Firm‐wide integration and firm performance

Purpose – This paper is intended to extend previous research by exploring the scope of integration and its impact on firm performance. In addition to, examining dyadic integrative relationships, the research also looks at firm‐wide process‐oriented integration. Design/methodology/approach – Literature on collaboration and integration was reviewed along with discussions with subject experts. The resulting survey was administered to supply chain executives. Structural equation modeling was used to analyze the relationships between the constructs of marketing/logistics collaborative activities, firm‐wide cross‐functional integration, and firm performance. Findings – This research shows that marketing/logistics collaboration does not have a direct impact on firm performance when firm‐wide integration is considered. The results indicate that marketing/logistics collaboration increases firm performance through the mediation of firm‐wide cross‐functional integration. Additionally, dyadic collaboration needs the support of broader firm‐wide integration to achieve better firm performance. Research limitations/implications – The paper presents an initial quantitative study on the scope of integration. Future research should examine other influential factors and explore the relationship between internal integration and external integration. Further, studies should also investigate the order in which firm processes should be integrated. Practical implications – The primary implication is that firms can follow a path starting with focused dyadic collaborative behaviors involving as few as two functional areas and move towards firm‐wide integration of processes over time. Originality/value – This paper shows that functional level collaboration (logistics and marketing) is a precursor for firm‐wide integration leading to increased firm performance.