CHAPTER ONE

RESEARCH OVERVIEW

1.0 Introduction:

This part presents the foundation of this examination, trailed by the issue proclamation that
legitimizes the current review. Followed by the research questions, the research objectives, the
extent of the review, the meaning of this examination, and the meaning of key terms are
expounded.

1.1 Background of the study:

Firm iusually iface ithe icomplexity iin ithe ibusiness iprocesses, itrying ito ifind iways ito iimprove iperformance.
i Method ito ienhance ithe iIQ iof ienterprise iapplication iis iinformation icompleteness, iinformation iaccuracy,
i information iformat, iand iinformation icurrency iconstitutes ithe iconstruct iinformation iquality. i(Mohd iel iat.
i 2017) iRoad ilogistics, itransportation ineed imobility imedium ito irun ia ibusiness iprocess. iDelivery idelay iand
i rising icosts iare ithe itwo imajor ieffects iof ibusiness iperformance ifor ilogistics iservice iproviders.In a global
economy, icompetitiveiandidynamicienvironment, ilogistics imanagements iare ian iessential
i strategic ifeature ifor irising icompetitiveness. iThe iimportance iof ilogistics imanagement ihad ichanged
i from ia imore ipassive iand iexpense iminimization ioriented iaction ito ia ikey isuccess ifactor ifor ifirm
i competitiveness. There iwas itherefore ian iunindustrialized iconsensus iabout ithe ineed ifor ibusinesses
i to imanage ilogistics iproblems itogether iwith ieconomic iand ibusiness iissues. iThe iperformance iof
i logistics isystems iwas itypically irelated ito idelivery iservice, ilogistics icost iand itied iup icapital.
i Consumers iincreasingly iexpected ishorter idelivery itimes iand imore iaccurate iservices iand ilogistics
i management iwas iperhaps imost ieasily iabstracted iin ia ithird iparty ilogistic iservice iprovider. iThe
i influence iof ilogistics iperformance ias ia imoderating ivariable ion ithe iconnection ibetween ilogistics
i management iand ibusiness iperformance iwas ialso iinvestigated. iThe istudy's ispecific iobjectives iare
i to iexamine ithe iimpact iof itransportation imanagement, iwarehousing, iand itimely idelivery ion ifirm
i performance, ito icalculate ithe iimpact iof iinventory imanagement ion ifirm iperformance, ito iexamine
i the iimpact iof iorder iprocessing ion ifirm iperformance, ito idetermine ithe iimpact iof iinformation iflow
i on ifirm iperformance, iand ito iassess ithe iimpact iof ilogistics iinformation isystem ion ithe irelationship
i between ilogistics imanagement iand ifirm iperformance.

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Adaptive capabilities dynamic capabilities may certainly have an impact on company
performance FP in a variety of ways. First, dynamic capabilities can assist businesses in
identifying and responding to opportunities by developing new processes, products,
commodities, and services with the potential to increase income. Second, dynamic capabilities
may improve the speed, effectiveness, efficiency, and values with which a company operates and
adapts to changes in the environment, lowering costs. Third, through resource reconfigurations,
dynamic capabilities deliver previously unavailable choice possibilities for improved
profitability (Drnevich and Kriauciunas, 2011). It's possible that dynamic capabilities are
context-dependent (Collis, 1994; Winter, 2003). In emerging and underdeveloped economies,
dynamic capacities were shown to be more important than in industrialized countries
(Fainshmidt et al., 2016). Few people believe that dynamic qualities are only valued in
tumultuous situations. (Moorman and Miner, 1998) but Pavlou and El Sawy (2011) demonstrated
the impact of dynamic capabilities on new product development performance throughout the
whole range of turbulence in the environment. Protogerou et al. (2011) Dynamic capacities were
also discovered to be active in both high and low degrees of environmental dynamism. Dynamic
capacities, according to Eisenhardt and Martin (2000), are essential and significant, but not
sufficient, for competitive advantages. Fainshmidt et al. (2016) Dynamic capacities are positively
associated to organizational performance, according to their meta-analysis of previous empirical
investigations. Performance is more closely linked to higher-order dynamic capabilities than
lower-order dynamic skills. Lower-order dynamic capabilities have a role in the link between
higher-order dynamic capabilities and performance. (Fainshmidt et al., 2016). This is nothing out
of the usual. Dynamic capabilities have an impact on working capabilities, which has a major
impact on FP, according to Protogerou et al. (2011). Dynamic capabilities can improve
performance by altering current and operating capabilities to be more responsive to changes in
the environment. (Pavlou and El Sawy, 2011). Hung et al. (2010) dynamic capabilities mediate
the link between organizational learning culture and performance in high-tech organizations,
defining that dynamic capabilities modify the contribution of organizational learning to expand
total firm performance. Supply chain management currently encompasses a wide variety of
operations aimed at facilitating the movement of products and resources between enterprises in
various parts of the globe. Transportation, sourcing, investment, order fulfillment, and finance
logistics service providers throughout the world must adapt their services on a regular basis to

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satisfy the requirements and desires of their suppliers and end consumers. International and
domestic markets for logistics services providers are continuously changing with the flow of
time, so it is mandatory that logistics service providers develop the ethical and right practices,
capabilities and competences. Logistics service provider’s capabilities have impression beyond
the firm as logistics service providers LSP regulator activities upstream and downstream beside
the supply chain. Dynamic capabilities are essential as stationary capabilities cannot endure over
lengthy phases of time, especially in the speedy change and increasingly global supply chain
atmosphere (Defee and Fugate, 2010). Decision makers must regularly make decisions on how to
renew, enhance, improve and upgrade the existing logistics operelational capabilities into new
ones. Powerful opposition has undermined the implementation of small and medium enterprises
SMEs in under developed and developing economies as they try to expand and enlarge the
capacity of their operation and market which can be on domestic level or on international level.
Several factors have hampered small and medium enterprises' ability to keep up with the
development and improvement of the international technological business situation, including a
lack of commitment to acquire new technologies, a lack of technical, mechanical, and
networking skills, insufficient human capital, and poor technology selection (MAN, 2017;
Mefuna & Abe, 2015). As a result, foreign dynamics and merchandises dominated the industrial
and commercial landscapes (MAN, 2017). So, what variables, issues, and circumstances can
influence the creation of dynamic capabilities? Researchers have looked at antecedents such as
orientations to find an answer to this question.(Defee iand iFugate, i2010; iJantunen iet ial., i2005;
i Menguc iand iAuh, i2006; iSarkar iet ial., i2016; iZhou iand iLi, i2010), ienvironmental ivitality i(Barrales-Molina
i et ial., i2013; iRojo iet ial., i2018), istructural iplan i(Felin iand iPowell, i2016) iand iawareness i(Chien iand iTsai,
i 2012; iHung iet ial., i2010; iNieves iand iHaller, i2014; iZollo iand iWinter, 2002). However, there are a lot of
uncertainties in the literature concerning the dynamic capacities idea, its processes, how it works,
and what it means. (Albort-Morant et al., 2018). Furthermore, few academics have empirically
studied its origins outside of manufacturing and knowledge-intensive services industries. (Nieves
and Haller, 2014). The question of how logistics companies might create dynamic capabilities is
still being debated. For logistics service providers LSPs that want to refresh their skills, there is
currently very little assistance available. Defee and Fugate (2010), One of the few people that
looked at dynamic capacities in the supply chain proposed a conceptual model but didn't test it
empirically. Because the evaluations focused on the entire supply chain rather than the logistics

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business, their approach is only of limited use to logistics service providers LSPs. (Beske, 2012).
Environmental and organizational circumstances are similar for dynamic capacities and supply
chain management. Supply chain orientation is a strategic attitude that all supply chain
enterprises must have. (Beske, 2012). It is an organization's realization of the systemic, strategic
consequences of the tactical actions involved in managing the supply chain's numerous flows.
(Mentzer et al., 2001, p. 11It stresses the firm's strategic understanding and embrace of supply
chain management, as well as how this emphasis is used to generate success. (Defee and Stank,
2005). A cohesive resource mix is required for dynamic capabilities (Verona and Ravasi, 2003),
and supply chain orientation guides resource mix and deployment decisions. Exploration on how
Supply chain orientation enables dynamic capabilities is a promising space that hasn't gotten a lot
of study attention. A little more focus is needed by the professional to look for the betterment of
supply chain orientation and dynamic capabilities working in a connected phase. Supply chain
orientation and organizational learning (OL) are examined as antecedents of dynamic skills in
logistics companies in this study. At a time when supply chain skills are in limited supply
throughout the world, (Capgemini Consulting, 2015; McKinnon et al., 2017), By actively
establishing, extending, or altering their resource base, logistics companies must identify new,
newest, and better methods to produce value. Because dynamic capacities imply renewal, fresh
or improved data is an important component. iThe iresearch ion iknowledge iresources iand iwisdom
i procedures ifor ideveloping idynamic iskills iis iexpanded iin ithis iwork. i(e.g. iHung iet ial., i2010; iPisano, i2017;
i Wang iand iAhmed, i2007; iZollo iand iWinter, i2002) iby iexamining ithe irole iof isupply ichain iorientation iin
i this ievolution. iA ilimited iresearch ihas ibeen idone ion ithe ifollowing itopics iand istudy iand imore ifocus iis
i needed ito iimprove ithis idepartment iand ibackbone, iwhich iis iplaying ian iimportant ipart iin igenerating
i revenues iof iany ifirm. iThis istudy icontributes ito ithe istrategic imanagement iand isupply ichain iliterature iby
i demonstrating ihow iorganizational ilearning iinfluences idynamic icapacities iboth idirectly iand iindirectly ivia
i supply ichain iorientation. iDue ito ia ilack iof iopen istandards, iSMEs imust idevelop iunique icapabilities iand
i products iin iorder ito ieffectively igrow iand iinternationalize itheir ioperations iand iwithstand ithe ieffects iof
i globalization. i(Rugraff, i2012). iThe iresource-based iview i(RBV) iand ithe idynamic icapabilities iview ihave
i for idecades idemonstrated ithe icrucial irole iof icapabilities iin ienhancing ifirm’s icompetitive iadvantage iand
i performance i(Teece, iPisano, i& iShuen, i1997; iBarney, i1991; iWernerfelt, i1984). iTherefore, itechnological
i ability iand irelational icapability iare inecessary idynamic icapabilities ithat ienable ifirms ito iaccomplish iand
i continue isustainable icompetitive iadvantage iand isuperior iperformance iin icompetitive iworldwide iindustry
i environment i(Yang, iXie, iLiu, i& iDuan, i2018; iWang, iLo, iZhang, i& iXue, i2006; iTeece iet ial., i1997).

