Synergistic effect of cooperation and coordination to enhance the firm's supply chain adaptability and performance

Purpose To address how organizations should be malleable, the purpose herein is to draw on complementarity theory to examine the interaction effect of customer integration (i.e. coordination) and shared relationship governance (i.e. cooperation) on supply chain adaptability and firm's performance. Design/methodology/approach A survey research design is adopted to collect primary data from 177 automotive components suppliers. After assessing the measures' psychometric properties, the hypothesized relationships are evaluated using hierarchical regression analysis supplemented by structural equation modeling and complementarity test. Findings In the context of industrial markets, and specifically the automotive component industry, a complementary interaction effect is found between coordination and cooperation. The complementary impact was significant in affecting the supply chain adaptability and the firm's performance. Our results refine the existing supply chain integration by highlighting the complementary effect of coordination and cooperation. Practical implications Understanding the true interaction effect between cooperation and coordination to develop supply chain integration avoids decision-makers' misperception over or underinvesting in activities. This research also provides key insights on the complementary effect of coordination and cooperation to establish structural flexibility in the supply chain and the ability to respond to the disruptions, such as the COVID-19 pandemic. Originality/value Understanding the true interaction effect between cooperation and coordination to develop supply chain integration avoids decision-makers' misperception over or underinvesting in activities. The implications for theory and practice are also presented.