A Dynamic Capabilities Framework for Managing Supply Chain Risk and Building Resilience in Malaysia’s Priority Manufacturing Sectors

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Abstract
Global supply chains have become increasingly complex and interconnected, making them highly susceptible to disruptions caused by pandemics, geopolitical instability, and climate-related events. These vulnerabilities are especially pronounced in emerging economies, where manufacturing sectors are heavily reliant on international networks. Despite increasing academic and managerial focus on supply chain resilience, existing models often examine risk management, resilience, performance, and sustainability in isolation, lacking an integrated perspective. This paper develops a conceptual framework grounded in Dynamic Capabilities Theory (DCT) to explain how firms can enhance supply chain performance by leveraging structured risk management practices and sustainability initiatives. The framework integrates four key constructs, which are Supply Chain Risk Management (SCRM), Supply Chain Resilience (SCR), Supply Chain Performance (SCP), and Sustainability Efforts (SE), with SE acting as a moderating factor that amplifies the relationship between SCRM and SCR. By aligning these constructs with DCT’s core functions of sensing, seizing, and transforming, the model provides a holistic explanation of how firms can build adaptive and responsive supply chains. The paper offers four theoretical propositions and outlines practical and policy-oriented implications, contributing to the development of more resilient and sustainable supply chain strategies, particularly in developing manufacturing contexts.

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