Logistics growth in the armed forces: development of a theoretical framework and research propositions

ABSTRACT

Considering the current instability within the European security landscape, militaries are seeking new ways to grow and counter emergent threats. However, there is a rarity of armed forces addressing logistics growth within literature. Thus, this paper investigates growth concepts that can enable military forces develop, conduct, and grow logistics to achieve its operational objectives. The paper undertakes extant literature analysis of three relevant theories of growth as a means to review for comprehending organizational growth. The relationships between logistics and three growth theories as well as industry growth practices are analysed. Argues that the development of the concept of logistics growth in the military require support not just from established growth theories but also from long-standing industrial practice in order to fully develop the best strategic-fit growth concept for the military. Nine propositions reflecting antecedent relationships amongst theoretical variables for growth are developed. Study serves as a point of departure for further research on military growth in general and military logistics growth in particular and provides military leaders with disciplinary options for evaluating logistics growth strategies for achieving operational objectives and goals.

KEYWORDS:

• Military growth
• logistics growth
• governance measures
• hybrid growth
• theoretical antecedents
• performance measures

Introduction

Growth, whether considered within contemporary organizational units or within the military and armed forces, is a particularly complex phenomenon. Nevertheless, it remains an essential prerequisite to the achievement of business and strategic goals (Storey 1994), and significant contributor to the national economy (Gupta, Guha, and Krishnaswami 2013). Given the constantly changing security situation in many parts of Europe, nations, and their militaries are seeking ways to grow to counter such risks. As a profession where logistics accounts for about 60–70% of its operations, any anticipated growth capability within the armed forces requires corresponding growth and development within logistics. Thus, there is a need to identify logistics growth concepts if we are to understand the concept of growth in the military (Zsidisin et al. 2019).

Within military literature, there is a marked rarity of studies of the typical armed forces undertaking and achieving growth. Even as logistics and its references within the concept of total defense, at least within the Nordic context, are important to consider, the economic growth of a state is crucial to this growth as it can limit the capabilities of its armed forces (Hartley 2011). Similarly, an armed force logistics capability can limit and substantially diminish its operations. As such, military logistics, which depend on economic factors as well as the ability of military organizations to manage logistics activities, can place limits on military operations at all levels (tactical, operational, and strategic) (e.g. see Kress 2016).

Within management and organizational studies literature, the subject of organizational growth has and continues to attract considerable attention (e.g. Delmar, Davidsson, and Gartner 2003; Phelps, Adams, and Bessant 2007). However, the concept of growth offered within these literatures connote different phenomena for different scholarly perspectives. For example, growth is conceptualized in terms of increase in the number of employees, assets, or profit, while for others it is viewed in terms of equity or value added to the firm (e.g. see Davidsson and Wiklund 2000; Gupta, Guha, and Krishnaswami 2013; Weinzimmer, Nystron, and Freeman 1998; Wiklund, Patzelt, and Shepherd 2009). Given the amount of attention to the concept of growth within literature, there is still disagreement about how growth occurs and how it should be measured within existing literature (e.g. Wiklund, Patzelt, and Shepherd 2009). In addition, given the dearth of literature within logistics and supply chain management per se on the logistics growth, the question of interest in this paper is how can logistics growth be addressed within the military forces? In an attempt to answer this question, this paper seeks to examine the theoretical concepts of logistics growth as informed by management and organization, economics and population ecology literatures. Hence, the aim of this paper is to develop a theoretical framework for logistics evolution in the armed forces, specifically within military logistics. To achieve this, the following research objectives are sought;

1. Identify how logistics and supply chain management (SCM) literature address logistics growth.

2. Investigate theoretical antecedents of logistics and supply chain management for military logistics growth.

We define military logistics growth as the means and processes through which military forces develop and expand their logistics capabilities to efficiently undertake, meet, and support the changing scope of its primary function of defence to the nation. As forces grow and metamorphose, logistics capability is required to keep up with such changes either personell, technology, intelligence, and so on. Thus, studying growth from a management perspective for application within the military logistics operations context is important for a number of reasons. First, it prepares leaders and stakeholders alike within military structures to think strategically about how to create value (in terms of defence capability) along its supply and ultimately, its logistics chains. Since military logistics control ultimately depends on commercial supply chains to assure its functionality, we do not make any distinction between military and commercial supply chains. As such, we argue here that the similarity between commercial/business and military supply chains allows for the application of commercial growth principles to military supply chains; however, they remain different types of organizations with different incentive structures and ultimate end-users (e.g. Parlier 2011, 2016). While authors have argued for logistics as the backbone of supply chain management (e.g. Kamauff 2009; Waters 2003), supply chains must be able to feed logistics structures to such a point where it in turn supports the operations of the supply chain. Second, because characteristics of national armed forces, just like logistics chains, are fundamentally distinct in the manner of their operations as well as their unique social, environmental, and geographical contexts, the growth path for different national forces will ultimately be different. Thus, understanding the growth peculiarities of the different forces, albeit from a broader logistics perspective, gives leaders an insight into the organizational interplay between the different factors that act to shape if, how and when forces can grow.

Finally, this paper contributes to the growth and logistics literatures beyond the traditional defense-growth paradigm that abound within the literature by integrating three theoretical perspectives (Economic, Penrose, and Ecology theories) to extend the research on growth within logistics for application within the military context. No previous study to the best of authors’ knowledge has theoretically investigated logistics growth in the military setting.

