Purpose -This paper seeks to identify the up-stream supply chain member's (manufacturers, suppliers, supplier's service providers) characteristics, economics, dynamic capabilities, technology and institutional perspectives of risk in relationship to develop a trust building model through risk evaluation and to address the issue: should a supply chain member strive to build the trust or strive to reduce the risk with its members and from which perspectives? Design/methodology/approach -A conceptual framework was developed considering five key perspectives (characteristics, economics, dynamic capabilities, technology and institutions) to evaluate the member's risk in relationship and derived the hypothesis from the framework. A survey was conducted in UAE packaged food industry upstream supply chain covering senior managers of 102 companies. Data were analysed using multiple regression analyses through SPSS. The selected supply chain members of this industry include packaged food products companies as manufacturers, packaging material converters as suppliers of packaging material to manufacturers and packaging raw material suppliers as supplier's suppliers of manufacturer. Findings -From the survey results it is found that characteristic and institutional risk perspectives influence significantly to initiate a trustworthy relationship. Economics, dynamic capabilities and technology risk perspectives play a significant role to maintain trust in relationship. No perspective of members is found to be significantly risk-free. Research limitations/implications -This study has identified the perspectives of risk that can initiate and build trust between supply chain members in the context of a global business environment with a strong institutional system. Further research is required to identify the supply chain member's riskworthy characteristics, threshold levels of risk bearing capacity and the extent to which the institutions can reduce the membership risk to build trust. Practical implications -The study results suggest that the supply chain members should strive to reduce the membership risk levels to build trust rather than striving to build trust to reduce the risk. As long as a member's risk levels are within their bearable limits trust can be considered as a risk coping mechanism and when the risk levels exceed their bearable limits the subject of trust turns into risk management/security management. Originality/value -This study may be one of the first to develop a trust building model through a risk evaluation process and also one of the first to study the trust in supply chain member's relationship in UAE. Findings from this research should prove useful to management researchers and practitioners.
Purpose -The purpose of this paper is to understand what breaks trust in a customer supplier relationship and how to repair it. Design/methodology/approach -The approach takes a single case study to test the established theories on trust. It captures the circumstances and conditions of everyday situation in business and it is a longitudinal study covering three years' experience of two organisations in business. Findings -The important findings of this case study are that knowledge, level of risk and level of risk tolerance of customers/suppliers are the main causes of trust break down. Though the research on trust focus on partner's characteristics such as benevolence, honesty, reliability, credibility, integrity, contracts, agreements etc., in the context of B2B relationship these perspectives can only help the partners in evaluating the other partner as trust worthy. Once the partners engage in the relationship the orientation will change towards perspectives of rational risk. If the risk level exceeds their bearable limits, trust will break. Trust repair depends on the convincing power of the trustees, and how and why the trustor should bear the uncertainty or risk involved in the relationship. Research limitations/implications -With its focus on two business partners this case cannot be generalised to all business settings. However, the in-depth analysis stimulates further research on how trust may break between partners and how and who (trustor/trustee) should initiate trust repair process. Practical implications -Practicing managers and research scholars can use this case in trust building process in customer supplier relationship. Originality/value -The paper presents a case that is original.
Performance has been defined variously by researchers. One of the shortest and precise definition is offered by European Foundation for Quality Management in their EFQM Award Guidelines as "A measure of attainment achieved by an individual, team, organization, or a process." Neely ('Performance Measurement: Why, and How', Economist Books, London, 1998) explains it in a more detailed manner as 'an effective performance measurement system enables informed decisions to be made and actions to be taken because it quantifies the efficiency and effectiveness of past actions through acquisition, collection, sorting, analysis, interpretation, and dissemination of appropriate data.' Business Performance Measurement thus is fundamental to the process of management. In the ultimate analysis, performance measurement becomes an important tool for self assessment. It helps creating commitment and motivation across the organization to realize common goals. The process of evaluation of the performance assists the executives to identify the gaps between the actual performance and the targeted course; to assist the organization to formulate a proper strategy to bridge the gaps and to evolve plans for the redeployment of resources and positioning of initiatives. Any plan for improvements can result only from the measurement of performance. Performance measures and strategy go together; a non-alignment would result in wrong deployment of resources and a total chaos. The performance measurement scene over the decades has been dominated by the financial measures, accounting systems and financial ratios. In an economic environment when the supply was lagging demand, the organizations concerned themselves with only a single objective of focusing on maximizing the bottom line. The planning for the cash flow, high profitability, concern to use the assets and concentration to maximize returns on investment, earning per share, and dividends became the only legitimate objectives for an organization. In later years, market capitalization, market value added (MVA), economic value added (EVA) were included in the list of measures. However, it became increasingly recognized that financial measures were no doubt important, but only offered a postm0rtem exercise and provided limited information on performance of the future. It lacked to provide guidelines against an all important objective of achieving improvement and understanding 'how well the organization was performing against goals of satisfaction to stakeholders'. The researchers came up with alternative measures ofbusiness performance.Kaplan and Norton through their 'Balanced Scorecard' elaborated on the strategy management system in their first book 'The Balanced Scorecard: Translating Strategy into Action'. The authors introduced four perspectives of Shareholders, Customers, Internal Processes and Innovation, and Learning. The concept virtually brought revolution in thought process on performance measurement. It became an instant hit giving birth to a variety of other approaches. As a ma...
