Archive | February 2012

The Network Inertia Perspective

In their insightful AMR article, Framing interorganizational network change: A network inertia perspective, Kim et al. (2006) argue that it is often unlikely that firms will replace their network partners based solely on economic motivations. The authors use the term “network inertia” for these constraints on network change and define it as “a persistent organizational resistance to changing interorganizational dyadic ties or difficulties that an organization faces when it attempts to dissolve old relationships and form new network ties”. In their theoretical framework, Kim et al. describe causal mechanisms for the action of constraints on network change and formulate twelve propositions. For instance, the likelihood of an organization to change its network ties is higher if its environment is competitive or its status is high, but this likelihood is lower if the organization is large or old. The framework can be applied to different units of analysis, particularly to supply and demand networks.

Kim, Tai-Young, Oh, Hongseok, & Swaminathan, Anand (2006). Framing interorganizational network change: A network inertia perspective. Academy of Management Review, 31 (3), 704-720 DOI: 10.5465/AMR.2006.21318926

CDP Supply Chain Report 2012

Supply chain thinking enables managers to understand that indirect greenhouse gas emissions (i.e., those from the supply chain) often represent the lion’s share of a company’s total emissions. The Carbon Disclosure Project (CDP) has now published its Supply Chain Report 2012. CDP Supply Chain members are about 50 companies who are requesting climate information from their suppliers. The report reveals that a majority of these companies reward “suppliers that employ good carbon-management practices” and that many of these companies will soon begin to deselect suppliers, if they don’t adopt such measures. Moreover, these companies increasingly factor climate change into the evaluation of suppliers. It has been found that many companies have benefited both from own emission reduction activities and from their supplier’s reduction activities. The report warns that suppliers will soon “see their business move to competitors that can provide better information and clearer evidence of change”, if they do not measure, quantify, and manage their greenhouse gas emissions.