Next, we review definitions of military logistics and section 3 analyzes growth theories within three theoretical perspectives. Section 4 develops a theoretical framework and subsequently presents propositions developed from the theoretical perspectives. Finally, section 5 presents a conclusion.

Military logistics

When politicians make decisions to increase the armed forces volume and capability, the growth of logistics acts as a key enabler of such increase. The type and manner of a nation’s military strategy and operations reflect its politics, economy and more recently, innovation and technological advancement (Toroi 2021). As the military operations environment is becoming more complex and occurring more frequently in remote locations, logistics must evolve as these operations change (e.g. Raisio, Puustinen, and Jäntti 2020). Hence, the importance of a military logistics focus within today’s armed forces is justifiable, given the uncertainty embedded within military expeditions and operations (McConnell et al. 2021).

Military logistics refers to a group of diverse activities that systematically, completely and continually support the needs of the military forces (Prebilič 2006). While this description might seem quite clear, a major challenge for logistics management is the task of ensuring that there is a single, shared understanding of what logistics means among the stakeholders, e.g. service providers, suppliers, etc. especially concerning the class of items included within its logistics description. For example, Acero et al. (2019) suggests three main aspects necessary for operating military logistics include production or acquisition logistics, in-service logistics, and consumer or operational logistics. These areas span the entire scope of the supply chain from procurement to receiving and storage of about 1 million material items with a unique identification numbers including its distribution, maintenance, and support services to end-users. As such, while logistics definition from a business perspective emphasizes activities that make up the concept, logistics within the military context goes one step further to include emphasis on the identification of classes of items that constitute logistics independently.

Logistics involves the planning and implementation of relocation, maintenance, and supply of units and divisions aimed at establishing, maintaining, or developing the units’ combat value, including medical care (e.g. Försvarsmakten 2016). For example, Sweden employs the North Atlantic Treaty Organization (NATO)’s five-point classification system for identifying items within this definition (Table 1). A common definition used by NATO members describes logistics as “ … the science of planning and carrying out the movement and maintenance of forces. In its most comprehensive sense, the aspects of military operations that deal with: design and development, acquisition, storage, transport, distribution, maintenance, evacuation and disposal of material, transport of personnel; acquisition or construction, maintenance, operation and disposition of facilities; acquisition or furnishing of services; and medical and health service support” (NATO 2012, NATO Logistics Handbook, p. 20). This definition identifies five classes of supply items as discussed above (Table 1).

Table 1. Classification of military logistics components across forces.

Class	United States Classification	Class	NATO/Swedish Classification
1	Sustenance and water	I	Sustenance and water
2	Individual clothing and equipment	II	Supplies for which allowances are established by tables of organisation
3	Petroleum, oils and lubricants	III	Petroleum, oils and lubricants
4	Field fortifications and supplies	IV	Fortification and construction materials, additional quantities of class II, and other supplies
5	Ammunition, mines and explosives	V	Ammunition, explosives and chemical agents
6	Re-sale and personal items
7	Major equipment
8	Medical and dental
9	Spare parts
10	Aid to civilians

Similarly, the Department of Defense (2016) defines logistics as “ … .the science of carrying out the movement and maintenance of forces.” Despite its brevity, the definition presents a detailed taxonomy of 10 classes of logistics items further sub-divided based on consumer classes (troops, equipment, and civilians). Table 1 compares the US and NATO reference item showing that the US classification system focuses more on diverse categories of items supporting transportation and warehousing, while the NATO system has one class, i.e. Class II, focusing on the required items for military units and another class, Class IV, for replenishment of military units. On the whole; the US classification focuses on logistics planning and national capacities, while the Swedish Classes focus on organizational and operational needs (Skoglund 2012).

Theoretically, the concept of logistics remains the same between military as well as business. While logistics is the backbone of business logistics, military logistics makes it possible to carry out tactics and implement strategy (Prebilič 2006). Literature on definition of military logistics abound (e.g. De Jomini 1838/2007/2007; Foxton 1994) and organized across three main categories (Kress 2016).

The first includes historical accounts of logistics applications in wars and operation, the second is made up of doctrinal documents and manuals published by military organizations and lastly is a group of publications that include theoretical essays that probe the structure and essence of logistics. These literatures propose several conceptualizations of logistics.

Thorpe (1917) sought to distinguish military logistics into pure and applied logistics, where pure logistics involved theoretical aspects while applied logistics refers to the implementation of insights gained from pure logistics. Kress (2016) highlights the artistic and scientific alternatives of viewing logistics; the argument seeks to differentiate the physical, quantifiable relations between entities, which make up the scientific facet of logistics, from the more creative and intuitive qualities such as leadership, morale, that is the artistic facet. In the same vein, Kress (2016) goes on to draw an analogy between war and a production system as an expedient way to understand logistics. A production system is a collection of entities and processes that consume inputs to produce one or more outputs of higher value than the inputs (Kress 2016). Given the emphasis on output of the production, the analogy depicts the act of war as a (production) system which produces output from inputs, including maneuvers, engagement, and firefights (Kress 2016). Inputs describe two main components, means and resources, where the means refer to the actual armed forces, i.e. the soldiers, its weapons, and intelligence operations, while resources refer to the movement and handling of all item components within the classes defined in Table 1. Thus, it works to ensure that resources arrive in a state in which they can be used, stored, or maintained.

