost of product l) willingness to change their products and services to meet your changing needs f) use of electronic data interchange (EDI) m) willingness to participate in your firms new product development and value analysis g) willingness to share sensitive information Q18: How important are the following issues in assuring that suppliers products and services conform to your specifications? Suppliers need to. . . a) maintain a formal program for safety and hygiene i) ensure that purchased product and materials conform to their specifications b) maintain adequate records of all inspections and j) establish and document their quality system tests performed c) maintain procedures to control and verify the k) comply with all requirements of your firm design of the product d) maintain a facility-wide, documented preventative l) have a comprehensive internal quality audit maintenance program system in place e) maintain adequate gauging and testing devices for m) investigate causes of nonconformance and take inspection and testing corrective actions f) ensure that critical processes are carried out under n) verify whether quality activities comply with controlled conditions planned quality systems g) ensure that the quality policy is understood, o) provide their personnel with written inspection implemented and maintained and testing instructions h) ensure that statistical techniques/process controls are used on a daily basis Q19: How important are the following factors when selecting a key/preferred supplier for your firm? a) company size q) flexible contract terms and conditions b) ethical standards r) geographical compatibility/proximity c) testing capability s) cultural match between the companies d) scope of resources t) past and current relationship with supplier
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Appendix A (continued) Q19: How important are the following factors when selecting a key/preferred supplier for your firm? e) technical expertise u) suppliers effort in promoting JIT principles f) industry knowledge v) supplier has strategic importance to your firm g) commitment to quality w) suppliers willingness to share confidential information h) open to site evaluation x) percentage of suppliers work commonly subcontracted i) suppliers process capability y) suppliers order entry and invoicing system, including EDI j) insurance and litigation history z) your annual orders as a percentage of their overall business k) references/reputation of supplier aa) suppliers ability to make a decent profit for supplying to you l) ability to meet delivery due dates bb) willingness to integrate supply chain management relationship m) price of materials, parts and services cc) commitment to continuous improvement in product and process n) financial stability and staying power dd) reserve capacity or the ability to respond to unexpected demand o) suppliers effort in eliminating waste p) honest and frequent communications Q23: How important are the following issues/tools in your firms new product design and development activities? a) modular design of parts e) standardization of component parts b) early supplier involvement f) the use of value analysis/ value engineering c) the use of concurrent engineering g) quick product development and introduction time d) simplification of component parts h) the use of quality function development (house of quality) Q24: How important are the following JIT principles in your operations? a) reducing lot size e) buying from JIT suppliers b) reducing set-up time f) increasing delivery frequencies c) reducing supplier base g) reducing inventory, which in turn frees up capital investment d) preventative maintenance h) greducing inventory to expose manufacturing and scheduling problems Q25: How important are each of the following quality practices in your firm? a) inspection h) process improvement (modification of process) b) using benchmark data i) employee training in quality management and control c) simplifying the product j) empowerment of shop operators to correct quality problems d) statistical process control k) top management communication of quality goals to the organization e) using standard component parts l) emphasis on quality instead of price in the supplier selection process (continued on next page)
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Appendix A (continued) Q25: How important are each of the following quality practices in your firm? f) designing quality into the product m) considering manufacturability and assembly in the product design stage g) modular design of component parts Q27: How important are the following issues with respect to your firms attempts to improve customer service and satisfaction? a) your firms ethical standards m) successful resolution of customer complaints b) your firms financial stability n) entering into long term contract arrangements c) your firms use of JIT practices o) determination of future customer expectations d) your firms use of quality control techniques p) making it easier for customers to seek assistance e) your firms ability to meet delivery due dates q) being flexible to meet your customers changing needs f) your firms effort in striving for continuous cost r) employing a customer satisfaction measurement reduction system s) use of electronic data interchange (EDI) g) your firms geographical proximity to your suppliers facility communications h) your firms commitment to continuous t) determination of key factors for improving improvement in products and processes customer satisfaction i) ISO 9000 certification u) understanding how your customers use your products and services j) Sharing of confidential information v) employing routine follow-up procedures for customer inquiries or complaints k) Honest and frequent communications w) interaction with customers to set reliability, responsiveness and other standards l) Quality of your products and services x) adequate financial return to your customers for using your materials, parts and services
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Journal of Business Venturing 20 (2005) 403 436

Small business and supply chain management: is there a fit?

R.J. Arend, J.D. Wisner / Journal of Business Venturing 20 (2005) 403436

R.J. Arend, J.D. Wisner / Journal of Business Venturing 20 (2005) 403436

R.J. Arend, J.D. Wisner / Journal of Business Venturing 20 (2005) 403436

R.J. Arend, J.D. Wisner / Journal of Business Venturing 20 (2005) 403436

Fig. 1. Illustration of the relationships between SCM and the SME.

R.J. Arend, J.D. Wisner / Journal of Business Venturing 20 (2005) 403436

R.J. Arend, J.D. Wisner / Journal of Business Venturing 20 (2005) 403436

R.J. Arend, J.D. Wisner / Journal of Business Venturing 20 (2005) 403436

R.J. Arend, J.D. Wisner / Journal of Business Venturing 20 (2005) 403436

R.J. Arend, J.D. Wisner / Journal of Business Venturing 20 (2005) 403436

R.J. Arend, J.D. Wisner / Journal of Business Venturing 20 (2005) 403436

R.J. Arend, J.D. Wisner / Journal of Business Venturing 20 (2005) 403436

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R.J. Arend, J.D. Wisner / Journal of Business Venturing 20 (2005) 403436

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R.J. Arend, J.D. Wisner / Journal of Business Venturing 20 (2005) 403436

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R.J. Arend, J.D. Wisner / Journal of Business Venturing 20 (2005) 403436

R.J. Arend, J.D. Wisner / Journal of Business Venturing 20 (2005) 403436

R.J. Arend, J.D. Wisner / Journal of Business Venturing 20 (2005) 403436

R.J. Arend, J.D. Wisner / Journal of Business Venturing 20 (2005) 403436

R.J. Arend, J.D. Wisner / Journal of Business Venturing 20 (2005) 403436

R.J. Arend, J.D. Wisner / Journal of Business Venturing 20 (2005) 403436

R.J. Arend, J.D. Wisner / Journal of Business Venturing 20 (2005) 403436

R.J. Arend, J.D. Wisner / Journal of Business Venturing 20 (2005) 403436

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