Examining Transactions within a Supply Chain Context
In a previous post, I presented a discussion about the relationship between transaction cost economics (TCE) and supply chain management (SCM), which was started by Williamson (2008) and continued by Zipkin (2012). This discussion called attention to several theoretical gaps at the TCE/SCM interface. In their 2012 article, Supply Chain-Wide Consequences of Transaction Risks and Their Contractual Solutions, Wever et al. argue that “a shift [is needed] within the TCE literature from a focus on bilateral transactions, to examining transactions within a supply chain context”. They present five models which “(1) provide justification for moving the TCE framework beyond the dyad; and (2) explain the implications of the shift toward an extended TCE framework for the (optimal) use of supply chain contracts”. It turns out that supply chain members need to take into account both transactions on the supply side and transactions on the demand side, as only this can reduce exposure to transaction risks.
Wever, M., Wognum, P.M., Trienekens, J.H., & Omta, S.W.F. (2012). Supply Chain-Wide Consequences of Transaction Risks and Their Contractual Solutions: Towards an Extended Transaction Cost Economics Framework. Journal of Supply Chain Management, 48 (1), 73-91 DOI: 10.1111/j.1745-493X.2011.03253.x
Eight Rules for Formal Conceptual Definitions
Theory-building empirical research needs formal conceptual definitions. Particularly, such definitions are necessary conditions for construct validity. But what is a “good” formal conceptual definition? In his seminal JOM paper, A Theory of Formal Conceptual Definitions: Developing Theory-building Measurement Instruments, Wacker (2004) presents eight rules for formal conceptual definitions: (1) “Definitions should be formally defined using primitive and derived terms.” (2) “Each concept should be uniquely defined.” (3) “Definitions should include only unambiguous and clear terms.” (4) “Definitions should have as few as possible terms in the conceptual definition to avoid violating the parsimony virtue of ‘good’ theory.” (5) “Definitions should be consistent within the [general academic] field.” (6) “Definitions should not make any term broader.” (7) “New hypotheses cannot be introduced in the definitions.” (8) “Statistical tests for content validity must be performed after the terms are formally defined.” These rules are explained in detail in Wacker’s article. I am convinced that Wacker’s rules lead to better measurement instruments.
Wacker, J.G. (2004). A Theory of Formal Conceptual Definitions: Developing Theory-building Measurement Instruments. Journal of Operations Management, 22 (6), 629-650 https://doi.org/10.1016/j.jom.2004.08.002
Collaboration Networks, Structural Holes, and Innovation
Recently, I discovered an article by Ahuja (2000), Collaboration Networks, Structural Holes, and Innovation: A Longitudinal Study, which was published in Administrative Science Quarterly. It contains a framework that “relates three aspects of a firm’s ego network—direct ties, indirect ties, and structural holes (disconnections between a firm’s partners)—to the firm’s subsequent innovation output.” The author suggests that “[t]he more direct ties that a firm maintains, the greater the firm’s subsequent innovation output”. Similarly, he suggests that “[t]he greater a firm’s number of indirect ties, the greater the subsequent innovation output of the firm”. Here, the impact of indirect ties “will be moderated by the level of the firm’s direct ties”. These hypotheses are supported by the results of a longitudinal study. Two competing hypotheses are presented concerning the effect of increasing structural holes on innovation. The empirical results indicate that this effect is negative. Ahuja’s article is among the most-cited ASQ articles.
Ahuja, G. (2000). Collaboration Networks, Structural Holes, and Innovation: A Longitudinal Study. Administrative Science Quarterly, 45 (3), 425-455 DOI: 10.2307/2667105
Interesting × Important = Impact
“What is interesting research?” I recently read an essay by Cachon (2012), What Is Interesting in Operations Management?, published in Manufacturing & Service Operations Management, which starts with just this question. The essay discusses Cachon’s view of “the essential characteristics of interesting research in general and in operations management in particular”. According to him, “[i]nteresting means unexpected—interesting research piques your curiosity, it induces a pause for contemplation, and most importantly, it contradicts how you think about the world”. He also presents a simple rule for an interesting paper: “What was thought to be X is really Y.” Cachon gives several examples that demonstrate how this rule works in the field of operations management and similar examples could easily be found in supply chain management research. Cachon highlights that being interesting is necessary for research, but he also contends that this is not sufficient. To have an impact, research also needs to be important.
Cachon, G.P. (2012). What Is Interesting in Operations Management? Manufacturing & Service Operations Management, 14 (2), 166-169 https://doi.org/10.1287/msom.1110.0375
Supply Chain Management and Corporate Social Responsibility
Two recent disasters in the garment industry, the Tazreen Fashions fire (2012) and the Rana Plaza building collapse (2013), have caused outrage over the lack of social responsibility across global supply chains. In our new article, The Socially Responsible Supply Chain: An Imperative for Global Corporations, Robert Handfield and I discuss three core principles that are essential for ensuring socially responsible business practices and successfully managing the extended global supply chain: First, a program to audit both products and suppliers needs to be implemented; this program must go beyond direct relationships with tier-one suppliers. Second, visibility is important for those categories of supply that cannot be directly controlled; hereby, electronic and smart technologies promise new opportunities. Finally, collaboration is needed to successfully managing a socially responsible supply chain; this includes collaboration across the industry, with local partners, and with universities. It is time to become serious about socially responsible supply chain management.
