Supply chain sustainability during turbulent environment: Examining the role of firm capabilities and government regulation

Abstract

The turbulent environment like COVID-19 has forced many firms to the brink of collapse. It has a devastating impact on the supply chain management and its sustainability. Many firms were forced to close due to unavailability of raw materials, essential ingredients, and labor shortage. Not many firms were capable of efficiently handling such disruptive situation. There is not much study on appropriate supply chain strategy for such turbulent situation. The practitioners as well as academic researchers are interested to know how to deal with such situation and remain sustainable for any such future crisis like COVID-19. In this background the aim of this study is to examine the determinants that impact the supply chain sustainability during turbulent situation. The study investigates how firm capability and government regulation impact the supply chain sustainability during turbulent environment. With the help of literature review, dynamic capability theory and contingency theory, a theoretical model has been developed. Later the model has been validated using PLS-SEM technique with 315 usable responses from employees of different firms in India engaged in supply chain management process. The study finds out that firms’ capabilities, leadership team support and contingency plan play vital role to formulate appropriate supply chain strategy which in turn positively impacts supply chain sustainability during turbulent environment. The study also finds that there is a moderating role of government regulation impacting supply chain management during the turbulent environment.