Understanding Supply Chain Collaboration and Risk Management

Social network theory is an appropriate theory for understanding the relationships among the different parties in the supply chain. This article adopts the conceptual-theory framework to introduce arm's-length and close ties concepts into the field of supply chain risk management. The theoretical paradigm of social network theory is used to develop a framework and propositions for future empirical studies. Specifically, this conceptual article uses the idea of the social network theory to propose the need for firms to incorporate both the close and arm's-length ties in their supply chains. This approach of combining the two forms of ties as a composite tie within a supply chain could serve as an important supply chain risk management tool in relation to supply chain disruption and its mitigation, because of the synergistic benefits.