Given the significant role of logistics within this conceptualization of war as a production system, Kress (2016) defines logistics as “ … .a discipline that encompasses the resources needed to keep the means of a military process (operation) going in order to achieve its desired outputs (objectives). It includes planning, managing, treating, operating and controlling these resources.”

Over the decades, militaries have employed three major logistics strategies to the sustenance of military operations, and these strategies have been extensively treated within literature (e.g. Foxton 1994; Kress 2016; Skoglund 2012; Tuttle 2013; Van Creveld 1977, 2009). Most often applied for US classes 1–4 and 6 (Table 1), the logistics strategies include obtain, carry, and ship. Obtain describes a strategy where resources and supplies are obtained as troops make their way towards the frontline by, for example, going through cultivated areas or major trade routes where food and fuel could be foraged, coveted, or purchased. Within the carry strategy, logistics implementation means that troops carry all required supplies with them to the frontlines, including inventory stock for a steady supply of replenishment. This strategy is used for limited operations or for the startup phase. Send, a result of the industrial revolution involving advances in transportation and communication, refers to a logistics implementation where material, resources, information, etc. travel from different locations behind the frontline to support the troops.

Logistics today require innovative approaches and skills, new technologies and equipment is required to understand and handle contemporary logistics challenges, while preparing solutions for future challenges. As such, it is vital to understand growth conceptualization from a number of theoretical perspectives, which may then be integrated to develop a meaningful framework for operationalizing logistics growth for the military forces. Without doubt, military growth is a balancing act between operational and logistics needs. The following section reviews theoretical perspectives of growth.

Growth: three theories and the industry perspective

The nature of growth within organizations has been extensively treated within literature, focusing on small companies (e.g. Coad 2009; Geroski 2002; O’Farrell and Hitchens 1988; Penrose 1959; Sutton 1997), entrepreneurship (Gundry and Welsch 2001; Mata 1994; Ostgaard and Birley 1995) as well as in military distributions (e.g. Longhorn and Muckensturm 2019). Across the growth literature, there is an apparent chasm between studies focused on identifying techniques and variables to measure growth as some sort of quantitative increase in some variable and those seeking explanations as to why, and how firms grow. The latter is of fundamental interest in this paper. While the study of growth is largely heterogeneous in nature within literature (Delmar, Davidsson, and Gartner 2003), management, economics, ecology and organization and entrepreneurship have heavy influences on the theory and practice of growth. These literatures split growth along the lines of size, where small and medium enterprises (SMEs) are generally classified as small firms.

Economics theory

Early theoretical work into growth of organizations presumes that in order to create greatest value, organizations are to be at their optimal size, and if not already there, are expected to grow to reach it (Coad 2009). Thus, based on this neoclassical economics theory perspective, firms are attracted to the idea of optimality (size) of organizations (Viner 1932), as it is presumed to be the profit maximizing size for organizations (Coad 2009). Hence, growth occurs solely as a means to achieving profit maximization.

A model closely related to the neoclassical economics growth theory contends that the rate of growth of organizations has no association with company size and as such uncorrelated with time (Stanley et al. 1996). Gibrat’s (1931) law, also known as the law of proportionate effect, suggests that regardless of size, firms will have the same average proportionate growth rates (Samuels 1965). Studies testing the law show mixed results, and the reasons for these discrepancies include such factors as type of ownership; industry uncertainty and ownership structure (e.g. see Fiala and Hedija 2019). However, the law presents a straightforward recognition of firm heterogeneity concerning growth and thus remains useful.

Penrosean theory

According to Penrose (1959), the growth rate of a firm can only be constrained by limiting capacities within its existing management and leadership. The theory asserts that firms grow because of the economies of growth embedded within them, and not due to any other advantages such as size. Penrose (1959) refers to such economies of growth as unused services capabilities within the management usually concealed in the form of unused abilities. They constitute waste when unused, but are profitable and can create competitive advantage when properly exploited. Growth originates and is managed from inside the firm, where managers’ motivation and conscious decision-making are significant factors in driving growth. Penrosean growth is also associated with economic growth, given that firms use resources to generate value, which are only meaningful in the context of the firms’ unique environment. Hence, profit becomes a condition that must be satisfied in order to achieve growth. Penrose (1959)’s idea of growth fundamentally depends on the resources of the firm and at the time, set the groundwork for the resource-based view (RBV) (Lowe and Teece 2001). Nason and Wiklund (2015) present arguments on how the core elements of the resource-based view, i.e. the valuable, rare, inimitable, and non-substitutable (VRIN) (Barney 1991) explain growth. Barney’s VRIN resources allow unique growth opportunities present within the environment to be exploited (Alvarez and Busenitz 2001), protecting the first-mover advantage after the exploitation of these opportunities. However, Nason and Wiklund (2015) show that the VRIN resource-based logic of RBV do not explain firm growth, and suggest further VRIN research building on the Penrosean theory.

Ecology theory

The demographic model (Carroll and Hannan 2000) operationalizes growth as changes in firm size, i.e. for example the number of employees and the changes in size that occur as the population changes. However, because this model is based on the theory of population ecology, its reference to growth as change in size is different from the economics size perspective, which emphasizes optimality in growth. Population ecology theory asserts that change (growth) occurs at the population level, resulting from environmental selection processes of organisations that take place to ensure the selection of the fittest organizations for the prevailing operating environment (Carroll 1988). As such, the theory predicts that growth require resources that are specific to its niches and that these niches have maximum carrying capacities (Coad 2009). Niches can refer to industries, specializations within industries, e.g. biotech with the technology industry, or even not-for-profit organisations (Hannan et al. 1995; Simons and Ingram 2004). Population ecology’s focus of growth from a niche perspective suggests that heterogeneity of firms, as an explanation for the conflicting growth outcomes within literature, is irrelevant within this perspective. This is because the fundamental unit of analysis within population ecology is the population of organizations within the given niche as opposed to the individual organisation within the population (Coad 2009), and therefore differs from economic growth.

