IDEAS home Printed from https://ideas.repec.org/a/bla/jscmgt/v60y2024i2p64-92.html
   My bibliography  Save this article

Growing, learning, and connecting: Deciphering the complex relationship between government customer concentration and firm performance

Author

Listed:
  • Ellie C. Falcone
  • Brian S. Fugate
  • Matthew A. Waller

Abstract

The interplay between a firm's customer portfolio and the firm's performance presents a theoretical conundrum that challenges traditional supply chains. In particular, the role of government customer concentration—how extensively a firm incorporates government entities as part of its customer base—emerges as a pivotal factor with the potential to both bolster and burden firm performance. Analyzing 3,643 firm‐year observations from the U.S. Federal Procurement Data System‐Next Generation, Compustat, and FactSet Revere reveals an inverse U‐shaped relationship between government customer concentration and firm performance. Excessive or insufficient government customer concentration adversely impacts performance, suggesting that a strategic balance is essential. Firm size, absorptive capacity, and network embeddedness are crucial in navigating this complex relationship, guiding a firm toward optimizing its government customer portfolio. This research advances the discourse on customer base management, underscoring the essential strategic considerations for firms interacting with government buyers.

Suggested Citation

  • Ellie C. Falcone & Brian S. Fugate & Matthew A. Waller, 2024. "Growing, learning, and connecting: Deciphering the complex relationship between government customer concentration and firm performance," Journal of Supply Chain Management, Institute for Supply Management, vol. 60(2), pages 64-92, April.
    • Handle: RePEc:bla:jscmgt:v:60:y:2024:i:2:p:64-92
    DOI: 10.1111/jscm.12319
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/jscm.12319
    Download Restriction: no
    File URL: https://libkey.io/10.1111/jscm.12319?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Robert B. Handfield & Paul D. Cousins & Benn Lawson & Kenneth J. Petersen, 2015. "How Can Supply Management Really Improve Performance? A Knowledge-Based Model of Alignment Capabilities," Journal of Supply Chain Management, Institute for Supply Management, vol. 51(3), pages 3-17, July.
    2. Belk, Russell W, 1989. "Extended Self and Extending Paradigmatic Perspective: Comment," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 16(1), pages 129-132, June.
    3. Leigh McAlister & Shameek Sinha, 2021. "A customer portfolio management model that relates company’s marketing to its long-term survival," Journal of the Academy of Marketing Science, Springer, vol. 49(3), pages 584-600, May.
    4. Suresh Radhakrishnan & Zheng Wang & Yue Zhang, 2014. "Customers’ Capital Market Information Quality and Suppliers’ Performance," Production and Operations Management, Production and Operations Management Society, vol. 23(10), pages 1690-1705, October.
    5. HyunJun Na, 2020. "Customer concentration types and public debt contracts," Review of Accounting and Finance, Emerald Group Publishing Limited, vol. 19(2), pages 247-269, March.
    6. David D. Dobrzykowski & Rudolf Leuschner & Paul C. Hong & James J. Roh, 2015. "Examining Absorptive Capacity in Supply Chains: Linking Responsive Strategy and Firm Performance," Journal of Supply Chain Management, Institute for Supply Management, vol. 51(4), pages 3-28, October.
    7. Timothy Hawkins & Michael Gravier & Edward Powley, 2011. "Public Versus Private Sector Procurement Ethics and Strategy: What Each Sector can Learn from the Other," Journal of Business Ethics, Springer, vol. 103(4), pages 567-586, November.
    8. Abhay K. Grover & Martin Dresner, 2022. "A theoretical model on how firms can leverage political resources to align with supply chain strategy for competitive advantage," Journal of Supply Chain Management, Institute for Supply Management, vol. 58(2), pages 48-65, April.
    9. HyunJun Na, 2020. "Customer concentration types and public debt contracts," Review of Accounting and Finance, Emerald Group Publishing Limited, vol. 19(2), pages 247-269, March.
