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A conceptual framework for supply chain governance: An application to agri-food chains in China

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  • Xiaoyong Zhang
  • Lusine H. Aramyan
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    Abstract

    Purpose – Chinese agri-food chains consist of the millions of small scale farmers, who are not well structured and organized in the supply chain. Owing to market liberalization and globalization, one of the most challenging issues along agri-food chains in China is becoming the issue of how to link these small-scale farmers into the modern chains. Consequently, it is essential for both policy makers and private sectors to understand the governance structure in agri-food supply chains. Therefore, the purpose of this paper is to develop a theoretical framework for supply chain governance, including its antecedents and consequences, as well as a series of hypotheses for empirical testing. Design/methodology/approach – A conceptual framework of chain governance is proposed in this study, where governance structure consists of two dimensions: contractual governance and relational governance. The study intends to propose a complementary relationship between contracts and relational aspects, such as trust, in the Chinese context. Future research is needed to empirically test this model. Findings – The proposed conceptual model is unique, since the majority of the articles addressing this topic focuses on contract farming while limited research touches upon the issues of trust and relations. However, a combination of both contracting and relationships are seldom addressed. Originality/value – This paper evaluates a novel concept of two dimensional governance structure in the agri-food supply chain, where transaction cost economics theory and relational theory are combined to study the governance relationships between small scale producers in China and their buyers.

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    Bibliographic Info

    Article provided by Emerald Group Publishing in its journal China Agricultural Economic Review.

    Volume (Year): 1 (2009)
    Issue (Month): 2 (May)
    Pages: 136-154

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    Handle: RePEc:eme:caerpp:v:1:y:2009:i:2:p:136-154

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    Web page: http://www.emeraldinsight.com

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    Postal: Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK
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    Related research

    Keywords: Agriculture; China; Farms; Supply chain management;

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    References

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    1. Allen, Douglas & Lueck, Dean, 1992. "Contract Choice in Modern Agriculture: Cash Rent versus Cropshare," Journal of Law and Economics, University of Chicago Press, vol. 35(2), pages 397-426, October.
    2. Perry, Martin K., 1989. "Vertical integration: Determinants and effects," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 1, chapter 4, pages 183-255 Elsevier.
    3. Sartorius, Kurt & Kirsten, Johann, 2007. "A framework to facilitate institutional arrangements for smallholder supply in developing countries: An agribusiness perspective," Food Policy, Elsevier, vol. 32(5-6), pages 640-655.
    4. Peterson, H. Christopher & Wysocki, Allen F. & Harsh, Stephen B., 2001. "Strategic Choice Along The Vertical Coordination Continuum," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IAMA), vol. 4(02).
    5. Dave D. Weatherspoon & Thomas Reardon, 2003. "The Rise of Supermarkets in Africa: Implications for Agrifood Systems and the Rural Poor," Development Policy Review, Overseas Development Institute, vol. 21, pages 333-355, 05.
    6. Klein, Benjamin, 1980. "Transaction Cost Determinants of "Unfair" Contractual Arrangements," American Economic Review, American Economic Association, vol. 70(2), pages 356-62, May.
    7. Dennis R. Henderson, 1994. "Measuring and Assessing Vertical Ties in the Agro-food System," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 42(4), pages 549-560, December.
    8. Porter, Gina & Phillips-Howard[malt], Kevin, 1997. "Comparing contracts: An evaluation of contract farming schemes in Africa," World Development, Elsevier, vol. 25(2), pages 227-238, February.
    9. Han, Jiqin & Omta, S.W.F. (Onno) & Trienekens, Jacques H., 2007. "The Joint Impact of Supply Chain Integration and Quality Management on the Performance of Pork Processing Firms in China," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IAMA), vol. 10(02).
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    Cited by:
    1. Leat, Philip M.K. & Lamprinopoulou-Kranis, Chrysa & Revoredo-Giha, Cesar & Kupiec-Teahan, Beata, 2011. "Agri-food supply chains and sustainability-related issues: evidence from across the Scottish agri-food economy," Working Papers 109424, Scottish Agricultural College, Land Economy Research Group.

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