Theoretical overview

Overall, the three theoretical perspectives differ in how size is conceptualized in the process of growth. Within the economic perspective, the purpose of growth is to reach optimal size, and as such, growth is presumed to be terminal, as once organizations reach their optimal size, no further growth is feasible. From the management and entrepreneurship literature on the other hand, growth is predicted to be infinite, as long as organizations possess the resources to enable the firm to continuously generate profit, with motivation from managers and leaders. While this theory does not quantify growth, it focuses rather on how organizations are able to use its resources to create growth. Here, size is seen only as an outcome of past growth incidences (Coad 2009), and as such there is no limit to firm size. Population ecology theory, upon whose assumptions the demographic model addresses growth, quantifies growth through increase, e.g. employee turnover and company revenue. However, this model represents just one aspect of the population ecology theory, i.e. the assumption that organizational changes occur at the population level through net migration or deaths and births of firms within its niche (see Hannan and Freeman 1989). As such, for a population ecology perspective, growth must be analysed from the niche perspective.

While firm size remains one of the most studied variables of growth, other concepts contribute to the understanding of growth and the characteristics that influence growth within and across theories. Delmar and Davidsson (1998) assert that measuring firm growth requires the consideration of four main issues. They include the growth indicator (the variable over which growth is observed); measure of growth (i.e. relative vs. absolute growth) and the period over which growth analysis occurs. The relationship between growth and size, however, touches on the issue of the type of growth, as understanding how growth is measured, whether in absolute or relative terms, is important (Delmar and Davidsson 1998; Delmar, Davidsson, and Gartner 2003). Absolute growth denotes raw changes in the sizes of the measurement indicator used to depict growth, usually between two time points. On the other hand, relative growth refers to the annual percentage change in the indicators applied to the analyses (e.g. Delmar, Davidsson, and Gartner 2003).

Related to the type of growth is the actual measurement used to estimate growth; the number of indicators used to depict growth are rather vast (Coad and Hölzl 2010). The most popular indicators of growth are employee numbers and sales (Delmar 1997) due to their ease of use and accessibility; productivity where theoretical views vary from negative (e.g. Penrose 1959) to positive (McCombie 1987) associations with firm growth; market share, physical output, and assets (Delmar 1997). While there is yet no best composite measure of firm growth (Delmar, Davidsson, and Gartner 2003), using an array of indicators can act to divert attention from the purpose of the measurement exercise (e.g. Davidsson and Wiklund 2000).

Table 2 summarizes the growth literature across the three theoretical perspectives identifying the perspectives of growth within the different theories and the premise upon which they achieve identified growth.

Table 2. Theoretical growth perspectives overview.

	Perspectives of Growth	Premise
Economic theory	Size	Profit maximization/optimal size
Penrosean theory	Leadership	Limiting capabilities/economies of growth
Ecology theory	Change/Niche	Environmental selection/carrying capacity
Industry/practice	Performance	Logistics/scalability/IT

Alongside size, age is also frequently investigated as a determining characteristic of growth (e.g. Navaretti, Castellani, and Pieri 2014; Yasuda 2005) revealing a negative relationship between age and growth. However, literature demonstrates that in terms of job creation, older firms have been shown to create more jobs than new firms (Davidsson, Lindmark, and Olofsson 1993). However, growth undertaken via internal means are usually more profitable because they show smoother development patterns over time (Penrose 1959), compared to growth achieved through external acquisition.

Industry-based growth concepts: logistics, scalability, and IT

Most of the metrics used to measure firm growth inevitably involve logistics and its performance. For example, the performance and efficacy of organizations, regions, or nations can be determined by their logistics performance (Rashidi and Cullinane 2019). Literature over time has shown significant correlations between the logistics industry and the growth of the economy (e.g. Alnipak, Isikli, and Apak 2021; Feng, Chen, and Yao 2010; Zhang and Chen 2014), this relationship is found to be weak (Chakamera and Pisa 2021) mostly in developing countries due to lack of infrastructure investment (see also Klaus 2009). Logistics thus undertakes a central role in an economy by prompting several management aspects like storage, transport networks, packaging services, organization, implementation, communication and information technology, amongst other factors (Li et al. 2021; Sharipbekova and Raimbekov 2018), without which organizations, regions, and ultimately countries cannot achieve growth (Chakamera and Pisa 2021). Logistics work to lower transaction costs, increase productivity and enable better resource utilization (Navickas, Sujeta, and Vojtovich 2011), providing critical linkages to employment and economic growth (Wong and Tang 2018). Thus, logistics remains the backbone of the global economy (Liu et al. 2018). However, the discourse of logistics of growth per se, remains obscure within supply chain management and military logistics literature.