    10. Ni Wayan Rustiarini & Sutrisno T. & Nurkholis Nurkholis & Wuryan Andayani, 2019. "Why people commit public procurement fraud? The fraud diamond view," Journal of Public Procurement, Emerald Group Publishing Limited, vol. 19(4), pages 345-362, August.
    11. Benjamin R Tukamuhabwa, 2012. "Antecedents and Consequences of Public Procurement Non-compliance Behavior," Journal of Economics and Behavioral Studies, AMH International, vol. 4(1), pages 34-46.
    12. Christine Harland & Jan Telgen & Guy Callender & Rick Grimm & Andrea Patrucco, 2019. "Implementing Government Policy in Supply Chains: An International Coproduction Study of Public Procurement," Journal of Supply Chain Management, Institute for Supply Management, vol. 55(2), pages 6-25, April.
    13. Isaac Elking & John-Patrick Paraskevas & Curtis Grimm & Thomas Corsi & Adams Steven, 2017. "Financial Dependence, Lean Inventory Strategy, and Firm Performance," Journal of Supply Chain Management, Institute for Supply Management, vol. 53(2), pages 22-38, April.
    14. James L. Chan, 2003. "Government Accounting: An Assessment of Theory, Purposes and Standards," Public Money & Management, Taylor & Francis Journals, vol. 23(1), pages 13-20, January.
    15. Giovanna Culot & Matteo Podrecca & Guido Nassimbeni & Guido Orzes & Marco Sartor, 2023. "Using supply chain databases in academic research: A methodological critique," Journal of Supply Chain Management, Institute for Supply Management, vol. 59(1), pages 3-25, January.
    16. Dang, Chongyu & (Frank) Li, Zhichuan & Yang, Chen, 2018. "Measuring firm size in empirical corporate finance," Journal of Banking & Finance, Elsevier, vol. 86(C), pages 159-176.
    17. Verónica H. Villena, 2019. "The Missing Link? The Strategic Role of Procurement in Building Sustainable Supply Networks," Production and Operations Management, Production and Operations Management Society, vol. 28(5), pages 1149-1172, May.
    18. Cheryl Gaimon & Karthik Ramachandran, 2021. "The Knowledge Value Chain: An Operational Perspective," Production and Operations Management, Production and Operations Management Society, vol. 30(3), pages 715-724, March.
    19. Linda Argote & Manpreet Hora, 2017. "Organizational Learning and Management of Technology," Production and Operations Management, Production and Operations Management Society, vol. 26(4), pages 579-590, April.
    20. Tingting Yan & Thomas Y. Choi & Yusoon Kim & Yang Yang, 2015. "A Theory of the Nexus Supplier: A Critical Supplier From A Network Perspective," Journal of Supply Chain Management, Institute for Supply Management, vol. 51(1), pages 52-66, January.
    21. Clifford P. McCue & Jack T. Pitzer, 2000. "Centralized vs. decentralized purchasing: current trends in governmental procurement practices," Journal of Public Budgeting, Accounting & Financial Management, Emerald Group Publishing Limited, vol. 12(3), pages 400-420, March.
    22. Yoon Hee Kim, 2017. "The Effects of Major Customer Networks on Supplier Profitability," Journal of Supply Chain Management, Institute for Supply Management, vol. 53(1), pages 26-40, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. David E. Cantor & Tingting Yan & Mark Pagell & Wendy L. Tate, 2022. "From the editors: Introduction to the emerging discourse incubator on the topic of leveraging multiple types of resources within the supply network for competitive advantage," Journal of Supply Chain Management, Institute for Supply Management, vol. 58(2), pages 3-7, April.
    2. Jessica L. Darby & David J. Ketchen & Brent D. Williams & Travis Tokar, 2020. "The Implications of Firm‐Specific Policy Risk, Policy Uncertainty, and Industry Factors for Inventory: A Resource Dependence Perspective," Journal of Supply Chain Management, Institute for Supply Management, vol. 56(4), pages 3-24, October.
    3. Stefan Gold & Thomas Chesney & Tim Gruchmann & Alexander Trautrims, 2020. "Diffusion of labor standards through supplier–subcontractor networks: An agent‐based model," Journal of Industrial Ecology, Yale University, vol. 24(6), pages 1274-1286, December.
