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Updated: Apr 4, 2026

The Innovation Arena: A Method for Comparing Innovative Problem-Solving Across Groups
Published on: May 13, 2022
Enhancing innovation through strategic supplier relationships and IT decisions
Hui-Chuan Chen1, Taeuk Kang1, Monty Taylor1
1Department of MMIS, College of Business and Global Affairs, The University of Tennessee at Martin, Martin, Tennessee, USA.
Purpose:
This research study investigates the associations among supplier relationships, outsourcing decisions, IT investment, and innovative behavior in the healthcare industry.
Design/Methodology/Approach:
All measurement items used in the survey are based on existing test instruments. Survey questionnaires were distributed to the administrators of skilled nursing facilities which receive Medicare and Medicaid reimbursements. A total of 243 usable surveys were analyzed. Structural Equation Modeling (SEM) was implemented to test five hypotheses in order to determine the relationships among supplier relationships, outsourcing decisions, information technology investment, and innovative behavior at the firm level.
Findings:
Strong significant positive associations among supplier relationships, outsourcing decisions, IT investment, and innovative behavior are identified through statistical analysis. Specifically, strong supplier relationships (e.g. partnerships with pharmacies that share knowledge) are associated with outsourcing decisions and encourage employees to engage in innovative behaviors, such as exploring alternative solutions and encouraging IT investments in the facility. Finally, investments in IT-based solutions for operations issues can motivate employees to explore new technologies regarding how tasks are performed within a culture of innovation.
Originality/Value:
This study offers ways for healthcare administrators to enhance performance by cultivating transparent supplier partnerships, strategically outsourcing non-core functions, investing in IT for increased adaptability, and fostering staff innovation. Together, these practices reduce costs, increase efficiency, and improve patient care, thereby offering a practical framework for sustainable supply chain management and competitive advantage in the healthcare industry.
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