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i Dynamic icapabilities idiscuss ito i“the ifirm’s iability ito iintegrate, ibuild iand ireconfigure iinternal iand iexternal
i competencies ito iaddress irapidly ichanging ienvironments” i(Teece iet ial., ii1997, p. i516) iand iconsist iof
i “difficult-to-replicate ienterprise icapabilities irequired ito iadapt ito ichanging icustomer iand
i technological iopportunities” i(Teece, i2007, ipp. i1319-1320). iDynamic icapabilities iare ilearned iand
i established ipatterns iof ibehavior ithrough iwhich ia ifirm isystematically iproduces iand imodifies iits
i method iof idoing ioperations iso ithat ithe iorganization icould ibecome imore ieffective. iThey igovern
i the ichange iof ioperelational ipotentials iby ireconfiguring ithem ito ibe irelevant ito ithe ienvironment
i (Collis, i1994). Dynamic icapabilities ican ibe iparticular iprocesses, ipractices iand iroutines ithat
i develop iover itime iand iare idetermined inot ionly iby ia ifirm’s itangible iand iintangible iresource ibase
i at ia ispecific ipoint iin itime, ibut ialso iby ithe ichoices iit ihas imade iin iits ipast i(Eisenhardt iand iMartin,
i 2000). Dynamic icapabilities imay ibe ihierarchically iorderly i(Fainshmidt iet ial., i2016). iSchilke
i (2014b) iexplained ithat ilearning iprocedures imight ibe istudied ifirst-order idynamic icapabilities
i while isecond-order idynamic icapabilities ican ibe ithought iof ias i“learning-to-learn” icapabilities.
Winter i(2003) iexpressed ilower-order idynamic icapabilities ias ithose iaffecting imodification iin ithe
i resource ibase ior iordinary icapabilities i(e.g. ichanges ito ithe imanufacture iprocess) iand ihigher-order
i dynamic icapabilities ias ithose ideveloping ifrom iorganizational ilearning, iwhich icreates ior
i transforms ilower-order idynamic icapabilities. iHigher-order idynamic icapabilities iare iadditional
i transformational i– ithey itransform ithe iway ithe ifirm iresolves iits iglitches i(Zahra iet ial., i2006). iIn ithe
i corporate iworld, ilogistics isuccess ileads ito ihigher iefficiency, ireduced icosts, ihigher iproduction irates, ibetter
i inventory icontrol, iwiser iwarehouse ispace iutilization, ienhanced icustomer iand isupplier isatisfaction, iand ia
i better icustomer iexperience. iLogistics iis ia ivital ipart iof ia isuccessful isupply ichain isince iit ihelps ifirms ithat
i deal iwith iproduct imanufacturing; itransportation, iwarehousing, iand idelivery ienhance itheir isales iand
i profitability. iFurthermore, ia idependable ilogistics iservice imay iincrease ithe iworth iof ia icompany iand iassist
i in ipreserving ia igreat ipublic iimage. iHowever, ilogistics has an influence on financial performance
since it improves profitability when management is able to deliver items on time and satisfy
consumers. It is a full system that is engaged in supply chain operations and improves an
organization's entire process.
The industry we have selected is basically a Saudi based multinational company whose main
functions and operations are logistics and warehousing. This giant company is a leading sales
management solution provider including warehousing, logistics, branding and retail marketing
for small to corporate level. They are strategically ilocated inetwork iof iwarehousing ifacilities iacross
i Pakistan. iTheir imultiple ihub iand ispoke idistribution istructure ioperates iwith imore ithan i1 imillion isquare

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i feet iof iwarehousing ispace, ienabling ius ito iserve i200,000 iplus icustomers iincluding iseparate idivision iof i400
i and iabove isub-distributors. iThey istrive icontinuously ifor ioptimization iin ithe iareas iof icapacity iplanning,
i inventory imanagement iand idemand iforecasting iwhile isustaining iour iunparalleled iservices ilevels. iThe
i company itake ipride iin ibeing ithe iindustry ileader, ihowever iwe ibelieve ithat itrue iindustry ileadership iis inot ia
i sustainable ivirtue iunless iwe iraise ithe ibar iof iour iown iperformance iin ithis ievolving ibusiness ilandscape iof
i Pakistan. Logistics iensures iefficient iend-to-end itransportation iand istorage iof igoods ithroughout iour
i multiple ihub iand ispoke istructure. iTheir ilogistics istructure iis idesigned ito ideliver itheir iproducts ito
i customers, ivarying ifrom ithe ilargest ito ithe ismallest iretail istores iin iall icities iof iPakistan, iwhile imaintaining
i its iincomparable iquality istandards. iThe icompany’s ifleet icomprises iof i400 iplus idedicated ivehicles,
i ranging ifrom ilong ihaul icontainers ito ismall itri-vans, icatering ito iour icustomers inationwide

1.2 Problem Statement

The ifirm iperformance iis ia ivast iterm, iwhich imight iinclude ifunctioning iof ithe ifirm iand ioutcomes iof iits
i operations. iThe iend iresults igenerated ithe ifinal ioutcome iof iany iprocess. iWhile ithere iis ia irange iof ispecific
i models, imajor ideterminants iof ifirm-level iprofitability iinclude icharacteristics iof ithe iindustry iin iwhich ithe
i firm icompetes, ithe ifirm's iposition irelative ito iits icompetitors iand ithe iquality ior iquantity iof ithe ifirm's
i resources. i
Few iresearchers ihave ifocused ion iintegration iwith icustomers, iwhich iinvolve icollection iof iinformation
i (Kim i2009) ior isuppliers i(Smith iand iRupp i2013) ito idefine iSupply iChain iintegration iimpact ion ifirm
i performance. iIn iother iinvestigations, iresearchers iexpand ithe iscope iof iSupply iChain iintegration iby
i allowing ifor iboth isupplier’s iand icustomer’s irequirements i(Swink iet ial. i2007; iDroge iet ial. i2012) iand
i define iit ias ithe isole iand ibroader iconcept iinvolving iboth iupstream iand idown- istream ipartners. iThe ialliance
i with isuppliers iand icustomers iis iusually idenoted ias iexternal iintegration. iHowever, ithe iimpact iof isupplier
i and icustomer iintegration ion ia ifirm’s ioperational iperformance ivaries iacross iproduction isystems i(Shou iet
i al. i2018). i
Organizational iperformance ihas ibeen idescribed ias ithe icover iof ia ifirm’s iefficiency, iwhich iis idifferent ifrom
i target iachievement i(Tsamenyi iet ial. i2019). iThere iare ifive idimensions iof ia ibalanced ibusiness iscorecard
i that iconsist iof ia ifinancial idimension i(profits, isales igrowth, iand iexpense igrowth), ian iinternal ibusiness
i dimension, ia icustomer iperspective i(customer isatisfaction, iservice iquality, iand imarket ishare), ia ilearning
i and igrowth iperspective i(employee ijob isatisfaction, iand iemployee itraining) iand ia icommunity iperspective
i of icorporate ireputation. iThe ifirm’s isize idelineates ioverall iresults ifocus ibetween ithe idifferent icapabilities
i on ithe iperformance iof ithe iorganization iwhich iset iof iexpands ithe ifunction iof iservices icapability. iA isupply
i chain ifocus iconsequence iin iget ibetter ilogistics iperformance, iwhich iin iturn iled ito iprogress iorganizational

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i performance i(Green iet ial. i2018).
Reducing ilead-time iand iincreasing ithe irate iof iflawless iorder ideliveries ican isupport ithe ifocal ifirm iin
i improving ithe ivalue iof itheir iSupply ichain i(Shashi iet ial. i2017). iRecently, ideveloped ia iconceptual imodel
i and ihypnotized ivalue iaddition ipositively iaffects ifirm iperformance i(Shashi iet ial. i2018). iShowed ithe
i greater ithe ivalue icreation, ithe ihigher ithe isatisfaction iand iloyalty iof icustomers. iSupported ithe idirect
i impact iof ivalue iaddition ipractices ion ithe ifirm’s imarket iperformance i(Martinez i2014).
Green irecruitment iis ipositively ilinked ito ieconomic iaspects iof ia ifirm. iGreen ihuman iresource imanagement
i helps iin icreation iof ihighly imotivated iand idedicated iemployees ithat iproduces ieconomic ivalue iof ia ifirm
i (Longoni iet ial., i2018). iIn ia irecent istudy iit iis ifound ithat igreen ihuman iresources ihave ia idirect ieffect ion
i sustainable iperformance iof ia ifirm i(Zaid iet ial., i2018). iDesign iof ireverse ilogistics inetwork iis ia icomplex
i activity iand ihuman ifactors iplay ia icritical irole iin isuccessful iadoption iof ireverse ilogistics iin ithe ifirm. iMany
i small iand imedium ilevel ifirm ionly ifocus ion ieconomic iaspects iand ido inot iconsider ithe iother itwo iimportant
i dimensions isocial iand ienvironmental iaspects. iGreen iteams ithink ifrom ienvironmental iperspective ifor
i managing ireverse ilogistics iflows iand itakes iprudent imanagement idecisions, iwhich idirectly ienhances
i sustainability iperformance i(Hall iet ial., i2013; iMangla iet ial., i2016). i
Failing ito iidentify ithe idistinctive ieffects iof idifferent itypes iof isupplier iintegration ion ifirm iperformance
i may ibe ione ireason ifor ithe iinconsistent ifindings i(Flynn, iHuo, iand iZhao i2010; iZhao iet ial. i2013).
i Therefore, iempirically iinvestigating ithe iindividual ieffects iof iinformation, iprocess iand istrategic
i integration iwith isuppliers ican iextend icurrent iknowledge ion ithe imechanisms ithrough iwhich isupplier
i integration iimproves ifirm iperformance. iEmpirically iinvestigating ithe iimpacts iof iinternal iintegration ion
i information, iprocess iand istrategic iintegration iwith isuppliers iand itheir iinter- iaction ieffects ion ifirm
i performance ican ienhance iexisting iknowledge ion ihow iinternal iand isupplier iintegration ijointly iaffects ifirm
i performance i(Flynn, iHuo, iand iZhao i2010). iVietnam ihas ia ispecific icultural ienvironment, iwhich imay
i influence ithe iimpact iof isupplier iintegration ion ifirm iperformance i(Hofstede, iHofstede, iand iMinkov i2010).
i Hence, iinvestigating ithe ijoint ieffects iof isupplier iintegration iand iinternal iintegration iand itrust ion ifirm
i performance ican inot ionly ivalidate iabout isupplier iintegration iin iVietnam, ibut ialso ihelp imultinational
i organizations ito ioptimize itheir iglobal isupply ichains ito iboost iproductivity. i
This ishow ithat iinternal itrust iincreases iprocess iintegration ibut idecreases istrategic iintegration iimpacts ion
i firm iperformance iand ithat iinternal iintegration ionly ienhances ithe iimpact iof iprocess iintegration ion ifirm
i performance, iwhich iprovides ia ipossible iexplanation ifor ithe iinconsistent ifindings ifor ithe irelationship
i between isupplier iintegration iand ifirm iperformance i(Dröge, iJayaram, iand iVickery i2004; iFlynn, iHuo, iand
i Zhao i2010; iSchoenherr iand iSwink i2012; iZhao iet ial. i2013; iHuo iet ial. i2014). i
Firm iperformance irefers ito ihow iwell ia ifirm iachieves iits imarket ioriented iand ifinancial igoals i(Li iet ial.
i 2006). iIt ievaluates ithe ifirm’s iprofitability iand imarket igrowth i(Huo iet ial. i2014) iand iis iviewed ias ithe ifinal