Two main reasons that may affect the proliferation of logistics growth discourse within logistics and SCM literature can be advanced here. First, the overarching view of growth within management generally ties logistics to the organization in such a way that growth is embedded within it and viewed as an outcome of the overall growth strategy of the organization. Logistics is not treated as a strategic stand-alone aspect of organization operations whose growth can and should be independently evaluated. Thus, as the organization grows, logistics capability and operations within the organization tend to follow closely behind such growth. A major reason for this is the way growth literature define and undertake the growth discourse, i.e. for example using such indicators as increase in the number of employees; increase in assets; increase in profit, etc. While such measures tend to depict overall organizational growth quite well, they are, however, poor indicators of operational aspects of the organization such as those undertaken by the logistics function. Even though logistics is generally viewed within the context of the firm (e.g. Cavinato 1998), logistics can also be undertaken and optimized as a stand-alone function, for example planning, performing and optimizing logistics solutions for a single entity (e.g. Rousseau, Montaville, and Videlaine 2012). Here, firms use its own logistics means and resources to satisfy customers’ needs, planning its decisions independently of other organizations (Aloui et al. 2021).

A second reason advanced for the dearth of literature on logistics growth is logistics cost accounting. Identifying and measuring logistics cost parameters within the organizational accounting information system present challenges for organizations. Because cost centers within logistics functions revolve around the class of organizational costs referred to as capital assets and overhead costs, e.g. trucks, warehouses, etc., logistics costs per se are typically not isolated within its accounting systems (Stępień et al. 2016). Growth is consequently not analyzed from a logistics perspective, but from an overall organization perspective, which considers the minimization of logistics cost as the basis upon which favorable financial results are achieved (e.g. Stępień et al. 2016).

Regarding the concept of growth within supply chain management and logistics, the last two decades or so, has seen customers’ growing demand for faster, better, more value added, and innovative logistics services. This has, largely, pushed the limits of the concept of growth within logistics (e.g. Rousseau, Montaville, and Videlaine 2012), requiring integrated rather than stand-alone services from logistics service providers (Carbone and Stone 2005). As supply chain customers seek to use logistics firms to create competitive advantage for themselves, end-customer needs continued to evolve over time, compelling logistics firms to continuously re-evaluate their value and service propositions and strategies. As such, growth within logistics is bourne out of the need for logistics firms to satisfy customers, given that customers are central to an organization’s growth strategy (Mohapatra and Patra 2017). The heterogeneity of growth conceptualization, as observed within the management and organization literature, applies to logistics as well.

Thus, Hylton and Ross (2018) show agglomeration economies as the main medium through which logistics firms grow and define growth, in this case, as an increase in the concentration of logistics organization or logistics employment within identified logistics clusters. Here, increase in size as well as increase in the number of logistics employees depict logistics growth.

Another growth strategy discussed within the literature is mergers and acquisitions. Carbone and Stone (2005) used mergers and acquisitions (M&A) to investigate growth within European third-party logistics (3PL) organizations and show that logistics firms that possess the financial capacity primarily seek to undertake external growth strategies. Pressure from customers to widen the scope and range of services offered lead firms to respond by consolidating within the logistics sector, where such strategies as joint ventures sometimes represent a first step to a merger or acquisition (Carbone and Stone 2005; Stone 2001, 2002). While M&A focus on long-term growth, literature discusses alliances as a means of achieving growth, albeit for a short-run period. However, literature suggests that growth for logistics firms is more about the ability to provide extensive cohesive coverage of its logistics services to all its customers and stakeholders, and less about increase in size, which is relevant for the firm (Figure 1).

Figure 1. Logistics growth trajectory [authors’ conceptualization].

An option for logistics growth that does not focus on size is the idea of scalability. Often applied within IT and multi-processor electronic systems, scalability also functions as a means to understanding growth within business models, i.e. the ability of such business models to exploit economies of scale (Rappa 2004). While there is no generally accepted definition within literature (Hill 1990), the idea of scalability is closely related to the growth potential of an organization (e.Stampfl, Prügl, and Osterloh 2013), and commonly used within a technological context to describe the ability of a system to accommodate an increased workload (Hill 1990). From a business model perspective, Hallowell (2001) defines scalability as the capability of a business model to increase revenues faster than its equivalent cost base, and essentially describes a system’s ability to expand output on demand when resources are added (Nielsen and Lund 2018). Scalability for optimal functionality thus require operation models that allow for the exploitation of economies of scale within the model design.

The application of scalability within business has been discussed from a number of perspectives. Stampfl et al., (2013), based on a literature analysis and semi-structured expert interviews identify five factors that can influence scalability within business model conceptualization. First, technology; given its origins within IT systems, scalability is closely linked to technology, as it represents the core aspect of a system that enables scalability. This happens via automation, e-business model design, etc., as these tend to reduce the dependence on human resources. Second, cost and revenue arrangements are important consideration within the scaling process, as identifying and growing revenue streams while keeping the cost structure low remains a major purpose for growth. Similarly, within this factor, Nielsen and Lund (2018) advocate that shifting capital requirements to partners would allow firms to prioritize investments and optimize cash liquidity in order to reduce capacity constraints. Third, adaptability to the numerous legal regimes that scalability might warrant because of growth or expansion. The ability to transfer business models across countries and even continents is essential for scalability and growth, but this comes with different legal obstacles that must be navigated. Fourth, network effect can occur in physical or electronic networks and act to enhance the overall reach of the scalable model. Network effects refer to a situation where, as more users value a product, the more other users are attracted to it, hence growing the network and making network effects a scalability factor.

