Managing transaction risks in interdependent supply chains: an extended transaction cost economics perspective

M. Wever, P.M. Wognum, J.H. Trienekens, S.W.F. Omta

Research output: Contribution to journalArticleAcademicpeer-review

6 Citations (Scopus)

Abstract

The present study examines the management of transaction risks in supply chains. Risk management studies often ignore the wider supply chain context in which individual transactions take place. However, risk management strategies which are suitable to use when only a single transaction is considered may be inappropriate when other transactions in the supply chain are taken into account. This study addresses this issue by examining: (1) how risks arise as a result of interdependencies between the various transactions making up the supply chain; and (2) what types of contractual-based strategies actors can use to manage their risk exposure. To realize these aims, the study applies an extended Transaction Cost Economics (TCE) framework with a supply chain orientation. The framework illustrates how different types of interdependencies – pooled, sequential and reciprocal – expose companies to different sources of risk. Three strategies companies can use when facing barriers to risk minimization in sequentially interdependent supply chains are analyzed: risk transferring, risk altering and risk sharing. Examples from the agri-food sector are discussed to demonstrate the functioning of these strategies.
Original languageEnglish
Pages (from-to)243-260
JournalJournal on Chain and Network Science
Volume12
Issue number3
DOIs
Publication statusPublished - 2012

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