Global Supply Chain Management: Toward a Theoretically Driven Research Agenda

• Author: G. Tomas M. Hult,Brian L. Connelly,David J. Ketchen
• Date: 01 August 2013
• DOI: http://doi.org/10.1111/j.2042-5805.2013.01041.x
• Published date: 01 August 2013

GLOBAL SUPPLY CHAIN MANAGEMENT:

TOWARD A THEORETICALLY DRIVEN

RESEARCH AGENDA

BRIAN L. CONNELLY,1* DAVID J. KETCHEN,1and G. TOMAS M. HULT2

1Department of Management, College of Business, Auburn University,

Auburn, Alabama, U.S.A.

2International Business Center (CIBER), Michigan State University,

East Lansing, Michigan, U.S.A.

As competition becomes increasingly global in nature, the importance of global supply chain

management grows. Yet, research attention on this matter has been limited. We seek to offer a

strong foundation for future research on global supply chain management by examining it from

the perspectives of six prominent organizational theories that range in emphasis fromprimarily

endogenous to primarily exogenous influences. We, in turn, apply real options theory, inter-

nationalization theory, organizational economics, resource dependence theory, social network

theory, and institutional theory. We also examine the implications for global supply chain

management of juxtaposing the insights provided by multiple theories. Our hope is that the

ideas generated by applying these theories set the stage for subsequent theoretically robust

investigations of global supply chain management. Copyright © 2013 Strategic Management

Society.

INTRODUCTION

One way to cultivate a deeper understanding of a

concept is to examine the implications of important

theories for the concept. Building theory in this way

is valuable, in part, because doing so allows scholars

to describe a concept in vivid detail, explain its

importance, position it within the field of study, iden-

tify its implications for managers, and predict how it

affects and is affected by related phenomena and

ideas (Dubin, 1978; Kerlinger, 1986). Applying one

theory provides a basis to develop research ques-

tions, explore relationships, and create ideas that

describe, explain, and predict, but broader

approaches can offer even greater potential. Specifi-

cally, when a variety of theories—each of which

relies on a different set of assumptions—are applied

to a concept, the potential to generate useful insights

and new lines of inquiry increases substantially.

Scholars have leveraged this approach to expand our

framework for understanding such issues as logis-

tics, strategic sourcing, and supply chain manage-

ment (Hitt, 2011; Mentzer, Min, and Bobbitt, 2004;

Shook, Adams, and Ketchen, 2009).

Supply chain management, however, deserves

further attention because supply chains have been

transformed in recent years by the influence of glo-

balization. Supply chain management is the orches-

tration of units inside and outside a firm whose

activities collectively transform raw materials into

finished products and distribute them to customers

(Hult, Ketchen, and Arrfelt, 2007). The effects of

Keywords: supply chain; real options; transaction cost theory;

social networks; institutional theory

*Correspondence to: Brian L. Connelly, 402 Lowder Hall,

Auburn University, Auburn, AL 36849-5241, U.S.A. E-mail:

bconnelly@auburn.edu

Global Strategy Journal

Global Strat. J., 3: 227–243 (2013)

Published online in Wiley Online Library (wileyonlinelibrary.com). DOI: 10.1111/j.2042-5805.2013.01041.x

Copyright © 2013 Strategic Management Society

globalization have touched upon the complete range

of organizational activities and processes associated

with the flow of goods and services to end users

(Hult, 2004; Mudambi and Venzin, 2010). Virtually

every firm has been affected in important ways.

Tallman and Pedersen (2011: 2) note, ‘Simply put,

much of business and the environment of business

have become global in the last decade or two.’As the

importance of supply chains to competition and

success has grown (Ketchen and Hult, 2007a; Slone,

2004), an increasing number of executives havereal-

ized that the suppliers, partners, and customers with

the most potential to add value to their operations

may not be located within the same national borders

as their own firms. The amount of research devoted

to the global dimensions of supply chain manage-

ment, however, arguably has been small relative to

its practical significance.

As a result, the conceptual underpinnings of

global supply chain management remain underde-

veloped (Hult, 2004). Accordingly, the purpose of

this article is to generate new ways of thinking about

global supply chain management by examining the

concept within the context of multiple theories. Our

goal is to provide a broad foundation for theorizing

about global supply chain management and set the

stage for future research. For today’s firms, supply

chains can be a powerful competitive weapon. Some

observers even contend that competition is evolving

from an emphasis on firm versus firm rivalries into

battles that pit supply chain against supply chain

(Craighead, Hult, and Ketchen, 2009). Therefore, we

draw on a library of well-established organizational

theories, each of which views the issue through a

different strategic lens. This allows us to develop

multiple perspectives about what problems or

puzzles are most important in global supply chain

management, why they come about, and what firms

might do to solve them. We believe that the com-

bined insights that arise from multiple theoretical

lenses hold the potential of offering a more holistic

framework to guide knowledge creation about global

supply chains.

THEORIES APPLIED TO GLOBAL

SUPPLY CHAIN MANAGEMENT

The pendulum of organizational theory development

over the past few decades appears to have swung

back and forth between an emphasis on endogenous

forces on one side and exogenous forces on the other

(Hoskisson et al., 1999). Some theories, such as real

options theory and internationalization theory, gen-

erally begin their explication of organizational phe-

nomena by considering firm-level concepts. Real

options theory examines the implications of a firm’s

investments, and internationalization theory is

largely concerned with a wide range of firm charac-

teristics that determine where, when, and why firms

expand overseas. Other theories, such as institutional

theory and social network theory, begin their discus-

sion of organizational outcomes by highlighting the

influence of outside forces. The pillars of institu-

tional theory are the regulative, cognitive-cultural,

and normative pressures that act upon firms, and

social network theory is fundamentally about the

influence of firms to which a focal firm is connected.

Still others, such as organizational economics and

resource dependence theory, are more mid-range

theories that combine aspects of internal and exter-

nal influence. For example, these theories consider

individual and firm-level characteristics, but they

describe them in terms of the broader context—as a

nexus of contracts or a portfolio of dependencies.

We chose to explore the subject of global supply

chain management in view of the six theories listed

earlier (see Table 1) to intentionally capture a range

from those that are more internally focused to those

that emphasize environmental influences. In addi-

tion, we also sought to choose theories that are suf-

ficiently diverse with respect to their origins. Thus,

we consider some that have long been and remain

central players within knowledge development

efforts (e.g., organizational economics), others that

are growing in stature (e.g., real options theory), and

still others that serve to expand our thinking in new

ways (e.g., social network theory). In this respect,

our battery of theories captures perspectives that

have filled different roles within research on organi-

zations. Thus, our chosen set of theories collectively

provides a strong diversity of views.We leverage this

diversity of thought in order to lay a conceptual

foundation for subsequent theoretically robust inves-

tigations of global supply chain management.

Real options theory

As researchers examine the factors that contribute to

efficiency of global supply chains, an important con-

sideration is the firm’s balance between opportunity

and risk (Contractor, Woodley, and Piepenbrink,

2011). Traditional valuation techniques, such as net

present value (NPV) and discounted cash flow

228 B. L. Connelly et al.

Copyright © 2013 Strategic Management Society Global Strat. J., 3: 227–243 (2013)

DOI: 10.1111/j.2042-5805.2013.01041.x