Platform-based business model innovation can leverage the position of partners for the benefit of the firm, e.g. developing business models that turn competitors to customers (Nielsen and Lund 2018). Finally, concerning user orientation, Schreier and Prügl (2008) suggest that simplistic models that seek to solve real problems develop around existing user knowledge and as such scale more easily. Hallowell (2001) develops a scalability continuum defining four groups of services and their ease of scalability from high to low based on the complexity of the provided service. On the high end of the scale is information, as these types of service providers deal with few physical services, the ability to scale its services is very high. Next are products that require standard handling, such as books, clothes, etc., and next on the scale, we have customized products or services but require standardized handling procedures. The products or services with the lowest scalability according to Hallowell (2001) are unique products/services that also require unique handling, such as paintings and antiques.

More recently, technology and innovation literature have contributed to the theoretical discourse of firm growth and competitiveness (Lin and Chen 2007). Because just reducing cost and enhancing product service no longer suffices to gain advantage over competitors, innovative processes that push the boundaries of state-of-the-art technology is also required (Porter and Stern 2001). In their study into the relationship between innovation practices of firms and performance, Lin and Chen (2007) showed administrative innovations to be a more crucial factor in explaining growth in sales than technological innovation.

Following from Porter and Stern (2001), this implies that while possessing the latest technology may allow an organization catch up with its competitors, surpassing technology leaders requires technologically oriented innovative activities within the area value is sought. While a lack of consistency in the operationalization of innovation is acknowledged, Garcia and Calantone (2002) define innovation as “…an iterative process initiated by the perception of a new market and/or new service opportunity for a technology-based invention which leads to development, production, and marketing tasks striving for the commercial success of the invention.” As such, technological innovation involve creativity within such disciplines as engineering, applied sciences, industrial arts, pure sciences, etc (Garcia and Calantone 2002).

The definition of innovation above addresses three important distinctions: first is the fact that a technology-based invention must be involved; second is the focus of the innovation on the ultimate end-user and third, the continuous iteration process that takes place between the first two distinctions. Thus, innovation could be viewed from two important perspectives (Garcia and Calantone 2002): first, a comprehensive or strategic perspective, that seeks to develop the capacity to bring about a paradigm shift in the technological and market configuration of an industry. Second, a focused or operational perspective where the goal is to develop the capacity to influence the sum total of the organization’s resources, including marketing, technological, talent, knowledge, strategy, etc., as a result of a given innovation.

This focused/operational perspective to innovation is of interest to the conceptualization of logistics growth within this paper and hence the military. Henceforth, we refer to the collection of growth strategies developed in this section as hybrid growth. The hybrid growth concepts considered present enough breadth within the literature to contribute towards enhancing our understanding of logistics growth for the armed forces while broadening the operative perspective of logistics growth for military use.

Governance-performance typologies and growth

Based on the governance (Frankel et al. 2008) and performance (Parsons et al. 1961) frameworks, Chelariu et al. (2014) seeks to strengthen the literature on inter-firm and collaborative relationships within supply chain management. This is because power and influence as basis for relationships are usually lost in the use of such supply chain management concepts like integration, coordination, etc. As such, Heide (1994) defines governance as an approach to organizing transactions that include the initiation, maintenance and termination of relationships among a group of actors and goes on to identify three forms of inter-firm governance. Market governance refer to distinct transactions, consistent with a short-term orientation where inter-firm relationships reflect discrete relations that end after every completed transaction (Keysuk and Frazier 1996). Examples of organizational typologies that reflect market governance include governmental agencies and parastatals as observed within public procurement.

Unilateral governance refers to a non-market governance that includes aspects of power asymmetry, where one party develops, dictates, and imposes decisions on the other parties (Li and Dant 1997). Here, contracts with explicit specification of tasks and behavior govern exchanges. This form of governance accurately reflects the nature of command and control (C2) typically characteristic of professional armed forces. Command and Control is “a human activity that aims at solving (military) problems” (Brehmer 2010), and based on that Spak and Carlerby (2018) define C2 as the design and execution of courses of action to achieve (military) goals. It essentially involves the use of authority by a designated commander over forces in the accomplishment of operations. Lastly, bilateral governance refers to exchange relations based on social processes, norms, and cooperation among exchanging parties (Li and Dant 1997). As such within this governance form, the relationship is the foundation of exchange. These types of exchanges are common among traditional for-profit firms and commercial organizations.

For organizations seeking to grow, it is critical to understand and manage how such growth progresses over time (Gupta, Guha, and Krishnaswami 2013). While the life-cycle approach remains widely used, the performance of growth and its measures within literature suggests governance measures predominantly from a market or economic perspective, as discussed above. However, from a relational perspective, there is a need to expand the measures of performance of growth to include all four categories of performance, i.e. relationship, operational, strategic and economic measures. Economic measures are used to determine the extent to which organizations receive economic value, or provide value to partners (Chelariu, Asare, and Brashear-Alejandro 2014). Examples of economic measures can include profit, sales, asset, etc. Operational performance measure the degree to which organizations fulfill their operational obligations to customers and clients, and measures can include error rate, lead-time, on-time delivery, etc.

