Supply chain communication and cultural compatibility: performance implications in the global manufacturing industry

Purpose: Research has extensively focused on the cultural differences in supply chain collaboration while neglecting the importance of cultural similarities and compatible goals among supply chain members. With the rise of global supply chain network, the choice of supply chain orientation is critical. This study argues that performance differences between these configurations highlight managerial implications for sustainable development. Design/methodology/approach: Drawing from uncertainty reduction and cognitive social capital theories, this study developed a taxonomy of manufacturing firms based on process alignment between cultural compatibility and supply chain communication. The empirical data used in this study were drawn from the Global Manufacturing Research Group (GMRG) survey project, with data collected from 680 manufacturing companies, across various industry sectors and countries. Findings: There appeared to be consistent three major configurations: the Proactive, the Initiative and the Reactive. Manufacturers distanced themselves based mainly on communication with customers on events and proprietary information. Communication-cultural compatibility taxonomies influence differently on operations and financial performance. The Initiative, who excelled in communication practices gained significant improvement in efficiency and delivery measures. While Reactive lagged, Proactive aligned in both capabilities to experience higher payoffs in operational and financial measures. The findings offer a step-by-step approach where manufacturers intensify communication with partners for better efficiency and delivery measures, then align cultural practices to obtain financial, quality and innovation performance. Research limitations/implications: It will be fruitful for future research to examine the evolution of longitudinally. A comparison between developed and developing economies will be of interest. Practical implications: The findings provide a step-by-step decision-making process for supply chain communication and offer guidance especially for global supply chain managers. Originality/value: This study adds greater comprehensiveness and richness to the information exchange literature on performance by process aligning to enhance cultural compatibility.