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i performance ioutcome i(Huo i2012). iFinancial iand imarket icriteria iprovide ia iuseful itool ito iassess ia ifirm’s
i links iwith isuppliers, iinternal ifunctions iand iall iexternal iand iinternal iprocesses iover itime i(Li iet ial. i2006;
i Zhao iet ial. i2013). iThese ifindings ithat iinternal iand isupplier iintegration ienhance ifirm iperformance iin
i Vietnam, ialso iprovide imanagerial iguidelines ifor iexecutives ion ihow ito iintegrate iwith isuppliers iand ihow ito
i fully ireap ithe ibenefits iof isupplier iintegration ion ifirm iperformance iby ideveloping iinternal ipractices iand
i systems. i
Some ischolars isuggest ithat iintra-regional igeographic idiversification iis ipositively irelated ito ifirm
i performance, iwhile iinterregional igeographic idiversification ihas ibeen isuggested ito ihave ia ipositive ior
i negative ieffect ion ifirm iperformance i(Qian iet ial., i2010). iHowever, iother iwork ishows idivergent iresults ifor
i service iindustry icontexts i(Oh iet ial., i2015). iQian iet ial. i(2013) ipropose ithat iliability iof icountry iforeignness
i mediates ithe irelationship ibetween iintraregional idiversification iand ifirm iperformance, iwhile iliability iof
i regional iforeignness ihelps iexplain ithe irelationship ibetween iinterregional idiversification iand ifirm
i performance. iOverall, ifindings iabout ithe ieffect iof iinter iand iintraregional igeographic idiversification
i strategies ion ifirm iperformance iare istill iinconclusive iand ithe icontexts ifor ithese istrategies iremain
i underexplored. iMoreover, ithe ieffect iof iintra iand iinterregional igeographic idiversification ion ifirm
i performance iin ia isingle icountry iremains iunaddressed. i
The ionline iB2C iplatform iprovides ia iunique icontext ito iinvestigate idata ianalytics ivalue ifor itwo ireasons.
i First, imerchants ion ithe iplatform ishare ithe isame itechnical iinfrastructure iand ianalytics ifunctions iprovided
i by ithe iplatform, ithus ilargely iavoiding ithe ivariation iof itechnology iavailability iand ifunctionality ithat imay
i affect itheir ifirm iperformance. iIn iother iwords, imerchants’ idata ianalytics iusage ion ione iplatform iis imore
i comparable ithan ithe isituation iin iwhich ithey iapply idifferent idata ianalytics itechnologies. iSecond,
i merchants ishare ithe isame icustomer ibase iin ione iB2C iplatform iin iwhich imerchants’ idata isource iand itargets
i are ithe isame, icausing itheir idata ianalytics iand ifirm iperformance imore icomparable ithan ithose iapplied iin
i different iplatforms. i
Making ione ithing iclear iin imind ithat ithis ivast iand ilarge istudy ineed imore iprofessionals ito igive itheir
i important ithoughts ibased ion itheir iprofessional iexperience ifor ithe ibetterment iand iconsistency iof iFP
i keeping iin imind ithat ihow iother ifactors ican ieffect iit. iThe imajor iand ibasic ipurpose iof ithis istudy iis ito
i increase iout iour ipart ithat ihow ia ilogistics iindustry iplays ia ipart iin ifirm iperformance ior ihow iimportant iis
i logistics iindustry ifor ithe isupply ichain ibusinesses iand ihow iimportant irole idoes ithe ilogistic iindustry iplays
i in iimprovement iof ifirm iperformance. i
In ithis iparticular istudy iwe iare igoing ito iidentify iand imeasure ithe iimpacts iof iOrganizational ilearning i(OL),
i Supply iChain iOrientation i(SCO), iand iDynamic iCapability i(DC) iwith ithe imoderating irole iof iRelational
i Capability i(RC) ion iFirm iPerformance i(FP) iin ilogistics iindustry. iBecause iin ipast ivery ilimited iwork ihas
i been idone ion ithese ivariables. iMany istudies ihave ibeen idone ion ithese ivariables iseparately ibut iwe iare

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i conducting ithis istudy ito icontribute iour ipart ifor imore iimprovement iof ifirm iperformance iin iLogistics
i industry.

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1.2 Research Questions

Based on the gaps identified above, the present study aimed at providing answers to the
following research questions:

1. What is the impact of Organizational Learning (OL) on Dynamic Capabilities (DC)?

2. What is the impact of Supply Chain Orientation (SCO) on Dynamic Capabilities (DC)?
3. What is the impact of Dynamic Capabilities (DC) on Firm Performance (FP)
4. Does Relational Capacity (RC) moderate the relationship between Dynamic Capabilities
(DC) and Firm performance (FP)?

1.3 Research Objective

Consistent with the research questions, the present research aimed at meeting the following
research objectives:

1. To study the impact of Organizational Learning (OL) on Dynamic Capabilities (DC).

2. To study the impact of Supply Chain Orientation (SCO) on Dynamic Capabilities (DC).
3. To study the impact of Dynamic Capabilities (DC) on Firm Performance (FP).
4. To study the moderation effect of Relational Capacity (RC) between Dynamic
Capabilities (DC) and Firm Performance (FP).

1
 CHAPTER 2

2.1 Introduction
The purpose of this study was to investigate the firm performance of logistics employees
working in Pakistan’s logistics industry. This chapter presents an overview of the logistic
industry and distribution. It then discusses the theories that underpinned the present study. Next,
it reviews the relevant literature on Firm Performance FP, Organizational Learning OL, Supply
Chain Orientation SCO, Dynamic Capabilities DC and Relational Capability RC. Grounded on
the literature, the theoretical framework and proposed hypotheses are presented.

2.2 Logistics industry in Pakistan

Industrialization and rising consumption has necessitated the creation of a functional
transportation infrastructure. The simplicity with which a product or service is available to the
user is critical to its success.iA ihigh-quality iproduct ior iservice ithat iisn't iavailable iwhen ia
ipotential iconsumer ineeds iit iis idoomed ito ifail. iIdentifying iand ideveloping ithe iideal
ilogistics isystem iis ijust ias icritical, iif inot imore, ithan iproduct idesign, imanufacturing
iequipment, iand ihuman iresources. iLogistics iis ithe iprocess iof iplanning iand iexecuting
ihow iresources iare iobtained, istored, iand ithen imoved iand imade iaccessible ito ithe
iappropriate imarkets iand icustomers.Pakistan iis ithe iworld's ififth imost ipopulated icountry,
iwith ia ipopulation iof i212 imillion ipeople. iPakistan icovers ian iarea iof i881,913 isquare
ikilometers, iabout iequivalent ito ithe icombined iterritories iof iFrance iand ithe iUnited
iKingdom.
This large population distributed over Pakistan's enormous geography emphasizes the
significance of a well-functioning logistics infrastructure to ensure the availability of products
and services to all citizens. As a result, the logistics business has become a significant
contributor to Pakistan's total economy. Pakistan's logistics business makes up around 23% of
the service sector and employs roughly 6% of the country's workforce. In 2019, the logistics
industry rose by 3.34 percent and contributed 12.9 percent to GDP. Because of Pakistan's
strategic position and transit commerce, logistics play an important role. The China-Pakistan
Economic Corridor (CPEC) has increased the number of logistical options. The CPEC's

2
Industrial Parks and Special Economic Zones will expand and reinforce the road infrastructure,
making it easier for trucks to move from iand ito ithese iSEZs. iThe igovernment iwould ialso
ineed ito iimprove iand ifacilitate iinternational itransportation iby imodernizing iborder
icrossings, iairports, iand iports. iThese iCPEC iprojects ihave ienhanced istorage iand ifreight
iforwarding ifirms' icommercial ipotential. iModern iwarehouse iand iport iupgrades iare
irequired ifor iefficient ilogistics, iparticularly iinternational itransportation. iPakistan ihas ia
ilarge ilogistics isector, iwhich iis ivalued iat iabout iUS$35 ibillion iand ihas ia idouble-digit
igrowth irate. iPakistan ihas iprioritized ithe idevelopment iof iphysical iinfrastructure iduring
ithe iprevious itwo idecades in order to improve the movement of commodities and market
access, but there is still a long way to go. On the aggregated Logistic Performance Index (LPI),
Pakistan is rated 95th out of 167 nations in 2019. Due to lower expenditure on infrastructure
developments such as airports and motorways, Pakistan lags behind even certain Asian countries.
India is ranked 35th on the list, while Sri Lanka is ranked 92nd.
The logistics industry is continually developing and drawing new investment. Pakistan's
industrial sector has grown tremendously in the previous two decades. As a result, the logistics
business has grown to fulfill the increased demand for commodities produced by this increasing
industrial sector. To minimize operelational losses, the logistics sector must become more
structured and embrace a 360-degree business perspective. No one can deny the necessity of
government agencies' assistance in achieving this aim. We have 264,000 kilometers of roadways
in Pakistan, demonstrating the importance of trucking in supporting the efficient flow of products
across the nation and beyond to neighboring countries.
Issues such as taxation, port infrastructure, warehousing, growing fuel prices, and technological
deterrent, to name a few, affect the logistic industry. These are the most evident issues, and they
have only been recognized and addressed on rare occasions. The most common and practical
issues, however, are a lack of skilled drivers, the expense of new trucks, and the unpredictability
of the ireturn iload/consignment. iThese iare ithe imost itypical iissues ithat ithe ilogistics
iindustry ipays ivery ilittle iattention ito.
The iefficiency iis iat ithe iheart iof iany ibusiness isuccess; ilogistics isector icannot iachieve
ithis icompetence iwithout ihaving ihigh iquality itrucks.
The igovernment may help by guaranteeing that the vehicles are financed at a cheap interest rate.
This would entice investors into the logistics industry. Because of the low operating costs of the

3
new high-quality trucks, this low-interest financing for trucks will increase the quantity of high-
quality vehicles on the market, lowering freight prices. This would also improve the flow of
commodities, boost economic activity, and enhance the truck manufacturing and assembly
industry. Another significant issue is the return load for the trucks. The unpredictability of the
return load adds to the operating and freight costs.
Close communication and cooperation between carriers and their clients, as well as realistic
planning by transporters at the association level, can help solve this challenge. This collaboration
may also benefit both parties by cutting freight operations expenses. Transporters are already
cooperating and planning to some extent, but more deliberate efforts are needed on their part to
build deeper mutually beneficial relationships with manufacturers and other goods suppliers.
A scarcity of well-trained drivers is another issue that has received little attention. By taking
good care of the vehicle and following the most efficient routes, a well-trained driver can save
operating costs. Although the National Logistics Cell (NLC) has a few driver training centers,
they are insufficient to match the growing demand. The government should build contemporary
driving facilities for young individuals interested in becoming heavy truck drivers in
collaboration with logistic corporations. This will not only assist to ensure the safety of
shipments, but it will also aid in the prevention of accidents caused by inexperienced drivers.
Railway freight has long been overlooked, and it now accounts for just approximately 10% of
overall transit. Rail cargo accounts for 40% of India's overall transportation. Road transportation
is often favored over rail transportation because it is faster and easier to regulate. The
government, on the other hand, should focus on constructing rail infrastructure that can convey at
least 25% of total freight. Makingieffective iuse iof irail icargo ican ireduce ifreight icosts.
One iof ithe iaims iof iPakistan iVision i2025 iis i"Modernizing iTransportation iInfrastructure
i& iGreater iRegional iConnectivity." iAdopting ithe imost irecent itechnology iadvancements
iin ithe ilogistics ibusiness, isuch ias ionline ibooking ilike iCareem/Uber iand ithe iBykea
imodel, iis ialso icritical ito iprofitable isurvival by increasing the logistics sector's efficiency.
The significance of logistics in the whole supply chain operation cannot be overstated. Without a
well-functioning logistics system, no company can survive and thrive. As a result, boosting the
logistics industry benefits both the business community and the government.