Relationship measures relate to the quality and strength of the relationship between a firm and its partners, e.g. commitment, cooperativeness, etc. Strategic measures indicate the extent to which a firm is achieving its long-term strategic plans, e.g. contribution to growth. Strategic measures can also be used to benchmark competitors. However, in addressing the governance-performance typologies within growth, we apply the performance and governance frameworks to demonstrate the critical relationships between governance, performance, and growth (Figure 2). Based on literature, the matrix focuses on the organization type and suggests that governance typologies can determine the sources of growth an organization undertakes, because the organization is the main unit of growth. For example, organizations with market governance typologies are to employ more of hybrid growth strategies, and utilize economic measures to monitor performance.

Figure 2. Relationships between governance, performance and growth [authors’ conceptualization].

Framework development and research propositions

To investigate the theoretical antecedents of logistics growth, we sought to review three established theories and integrate them to develop a meaningful theoretical framework for further research work. However, we argue that the development of military logistics require support from the established theories as well as established logistics and supply chain practices in industry to develop a growth concept for military application. Militaries are unique in their composition, leadership structure, resources, and environment and developing such a critical concept requires the understanding and consideration of these unique characteristics. Hence, this study attempts to integrate the aforementioned theories and hybrid growth concepts to obtain a comprehensive understanding of logistics growth concepts, for subsequent application to the armed forces. Building upon the literature presented above, this section develops a theoretical framework for military logistics growth with contributions from the different theories and applies the hybrid growth (practice) as a sort moderator to support and accelerate innovations that originate from the different theoretical perspectives in the framework (Figure 3).

Figure 3. Proposed theoretical framework [authors’ conceptualization].

From a profit perspective, the military organization is not a business corporation and remains a non-profit entity. As such, there are complexities that could make growth measurement within such entities difficult (Pennerstorfer and Rutherford 2019). While the focus of growth within the economic growth literature is size, the means to achieving this is profit maximization. Profit maximization as a means to operationalize growth within the military is ineffective, given that the military performs a necessary service of protection to the nation.

Economic theory propositions

From a revenue perspective, military organizations, like all other public agencies, are not profit-making institutions and as such possess similar growth challenges. Thus, there exist inherent complexities that can make growth measurement within such entities difficult (Pennerstorfer and Rutherford 2019), especially from a single theoretical perspective. While the focus of growth within the economic growth literature is size, the means to achieving this is profit maximization.

Relating to the transaction cost (Coase 1937), the relationship between logistics and transaction cost could be a positive, as the point of the military logistics supply chain is to coordinate production by fiat when cost are high (e.g. wartime), and engage with suppliers and stakeholders via market mechanisms when costs are low (e.g. peacetime). Thus, the expectation would be that this relationship is positive. Finally, concerning size within the context of economic growth, the theory essentially engages in the process of profit maximization in order to achieve growth but because growth within organizations occur in idiosyncratic ways, the finality of growth within this theory presents a potential negative relationship between military logistics growth and size.

Thus, economic theory propositions include the following:

P1. The relationship between transaction cost and logistics growth is positive.

P2. The relationship between optimal size and logistics growth is negative.

P3. The relationship between profit maximization and logistics growth is negative.

Penrosean propositions

The Penrose theory presents the most straightforward compatibility with the military organization as a growing entity due to the characteristics, motivation and behavior of leaders to propose ideas associated with different types of growth propensities. While the theory is heavily based on (mostly) managerial resources, it corresponds to the resource base of typical militaries whose main resource include the nation itself, the soldiers, equipment, training, etc. Penrose (1959) argues that such resources, which are indivisible and interdependent, can help organizations achieve growth. Economies of growth emphasizes learning by doing where over time leaders and managers become familiar in their roles and routines, thus less time is spent on such tasks and more on other value creating activities and opportunities. This way, knowledge and experience possessed by organization staff increases as this process continues within the organization, emphasizing the age characteristics of growth. This then largely spills over to the ability of the organization to build leadership within the ranks of personnel. However, the Penrose effect, which asserts that organizations that grow too fast will encounter managerial constraints that check such growth, indicates that there can be limits to growth within this theory. Thus, the Penrosean propositions include the following:

P4. The resource base has a significant positive effect on logistics growth.

P5. Economies of growth has a significant positive effect on logistics growth.

P6. Leadership and entrepreneurship has a positive effect on logistics growth.

Ecology theory propositions

Ecology theory’s focus is the niche, which is the n-dimensional abstract space describing the characteristics of the resources a species needs to survive (Hutchison 1957). As discussed earlier, the niche could refer to the industry as a whole or specializations within the industry, and as such, growth within this theory focuses on the ability of entities within niches to survive as these niches continually undergo change. Thus, we expect a positive relationship between logistics and the niche, due to the specialized nature of the military within a state, and in most cases does not share the resources available within that niche with any other competing entity. In a similar disposition to the optimal size, carrying capacity, as defined within literature, refers to a situation in which organizations saturate the niche and deplete available resources within the niche so that resources can no longer support the population. Given the unique position of the military, this is unlikely to happen and thus presents a positive relationship. As such, propositions include the following:

P7. The niche concept has a positive relationship with logistics growth.

P8. Environmental change has a positive relationship on logistics growth.

P9. Carrying capacity has a negative effect on logistics growth.

