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Approaches to governance of risks beyond first-tier suppliers

Author

Listed:
  • Deodat Mwesiumo
  • Bella Belerivana Nujen
  • Jens Gunnar Aspelund
  • Vetle Helland

Abstract

This paper explores approaches to governance of supply risks beyond first-tier suppliers and factors that contribute to a firm choosing a particular approach. A multiple-case design was deployed to compare and evaluate firms with diverse characteristics. Data collected from six firms were coded, categorised, and aggregated into a delineation framework. The framework identifies four dynamic approaches that procurement managers can apply in governance of supply risks beyond first-tier suppliers, namely control, cooperate, trust and neglect. The choice of each approach is due to particular antecedent factors such as focal firm's ability to influence a first-tier supplier, its capability to manage risks in lower tiers, the ability of the first-tier supplier to manage risks in lower tiers, and trust between the focal firm and their first-tier supplier. The paper argues that procurement managers should primarily aim for the cooperation approach.

Suggested Citation

  • Deodat Mwesiumo & Bella Belerivana Nujen & Jens Gunnar Aspelund & Vetle Helland, 2022. "Approaches to governance of risks beyond first-tier suppliers," International Journal of Procurement Management, Inderscience Enterprises Ltd, vol. 15(2), pages 160-181.
    • Handle: RePEc:ids:ijpman:v:15:y:2022:i:2:p:160-181
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