The relationship between intra-organizational and inter-organizational coordination and its influence on product quality improvement

Abstract

A sample of 225 firms is analyzed, using structural equation modeling, to test five hypotheses. This study seeks to gain a better understanding of the practice of coordination among functional areas within the buying firm as well as between buyer firms and their key suppliers. The implications of this research suggest that it is important for firms to focus on their long-term success as they work with key suppliers. The research shows when the stakeholders of the firm support its efforts to coordination and cooperation with its key suppliers, the firm benefits. Evidence shows cross-functional coordination enhances the firm's capability to cooperate with its key suppliers. The findings are significant to supply chain manager and to the various functional managers in charge of quality, production, R&D, and customer service and their respective counterparts in supplier firms. Finally, this study expands prior research and fills a gap in the literature by showing the importance of inter-organizational coordination between the buyer's supply management/purchasing function and the supplier's operations function. This study reveals that conformance to specifications, product reliability and overall product quality performance can be significantly improved when these inter-organizational functional areas coordinate their requirements. The study also shows that product quality can be significantly improved when intra-organizational and inter-organizational coordination occurs simultaneously.