Environmental uncertainty, supply chain capabilities and business performance in horticultural marketing channels

This paper investigates the influence of environmental uncertainty on supply chain capabilities and business performance. Prior literature has indicated the link between business performance and environmental uncertainty. However, limited attention has been paid to the linkages between supply chain performance and environmental uncertainty. Environmental uncertainty is the degree to which future states of the world cannot be accurately predicted or anticipated (Pfeffer and Salanick, 1978). Channel members perceive environmental uncertainty when there are changes in technology, customers and competitors as well as in changes in supply channel relationships and act to reduce the negative impacts of these perceived environmental changes. The context of the research is the horticultural supply chain in Zimbabwe. We hypothesised that with, the exception of the impact of changing customer preferences on innovation, all the effects of environmental uncertainty on the development of supply chain chain capability would be negative, basically because of environmental uncertainty increases the risk for all supply chain participants as well as reducing cashflow for investment in supply chain initiatives. The results generally supported these hypotheses.