Hospital-supplier integration and hospital performance: evidence from Saudi Arabia

Abstract

Purpose The purpose of this paper is to develop a comprehensive conceptual model for the impact of hospital-supplier integration on the overall performance of healthcare organisations. It also investigates the moderating role of lean practices between hospital-supplier integration and hospital performance. Design/methodology/approach Data were collected from 498 public and private hospitals in Saudi Arabia using a survey. Structural equation modelling was used for data analysis. Findings The results indicate that hospital-supplier integration has a positive impact on the hospital performance. These effects are even more notable when adopting lean practices in the hospitals. Research limitations/implications The data were collected from one developing country, namely Saudi Arabia. Thus, the findings may be relevant to the Saudi context but not those of other developing countries. Second, the data were collected from the hospitals’ end but not from the suppliers, so the latter’s perspectives on the themes covered here are not known. Future research may investigate the validity of the model in various developing countries whose healthcare systems have different characteristics, and the relationships between hospitals and their suppliers may follow different governance models. Practical implications The developed model and results will help hospitals in the Saudi health system to make better decisions on managing their logistics and supply partners. Originality/value This study extends the current research by developing a model that highlights the impact of hospital-supplier integration on the overall performance of healthcare organisations and tests this model to confirm its validity. To the authors’ knowledge, this study would be one of the first that uses both lean thinking and relational view of competitive advantage theory combined to examine the moderating role of lean practices on the inter-organisational relationships in Saudi Arabia.