2.3 Firm Performance

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The word "firm performance" encompasses organizational performance, the company's
functioning, and the results of its activities. More information may be found in The Effects of
Corporate Tax Rates on Firm Performance. A metric for determining how successfully or poorly
a company fared over time. iA isuccessful ibusiness imay icreate isubstantial iand ilong-term
iprofits, iresulting iin imore ijob iprospects iand imore ipersonal iincome. iFurthermore, ia
icompany's ifinancial iperformance iwill iincrease iemployee ireturns, iimprove iproduction
iunits, iand iprovide ihigher-quality iitems ito iits iconsumers. Companies in the logistics
industry should foster a learning culture. Learning in the workplace increases a company's
readiness to adjust and innovate. It also aids staff in gaining a better awareness of the supply
networks and options available to clients. Supply chain orientation aids the company in focusing
iits ireconfiguration iand irenewal iefforts iwhere ithey iwill iprovide ithe ibest iresults.There
ihas ibeen ilittle istudy ion ithe iantecedents iof icapacity ioutside iof imanufacturing iand
iknowledge-intensive iindustries. iThe ilogistics iservices iindustry iwas ithe isubject iof ithe
iresearch. iIn iearlier istudies, ia inecessary istrategy idirection ifor isupply ichain ienterprises
ihas inot ibeen iexperimentally istudied. iThis istudy ifills iin ithe igaps iin ithe iliterature iand
iadds ito iour iknowledge iof ithe ivariables. iIt istresses ithe ifirm's istrategic iawareness iand
iembrace iof isupply ichain imanagement, ias iwell ias ithe iuse iof ithis ifocus ito iimprove
iperformance. i(Defee iand iStank, i2005). The iimplementation iof inew isystems iand
iprocedures ishould iimprove ithe iefficiency iwith iwhich ilogistic iservices iare isupplied.
iCompanies iwith igreater ilearning iskills ihave ibeen ifound ito ihave ibetter iorder ifulfillment,
iexternal icollaboration icapabilities, iand iservice icompetency. i(Celuch iet ial., i2002). iHung
iet ial. i(2010) idemonstrated ithat ithe iculture iof ia ihigh-tech iorganization ihas ia isignificant
iinfluence ion iperformance.In iorder ito iassess iits ivalue-added iservice iin ithe iindustry, ithe
iLSP imust icommunicate iand inegotiate iwith isupply ichain ipartners. iTo ijustify itheir
iexistence, iLSPs iaim ito imake itheir icustomers icompetitive, iexamine itheir icore ibusiness
iand iorganize iexternal iresources ito imeet icustomer irequirements, iand ibuild inew iservice
imixes iin idynamic ibusiness inetworks. iFor icontinuous iservice iimprovement, iit irequires ia
isupplier–customer ichain istudy. iInteractions ibetween ithe iLSP iand iits isupply ichain
ipartners ican ilead ito ithe icreation iof inew iresources iand icapabilities ithat iwill iaid ithe
iLSP iin imaintaining ilong-term icompetitiveness.Supply ichain imanagement iphilosophy iis

5
ithe iidea ithat ieach ifirm iin ithe isupply ichain ihas ia idirect ior iindirect iinfluence ion ithe
iperformance iof iother isupply ichain imembers.

(Patel et al., 2013). Organizations may improve their performance by using a systems approach
to understanding the supply chain as a whole, collaborating with other supply chain participants
to create shared goals, and concentrating on providing value to the end user. (Mentzer et
al.2001). iSupply ichain iorientation iis iused ito iintegrate ithe isupply ichain imanagement
iconcept ithroughout ithe ifirm.
The iperformance iof ismall iand imedium ibusinesses iin iemerging inations ihas ibeen ihurt iby
istrong irivalry ias ithey itry ito iexpand itheir iscope iof ioperation iand imarket. iA ilack iof
iwillingness ito ilearn inew itechnologies, ia ilack iof itechnical iand inetworking iskills,
iinsufficient ihuman iresources, iand ipoor itechnology ichoices ihave iall iimpeded ismall iand
imedium-sized ifirms' idesire ito istay iup iwith ichanges iin ithe iglobal itechnological ibusiness
ienvironment (MAN, 2017; Mefuna & Abe, 2015). As a result, African countries have pledged to
improve the region's economic and commercial operations by enhancing the competitiveness of
small and medium-sized businesses both locally and worldwide, as part of the African
Continental Free Trade Agenda.
Existing literatures, on the other hand, have demonstrated ithat itechnological, irelational, iand
ilearning icapacities iare iimportant, iunique, iinimitable, iand inon-substitutable iresources iand
idynamic icapabilities ithat ihelp imaintain icompetitive iadvantage iand iperformance iin ia
iconstantly ichanging ienvironment. i(Yang iet ial., i2018; iPham, iMonkhouse, i& iBarnes,
i2017; iAhmad, iOthman, i& iMad iLazim, i2014). iAs ia iresult, ithese iskills iare iseen ias
icrucial ifor ithe iadaptation iand iassimilation iof inew iinformation iand ipractices iin iorder ito
iimprove iperformance. iSukoco, iHardi, iand iQomariyah i(2018) iaimed ito iinvestigate ithe
irole iof ilearning iin imediating ithe irelationship ibetween ia ifirm's icapabilities iand
iperformance.
Nonetheless, ilittle iemphasis ihas ibeen ipaid ito iempirical istudies ion ithe imediating irole iof
ilearning icapability iin ithe ilink ibetween itechnological iand irelational icapacities iand ithe
iperformance iof ismall iand imedium ibusinesses iin iemerging inations. iAs ia iresult, ithe
ipurpose iof ithis iresearch iwas ito ilook iat ithe irole iof ilearning icapability iin imediating ithe
irelationship ibetween itechnological icompetence, irelational icapability, iand ismall iand

6
imedium icompany iperformance iin iemerging icountries. iThe iability iof ia icompany ito
idesign iand idevelop inew iprocesses, iproducts, iand iupgrade iknowledge iand iskills iabout
ithe iphysical ienvironment iin ia iunique iway, ias iwell ias itransform ithat iknowledge iinto
iinstructions iand idesigns ifor ithe iefficient icreation iof idesired iperformance, iis ireferred ito
ias itechnological icapability i(Wang iet ial., i2006).
Not ijust itechnical iknowledge, ibut ialso ithe icapacity ito ibuild iand ideploy ithe ifirm's
iessential icapabilities, ias iwell ias ithe iability ito isuccessfully imix imany istreams iof
itechnology iand imobilize itechnological iresources across the business, is all examples of
technological competency. (Zawislak, Alves, Tello-Gamarra, Barbieux, & Reichert, 2012).
Technological competence also encompasses a wide range iof ipractical iand itheoretical
iknowledge, imethods, iexperience, itechniques, iand iphysical itools iand iinstruments. i(Ahmad
iet ial., i2014). iA icompany's ioutstanding iand idiversified itechnical iresources, iwhich iare
irigorously iconnected ito idesign, iproduct, iinformation, iand iprocess itechnologies as well as
the procurement and integration of external knowledge, are referred to as technological
competence. (Bergek,iTell, Berggren, & Watson, 2008). These technological abilities are
responsible for a significant portion of a company's success. (Bergek et al., 2008). Technological
competence aids a company's ability to locate, acquire, and use fresh external data in order to
increase operelational abilities and create superior results. A firm's technological acumen enables
it to manufacture and supply new goods and services in a more efficient and effective way that
best satisfies customer needs, hence boosting the overall success and performance of the firm's
new product creation. (Wang et al., 2006). As a result, technical aptitude assists SMEs in coping
with the effects of a rapidly changing business environment across their entire business life
cycle, from start-up through corporate social responsibility. Openness to changes in the
technological environment, ongoing accumulation of relevant information, and efficient use of
current technologies are all required for the development of technical aptitude in SMEs. (Ahmad
et al., 2014; Bergek et al., 2008; Wang et al., 2006).
As a result, a well-balanced set of appropriate operational skills strengthens a company's
technical capabilities. Businesses may now manufacture and sell useful products or services to
customers, as well as maintain effective customer connections, all of which boost performance.
(Reichert &iZawislak, 2014; Ahmadet al., 2014; Zawislak et al., 2013; Wang et al., 2006).
On the basis of above empirical reviews it is assumed that Dynamic Capabilities DC, Supply

7
Chain Orientation SCO, Organizational Learning OL and Relational Capability RC will affect
Firm Performance FP.

2.4 Theoretical Background

This istudy iprovides iboth imanagerial iand itheoretical icontributions. iTheoretically, ibased ion
iRBV iand idynamic icapability itheory, iit ioffers isome ivaluable iexplanation ion ithe irole iof
itechnological icapability iand irelational icapability iin iimproving iSmall iand imedium
ienterprises icompetitive iadvantage iand ifirm iperformance. iAlthough iboth itheories
iconsidered icapabilities ias iessential iresources, ithey idiffer ion ithe itiming iand iplace iof
ideployment. iThe iRBV iconsiders icapabilities ias iresources, iwhich idetermine iwhat imarkets
ito ienter iand ihow ito istand. iHowever, iunlike ithe iRBV, ithe idynamic icapability iview
iconsiders ithe iability iof ibusiness ifirm’s ito ireconfigure icapabilities; iadjust iand isurvive iin
ichanging ioperating ibusiness ienvironment. iHence, ithrough ideployment iof ivaluable
iresources iand idynamic icapabilities, isuch ias itechnological, irelational iand ilearning
icapabilities, iSmall iand imedium ienterprises ifirms iachieve idistinctive icompetitive iposition
iin ithe imarket. iThis iunderscored ithe ipostulation iof ithe iproponents iof iRBV i(Barney,
i1991; iWernerfelt, i1984). iAccordingly, itechnological, ilearning iand irelational icapabilities
iare idynamic icapabilities ithat ienable iSmall iand imedium ienterprises ito iadequately iadjust
ito ichanging ioperating ienvironment. iDavid iTeece iand iPisano i(1994) idemonstrated ithat ia
ifirm idrives isustainable icompetitive iadvantage ithrough ieffective ireconfiguration
icapabilities ithat isuit ichanging ienvironment. iTherefore, ithis istudy icontributes ito ithe ibody
iof iexisting iknowledge iby ipostulating itechnological, irelational iand ilearning icapabilities ias
istrategic iVRIN iresources ithat ihelp iSmall iand imedium ienterprises ito icreate idistinctive
icompetitive iposition iin ithe imarket. iIt ialso iadvances ithe iroles iof ithese icapabilities ias
idynamic icapabilities, iwhich ienabled iSmall iand imedium ienterprises, iachieve isustainable
iimproved iperformance iin ichanging ienvironment. iFurthermore, ithe istudy icontributes
itheoretically, iby itesting ithe imoderating irole iof irelational icapability ion irelationship
ibetween idynamic icapability iand ifirm iperformance ias isuggested. i
Practically, imanagers iof iSmall iand imedium ienterprises ifirms iin ideveloping ieconomy
imust irecognize iand iappreciate ithe ipotential irole iof itechnological, irelational iand ilearning

