The use and abuse of power in supply chains.pdf

The use and abuse of power in supply chains.pdf - The Use...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
The Use and Abuse of Power in Supply Chains Charles L. Munson, Meir J. Rosenblatt, and Zehava Rosenblait T he ability of groups of companies to per- form the spectrum of supply functions more efficiently than one company alone has given rise to supply chains. As with any other type of multi-organizational network, the effec- tiveness of a supply chain depends to a large extent on the relationships among its members. But often one company in a chain may attempt to influence other members in order to achieve its own goals and promote its own interests. The organizationalpower theoretical frame- work we use to investigate such power-wielding has gained importance and relevance in research as interdependence among firms grows, caused in part by the tendency of some to shrink and become less integrated. As companies become smaller, they are more likely to externalize tasks, including supply functions (as exemplified by the increasing prevalence of outsourcing). This trend toward externalization increases inter-unit and interfirm dependence. Organizational studies have recognized the effect such interdependence has on network forms. In the case of supply chains, increased externalization results not only in dependence but also in a structural imbalance in the network position of individual members. Although firms in a supply chain depend on each other and work together for mutual benefit, the relationships among them are rarely symmetrical. Supply chains often have channel leaders or “channel captains” that may exert tremendous influence on the other firms in the chain. These strong companies have numerous opportunities to exploit their relative advantages, and their choices can have significant long-term consequences on the overall health of the supply chain. Organizational power is defined most simply as “potential force.” It is the ability to get things done, to achieve desired goals and outcomes. Power is exercised through corporate politics by using various tactics or political games, such as “alliance building,” that influ- ence opponents and build power bases. Early studies on the sources of power explored personal attributes (such as expert and referent power) and positional attributes (such as reward, coercive, and le- gitimate power). These no- tions of power were originally applied to key decision mak- ers and were later adopted to the organizational level of analysis. In a supply chain, for example, a company has expertpower if it maintains sole ownership of knowledge and expertise in the relevant content domain; it has referentpower if other decision makers in the chain perceive its man- agement as prestigious enough to publicly iden- tify themselves with. A firm has rewardpower if its management can help other channel members achieve their goals; with coercivepower, it can threaten other channel members. And a company with legitimatepower has a handle on a formal leverage, such as a monopoly on producing or selling a popular product.
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern