Beyond the contract: managing risk in supply chain relations

H.C. Dekker, J. Sakaguchi, T. Kawai

Research output: Contribution to JournalArticleAcademicpeer-review

Abstract

As a consequence of the development of intensified relations with suppliers, for many firms the supply chain has become a significant source of risk exposure. In this paper we examine firms' use of control practices to manage risks associated with intensified collaboration with supply chain partners. Specifically, we examine how buyers manage risks associated with interfirm transactions through their choice of supply partner, in terms of perceived goodwill and competence trust, and their use of multiple interrelated supply chain management (SCM) control practices. These control practices include contractual contingency planning, performance target setting, operational reviews, information sharing, supplier support and joint problem solving. We collect survey data from Japanese manufacturing firms about their relations with part suppliers to test hypotheses about the associations between transaction risks, selection of trusted suppliers and use of SCM practices. Our results support that transaction characteristics that are at the basis of transaction risks significantly affect the selection of trusted partners to collaborate with as well as their use of various control practices to manage relationships. We also find that in particular competence trust facilitates the use of control practices to support effective SCM. © 2013 Elsevier Ltd.
LanguageEnglish
Pages122-139
JournalManagement Accounting Research
Volume24
DOIs
Publication statusPublished - 2013

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Supply chain
Suppliers
Supply chain management
Management practices
Contingency planning
Target setting
Management control
Information sharing
Risk selection
Manufacturing firms
Goodwill
Problem solving
Buyers
Survey data
Risk exposure
Hypothesis test

Cite this

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Beyond the contract: managing risk in supply chain relations. / Dekker, H.C.; Sakaguchi, J.; Kawai, T.

In: Management Accounting Research, Vol. 24, 2013, p. 122-139.

Research output: Contribution to JournalArticleAcademicpeer-review

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