Global supply chain risk management strategies - The current issue and full text archive of this journal is available at

Global supply chain risk management strategies - The...

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Global supply chain riskmanagement strategiesIla ManujDepartment of Marketing and Logistics, University of North Texas, Denton,Texas, USA, andJohn T. MentzerThe University of Tennessee, Knoxville, Tennessee, USAAbstractPurpose– Global supply chains are more risky than domestic supply chains due to numerous linksinterconnecting a wide network of firms. These links are prone to disruptions, bankruptcies,breakdowns, macroeconomic and political changes, and disasters leading to higher risks and makingrisk management difficult. The purpose of this paper is to explore the phenomenon of riskmanagement and risk management strategies in global supply chains.Design/methodology/approach– This paper is based on an extensive literature review and aqualitative study comprising 14 in-depth interviews and a focus group meeting with senior supplychain executives.Findings– The study provides insights into the applicability of six risk management strategies withrespect to environmental conditions and the role of three moderators.Research limitations/implications– The model is developed in a global manufacturing supplychain context. It should be tested in other contexts and with other methods to provide generalizability.The study takes a much needed step toward building a theory of risk management in global supplychains, which opens important future research directions.Practicalimplications– Thisresearchprovidesdirectiontomanagersforchoosingriskmanagement strategies based on the global supply chain environment. Moderators have practicalimplications for global supply chain managers.Originality/value– The paper addresses an identified gap in the literature for selecting riskmanagement strategies in global supply chains. It employs grounded theory, a methodologyappropriate for theory-building, to explore a phenomenon with an inadequate theoretical base.KeywordsRisk management, Supply chain management, International businessPaper typeResearch paperIntroductionGlobal supply chains are a source of competitive advantage. Global configurations offirms provide access to cheap labor and raw materials, better financing opportunities,larger product markets, arbitrage opportunities, and additional inducements offered byhost governments to attract foreign capital (AlHashim, 1980; Kogut and Kulatilaka,1994). However, coupled with these benefits that entice firms to go global are theuncertainties and consequent risks that managers face in global supply chains. AsBarry (2004) argues, “An enterprise may have lowest over-all costs in a stable worldenvironment, but may also have the highest level of risk – if any one of the multiplegating factors kink up an elongated global supply chain!”There is wide acknowledgement in the literature of the risks and uncertainties inglobal supply chains. Although risk management in multinational enterprises has beenThe current issue and full text archive of this journal is available atIJPDLM38,3192
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