8
icapabilities iin iachieving isustainable isuperior ifirm iperformance iin ithis icompetitive iand
idynamic ichanging ienvironment. iThe idynamic ioperating ienvironment ientails ithat iSmall
iand imedium ienterprises ifirms imust iwork iwith inot ionly ibusiness ipartners, ibut ialso
icollaborate iwith iall istrategic irelevant ipublic iand iprivate iorganizations ito idraw iexternal
iinformation iand iresources ito iimprove icompetitive iposition iand iperformance. iThrough
irelational icapability, iSmall iand imedium ienterprises ican idevelop iefficient icollaborative
irelationship ito iacquire inew iresource, itechniques iand iknowledge. iThis iis ispecifically
iessential ifor iSmall iand imedium ienterprises ifirms ifrom iless ideveloped ieconomies ias
ithey iare ilagging ibehind ion ithe iglobal icompetitive iplatform, iand ithat ithe ipossession iof
ispecific iadvantage ilocally imay inot ibe iadequately ienough ito ihelp ipenetrate ithe iglobal
imarkets.
2.5 Organizational Learning
The process iof iproducing, imaintaining, iand itransferring iknowledge iinside ian iorganization
iis iknown ias iorganizational ilearning. iAs ian iorganization iaccumulates iexperience, iit
iimproves ithrough itime. iIt iis iable ito idevelop iinformation ifrom ithis iexperience. iThis
iexpertise iis iextensive, ispanning ievery iissue ithat imight ibenefit ia icompany. iWe idivide
iorganizational ilearning into four phases to better explain this variation: search, knowledge
generation, knowledge retention, and knowledge transfer. We offer studies on how different
characteristics of experience and the organizational setting impact learning processes and results
for each phase.
Due to its relevance in the changing corporate environment, the idea of learning capability has
evolved significantlyiin ithe ifield iof istudy iand iamong ipractitioners iover ithe iyears. i(Alegre
i& iChiva, i2008). iNonetheless, ithe iidea iof ilearning iability iis ian iimportant ione. i(Goh,
iElliott, i& iQuon, i2012; iSok i& iO’Cass, i2011; iAlegre i& iChiva, i2008) iThe inecessity iof
ia ifew isupporting ivariables ifor ieffective iorganisational ilearning iand iinventive
iperformance iis istressed.
In itoday's idynamic iand icompetitive ibusiness iworld, ilearning icapability iis ia ikey iasset ifor
ifirm isurvival. i(Santos-Vijande iet ial., i2012; iSok i& iO’Cass, i2011; iCalantone, iCavusgil,
i& iZhao, i2002). iLearning ihas ilong ibeen iseen ias ia ivaluable itool ifor ireducing
iorganizational iand ipersonnel irigidity. i(Chiva, iAlegre, i& iLapiedra, i2007; iWang iet ial.,
i2006). iEmployees iand iSMEs ifirms iwith ieffective ilearning icapabilities ican inot ionly

9
iacquire iand ispread iinformation iabout itechnological imarkets, ibut ican ialso iexamine ithe
iquality iof ithe ifirm's istorage iand iinterpretive ifunctions, ias iwell ias ithe isoundness iof ithe
ioverarching ilogic ithat iguides ithe ientire ilearning iprocess, ion ia iregular ibasis. i(Hailekiros
i& iRenyong, i2016; iWang iet ial., i2006). iSMEs imay iuse ilearning icapability ito imotivate
ipeople ito iput iout ienough ieffort, iestablish ian iatmosphere ithat iencourages icreativity iand
iinnovation, iand iguarantee ithat iphysical iand iintangible iresources iare ideployed iwisely ito
iproduce igreater ivalue. iAs ia iresult, ilearning-oriented iSMEs imay ieffectively iharness itheir
itechnological iand irelational istrengths ito iprovide igreater icustomer ivalue, iincrease
icompetitive iadvantage, iand iachieve iexceptional iresults. iYu iand iHuo i(2018) iadvocated
ithat ia icompany's iinformation imight icome inot ijust ifrom iinternal iexperiences, ibut ialso
ifrom iexternal ipartners. iExternal irelationships iassist iorganizations iin iachieving ia
icontinuous ilearning icycle iand istimulate igreater iexternal iengagement. i(Hillebrand i&
iBiemans, i2003).
SMEs must also examine their technical development strategic planning to create a commitment
to learning by assigning appropriate resources and trained technicians to embrace
experimentation, risk taking, dialogues, engagement, and participatory activities. Firms may find,
acquire, transform, and exchange ideas, information, and knowledge that can assist improve
corporate performance and social considerations using technical, relational, and learning
capacities. SMEs may efficiently acquire, manage, and update technology that can be utilized to
create products that match changing market demands by using their technological capabilities. In
today global competitive business climate, relational competence via learning capability is very
critical in obtaining and maintaining exceptional SMEs performance.
As a result, government policies and programs aimed at promoting technical progress and
innovation must be altered to take into account the unique characteristics of businesses. It will
boost customer service, responsiveness, and satisfaction while also lowering inventory-handling
costs. (Madhan 2012). Integrating with suppliers, for example, can aid in the timely and
dependable supply of raw materials and equipment, allowing firms to swiftly launch completed
products to the market. Zhu et al. (2018) claimed that effective inter-organizational learning
management might lead to increased customer value.
It is critical to have a well-functioning firm's system in order to execute logistics operations
efficiently. Various dynamic skills, such as management knowledge and presence, cross-

10
functional cooperation, control, organizational learning, and supply chain interactions, are used
to maintain logistics operelational capability. (Sandberg and Abrahamsson, 2011).
The study looks at organisational learning (OL) as a predictor of DC in logistics companies. At a
time when supply chain skills are in limited supply throughout the world. (Capgemini
Consulting, 2015; McKinnon et al., 2017), By actively establishing, extending, or altering their
resource base, logistics companies must find new and better methods to produce value. DC
denotes renewal, therefore fresh or improved knowledge is an important component. The
research on knowledge resources and learning methods for developing DC is expanded in this
paper. (Hung et al., 2010; Pisano, 2017; Wang and Ahmed, 2007; Zollo and Winter, 2002) by
looking at the role of SCO in this process.
The practice of developing and using knowledge to improve competitive advantage is referred to
as organizational learning. This involves gathering and exchanging data on market shifts,
competitor actions, and customer requirements. (Hurley and Hult, 1998; Moorman and Miner,
1998). It is distinguished by a culture that encourages shared vision, collaboration, openness to
change, and intra-firm information exchange. (Calantone et al., 2002; Sinkula, 1994; Sinkula et
al.,1997).
Organizational learning is a critical component in developing dynamic capacities. (Zollo and
Winter, 2002). The firm's strategies for changing current operelational routines are referred to as
dynamic capacity. (Defee and Fugate, 2010). To overhaul current operations, retool old cross-
functional capabilities, and generate unique capabilities, new knowledge is required. (Esper et
.al., i2007; iPavlou iand iEl iSawy, i2011). iAbsorbing iand isupporting ithe iintegration iof ithis
iinformation iinto ithe irest iof ithe iorganization iis ipart iof ithe iprocess iof igenerating
idynamic icapabilities. i(Barrales-Molina iet ial., i2014).
Organizational ilearning iaids iin iimproving ithe ifirm's ienvironmental iconsciousness iand
ihighlighting icrucial iconcerns ifor imanagement iaction, ias isupply ichain imanagement
iprocedures iare icomplex iand idynamic. iOrganizational ilearning iincreases ia icompany's
ipropensity ito ichange, iadapt, iand iinnovate iin iorder ito iimprove iinternal iefficiency iand
iseize iexternal imarket idevelopment ichances. i(cf. iGrant, i1996).
A ilearning iorganization icollects iand iinterprets idata ifrom iits isurroundings ion ia iregular
ibasis. iOrganizational ilearning ienables ithe iLSP ito iget ia ibetter iawareness iof iits ipartners'
icapabilities, ithe icustomer's ienvironment i(both iupstream iand idownstream), iand iencourages

11
imore iefficient ilabor idivision iacross ithe isupply ichain. iIncreased iefficiency iare ithe
iconsequence iof iclearly idefining isupply ichain iroles iand iduties, iallocating ithe imost
iqualified ifirm ito ieach ifunction, iand igiving imembers ithe ifreedom ito icoordinate ithe
iexecution iof itheir iparticular iskills. i(Defee iand iFugate, i2010).
Sinkula iet ial. i(1997) Organizational learning is defined as a collection of organizational
principles characterized by a dedication to learning, an open mind, and a common vision.
Organizational learning is currently measured using no generally acknowledged scale. (Santos-
Vijande et al., 2012). Panayides' LSP metric was adopted for this study. (2007), Hult et al.
(2004) and Santos-Vijande et al. (2012)
Organizational learning and performance can be influenced by age. Age can help businesses
grow their operations more effectively by providing experience and organizational capabilities.
(Sørensen and Stuart, 2000). Organizational learning is also defined in the literature on learning
curves as skill development based on the repeated execution of comparable activities, as well as
the tastiness that occurs when learning is experiential. (Huber, 1991). As a result, more
experienced organizations will have higher learning skills, which will aid in their company
progress.
2.6 Supply Chain Orientation
Despite the fact that supply ichain iorientation iis ithe idriving iidea iunderpinning isupply ichain
imanagement, iresearch ion ithe isubject iis ifew. iThe irecognition iby ian iorganization iof ithe
isystemic, istrategic iimplications iof ithe itactical iactivities iinvolved iin imanaging ithe
ivarious iflows iin ia isupply ichain iis iknown ias isupply ichain iorientation. iThe imanagement
iof ioperelational ioperations iis ireferred ito ias isupply ichain iorientation. iThe imanagement
iof ithe imovement iof icommodities iis ireferred ito ias isupply ichain imanagement.
For the purpose of determining company performance, the suggested supply chain orientation
model contains three factors: top management support, commitment, and credibility. The idea of
supply chain orientation is a useful addition to the conceptual toolkit. The main takeaway for
executives is that companies that build a strong supply chain focus will outperform those that do
not.
The supply chain is viewed holistically via the lens of supply chain orientation, which takes a systems
perspective. LSPs work hard to understand their supply chain partners' skills and competencies. The
goaliis ito iappreciate ithe ibreadth iof icapabilities iavailable ialong ithe isupply ichain, ias iwell

