The influence of strategic leadership, business continuity planning and supply chain resilience on organizational performance

Abstract

Supply chain risks result in negative impacts on organizations' performance and often lead to the decline of sales, increase of costs and failure of service delivery by the organizations. In this circumstance, it is highly important for organizations to manage supply chain risks effectively. Organizations with a higher ability to return to the original condition after disruption will exhibit better performance. Therefore, this study aims to determine the factors that enhance organizations' supply chain resilience, thereby improving organizational performance. To achieve this objective, the influence of strategic leadership, business continuity planning, and supply chain resilience on multidimensional organizational performance involving financial performance, operational performance, and supply chain risk management performance were tested using two theories, namely Structural Contingency and Upper Echelon. Using non-probability-convenience sampling, a questionnaire was distributed among 248 CEOs and top managers of food manufacturing companies in Saudi Arabia. The current study employed the Statistical Package for the Social Sciences (SPSS) and Partial Least Square-Structural Equation Modelling (PLS-SEM) techniques for data analysis. The findings revealed that business continuity planning and supply chain resilience have positive impacts on all dimensions of organizational performance. However, strategic leadership only affects operational performance. Additionally, a mediating relationship was found between business continuity planning and all dimensions of organizational performance through supply chain resilience. The findings of this study contribute to the literature by investigating the factors that improve an organization's ability to avoid and recover from disruptions and thus be more resilient. This study is also significant as it fills the gap in the literature by examining the mechanism through which business continuity planning affects organizational performance. From a practical perspective, the findings benefit managers and leaders of organizations by providing a theoretically-supported and empirically-proven framework.