Frequent supply chain disruptions and firm performance: the moderating role of exploitation, exploration and supply chain ambidexterity

The present manuscript assesses how firms should manage frequent supply chain disruption triggers and whether these firms should use existing supply chain competencies, develop new ones or both to mitigate any adverse consequences on financial performance.

Data for the study come from a survey administered to professionals in India. India was an appropriate base for the study because of its developing economy and businesses often facing SC disruptions in the marketplace.

The findings show that the negative association between the frequency of supply chain disruption triggers and financial performance is weaker when a firm utilizes supply chain exploitation competencies. Conversely, the negative association between the frequency of supply chain disruption triggers and financial performance becomes stronger when using supply chain exploration competencies. Most significantly, however, the authors show that a strategy of supply chain ambidexterity – one that combines both exploitation and exploration practices – is more beneficial in mitigating the impact of frequent disruption triggers on firm financial performance compared to the other strategies.

These findings contribute to the literature, extending the benefits of ambidexterity beyond domains of innovation, manufacturing flexibility, competitiveness and firm performance to include mitigation of supply chain disruptions.