Relational embeddedness, absorptive capacity and supply chain flexibility: Evidence from China

Competition is no longer company to company, but supply chain to supply chain and flexibility is viewed as a key dimension of supply chain performance in global competition recently. Companies must manage the entire supply chain and work together with supply chain node enterprises, have access to resources, knowledge, and information from the network, and improve supply chain flexibility. Relational embeddedness is often considered as crucial driver for the improvement of supply chain flexibility. However, quantitative studies demonstrating these links are scant and an increasing amount of evidence suggests that there is a need to develop a complete model of relational embeddedness on supply chain flexibility by examining the potential mediating effect of absorptive capacity. To meet this need, we define relational embeddedness and absorptive capacity, develop a valid and reliable instrument to measure these, build a framework that relates relational embeddedness, absorptive capacity and supply chain flexibility, and then test structural relationships within this framework using SPSS. Based on 136 responses from companies in the Yangtze River Delta, statistically significant and partially positive relationships were found among relational embeddedness, absorptive capacity and supply chain flexibility. Managerial implications of the empirical findings of this study are also discussed.