Wieland, A., & Handfield, R.B. (2013). The Socially Responsible Supply Chain: An Imperative for Global Corporations. Supply Chain Management Review, 17 (5), 22-29
Resource Dependence Theory and Supply Chain Management
In their seminal publication, The External Control of Organizations, Pfeffer and Salancik (1978) have postulated resource dependence theory. Basically, it argues “that organizations are constrained and affected by their environments and that they act to attempt to manage resource dependencies” by setting up different forms of interorganizational arrangements. However, the original theory has sometimes been criticized for empirical and conceptual shortcomings, e.g., for combining the dimensions of power imbalance and mutual dependence in the single construct of interdependence, making theory testing challenging. In their article, Synthesizing and Extending Resource Dependence Theory: A Meta-Analysis, recently published in the Journal of Management, Drees and Heugens (2013) “consolidate 157 tests of [resource dependence theory] and corroborate its main predictions”. They show that the theory is, indeed, “a premier perspective for understanding organizational–environmental relations”. Given that a supply chain is a hybrid of one’s own organization and its environment, this result might encourage new research in our field.
Drees, J.M., & Heugens, P.P.M.A.R. (2013). Synthesizing and Extending Resource Dependence Theory: A Meta-Analysis. Journal of Management, 39 (6), 1666-1698 DOI: 10.1177/0149206312471391
Citations of Excellence Awards 2013
Some of you may remember my last year’s post about the 2012 Citations of Excellence Awards. A year has passed since and Emerald Management Reviews has now announced the winners of the 2013 Citation of Excellence Awards. I went through the list of 50 awarded papers and discovered two papers which I think are particularly relevant to our field. First, a paper by Lawson et al. (2009), Knowledge Sharing in Interorganizational Product Development Teams: The Effect of Formal and Informal Socialization Mechanisms, reveals that informal socialization mechanisms, including communication guidelines and social events, “play an important role in facilitating interorganizational knowledge sharing”. Second, a paper by Pagell and Wu (2009), Building a More Complete Theory of Sustainable Supply Chain Management Using Case Studies of 10 Exemplars, examines the supply chain as an entirety and builds “a coherent and testable model of the elements necessary to create a sustainable supply chain”. Congratulations to the winners of the awards.
Lawson, B., Petersen, K.J., Cousins, P.D., & Handfield, R.B. (2009). Knowledge Sharing in Interorganizational Product Development Teams: The Effect of Formal and Informal Socialization Mechanisms. Journal of Product Innovation Management, 26 (2), 156-172 DOI: 10.1111/j.1540-5885.2009.00343.x
Pagell, M., & Wu, Z. (2009). Building a More Complete Theory of Sustainable Supply Chain Management Using Case Studies of 10 Exemplars. Journal of Supply Chain Management, 45 (2), 37-56 DOI: 10.1111/j.1745-493X.2009.03162.x
Supply Chain Management and Bioinvasion
We all know that economic, ecological, social, and ethical aspects need to be considered when managing global supply chains. This includes topics such as resource scarcity, climate change, and labor conditions. So far, however, I did not associate bioinvasion with our field. This has changed now: An article by Seebens et al. (2013), recently published in Ecology Letters, discusses the risk of marine bioinvasion caused by global shipping. The authors argue that “the rate of biological invasions has strongly increased during the last decades, mostly due to the accelerated spread of species by increasing global trade and transport”. They demonstrate that forecasting of bioinvasions needs to take into account information about ballast water transport, biogeographic distribution, and environmental heterogeneity. Particularly, they identify “high-risk invasion routes, hot spots of bioinvasion and major source regions from which bioinvasion is likely to occur”. In sum, their model reveals a new aspect of ecological responsibility in supply chains.
Seebens, H., Gastner, M.T., & Blasius, B. (2013). The Risk of Marine Bioinvasion Caused by Global Shipping. Ecology Letters, 16 (6), 782-790 DOI: 10.1111/ele.12111
Toward a Theory of Supply Chain Management
We have to admit that there is still no such thing as a “theory of supply chain management”. A new article by Mena et al. (2013), titled Toward a Theory of Multi-Tier Supply Chain Management, might bring us one step closer to such a theory by taking into account that supply chains have become more complex, more fragmented and longer. This piece of research, which is based on an inductive case study research design, hands theory-testing researchers interesting propositions on a silver platter: First, depending on the supply chain position, the members of the supply chain draw power from different sources. Second, the buyer needs to connect directly with the supplier’s supplier (“closed supply chain”) to influence product characteristics. Third, with a growing degree of such a direct connection, power is increasingly replaced by trust. Finally, closed supply chains are more stable, but require more management resources.
Mena, C., Humphries, A., & Choi, T.Y. (2013). Toward a Theory of Multi-Tier Supply Chain Management. Journal of Supply Chain Management, 49 (2), 58-77 DOI: 10.1111/jscm.12003
Rigor and Relevance in SCM Research
Good research stands out through relevant research questions which are answered applying rigorous research methods. Researchers routinely signal methodological rigor in a detailed methods section and reviewers take great care to check whether all methodological steps are applied properly. Besides rigor, it is necessary to ensure that research is relevant in terms of both theoretical and practical contribution. The former is usually reflected in a comprehensive theory section. The latter, however, is often just being skipped. Reviewers are rarely practitioners! It has, indeed, been demonstrated that practitioners often disagree that operations management research papers are useful to their practice (de-Margerie and Jiang, 2011). Salvador (2011) suggests “to get in contact with practitioners and to try to understand how they react to the central theoretical ideas proposed”. Moreover, I believe that reviewers should routinely ask for at least one paragraph on how the researcher has ensured practical relevance, e.g. by involving a practitioner panel.
de-Margerie, V., & Jiang, B. (2011). How relevant is OM research to managerial practice? An empirical study of top executives’ perceptions. International Journal of Operations & Production Management, 31 (2), 124-147 DOI: 10.1108/01443571111104737
Salvador, F. (2011). On the importance of good questions and empirically grounded theorizing. Journal of Supply Chain Management, 47 (4), 21-22 DOI: 10.1111/j.1745-493X.2011.03248.x