12
ias iwhen iand iwhen ieach imight ibe imost ieffectively iutilised ifor ithe iadvantage iof ithe
iwhole isupply ichain. i(Defee iand iFugate, i2010). iIn iorder ito ievaluate iits ivalue-adding
iservice iin ithe iindustry, ithe iLSP imust iproactively icommunicate iand inegotiate iwith
isupply ichain ipartners. iTo ijustify itheir iexistence, iLSPs istrive ito imake itheir icustomers
icompetitive, iassess itheir icore ibusiness iand icoordinate iexternal iresources ito imeet
icustomers' idemands, iand ibuild inew iservice imixes iin idynamic ibusiness inetworks. iFor
icontinual iservice iimprovement, iit inecessitates isupplier–customer ichain ianalysis.
iInteractions ibetween ithe iLSP iand iits isupply ichain ipartners ifrequently iresult iin ithe
icreation iof inew iresources iand icapabilities ithat icontribute ito ilong-term icompetitive
iperformance. i(Håkansson iand iSnehota, i1995).
Increased iefficiency iare ithe iconsequence iof iclearly idefining isupply ichain iroles iand
iduties, iallocating ithe imost iqualified ifirm ito ieach ifunction, iand igiving imembers ithe
ifreedom ito icoordinate ithe iexecution iof itheir iparticular iskills. i(Defee iand iFugate, i2010).
In ithe isupply ichains iof ia iFortune i500 itransportation ifirm, iknowledge iacquisition
ioperations ihave ibeen iproven ito iminimize icycle itime. i(Hult iet ial., i2004). iOrganizational
ilearning iis ilinked ito ithe iefficacy iof ilogistic iservices iand ileads ito irelationship
iorientation. i(Panayides, i2007) iand icustomer iorientation i(Hult iet ial., i2003). i
Employees ithat iadopt ia isupply ichain ioriented iattitude iare ibetter iable ito icomprehend ithe
ifull iconsequences iand iinfluence iof ithe icompany's ichoices ion iother iparties iin ithe isupply
ichain. iThey'll ibe ibetter iequipped ito ispot islack, ireduce iexpenses, iboost iefficiency, iand
iseize ibusiness ipossibilities. iWhen ia icompany iadopts ia icomprehensive, icollaborative, iand
ivalue-focused perspective of the supply chain, supply chain orientation makes it easier to
manage the movement of goods, information, and cash between businesses in an uninterrupted
and smooth manner. The findings provided give empirical evidence for the claims that supply
chain orientation is a critical component in supply chain management adoption. Employees that
adopt a supply chain oriented attitude are better able to comprehend the full consequences and
influence of the company's choices on other parties in the supply chain.
They'll be better equipped to spot slack, reduce expenses, boost efficiency, and seize business
possibilities. When a company adopts a comprehensive, collaborative, and value-focused
perspective of the supply chain, supply chain orientation makes it easier to manage the
movement of goods, information, and cash between businesses in an uninterrupted and smooth

13
manner.
The concept that each business in the supply chain has a direct or indirect impact on the
performance of other supply chain members is known as supply chain management philosophy.
(Patel et al., 2013). This ideology contends that organisations may enhance their performance by
adopting a systems approach to understanding the supply chain as a whole, cooperating with
other supply chain participants to set uniform objectives, and focusing on providing value for the
final client. (Mentzer et al., 2001). The supply chain management concept is implemented in the
organisation through supply chain orientation. Supply chain-oriented companies make strategic
decisions to compete based on better supply chain capabilities. (Defee and Stank, 2005). The LSP's
goal is to recognize and fulfill clients' explicit and unspoken demands. Successful LSPs would be
aware of these developments as they arose. To fulfil the shifting requirements, they will
reorganize, merge, or invest resources to produce new services. Because profit margins in the
business are narrow, and many companies compete at the bottom end of the market, innovation
is critical. Supply chain-related possibilities that might improve operelational efficiency or
customer service may be neglected if supply chain orientation is not prioritized. Amazon has
become more competitive thanks to a comprehensive perspective of the supply chain.
Because the integration, development, and reconfiguration of competences frequently include cross-
functional activities, supply chain orientation, as a mindset is a facilitator. Supply chain orientation
does not directly and positively contribute to performance, according to studies of supply chain
orientation inside particular enterprises' operations. However, supply chain orientation indirectly
contributes to performance through operelational flexibility.
The realization by an iorganization iof ithe isystemic, istrategic iconsequences iof ithe itactical
ioperations iinvolved iin imanaging ithe ivarious iflows iin ia isupply ichain iis iknown ias
isupply ichain iorientation. i(Mentzer iet ial., i2001, ip. i11). iBusinesses ithat iare isupply ichain
ioriented iuse ia isystems iapproach ito ilooking iat ithe isupply ichain ias ia iwhole icollaborate
iwith iother ifirms ito isynchronize iintra- iand iinter-firm icapabilities, iand iconcentrate ion
ideveloping iunique isources iof icustomer ivalue. i(Defee iand iFugate, i2010). iThe inotion iof
isupply ichain iorientation iis irelatively inew. iThe ithings iwere iborrowed iin iorder ito
imeasure iit ifrom iGligor i(2014) iand iMin iet ial. i(2007) iand itailored ito ithe ineeds iof
ilogistics iservices.
This research looked into logistics services, with an emphasis on the supply chain's focal firm.

14
Supply chain orientation, which is an essential strategic orientation for supply chain enterprises,
has never been empirically studied before. (Beske, 2012)
The company can study methods to enhance supply chain operations and develop new ways to
adapt to the environment by investigating new knowledge resources and integrating them with
current knowledge and employee experiences. Genuine logistics breakthroughs frequently need a
combination of skills and intellectual ability that is beyond the individual's capabilities.
Employees might be encouraged to explore new methods of doing things through information
exchange and a culture that is open to learning and experimenting.
Employees that adopt a supply chain mindset might gain a comprehensive understanding of their
clients' supply networks. Supply chain orientation enables a company to evaluate the potential
impact of supply chain reconfiguration and renewal activities, as well as how changes in one area
affect other areas. It may assist managers in making the best investment decisions, such as
tracking technologies, enhanced analytics, and smart logistics solutions. (Karakikes and
Nathanail, 2017). It instructs managers to concentrate their learning on the most profitable
aspects of supply chain management methods. Employees with a supply chain orientation are
also more likely to notice supply chain-related possibilities that might increase efficiency or
customer service that would otherwise go unnoticed. Many advantages may be gained through
smart supply chain solutions. A never-before-seen amount of data can be gathered and used to
make better judgments. Better corporate procedures may be created to enable increased
efficiency and reaction times.
Supply chain orientation, in order to be effective, necessitates a supply chain focus across all
business divisions in order to promote firm performance. As a result, top-level management
assistance is required. Firms ishould ihave ileadership istyles iand istructures ithat ienable icross-
functional icollaboration.

2.7 iDynamic iCapabilities

The ifirm's icapacity ito iintegrate, icreate, iand ireconfigure iinternal iand iexternal
i resources/competences ito imeet iand ishape iquickly ichanging ibusiness ienvironments iis ireferred ito
i as idynamic icapabilities.
The icapacities iof ia icompany ito iintegrate, igrow, iand ireconfigure iinternal iand iexternal
i competences iin iresponse ito irapidly ichanging icircumstances iis ireferred ito ias idynamic icapabilities.

15
i (Teece iet ial., i1997, ip. i516). iThey iare icomprised iof idifficult-to-replicate ibusiness icompetencies
i needed ito irespond ito ichanging iconsumer iand itechnological ipossibilities. i(Teece, i2007, ipp. i1319-
1320). iDynamic iCapabilities iare ilearnt iand ipersistent ipatterns iof ibehaviour ithat iallow ia icompany
i to isystematically iproduce iand imodify iits imethod iof idoing ithings iin iorder ito iimprove iits
i effectiveness. iThey ioversee ithe ireconfiguration iof ioperelational icapabilities ito imake ithem imore
i relevant ito ithe ienvironment. i(Collis, i1994). iDynamic iCapabilities iare ispecific iprocesses iand
i routines ithat iemerge iover itime iand iare iinfluenced inot ijust iby ia ifirm's itangible iand iintangible
i resource ibase iat ia igiven imoment iin itime, ibut ialso iby iprior iactions. i(Eisenhardt iand iMartin, i2000).
i Dynamic iCapabilities ican ibe iarranged iin ia ihierarchy i(Fainshmidt iet ial., i2016). iSchilke i(2014b)
i explained ithat ilearning iroutines imight ibe iconsidered ifirst-order idynamic icapabilities iwhile
i second-order iDynamic iCapabilities ican ibe ithought iof ias i“learning-to-learn” icapabilities. iWinter
i (2003) iLower-order idynamic icapabilities iare idescribed ias ithose ithat ieffect ichanges iin ithe
i resource ibase ior iconventional icapabilities ichanges iin ithe iproduction iprocess, iwhile ihigher-order
i dynamic icapabilities iare idefined ias ithose ithat iarise ifrom, ior imodify, ilower-order idynamic
i capabilities. iHigher-order idynamic iskills iare imore itransformative iin ithat ithey ialter ihow ia
i company ihandles ichallenges. i(Zahra iet ial., i2006). i
LSPs iwork iin ihigh-stakes ibusiness icontexts. iThey imust imanage iresource ipools ithat ienable ithe
i tailored iservices ithat ivarious iclients irequire. iLSPs imust iconstantly ialter itheir iservice imix iand
i enhance itheir iservice ioperations ias iagents iwho ilink ithe ibusiness iactivities iof isupply ichain
i members iupstream iand idownstream. iTheir imulti-functional iactivities ithat isupport iadaptability
i and icreativity iin ichanging isituations idemonstrate itheir idynamic icapacities.
Many iLSPs iwho iprovide itraditional itransportation iand istorage iservices iare ifinding ithat ithey ineed
i 22. ito iextend itheir ibusinesses ito iencompass ihigher-end iservices ilike iinformation imanagement,
i contract imanufacturing, iand isupply ichain ifinancing. i(Selviaridis iand ispring, i2007). iIn idynamic
i contexts, iLSPs imust ibe iflexible iin itheir iresource iallocation ito imeet ichanging iclient idemands.
i Their iflexible iand iinventive italents ienable ithem ito ianticipate ienvironmental ichanges, ianalyze
i various ioperating istrategies, ideploy iresources iflexibly, iand icontinually ienhance iand ireinvent
i profitable iservice iofferings. iLSPs iwork iin ihigh-stakes ibusiness icontexts. iThey imust imanage
i resource ipools ithat ienable ithe itailored iservices ithat ivarious iclients irequire. iLSPs imust iconstantly
i alter itheir iservice imix iand ienhance itheir iservice ioperations ias iagents iwho ilink ithe ibusiness
i activities iof isupply ichain imembers iupstream iand idownstream. iTheir idynamic icapabilities iis

