Modelling marketing resources, procurement process coordination and firm performance in the building construction industry: the integration of resource based view and coordination theories / Akmal Aini Othman

The construction industry is a complex and the most people-intensive sector in the
national economy. While it forms a major pillar to a nation’s socio-economic
development, past studies have found that this industry, with particular reference to the
building materials resources, were not sufficiently managed, leading to a waste of bad
material management with time and cost overrun. Problems in the inaccuracy of data,
unplanned deliveries, wrong and defective deliveries for instance, require the supply
chain members to be coordinated. In view of this, there is a need to investigate the
procurement process coordination (PPC) between the contractor and his building
materials suppliers, focusing on the opportunities of the improvement in operational and
customer performance. Thus, the present study looked into the coordination between the
construction firm and its main building materials suppliers to allow for greater
understanding in the field of supply chain management (SCM). Drawing upon two
theories namely Resource Based View (RBV) and Coordination Theory (CT), it also
analysed the relationship of the three critical constructs; marketing resources, PPC and
firm performance. This study intended to shed light into the potential implication of the
link in a more coherent and integrated approach particularly from the lens of construction
supply chain. With this backdrop, the objective of the study was formulated to establish a
link between these constructs (marketing resources, PPC and firm performance) and their
dimensions as well as to examine the mediating role of PPC on this link. This study
contributes to the new knowledge by detailing the activities involved in PPC instead of
testing it in a general setting.
Data for this study was gathered through a survey questionnaire. The analysis was
conducted using Structural Equation Modelling (SEM) technique by examining two
competing models that represent full and partial mediation. The findings revealed that
marketing resources have positive and significant effects on PPC dimensions. It was also
found that PPC fully mediates the relationship between marketing resources and firm
performance. Result from the Sobel test provides evidence that joint operational planning
and supplier relationship development appeared to confirm their role as mediating factor
in the relationship between marketing resources and firm performance. In other words
these two dimensions of PPC facilitate the conversion of marketing resources into firm
performance. This finding was consistent with the movement of the industry players
towards ‘best practices’ which emphasised on SCM, client orientation and
innovativeness. Following these findings, a number of implications are offered for the
construction industry. First, construction industry players should adopt and emphasis on
such orientations in order to enhance their performance particularly with the operational
and customer performance. Second, PPC, in particular join decision planning and
supplier relationship development provided greater room for understanding on the impact
of marketing resources on the effectiveness and efficiency of the construction supply
chain. Finally, the industry players must act upon the importance of marketing resources
in order to optimise their supply chain coordination capability.