RELEVANCE OF STRATEGIC MANAGEMENT THEORY AND RESEARCH FOR SUPPLY CHAIN MANAGEMENT

• Date: 01 January 2011
• DOI: http://doi.org/10.1111/j.1745-493X.2010.03210.x
• Published date: 01 January 2011
• Author: MICHAEL A. HITT

RELEVANCE OF STRATEGIC MANAGEMENT THEORY AND

RESEARCH FOR SUPPLY CHAIN MANAGEMENT

MICHAEL A. HITT

Texas A&M University

This article examines the relevance of several prominent theoretical perspec-

tives in strategic management for supply chain management. The resource-

based view of the firm, transaction cost economics, organization learning

theory and social capital are reviewed for their applicability to important

research questions in supply chain management. The work includes a dis-

cussion of some common strategic management researchmethods that can be

useful in supply chain management research. The paper concludes that the

research in strategic management and supply chain management are com-

plementary and that both fields could benefit from more integration of the

work from both.

Keywords: strategic management; resource-based view; transaction cost economics;

organizational learning; social capital

INTRODUCTION

This essay is loosely organized around three questions

that were used to provide guidance to members of a

thought leader panel. These questions focused on (1)

theories from the strategic management field relevant for

supply chain management (SCM), (2) SCM problems

and researchquestions that might benefit froma strategic

focus and (3) empirical methodologies in strategic

management that might be particularly useful in SCM.

I will first focus on theoriesused in strategic management

research that seem particularly relevant for SCM.

STRATEGIC MANAGEMENT THEORIES

Although there may be a number of theoretical per-

spectives in strategic management that could be particu-

larly useful in SCM, I willfocus on four primary theories.

Relevant theories for SCM include the resource-based

view of the firm (RBV), transaction cost economics

(TCE), organizational learning theory and social capital

theory.Several of these have alreadybeen applied in SCM

by some researchers and, thus, have captured the atten-

tion of some scholars in the field. For example, McKone-

Sweet and Lee (2009) used the resource-based view as a

primary base for the development of a supply chain

strategy taxonomy. Because of this, I will go beyond the

basic RBV and focus on some of the current research

based on and/or derived from the RBV, resource orches-

tration and dynamic capabilities.

RBV

Resource Orchestration

What was originally termed resource management and

more recently referred to as resource orchestration

addresses managers’ role in structuring, bundling and

leveragingthe firm’s resources. This workextends the RBV

by articulating managerial actions to orchestrate re-

sources in ways that help firms create a competitive ad-

vantage (Sirmon,Hitt and Ireland 2007). Essentially, this

work is based on the premisethat ‘‘What a firm does with

its resources is at least as important as which resources it

possesses’’ (Hansen, Perry and Reese 2004, p. 1280).

Sirmon et al. (2007) developed a frameworkthat addresses

the process-oriented managerial actions required to de-

velop a competitive advantage and thereby contribute to

the creation of value for the firm. This framework first

suggests thatstructuring the resource portfoliois a critical

component of managing the resources. This involves the

acquiring of resources, developing resources and, when

necessary, divesting resources that are no longer useful

for the strategy used by the firm. However, as implied

above, holding valuable and rare resources is a necessary

but insufficient condition for achieving a competitive

advantage.These resources must be used in effectiveways

to create the competitive advantage. To do so, the re-

sources must be bundledin ways to build the capabilities

needed by the firm. And, those capabilities must be

leveraged in the marketplace (Sirmon, Hitt, Ireland and

Gilbert 2011).

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