Purpose -Capitalism as a concept is founded on "free economy" guided by a free price system and free access to markets. Many of the ills facing present day society such as unemployment, poverty, rising disparities of income, malnutrition, high polluted environment are getting increasingly linked to this corporate philosophy. Alternatives such as social business enterprises have been suggested and practiced by some of the enlightened entrepreneurs. This paper examines the tenets of social business, which advocates enhancing values to society, and the social benefit to all the stakeholders. Design/methodology/approach -This is an exploratory study and presents the origin, the rationale of the development of the strategic business model and its implementation. The model, based on the philosophy of social business, has been developed and practiced by Grameen Danone Foods Limited. The study has been conducted entirely on the basis of information and data available in the public domain. Findings -The findings show an encouraging contribution towards enhancing social benefits to society. These are visible in meeting the needs of the children suffering from malnutrition, in the generation of employment and providing a rare dignity to the poor of the poorest. The shortfall in business results is traced to missing economy of scale of operations. Originality/value -Social business is a new and a bold concept. It has faced many hurdles in its journey to meet objectives. The solutions it has discovered are sure to benefit many researchers, entrepreneurs, social-welfare oriented societies, non-profit organizations, national planners, regulators and society-leaders.
Clusters evolve as a mechanism to gain competitive advantage, when industrial units come together to share knowledge and supplement each other in enhancing strengths. The phenomenon of clustering is known to have created a high degree of networking, a market focus, an ambiance of high productivity, excellence, development of skills and creativity. These in turn can lead a firm to technological innovation and its applications. Large customers prefer to source from clusters which have developed networking to meet the challenges of high demand. A high rate of success of SMEs in India, Pakistan and Sri Lanka can be traced in part to clusters. Some of these clusters arc quite large responsible for a substantial share of production. The paper takes up several perspectives discussing the evolution and the growth of the clusters, their spread in the three countries and how these have helped in the development of SMEs. Keywords: small and mediu
Purpose -This paper aims to analyse as to how the benefits to Tsunami affected small industry were misplaced and carried wrong priorities. Besides the support provided was insufficient for an effective recovery. There existed many governance-related problems. Overall recovery was at a low figure of 64.8 percent. The occurrence of the natural disaster of this high magnitude leaves a trail of lessons to be learnt by both the government agencies and also the donor community. There was no shortage of either the funds or the commodities, but it was sadly the governance and the sensitivity to the suffering of the people. Design/methodology/approach -The study employed the proven methodologies of a survey of available literature, web sites, and publications to obtain secondary data and information on industry especially the micro and SMEs in areas of disaster damage occurred because of Tsunami. The second methodology of research is in areas of collection of data on industry at national level and categorization for selection of sample size. Interviews formed an important source of information. Interviews were conducted with relevant stakeholders conducting various rehabilitation and re-establishment programmes. Findings -Micro and SMEs are important for economic development of Sri Lanka. These carry a strategic importance to generate employment. As such rehabilitation of industry affected by Tsunami is vital. Tsunami could have been used by the government, development agencies and donors as opportunity for rebuilding on modern lines. The main damage was caused to the plant and machinery. A right expenditure should have been in the direction of procurement of tools, equipment and machinery for the affected units. Unfortunately the help could not be organized to reach the right industry, in right quantity, and right way. Surprisingly, it was not because of shortage of funds. Originality/value -The present case leaves lessons for development agencies, government departments and welfare associations. No such extensive study seems to have carried out.Special thanks are extended to T. Kasun, M. Manukantha, M. Deleepa and K. Kanthi for their research assistance and several officers of Industrial Development Board, Disaster Management Centre and others in Southern Lanka for their support.
The automobile industry is a major contributor to India’s economy. The Indian automobile manufacturers face stiff international competition in the wake of all major US and European car manufacturers entering the Indian market. In the contemporary scenario, supply chain management practices can be adopted to improve operational efficiency and profits. This paper presents the current status of Indian automotive supply chains. For this, data was collected by conducting a nationwide survey. The paper highlights some major problems plaguing the Indian automotive supply chains and finally, presents some recommendations that are potentially useful to bring Indian automotive supply chains at par with global industry leaders.
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