SSE as multidimensional construct

In this study, I conceptualize supplier social engagement (SSE) as a multidimensional construct and it is proposed that social engagement of suppliers is a firm-level capability that reflects an organization’s expertise in deploying resources and routines, usually in combination, to achieve desired social performance as an outcome. This capability is operationalized as a

multidimensional construct reflected by four complementary dimensions: cultural astuteness, bi- directional communication, operations astuteness, and social cognizance.

3.1.1 Multidimensional constructs

Multidimensional constructs can exist in several forms and it is important to clearly specify the set of relationships among the overall construct and its dimensions (Edwards, 2001). Law, Wong, & Mobley (1998) state that without specifying the relationships between the overall construct and its dimensions, the various dimensions are simply a collection of related variables, and there is no need to label them as components of a multidimensional construct.

A multidimensional construct is different from a unidimensional construct in a way that a unidimensional construct refers to a single theoretical concept, while a multidimensional

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construct consists of a number of interrelated dimensions. These dimensions are regarded as distinct but related concepts rather than a single overall concept (Edwards, 2001).

In order to explain the difference among various types of multidimensional constructs, Law et al. (1998) developed a taxonomy consisting of two classification criteria: (1) Relational level and (2) Relational form. This taxonomy of multidimensional constructs is presented in Figure 3-1.

Figure 3-1: Taxonomy of multidimensional constructs [Adapted from Law et al. (1998)]

‘Relational level’ refers to whether the multidimensional construct exists at a deeper level than its dimensions or whether it exists at the same level, as a combination of its dimensions. If a multidimensional construct could be thought of as a higher-order abstraction underlying its dimensions, then Law et al. (1998) labels this type as ‘latent model’. Another way of conceptualizing a latent model is to think of a latent multidimensional construct as a

commonality among its dimensions. For a latent multidimensional construct, its dimensions are simply different forms manifested by the construct and if a latent multidimensional construct

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were replaced by a conceptually analogous construct conceived as distinct from its dimensions, then relationships between this construct and the dimensions may be causal (Edwards, 2001).

However, if a multidimensional construct could be thought of as a combination of its underlying dimensions, the construct cannot be called a latent type and the criteria of ‘relational form’ is applied to further classify the construct in various types. ‘Relational form’ indicates whether the multidimensional construct can be formed as an algebraic function of its dimensions. This classification rule applies only if the multidimensional construct does not exist at a deeper

conceptual level than its dimensions. In some multidimensional constructs, the dimensions of the construct can be algebraically amalgamated into an overall representation of the construct. Law et al. (1998) labels constructs in this category as aggregate model. In other cases, because of the theoretical nature of the construct, the multidimensional construct is interpreted as various profiles formed by pairing the characteristics of different dimensions. Here, levels of the

multidimensional construct are determined by profiling levels of each of the dimensions. Law et al. (1998) labels this as the profile model of multidimensional construct in its proposed

taxonomy.

3.1.2 Examples of multidimensional constructs in OM research

Multidimensional constructs are not new to the operations management literature. For example, Peng, Schroeder, & Shah (2008) while studying plant-level capabilities, identified

‘improvement’ and ‘innovation’ as two capabilities and conceptualized these as second-order latent constructs consisting of a set of underlying routines. The authors defined ‘capabilities’ as the strength or proficiency of a bundle of interrelated routines for performing specific tasks (Peng et al., 2008).

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Menor & Roth (2007) developed the notion of ‘new service development (NSD) competence’ and defined this competence as reflecting a set of expertise that enables an organization to deploy resources and routines to achieve a desired new service outcome. NSD competence was conceptualized as a second-order latent construct consisting of four underlying dimensions.

Menor, Kristal, & Rosenzweig (2007) introduced a second-order latent construct called ‘operational intellectual capital (OIC)’ consisting of three underlying dimensions of human capital, structural capital and supply chain integration.

More recently, Kristal, Huang, & Roth (2010) developed the notion of ‘ambidextrous supply chain’ and conceptualized it as a second-order construct consisting of supply chain exploitation and exploration as its two dimensions. The authors however, did not explicitly model the higher- order construct as a latent multidimensional construct.

Shafiq, Awaysheh, Klassen, & Johnson (2014) developed four separate higher-order latent constructs. These four second-order latent constructs represented socially responsible practices of business firms aimed at four stakeholder groups: customers, suppliers, employees and local community.

Shah & Ward (2007) argued for the multidimensional nature of ‘Lean’ by deriving a ten factor model. The authors commented that since the 10 factors (i.e. dimensions) derived during

empirical analysis are positively and significantly correlated with each other, thereby it provides support to the multidimensional and integrated nature of lean production systems. The authors further commented that it is the complementary and synergistic effects of the 10 distinct but highly inter-related elements that give lean production its unique character and its superior ability to achieve multiple performance goals. While each element by itself is associated with

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better performance, firms that are able to implement the complete set achieve distinctive performance outcomes that can result in sustainable competitive advantage (Shah & Ward, 2007).

Based on my conceptualization of SSE capability as explained in Chapter 2 and the taxonomy of Law et al. (1998), it is evident that SSE capability is a higher-order construct of latent type. I categorize SSE as a latent construct because it is a capability consisting of a set of four underlying dimensions. I also posit that the four dimensions underlying SSE capability are complementary. For a latent multidimensional construct, its dimensions are simply different forms manifested by the construct and the relationships between this construct and its dimensions are represented as causal paths (Edwards, 2001). On the basis of the arguments above, I hypothesize:

Hypothesis 1a-1d: SSE capability is multidimensional and is reflected by and positively related to cultural astuteness, operations astuteness, bi-directional communication, and social

cognizance.

In the following sections, I argue that SSE capability has an impact on social and operations performance of the buyer firm. I will also argue that SSE capability helps create reciprocity between the social practices of a firm and its suppliers.