Impact of Supply Chain Integration and Selective Disintegration on Supply Chain Efficiency and Organization Performance

An efficient business system integration (BSI) is the key determinant factor for the organization to stay competitive. The goal of this study is to develop and execute a research project to study BSI in the oil & gas industry and how an efficient BSI in supply chain (SCI) can be used to gain advantage. A mixed (qualitative & quantitative) survey method was employed and structural equation modeling (SEM) is applied to test the theoretical framework and hypotheses. Findings reveal that, total integration do not offer optimum performance and selective disintegration (DIS) is necessary for supply chain efficiency (SCE) and organization performance (PER). This study helps to better understand the degree of integration required for optimum supply chain performance and came up with new construct DIS. Specifically, this study investigated the effect of SCI and DIS on SCE and PER. The compelled sample size precludes evaluating and testing of additional broad models of the relationship amongst the constructs. The main managerial lesson is that, in contrast to what has been written in many books and other popular publications, selective disintegration is necessary for optimum supply chain efficiency.