Risk management of manufacturing multinational corporations: the moderating effects of international asset dispersion and supply chain integration

Abstract

Purpose The purpose of this study is to investigate the contingencies of supply chain risk management (SCRM) in manufacturing multinational corporations (MNCs) by exploring the moderating role of international asset dispersion in the performance effect of SCRM, as well as the counteraction effect of supply chain integration (SCI). Design/methodology/approach Multi-country survey data from a sample of 378 responses collected by the sixth round International Manufacturing Strategy Survey were analyzed. Hierarchical regression analysis was conducted to test the proposed hypotheses. Findings The results demonstrate that SCRM improves the operational effectiveness of manufacturing MNCs but this performance effect is attenuated by international asset dispersion. Nevertheless, external integration can counteract the negative effect of international asset dispersion and ensure the efficacy of SCRM practices. Practical implications The results of this study provide suggestions for supply chain managers of manufacturing MNCs to better conduct SCRM practices under the condition of dispersed international assets. Besides, supply chain managers can leverage external integration to ensure the efficacy of SCRM practices. Originality/value Although there are plenty of studies on the relationship between SCRM and operational performance, prior findings are inconsistent. This study sheds light on the SCRM-operational performance relationship by considering how a manufacturing MNC’s international asset dispersion can influence the efficacy of SCRM practices and how SCI can attenuate the negative effect of international asset dispersion.

The role of collaborative interorganizational relationships in supply chain risks: a systematic review using a social capital perspective

“…The buyer-led practices of supplier development and supplier performance management enable risk visibility (Jüttner and Maklan, 2011; Manhart et al , 2020), which helps to contain supply risks’ propagation to downstream networks of buyers (Zhang et al , 2018). Supplier development can reduce disaster risks (Dahlmann and Roehrich, 2019; Hu et al , 2019; Sawyerr and Harrison, 2019) and mitigate supply risks (Chowdhury et al , 2019; Fan and Stevenson, 2018; Zhao et al , 2013), as it trains suppliers to be proactively aware of problems such as supply quality risks (Tse et al , 2019) or slave labor (Gold et al , 2015). The more supply, manufacturing and transportation risks increase, the more buyers’ SCRs awareness rises, which elevates supplier development (Jajja et al , 2018).…”

“…Joint planning is a cooperative capability used to plan and cope with environmental risks (Dubey et al , 2020; Jain et al , 2017), such as the weak rule of law (Wiengarten et al , 2016) but also supply risks (Bevilacqua et al , 2019; Chowdhury et al , 2019; Dubey et al , 2019; Hu et al , 2019; Lima et al , 2018; Manhart et al , 2020; Stone and Rahimifard, 2018) including lead time fluctuation, forecast inaccuracy and on-time delivery (Sinha et al , 2004). Joint planning enables stock pooling, which decreases supply and demand risks among partners (Cohen et al , 2000).…”

“…Strategic horizontal and vertical collaboration in decision-making are vital coordination factors that can alleviate SCRs such as Hurricane Katrina (Scholten et al , 2014) but also inflation, political instability, supply disruption and local food demand increase because of the Brexit constitutional changes (Hendry et al , 2019). Joint decision-making optimizes supplier-buyer alignment needed against disaster (Sawyerr and Harrison, 2019), customer’s demand variability (Zhao et al , 2013) and supply risks (Chowdhury et al , 2019; Dubey et al , 2019; Hu et al , 2019; Kalaitzi et al , 2019; Manhart et al , 2020; Zhao et al , 2013). In a simulation, Levalle and Nof (2015) discuss the practice of resilience by teaming based on joint decision-making where buyers select low-cost suppliers to make them work together to yield a higher combined quality of service.…”

“…Lack of transparency is an informational risk creating uncertainty between partners. Information sharing appeases this risk by facilitating communication and visibility (Brandon-Jones et al , 2014; Gunasekaran et al , 2015; Jain et al , 2017), which are used, for instance, against demand volatility, price erosion (Subramanian et al , 2015) or supply risks (Aboah et al , 2019; Bevilacqua et al , 2019; Chowdhury et al , 2019; Colicchia et al , 2019b; Dubey et al , 2019; Hu et al , 2019; Kalaitzi et al , 2019; Lima et al , 2018; Manhart et al , 2020; Stone and Rahimifard, 2018). Knowledge sharing has similar visibility effects, enabling the identification and mitigation of supply-side risks (Chen et al , 2016; Dabhilkar et al , 2016; Scholten and Schilder, 2015; Scholten et al , 2019; Tukamuhabwa et al , 2015) and political risks emanating from strife and economic hardships (Gölgeci and Kuivalainen, 2020).…”

Information-driven Supply Chain During a Catastrophic Event: COVID-19 Pandemic

“…The process is impacted by conditions in the pre-and post-disaster situations (Tierney, 2007). The evaluation of the process of the recovery is based on parameters that indicate objectivity and comparability (Shohei, 2007). The parameters-either qualitative or quantitative measures-should emerge from facts that are systematically observed (OECD, 2008) and that explain the features and evaluation of a phenomenon (Dopheide & Martinez, 2007).…”