16
i expressed iin itheir imulti-functional ijobs, iwhich iallow ithem ito iadapt iand iinnovate iin iever-changing
i circumstances. iMany iLSPs iwho iprovide itraditional itransportation iand istorage iservices iare
i finding ithat ithey ineed ito iextend itheir ibusinesses ito iencompass ihigher-end iservices ilike
i information imanagement, icontract imanufacturing, iand isupply ichain ifinancing i(Selviaridis iand
i Spring, i2007). iIn idynamic icontexts, iLSPs imust ibe iflexible iin itheir iresource iallocation ito imeet
i changing iclient idemands. iTheir iflexible iand iinventive italents ienable ithem ito ianticipate
i environmental ichanges, ianalyse ivarious ioperating istrategies, ideploy iresources iflexibly, iand
i continually ienhance iand ireinvent iprofitable iservice iofferings.
Furthermore, ifew iempirical istudies iof iits iorigins ioutside iof imanufacturing iand iknowledge-
intensive iservices iindustries ihave ibeen iconducted i(Nieves iand iHaller, i2014). iDiscussions ion ihow
i logistics icompanies imay iestablish idynamic icapabilities iare istill iin ithe iearly istages. iFor iLSPs
i looking ito irefresh itheir iskills, ithere iis icurrently ivery ilittle iassistance. iOne iof ithe ifew iresearchers
i who iexplored idynamic icapabilities iin ithe isupply ichain, iDefee iand iFugate i(2010), iprovided ia
i conceptual imodel ibut idid inot itest iit iempirically. iBecause ithe ievaluations iwere idone ion ithe iwhole
i supply ichain irather ithan ithe ilogistics ibusiness, itheir imodel iis iof ilimited iuse ito iLSPs i(Beske,
i 2012).
Environmental iand iorganizational icircumstances iare icomparable iin idynamic icapabilities iand
i supply ichain imanagement. iSupply ichain iorientation iis ia istrategic iorientation irequired iof iall
i supply ichain ibusinesses i(Beske, i2012). iIt iis idefined ias ian iorganization's iawareness iof ithe
i systemic, istrategic iconsequences iof itactical iactions iinvolved iin imanaging imultiple isupply ichain
i flows i(Mentzer iet ial., i2001, ip. i11). iIt ihighlights ithe iimportance iof ia ifirm's istrategic iunderstanding
i and iembrace iof isupply ichain imanagement, ias iwell ias ithe iuse iof ithis iattention ito idrive isuccess
i (Defee iand iStank, i2005). i iDynamic icapabilities irely ion ia iconsistent iresource imix i(Verona iand
i Ravasi, i2003), iwhile isupply ichain iorientation idirects iresource imix iand ideployment idecisions.
i The istudy iof ihow isupply ichain iorientation ifacilitates idynamic icapabilities iis ia ipotential iissue ithat
i has igotten ilittle iattention.
Dynamic icapabilities irefer ito ia icompany’s icapacity ito iintegrate, igrow, iand ireconfigure iinternal
i and iexternal iskills iin iorder ito irespond ito iquickly ichanging isurroundings i(Teece iet ial., i1997, ip.
i 516) iand iinclude idifficult-to-replicate ienterprise icapabilities.
Opportunity iis ifor icustomers iand itechnology i(Teece, i2007, ipp. i1319-1320). iDynamic icapabilities
i are ilearnt iand iconsistent ipatterns iof ibehavior ithat ia icompany iuses ito imethodically iproduce iand

17
i modify iit iare ithe iway iof imaking ithings idone iin iorder ito iimprove iits iefficiency. iThey ioversee ithe
i reconfiguration iof ioperelational icapabilities ito imake ithem imore irelevant ito ithe ienvironment.
i (Collis, i1994). iDynamic icapabilities ican ibe iparticular iprocesses iand iroutines ithat idevelop iover
i time iand iare idetermined inot ionly iby ia ifirm’s itangible iand iintangible iresource ibase iat ia iparticular
i point iin itime, ibut ialso iby ithe idecisions iit ihas imade iin iits ipast i(Eisenhardt iand iMartin, i2000).
i Dynamic icapabilities ican ibe iarranged iin ia ihierarchy. i(Fainshmidt iet ial., i2016). iSchilke i(2014b)
i Learning iprocedures ican ibe iclassified ias ifirst-order idynamic icapabilities, iaccording ito ithe iauthor.
i Second-order idynamic icapabilities, ion ithe iother ihand, imay ibe iviewed iof ias i"learning-to-learn"
i skills. iLower-order idynamic icapabilities iare ithose ithat ieffect ichanges iin ithe iresource ibase ior
i conventional icapability ichanges iin ithe iproduction iprocess, iaccording ito iWinter i(2003), iwhereas
i higher-order idynamic icapabilities iare ithose ithat iarise ifrom iorganizational ilearning ithat idevelops
i or ialters ilower-order idynamic icapabilities. iHigher-order idynamic icapabilities iare imore
i transformative isince iit ialters ithe iway ithe icompany iaddresses ichallenges. i(Zahra iet ial., i2006).
LSPs iwork iin ihigh-stakes ibusiness icontexts. iThey imust imanage iresource ipools ithat ienable ithe
i tailored iservices ithat ivarious iclients irequire. iLSPs imust iconstantly ialter itheir iservice imix iand
i enhance itheir iservice ioperations ias iagents iwho ilink ithe ibusiness iactivities iof isupply ichain
i members iupstream iand idownstream. iTheir idynamic icapabilities iare iexpressed iin itheir imulti-
functional ijobs, iwhich iallow ithem ito iadapt iand iinnovate iin iever-changing icircumstances.
Many iLSPs ithat iprovide itraditional itransportation iand istorage iservices iare ifinding ithat ithey ineed
i to iextend itheir ibusiness ito iencompass ihigher-end iservices ilike iinformation imanagement, icontract
i manufacturing, iand isupply ichain ifinancing i(Selviaridis iand iSpring, i2007).
In dynamic contexts, LSPs must be flexible in their resource allocation to meet changing client
demands. Their flexible and inventive talents enable them to anticipate environmental changes,
analyse various operating strategies, deploy resources flexibly, and continually enhance and
reinvent profitable service offerings.
In logistics organizations, Supply chain orientation and organizational learning are examined as
dynamic capabilities predecessors. At a time when supply chain expertise is in short supply
throughout the world, (Capgemini iConsulting, i2015; iMcKinnon iet ial., i2017), iLogistics
iorganizations imust idevelop inew iand ibetter iways ito igenerate ivalue iby iactively ibuilding,
iextending, ior ichanging itheir iresource ibase. iFresh ior ibetter iinformation iis ia ivital
icomponent isince ithe iletters idynamic icapabilities istand ifor irenewal. iThis istudy iexpands

18
ion ithe iresearch ion iknowledge iresources iand ilearning istrategies ifor icreating idynamic
icapabilities. i(Hung iet ial., i2010; iPisano, i2017; iWang iand iAhmed, i2007; iZollo iand
iWinter, i2002)

2.8 Relational Capability

The istatistical iconclusion ishows ithat itechnological icompetence, ilearning icapability, iand
ismall imedium ienterprises iperformance iare iall ilinked. iRelational icapability ialso ihas ia
isubstantial iand ipositive irelationship iwith iSmall imedium ienterprises ilearning icapability.
iRelational icapability, ion ithe iother ihand, ihas ia inegative irelationship iwith iSmall imedium
ienterprises ifirm’s iperformance, iwhereas itechnological icapability ihas ia inegative
irelationship iwith ilearning icapability. iFurthermore, ilearning icapability itransforms ithe
inegative iassociation ibetween irelational icompetence iand iSmall imedium ienterprises
iperformance iinto ia istrong ipositive irelationship, ialthough itechnological icapability iand
iperformance are unaffected. The research made a substantial contribution to the corpus of
knowledge on technical and relational capacities and performance. It also underlined the
importance for small medium enterprises managers to understand and grasp the roles of strategic
skills in establishing a long-term competitive advantage.
Small medium enterprises build efficient collaborative relationships to learn new techniques and
expertise through relational competence. This is especially important for small medium
enterprises from developing and emerging nations, since they are falling behind on the
worldwide competitive platform, and their local competitive advantages may not be sufficient to
help them access global markets. Similarly, technical capability enables businesses to
find,iacquire, iand iuse inew iexternal iinformation iin iorder ito iestablish ioperelational
icapabilities ithat ican ilead ito iimproved iresults. iAs ia iresult, itechnical iand irelational
icompetence iare icritical idynamic icharacteristics ithat ienable ibusinesses ito iattain iand
iretain ia isustainable icompetitive iedge iand ibetter iperformance iin itoday's icompetitive
iglobal imarketplace. i(Yang, iXie, iLiu, i& iDuan, i2018; iWang, iLo, iZhang, i& iXue, i2006;
iTeece iet ial., i1997)
Inefficient icapabilities, ion ithe iother ihand, ihave ihampered ismall imedium ienterprises
ibusiness iactivities iand iperformance i(Sok, iSnell, iLee, i& iSok, i2017), iparticularly iin
iAfrican ieconomies, iwhere ihuman icapital, itechnological, icollaborative, iand iinnovative

19
icapabilities ihave ihampered ithe isector's icompetitiveness iand iperformance. i(Asante, iKissi,
i& iBadu, i2018; iAkeyewale, i2018; iOyelaran-Oyeyinka i& iAbiola iAdebowale, i2012).
iNonetheless, iexisting iliteratures ihave iproven ithat itechnological, irelational, iand ilearning
icapacities iare iimportant, iuncommon, iinimitable, iand inon-substitutable iresources iand
idynamic icapabilities ithat ihelp imaintain icompetitive iadvantage iand iperformance iin ia
icontinuously ichanging ienvironment i(Yang iet ial., i2018; iPham, iMonkhouse, i& iBarnes,
i2017; iAhmad, iOthman, i& iMad iLazim, i2014). iTechnological iand irelational icapacities
iare icritical idynamic icapabilities ifor ialtering iwhat ia icompany iunderstands iby
iinternalizing inew iinformation. i(Pham iet ial., i2017; iZawislak, iAlves, iTello-Gamarra,
iBarbieux, i& iReichert, i2013)
Nonetheless, iempirical iresearch ion ithe isignificance iof irelational icompetences iin ithe
irelationship ibetween itechnology iand ibusiness iperformance iof iSMEs iin iemerging
ieconomies ihas ireceived ilittle iattention. iAs ia iresult, ithe igoal iof ithis iresearch iwas ito
iinvestigate ithe imediating ifunction iof ilearning icapability iin ithe ilinks ibetween
itechnological iskill, irelational icapability, iand ismall imedium ienterprises isuccess iin
iAfrica's iemerging ieconomies.
Because of their limited resources and strategic competencies, small medium enterprises find it
difficult to break into new and unfamiliar marketing environments. (Pham et al., 2017). Business
businesses must interact with not just innovative partners, but also all critical public and private
organizations to draw external information and resources to strengthen their competitive position
and performance in today's dynamic operating environment. (Kolk, Eagar, Boulton, & Mira,
2018). As a result of their relational aptitude, SMEs can build collaborative relationships in order
to learn new techniques, expertise, and information more quickly. (Martins, 2016). This is
especially important for businesses in poor and emerging nations, since they are falling behind
on the global competitive platform, and their local competitive advantages may not be sufficient
to help them break into global markets. (Yiu, Lau, & Bruton, 2007). Hence, Lado, Paulraj, and
Chen (2011) small medium enterprises must work hard to nurture and exploit relational
capabilities in order to produce and supply greater customer utilities, according to the report.
Ghane and Akhavan (2014) emphasised the importance of relational capacity in the
implementation of strategy and initiatives aimed at lowering customer complaints, building
cordial relationships, and increasing satisfaction.

