Trust as an Organizing Principle
Organization Science
Association Between Supply Chain Glitches and Operating Performance
Management Science
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Many severe and costly supply network disruptions have been documented in the academic and business literatures, and the issue is receiving increased coverage and consideration by scholars and practitioners. It is widely acknowledged that recent trends in supply network management, such as greater global interconnectivity, make firms more susceptible to disruption risk than ever before. Further, research has demonstrated that firms are generally not able to quickly recover from the negative economic impacts associated with supply disruptions. Passive acceptance of disruptions is not a viable option; therefore, firms face a pressing need to develop superior disruption risk management capabilities. Supply network risk management has been defined as the management of external and supply network risk through a coordinated approach among supply network members to reduce vulnerability in the supply chain. Today's global manufacturing networks are complex socio-technical systems, which require socio-technical strategies for managing disruption risks. While the extant research heavily focuses on `hard' technical strategies such as second sourcing and inventory management, 'soft' socio strategies have received minimal attention. This chapter highlights socio factors such as relational closeness that are also crucial for supply partners to jointly resolve problems and contributes to the literature on disruption risk management by identifying associations between specific characteristics of relationships between partners, effective risk identification and joint problem resolution. Specifically, the chapter focuses on the dyadic relationships between a global manufacturing firm and its first tier suppliers. This dyad is the first key link in the supply network and the research conclusions may be applied to other dyadic links in the global network of suppliers.