Theorizing the governance of direct and indirect transactions in multi‐tier supply chains

Sangho Chae, Thomas Y. Choi and Glenn Hoetker

Journal of Supply Chain Management, 2024, vol. 60, issue 2, 3-21

Abstract: An outsourcing decision does not equate to the outsourcing of a sourcing decision. Many indirect transactions with lower tier suppliers are embedded in transactions with first‐tier suppliers. Building on the identification of a transaction as the fundamental unit of analysis, this study proposes that transactions comprise bundles of intertwined direct transactions at the firm level and indirect transactions at the supply chain level. These indirect transactions require separate but not independent sourcing decisions. Using a buyer's decision to control or delegate the governance of indirect transactions for an externally sourced product, this study demonstrates that disaggregating the transaction advances theory by extending the range of outcomes, refining the calculus of the make‐or‐buy decision, and providing a coherent theoretical framework for multi‐tier supply chain management. This study considers the theoretical, managerial, and societal implications across various contingencies involving inter‐firm relationships.

Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/jscm.12318

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:jscmgt:v:60:y:2024:i:2:p:3-21

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1523-2409

Access Statistics for this article

Journal of Supply Chain Management is currently edited by Lisa Ellram, Craig Carter and Chad Autry

More articles in Journal of Supply Chain Management from Institute for Supply Management
Bibliographic data for series maintained by Wiley Content Delivery ().