Based on the above-developed framework, propositions that make up the theoretical antecedents to logistics growth span economic, management, and ecological constructs depending on the theoretical lenses applied. Conceptualizing the military as a unilateral organization, tradeoffs between growth, performance, and governance are used to better understand how to enhance growth within different organizational structures. The military organization demonstrates least compatibility with the economic theory and most compatibility with the Penrose and population theories. However, the focus of Penrose on how the idea of economies of growth, leadership and resource bases help to achieve growth could be valuable to structured and hierarchical organizations such as the armed forces. However, the theory does not specify a particular growth rate, but rather suggests that certain combinations of underlying factors and decisions made regarding the operations and activities of organizations can result in a growth outcome. Finally, combining the three theoretical perspectives, we espouse five emergent growth concepts (Figure 4) capable of supporting a military logistics growth framework. This in combination with hybrid growth factors (scalability, IT/innovation and logistics) discussed above allows for the handling of flexibility, environmental uncertainties and innovation within military logistics.

Figure 4. Emergent growth concepts across the three theoretical perspectives.

Conclusion

Logistics is essential to the armed forces, and its ability to grow is critical to any nation’s sovereignty and security. The heightened focus on logistics growth within the military reflect the recent changing security situation and events in Europe, even though there is a lack of such growth discussions within literature. Although literature on logistics growth within the military already face inherent coordination challenges in the form of the varied definitions and the consequent reference classes applied across the major allied forces, the current European security situation challenges the collaborative capability of such alliances. This can have devastating impacts on national securities of vulnerable countries on the continent.

First, we show that within logistics and SCM literature, logistics growth is treated as an organization cost center with the firm. However, literature review findings show that organizations could develop their logistics strategies for growth in ways that allow for scaling, including modular logistics systems and digital platforms.

Second, we investigated logistics growth by reviewing logistics and SCM literature to identify emergent growth concepts applicable to military logistics via nine propositions across three theoretical perspectives – population ecology theory, economic theory, and Penrose theory. While the developed propositions are mostly positive, the negative interactions between logistics growth and optimal size and profit maximization can have undesirable implications for logistics growth. We rather argued for a combined (theoretical and industry-based practice) approach for a better fit between logistics growth concepts identified and military practice. Based on the study’s results, we developed a theoretical framework to show how theoretical as well as practical perspectives from different disciplines and industries can influence military logistics growth.

Our findings have implications for military growth research and practice by revealing how military leaders may bypass traditional growth approaches to using a variety of theoretical and innovative strategies to develop collaborative and flexible techniques to plan for and manage logistics growth within an inter-disciplinary (e.g. Baciu 2022) environment. The study makes important contributions by extending the limited research on logistics growth within the military, and thus is among the first to consider logistics antecedents for growth applications in a military context. Second, it identifies hybrid growth as a moderating role between the three theoretical perspectives and logistics growth innovation, thus, explaining the mechanisms through which theoretical ideas may be tested and subsequently realized.

Future research based on the propositions will seek to extend current theory on logistics growth by developing empirical case perspectives alongside best practices within the armed forces. This is critical, as logistics remains an academic discipline as well as an operational subject.

Acknowledgments

This research is funded by the Swedish Defence Forces and authors hereby acknowledge that an earlier version of this paper is contained in the report Antai, I., Hellberg, R. and Skoglund. P. (2021). The Straight Road to the Goal: Conceptual framework for Development of Logistics Activities Related to an Increased Defense Ambition. Research and Development. A preliminary draft of this article was presented and discussed at the 34th Annual NOFOMA Conference June 8–10, 2022, Reykjavík, Iceland. The current article has been significantly extended.

Additional information

Funding

The work was supported by the The Swedish Defence Forces .

Notes on contributors

Imoh Antai

Imoh Antai is a senior lecturer at the Swedish Defence University (SDU), Stockholm. His research interests include the growth phenomenon within the military forces, logistics and supply chain management more broadly, but he also retains interest in the application of geographical information systems (GIS) within business, environmental, as well as security issues that may lie at the intersection of unfolding climate and energy trends. He teaches Logistics, Project Management and Supply Chain Management.

Roland Hellberg

Roland Hellberg has been working with research on defence supply chains at the Swedish Defense University in Stockholm since 2021. Dr Hellberg received his doctorate in Linköping in 1992 on the topic of synchronized material supply/Japanese production philosophy.

Dr Hellberg has researched, taught, supervised and been course and program responsible at several academic institutions in Sweden and Norway (in total more than 20 years) in subjects related to master education programs in Industrial Engineering and Management. Hellberg has mainly worked within cross-disciplines and applied subjects such as supply chain management, sourcing, logistics, lean improvement, quality assurance/TQM, project management, inventory and production control, innovation and business development. In addition to the academic experience, Dr Hellberg has 20 years of business experience from various management positions in Swedish and Norwegian companies with logistics as their core business, e.g. the Swedish Post – International mail, Bonnier book distribution, Linjegods (transport company).

Per Skoglund

Per Skoglund is head of the Division for Functions and Perspectives at the Swedish Defence University. The position comprise the academic responsibility for the division’s education and research, and the head of Defence Logistics Group. He also has part-time employment as associate Professor at The Norwegian Defence University College. During the period 1990–2015, Per has held several different positions at Swedish Defence Headquarters and Swedish Defence Procurement Agency (FMV) including; Senior advisor in logistics, Director of Logistics, and project leader integrated logistics support for the Leopard2 and CV90 systems. Per started his military career as an officer at the artillery regiment A9 in Kristinehamn. Per has his PhD in Business administration from Jönköping International Business School. His dissertation has the title: Sourcing decisions for military logistics in Peace Support Operations. Per holds a Master Degree in Mechanical Engineering from Chalmers University of Technology as well as exams from different military programs at the Swedish Defence University.