The Effects of Top Management Commitment on Operational Performance Through the Use of Information Technology and Supply Chain Management Practices

¹ Faculty of Business and Economic, Petra Christian University, Jl. Siwalankerto 121-131, Surabaya 60236, Indonesia
² Dayeh University, No.168, University Rd., Dacun, Changhua 51591, Taiwan

^* Corresponding author: hotlan.siagian@petra.ac.id

Abstract

The company's performance must be continuously improved to be able to face the increasingly fierce global competition. The improvement of the company's performance can be made by implementing supply chain practices. The implementation of supply chain practice is a policy set by the company's top management by making the system integrated. Integration of all functions, internally and externally, is done by using integrated information technology. This study takes data from companies in East Java, engaged in machinery that has a workforce of more than 100 people categorized as medium and large companies. Respondents were set on employees with a minimum of 2 yr of working experience and a middle manager position. There were 55 respondents in this study, with data analysis using partial least square (PLS) to test the research hypothesis. The result of the data processing found that the commitment of top management affects the supply chain practices and the use of information technology. This is because the management has shown its commitment by providing the necessary human resources. The top management commitment directly influences the company's operational performance. The use of information technology directly affects supply chain practices and the company's operational performance. Supply chain practices affect the company's operational performance. This is because the company has carried out the process of information sharing with the company's suppliers to control and facilitate the procurement of quality raw materials.