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Agency theory and supply chain management: a structured literature review

Sajad Fayezi (School of Management and Marketing, Deakin University, Melbourne, Australia)
Andrew O'Loughlin (School of Management and Marketing, Deakin University, Melbourne, Australia)
Ambika Zutshi (School of Management and Marketing, Deakin University, Melbourne, Australia)

Supply Chain Management

ISSN: 1359-8546

Article publication date: 3 August 2012

Abstract

Purpose

The paper aims to explain how agency theory can be used to inform our understanding of the dynamics surrounding supply chain behaviours and relationships.

Design/methodology/approach

A structured review of the literature using a three‐stage refinement process is used. The articles were sourced through online databases and keyword classifications, such as “agency theory”, “principal‐agent relationships” and “supply chain management”. The search initially identified over 86 articles. After further screening these were reduced to 19 for final assessment and comparison.

Findings

Despite agency theory's prevailing descriptive and predictive qualities there is scarcity in its application to the SCM discipline. The authors posit that agency theory provides valuable insights for relationship engineering within supply chains where social, political, legal and behavioural dynamics dominate.

Practical implications

It is a critical task for managers to understand and mitigate abnormal behaviours across the supply chain. Agency theory serves this need by providing them with a useful tool to respond to transaction cost dilemmas through contractual and non‐contractual remedies.

Originality/value

This is one of the first studies that examines the current state of agency theory application in the SCM literature and suggests potential avenues for future research.

Keywords

Citation

Fayezi, S., O'Loughlin, A. and Zutshi, A. (2012), "Agency theory and supply chain management: a structured literature review", Supply Chain Management, Vol. 17 No. 5, pp. 556-570. https://doi.org/10.1108/13598541211258618

Publisher

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Emerald Group Publishing Limited

Copyright © 2012, Emerald Group Publishing Limited