Exploring the Nexus Between Economic Utility, Perceived Risk, Organizational Characteristics, and Supply Chain Performance

Abstract

This study investigates the effects of the mediations of economic utility and moderation of perceived risk on supply chain performance as determined by the organization factors (innovation, organizational culture, and employee motivation) in the Egyptian Fast-Moving Consumer Goods (FMCG) Industry. Although previous research has identified an excess of factors affecting supply chain performance, limited were the studies trying to establish relationships among those factors, especially in emerging economies. Thus, a quantitative approach was adopted, using a structured questionnaire, which was distributed to 382 FMCG supply chain professionals in Egypt. Data were analyzed using structural equation modeling (SEM) to test relations between the hypothesized variables. The results provide evidence that innovation and employee motivation have a positive impact on supply chain performance; organizational culture, however, has no significant impact. Economic utility partially mediates this relationship, of which time utility is by far the strongest mediator. Furthermore, perceived risk moderates the effects of innovation and organizational culture on supply chain performance, thus creating a necessity for risk management. Such information will benefit supply chain managers through considering organizational agility, time-efficient utility drivers, and risk reduction strategies. This research adds to the literature by providing a broad framework integrating organizational factors, economic utility, and perceived risk within supply chain performance systems in developing markets.