Approaches to governance of risks beyond first-tier suppliers

Deodat Mwesiumo, Bella Belerivana Nujen, Jens Gunnar Aspelund and Vetle Helland

International Journal of Procurement Management, 2022, vol. 15, issue 2, 160-181

Abstract: This paper explores approaches to governance of supply risks beyond first-tier suppliers and factors that contribute to a firm choosing a particular approach. A multiple-case design was deployed to compare and evaluate firms with diverse characteristics. Data collected from six firms were coded, categorised, and aggregated into a delineation framework. The framework identifies four dynamic approaches that procurement managers can apply in governance of supply risks beyond first-tier suppliers, namely control, cooperate, trust and neglect. The choice of each approach is due to particular antecedent factors such as focal firm's ability to influence a first-tier supplier, its capability to manage risks in lower tiers, the ability of the first-tier supplier to manage risks in lower tiers, and trust between the focal firm and their first-tier supplier. The paper argues that procurement managers should primarily aim for the cooperation approach.

Keywords: risk governance; first-tier suppliers; lower-tier suppliers; risks beyond first-tier suppliers; sub-suppliers; procurement management. (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijpman:v:15:y:2022:i:2:p:160-181

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