Evaluating supply chain relationship quality, organisational resources, technological innovation and enterprise performance in the palm oil processing sector in Asia

Abstract

Purpose – This paper aims to evaluate the relationship between organisational resources, technological innovation, relationship quality and enterprise performance, as well as the mediating effect of firm–supplier RQ. Design/methodology/approach – A survey was conducted of the palm oil processing sector in Malaysia, consisting milling, refining and oleo-chemical companies. Data were gathered and used to statistically test hypotheses that underpinned a proposed conceptual model. Findings – Organisational resources have a direct impact on RQ, which, in turn, has a direct effect on performance indicators such as financial performance, market effectiveness and strategic objectives. RQ is a mediator in some of the resource-performance relationships, which underpins the genesis of the research undertaken. The mediating role played by RQ in promoting business performance in the palm oil processing sectors, is achieved through translating the effects of organisational resources into improved business performance. Research limitations/implications – The main limitation of this study lies in its cross-sectional nature. A single respondent was drawn from each company, and information from each respondent was obtained only once and at a single point in time. Practical implications – The results offer some suggestions to top management, e.g. on the type of resources to invest in and exploring vital relational issues that enhance performance outcomes and the impact of different sets of resources on relational dynamics. Originality/value – Very little is known about the application of resource-based view in the Asian context, or how RQ affects business performance from the East Asian perspective. By confirming the strong impact of RQ on business performance in the Asian context, the study adds value by providing evidence from the East. The study also makes a contextual contribution, by demonstrating the applicability of the observed relationships among palm oil processing companies from a non-Western, collectivist society.