Essay Sample on Cultural and Economic Conditions Affecting Supply Chain

Introduction

The modern competitive market, most businesses have realized the value of gaining and sustaining the competitive advantage and the best way to achieve this is by delivering the best to customers at the lowest price. A perfect supply chain management allows for the lowering of inherent risks that occur when purchasing and selling products. In the global market, the completion has driven businesses to match the activities of a chain that add value with the exceptional competitive advantage that is offered by other organizations/companies that make up the chain. Companies use supply chain management due to merit factors such as reduction of delivery time, improvement of financial performance, superior satisfaction of consumer and trust building with the suppliers. To identify how a supply chain operates, companies have to understand the factors and subfactors that affect activities of supply chain management. The supply chain is directly connected to the cost of products, and therefore companies applying the supply method incorporates the cost curve. Supply chain management can be fully understood by the study of a business as an open system.

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This study of literature review involves the analysis and assessment of previous theoretical works on the cultural and economic factors affecting the supply chain. This review is also designed to develop a critical evaluation of the strengths that each research has on the topic that is discussed. Other works of the literature are also criticized according to the contribution they have on the subject of cultural and economic factors that affect the supply chain. This review located a total of 13 articles to be used in the study. Putting into account the heterogeneity of this study, the report is presented as a narrative report focusing on the supply chain with a critical focus on the economic and cultural factors that affect the supply chain.

The inclusion criteria in this study involved the restricted use of articles and publications before 2014 due to the emergence of trends that could cause a change factors that affect the supply chain. Also, this review incorporates the use of peer-reviewed articles for theoretical support of facts. Following this type of inclusion, a step of searching in online databases using keywords to identify the published and unpublished articles and journals. The exclusion criteria involve the rejection of unauthenticated sources such as editorials, books, and letters which may not contain original information. The exclusion is also applied to non-peer reviewed literature in this review. There is a detailed discussion of a model to give an insight into the modern model of cultural behaviour. The study of the literature review concludes with an investigation of the factors that will determine the success of an improved supply chain after addressing the hindrance factors relating to those of cultural and economic

Methodology: This research involves the use of community approach in observing the economic factors and behaviours associated with chain management in a diverse natural setting. Pre-existing measures of cultures that are related to work are used to explain the behaviors that are observed.

Research implications: top supply chain design demand for the consideration of local, individual, organizational and the state's cultural norms; demanding that the theory of supply chain be designed to justify for culturally diverse settings.

Research limitations: A small number of settings at the national level and the cases of each environment is assessed and used an opportunistic sampling thus limiting the all-purpose nature of findings.

Original contribution: This study is significantly relevant to the present-day challenges facing businesses trying to manage supply chains at higher market and economic levels and working with suppliers from diverse cultures. The exploratory research that is presented is the first step to develop a chain theory for the supply that is sensitive to economic and cultural diversities.

Economic Conditions

Economic factors are the factors that have an influence on the current and future value of a company (MacCarthy et al. 2016). Additionally, Economic factors motivate most decisions in the supply chain, and thus the supply chain managers need to get aware of these conditions that help run a firm. The economic that affect supply chain include Market dimensions, technological dimensions, supply chain networks, and sustainability. Some of these economic factors are interrelated, but the conditions they present on the supply chain is distinct.

Market Dimension

Vermeulen, Niemann, and Kotze (2016) point out market dimensions as a condition that affect supply chain management. These researchers add that a continuous unpredictability of demand in the global market has hindered the ability of the supply chain to respond effectively. The causes of the unpredictability of demand in the world markets are volatile and less controllable. Fluctuation of demand at the consumer market level presents a severe problem to the asset configuration of supply chain and management of lead time. Also, the researchers add that constant demand fluctuations lead to the 'bullwhip effect 'in the supply chain causing unsatisfactory goods and service delivery and a high cost of operation. Supply chain configuration is the way that a supply chain is designed from all its participant firms (MacCarthy et al. 2016). Kasemsap (2016) agrees by supporting the fact that the loyalty of customers has decreed has dramatically dropped over the year and the main concern that there is volatility in demand.