20
Relational capability is a critical strategic competency that allows companies to successfully
discover, access, and acquire technologies, information, and talents that they cannot give
themselves. (Hietajärvi, Aaltonen, & Haapasalo, 2017). Small medium enterprises firms that
build their relational competence effectively produce effective collaboration, which improves
their competitive position. Collaboration with strategic partners improves small medium
enterprise’s resilience, agility, and robustness, all of which help them give better service.
(Wieland & Wallenburg, 2013). Engaging relevant partners in the new product development
process is strategically sound, as it provides the business with extraordinary skills and resources
that it cannot deliver on its own. However, without relational skill, it may be difficult for a
company to capitalize on such strategic advantages. Developing strategic relationships with
partners, on the other hand, is beneficial when it leads to the production of greater advantages for
the company. As a result, the firm's generative learning and integration abilities must be
successful in order to produce adequate rent from relationships with external partners. (Albort-
Morant, Leal-Rodríguez, & De Marchi, 2018).
Small medium enterprises create strategic collaboration relationships on purpose to strengthen
their source of competitive advantage. (Ziggers & Henseler, 2009). By helping small medium
enterprises to generate and exploit inter-firm collaboration into advantageous relationships,
relational competence provides a defensible competitive advantage. Luvison and de Man (2015)
small medium enterprises organisations obtain greater alliance portfolio performance, according
to experts, when they have active relational capabilities. It is a critical competence that improves
the relationship values and firm performance of small medium enterprises. (Cheng, Chen, &
Huang, 2014), It has a substantial impact on internal quality, supplier integration, and customer
integration, all of which improves performance. (Yu & Huo, 2018). The firm’s operelational
performance of a company is heavily influenced by relational competence. (Yang et al., 2018;
Rungsithong, Meyer, & Roath, 2017) It also has a favourable influence on the financial success
of the company (Lado et al., 2011). According to Pham et al. (2017), relational capacity not only
improves performance, but it also helps with marketing intelligence, pricing, and
communication.
According to the RBV concept of relational capacity, valuable and uncommon resources are
inherent in relationships rather than in individual businesses. Rungsithong et al. (2017) Because
relational competence is based on a firm's knowledge sharing, companies in strategic

21
relationships require capability that facilitates and supports the sourcing of new ideas and
information from other partners. The rigours of a highly competitive economy make it difficult
for small medium enterprises to fulfil the diverse demands of numerous forces working together
to achieve similar aims. (Mat & Razak, 2011). Rungsithong et al. (2017) Employees' mood and
feelings are influenced by inter-personal trust at the corporate level, according to the author.
Through strategic relationships, employees at a company came to a common understanding and
enhanced the speed with which they shared information.
The capacity to form relationships has been built in order to favourably affect marketing
intelligence collection (Pham et al., 2017), improve the company's cultural orientation (Luvison
& de Man, 2015). Learning-oriented small medium enterprises may successfully harness their
technological and relational strengths to provide higher customer value, increase competitive
advantage, and achieve exceptional results. SMEs' learning capability was also found to be
considerably and favourably influenced by relational competence. This indicates that relational
capability is also a VRIN resource and a dynamic capability, both of which assist small medium
enterprises in developing successful cooperation with strategic partners in order to increase other
operelational capabilities and performance in today's dynamic environment. This isn't to say that
relational skill isn't important; it just means that it may require other resources, methods, or
operelational capabilities to successfully convert into greater performance in some
circumstances.
Small medium enterprises acquire a distinct competitive position in the market by deploying
important resources and dynamic capabilities, such as technological, relational, and learning
capacities. This supported the proponents of RBV's hypothesis. (Barney, 1991; Wernerfelt, 1984)
As a result, technological, learning, and relational capabilities are dynamic capabilities that allow
small medium enterprises to adapt to changing operating environments effectively.
2.9 Relational Capability (RC) as a Moderator
In our study Rational capability (RC) is the moderator, which is helping us in finding the
relationship between Dynamic Capabilities (DC) and Firm Performance (FP). Rational capability
(RC) can affect the strength of the relationship between Dynamic Capabilities (DC) and Firm
Performance (FP). Rational capability (RC) that is our moderator is defining that either our
independent variable Dynamic Capabilities (DC) is having an effect on our dependent variable
Firm Performance (FP), either positive or negative.

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2.9 Conceptual Model

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2.10 Research Hypothesis

H1: Organizational Learning (OL) has a significant impact on Dynamic Capability (DC).
H2: Supply Chain Orientation (SCO) has a significant impact on Dynamic Capability (DC).
H3: Dynamic Capability (DC) has a significant impact on Firm Performance (FP).
H4: Relational capability (RC) moderates the relation between Dynamic Capability (DC) and Firm
Performance (FP).

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 CHAPTER THREE
RESEARCH METHODOLOGY

3.0 iIntroduction
This ichapter idiscusses ithe imethodology iused iin ithis iresearch. iIt idescribes ihow ithe
iresearch iwas iconducted iand iwhich itechnique iwas iused ifor isystematic idata icollection.
iSpecially, ithis ichapter idescribes ithe iresearch idesign, ipopulation iand isampling iprocedure,
iresearch iinstrumentation iand imeasurement, idata icollection imethod iand iprocedures,
itechniques iof idata ianalysis, iand iconclusion.

3.1 iResearch ipurpose

The iresearch ipurpose iwe iuse ifor iour iresearch iis iexplanatory. iExplanatory iresearch iis ia
istrategy ifor ilooking iinto ia iphenomenon ithat ihasn't ibeen iresearched ibefore ior ihasn't
ibeen iadequately icharacterized iin ian iacceptable iway. iExplanatory iresearch iis itasked iwith
idetermining ithe isequence iof ievents iby iestablishing icause-and-effect relationships. It is well
characterized as an attempt to connect concepts, to explain cause and effect, and to clarify what
is going on, which implies researchers seek to know what is going on. With exploratory inquiry,
we began to try something new. We must describe what new findings we obtain as a
consequence of our study and what new conclusions we make as a result of our investigation. In
summary, we can assist the industry's weak points or places where a certain industry can focus
more in order to improve the flow of operations. Explanatory study examines how objects
interact and operate together. This research will not begin until and until there is sufficient
information to foresee what will happen next with reasonable accuracy.
Exploratory iresearch iis idescribed ias istudy iconducted ito ilearn imore iabout ia itopic ithat
iisn't iwell idefined. iIt iis icarried iout iin iorder ito igain ia ibetter iknowledge iof ithe icurrent
isituation, ibut ithe iresults iwill inot ibe idefinitive.
The imethods iused iin idescriptive iresearch iare ithose ithat idescribe ithe ifeatures iof ithe
ivariables ibeing istudied. iDescriptive iresearch iis ia itype iof iquantitative imarket iresearch ior
isocial iresearch ithat ientails iconducting isurveys iusing iquantitative ivariables ion ia imarket
iresearch ior isocial iresearch instrument.

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3.2 Research approach
In this particular study we are using a quantitative research purpose, this study looked into the
hypothesized links. The researcher can generalize the study's population using a quantitative
technique. This study was cross-sectional in nature, with data obtained just once.
Qualitative research is used to comprehend concepts, views27.or iexperiences, iqualitative
iresearch ientails igathering iand ievaluating inon-numerical idata i(e.g., itext, ivideo, ior iaudio).
iIn ithe ihumanities iand isocial isciences, iqualitative iresearch iis ioften iemployed iin iareas
isuch ias ianthropology, isociology, ieducation, ihealth isciences, ihistory, iand iso ion.
A ipragmatic iresearcher iaims ito ialter ian iissue iby idelving iinto iits iintricate iinterconnected
icomponents iin iorder ito ihave ia ibetter iunderstanding iof ithe isituation ias ia iwhole. iThe
iobjective iis ito igive ioptions iand itake iappropriate iaction. iThis iresults iin isocial iactivity
iand ithe iimplementation iof irelevant ipolicies.

3.3 iResearch iDesign i

The icurrent istudy iinspected ithe irelation ibetween iOrganizational iLearning iOL, iSupply
iChain iOrientation iSCO, iDynamic iCapabilities iDC iand iFirm iPerformance iFP, iwith ithe
imediating irole iof iRelational iCapability iRC. iIn iaddition, ithis istudy iinvestigated ithe
imoderating ieffect iof iRelational iCapability ion ithe irelationship ibetween iOrganizational
iLearning iOL, iSupply iChain iOrientation iSCO, iDynamic iCapabilities iDC iand iFirm
iPerformance FP.
Our research was correlational in nature since it looked at the links between the many elements
mentioned above. As a result, correlational research may be used to investigate the correlations
between variables, and this methodology is fit with our study's goals.
3.4 Sampling technique
For generalizability's sake, in this study we used Non Probability convenience sampling
technique. Convenience sampling is a sampling strategy that entails giving each member of the
population an equal chance of being chosen from a target population utilizing a predetermined
approach such as excels software as the foundation of sample selection. The major goal of
employing random sampling in this study was to choose a sample from the entire population at a
low cost while maintaining the characteristics of probability sampling. The result of this
selection was used as a benchmark for choosing sample units from the overall population.

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3.5 Target audience

0u/

Our target audiences are the entire employees working a logistics industry

3.6 Sample Size

The sample size or the number of respondent we used for our study is 150.

3.7 Statistical Techniques

The Statistical Package for the Social Sciences (SPSS) software was used in this investigation for
demographic and descriptive test.
For conducting other tests such as reliability analysis, factor analysis, and regression 28.analysis
iwe iused iPartial iLeast iSquares iStructural iEquation iModeling i(PLS-SEM)

3.8 iEthical iconsideration

The ineeded iinformation iis icollected ifreely ifrom irespondents ithrough iquestionnaire ifor
ithe iaim iof ithe iresearch istudy. iIt iis isolely ifor ithe ipurpose iof iachieving ithe istudy igoal,
iand iit imust inot ibe iused ito iinfringe ion ithe idignity iof iresearch iparticipants.
iFurthermore, ino ipersonal iinformation iof iany ikind imay ibe icirculated iwithout

icompromising iits iconfidentiality.

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