Document Type

Article

Language

eng

Publication Date

6-2018

Publisher

Emerald

Source Publication

International Journal of Logistics Management

Source ISSN

0957-4093

Abstract

Purpose

The purpose of this paper is to articulate propositions on how collaborating multi-national corporations (MNCs) can manage their supplier base in order to reduce the risk of suppliers’ non-compliance with shared codes-of-conduct.

Design/methodology/approach

The study utilises a conceptual theory development approach. In doing so, it utilises key tenets of agency theory that are applied in a multi-principal–supplier relationship context and synthesised in a series of propositions.

Findings

The study shows that MNCs have a variety of mechanisms for reducing the risk of suppliers’ non-compliance by decreasing information asymmetry, increasing their bargaining power and simultaneously use of both rewards/sanctions, and reputation-based safeguards.

Research limitations/implications

This is a conceptual theory development study, offering testable propositions, which have then to be empirically validated.

Practical implications

The study showcases that managers of MNCs who find themselves in relationships with non-compliant suppliers have at their disposal a variety of mechanisms to reduce the risk of suppliers’ non-compliance.

Originality/value

This is one of the first studies that explore suppliers’ non-compliance with codes-of-conduct at the level of a relationship, rather than a single firm. In this way it proposes a theoretical framework grounded in agency theory on managing relationships between multi-principal collaborators and their suppliers.

Comments

Accepted version. International Journal of Logistics Management, Vol. 29, No. 4 (June 2018): 1237-1254. DOI. © 2018 Emerald. Used with permission.

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