    4. Jung Seung Lee & Soo Kyung Kim & Su-Yol Lee, 2016. "Sustainable Supply Chain Capabilities: Accumulation, Strategic Types and Performance," Sustainability, MDPI, vol. 8(6), pages 1-16, May.
    5. Jialie Chen, 2023. "Learning and skill set formation: A structural examination of version upgrades, user visibility, and AI strategies," Production and Operations Management, Production and Operations Management Society, vol. 32(12), pages 3856-3872, December.
    6. Ahrom Kang & Joongsan Oh, 2023. "The configuration and evolution of Korean automotive supply network: an empirical study based on k-core network analysis," Operations Management Research, Springer, vol. 16(3), pages 1251-1270, September.
    7. Dong-Young Kim & Pengcheng Zhu & Wenli Xiao & Yen-Ting Lin, 2020. "Customer degree centrality and supplier performance: the moderating role of resource dependence," Operations Management Research, Springer, vol. 13(1), pages 22-38, June.
    8. (Daniel) Kao, Ta-Wei & Su, Hung-Chung & Chen, Yi-Su, 2019. "The curvilinear relationships between structural embeddedness and productive efficiency: An exploratory study," International Journal of Production Economics, Elsevier, vol. 212(C), pages 176-185.
    9. Christine Harland, 2021. "Discontinuous Wefts: Weaving a More Interconnected Supply Chain Management Tapestry," Journal of Supply Chain Management, Institute for Supply Management, vol. 57(1), pages 27-40, January.
    10. Sangho Chae & Thomas Y. Choi & Glenn Hoetker, 2024. "Theorizing the governance of direct and indirect transactions in multi‐tier supply chains," Journal of Supply Chain Management, Institute for Supply Management, vol. 60(2), pages 3-21, April.
    11. Simpson, N.C. & Tacheva, Zhasmina & Kao, Ta-Wei, 2023. "Semi-directedness: New network concepts for supply chain research," International Journal of Production Economics, Elsevier, vol. 256(C).
    12. Vasilii Erokhin & Dmitry Endovitsky & Alexey Bobryshev & Natalia Kulagina & Anna Ivolga, 2019. "Management Accounting Change as a Sustainable Economic Development Strategy during Pre-Recession and Recession Periods: Evidence from Russia," Sustainability, MDPI, vol. 11(11), pages 1-23, June.
    13. Tarifa Fernández, Jorge & de Burgos Jiménez, Jerónimo & Céspedes Lorente, José Joaquín, 2018. "Absorptive capacity as a confounder of the process of supply chain integration," MPRA Paper 120125, University Library of Munich, Germany, revised 2018.
    14. FeCheng Ma & Farhan Khan & Kashif Ullah Khan & Si XiangYun, 2021. "Investigating the Impact of Information Technology, Absorptive Capacity, and Dynamic Capabilities on Firm Performance: An Empirical Study," SAGE Open, , vol. 11(4), pages 21582440211, November.
    15. Young Mok Choi & Kunsu Park, 2019. "Foreign Ownership, Agency Costs, and Long-Term Firm Growth: Evidence from Korea," Sustainability, MDPI, vol. 11(6), pages 1-17, March.
    16. Qaisar Ali & Sulistya Rusgianto & Shazia Parveen & Hakimah Yaacob & Razali Mat Zin, 2024. "An empirical study of the effects of green Sukuk spur on economic growth, social development, and financial performance in Indonesia," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(8), pages 21097-21123, August.
    17. Yuhuan Jin & Sheng Zhang, 2019. "Credit Rationing in Small and Micro Enterprises: A Theoretical Analysis," Sustainability, MDPI, vol. 11(5), pages 1-15, March.
    18. Luo, Lianfa & Cheng, Zhiming & Ye, Qingqing & Cheng, Yanjun & Smyth, Russell & Yang, Zhiqing & Zhang, Le, 2024. "Nonmonetary awards and innovation: Evidence from winning China's Top Brand Contest," China Economic Review, Elsevier, vol. 86(C).
    19. Wasswa Asaph Senoga, 2023. "The Effect of Accountability, Transparency, And Integrity of Church Leaders on Fraud Prevention in The Management of Church Funds," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(1), pages 1388-1409, January.
    20. Hangeun Lee & Seong Ho Lee, 2019. "The Impact of Corporate Social Responsibility on Long-Term Relationships in the Business-to-Business Market," Sustainability, MDPI, vol. 11(19), pages 1-12, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jscmgt:v:60:y:2024:i:2:p:64-92. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=1523-2409 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.