Ho, Nguyen, Adhikari, Miles, and Bonney (2018) says that market orientation as an aspect of market dimension reflects on the direction of a business/ organization towards building customer's superior value. The five researcher's work emphasizes on the market orientation taking into account customer and competitive orientation. They also denote that customer and competitor orientation have a significant implication on strategies that are market-based. These two aspects under market orientations directly affect the operations of firms which in turn affects the supply chain.

Ho et al. (2018); and Kasemsap (2016) have both played a significant role in defining the economic relationship that exists between the customer and consumer orientation and firm operations in market orientation. The significance of the work of Vermeulen, Niemann and Kotze (2016) is shown in explaining the effects of the volatility of demand in the global market as an economic condition affecting the supply chain.

Technological Dimensions

Vermeulen, Niemann and Kotze (2016) denote that technology and the sophistication method of it to achieve competitive advantage are recognized as economic challenges in supply management. This challenge in technology dimension is divided into three challenges (Vermeulen, Niemann & Kotze, 2016). First is the technology lead-time problem. The lead-time starting from the innovative ideas to trying, prototyping not excluding manufacturing and marketing has considerably been shortened. This is partly as a result of expanded international partnership on technological development followed by commercialization. There is no doubt an economic challenge that is directly affecting global supply change. Ozkaya et al. (2015) also view the technological dimension as market-based innovation which is linked with the market knowledge competence. Their study looks at market innovation through the transmutation of customer and consumer-based orientations into market-based technological innovation.

The second is a disruptive technology. When the new technology adopted causes firm failure of large businesses, the dilemma is faced by the managers. Ozkaya et al. (2015) say that customers may at times lack the eagerness to purchase a new innovative idea in the market thus making the new products bad for the business. This is true since not all creative ideas are sustainable to the company. This brings into play economic stress caused by technology.

The third idea is the supply chain network. This part of the supply chain network is explained about technological advancement. In the supply chain network, new knowledge ideas and innovations come from the supplier. There is no guarantee of convincing the whole chain of cost supply of the cost reduction or addition of worth. The innovative ideas that come from the supplier can be shattered due to the inability of the supply chain to coordinate the contribution between individuals and the general supply chain (Kwon, Kim & Martin, 2016). When a technology leads to a drop in profit margins, the best step will be on cutting cost on the presented technology instead of taking chances to develop a new one. The work of Vermeulen, Niemann and Kotze (2016) is significant in the development of technology that does not affect the economy. However, the assumption on wrong customer perception on technology may not be very logical as some innovations enter the markets with impact. Kwon, Kim and Martin (2016), work is significant as it provides valuable information on the significance of having a coordinated supply chain group.

Supply Chain Networks and Integration

According to Kasemsap (2016), the constant emergence of a global distribution network and the rising population in the production environment points to the significance of enhancing the connections of a supply chain. He further adds that the supply chain networks are essential in boosting the performance and making them more responsive to the continually changing demand of customers. Networks in supply chain have an economic influence on the supply chain. The economic effect can be explained in terms of the balance that exists between the demand and supply and the cooperation of firms with their customers. According to this literature, a loyal customer is considered an asset for a business. The loyalty of customers has a significant impact on increasing profits and ensuring the survival of the company. The commitment of the customer also paves the way for the modern business to accomplish a competitive environment that is secure.

According to Kwon, Kim and Martin (2016), enhancing the level of innovativeness requires for the adaptation of human resource practice that will improve the performance of the work group. The supply chain relationships hold a significant role in helping the firm attain its goals. Integration and coordination of events with suppliers and understanding of the needs of customers' needs result in considerable benefits to the business. The researchers also add that to achieve a perfect competition; the firms often focus on providing higher quality, better services and a variety of choices.

The significance of the two works of Kasemsap (2016) and Kwon, Kim and Martin (2016) on business provide an understanding of supply chain networks as an economic factor affecting the supply chain. The two works have contributed to improving customer-supplier relationship which helps increase the profit base of the firm. Both studies emphasize that good economic conditions are boosted by the healthy relationships, networks and integrations that a firm has with other stakeholders. The perfect economic conditions provide for a complete supply chain.

Sustainability

Ivanov, Dolgui, Sokolov and Ivanova (2017) explain sustainability as an economic condition as a mechanism of marketing that helps improve the image of the firm with their customers and other stakeholders. They also denote that there exists a definite connection between the sustainable supply chain and economic growth. Additionally, firms are fighting towards becoming more environmentally friendly and e...