In order to improve performance at the operational level, more and more firms are developing explicit linkages with suppliers and with customers. While the question of “what beneficial impact do linkages with suppliers and with customers have for a firm” has been addressed in numerous studies, the equally important question of “why” this beneficial impact arises deserves further discourse and explication. This paper borrows and applies the Resource‐Based View of the Firm, a theoretical perspective prevalent in the strategic management literature, to develop a conceptual framework to describe, explain, and predict the advantages of a firm's linkages with entities in its supply chain on its internal operations. The proposed framework can be used to justify decisions to develop, strengthen, and protect relationships with suppliers on the upstream side and with customers on the downstream side. The framework can also be used to evaluate practices implemented to link a firm to its suppliers and customers and to provide a decision roadmap for firms to better understand how to maximize operational performance benefits from these supply chain linkages.
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