Multi-principal collaboration and supplier’s compliance with codes-of-conduct

Abstract

Purpose

The purpose of this paper is to articulate propositions on how collaborating multi-national corporations (MNCs) can manage their supplier base in order to reduce the risk of suppliers’ non-compliance with shared codes-of-conduct.

Design/methodology/approach

The study utilises a conceptual theory development approach. In doing so, it utilises key tenets of agency theory that are applied in a multi-principal–supplier relationship context and synthesised in a series of propositions.

Findings

The study shows that MNCs have a variety of mechanisms for reducing the risk of suppliers’ non-compliance by decreasing information asymmetry, increasing their bargaining power and simultaneously use of both rewards/sanctions, and reputation-based safeguards.

Research limitations/implications

This is a conceptual theory development study, offering testable propositions, which have then to be empirically validated.

Practical implications

The study showcases that managers of MNCs who find themselves in relationships with non-compliant suppliers have at their disposal a variety of mechanisms to reduce the risk of suppliers’ non-compliance.

Originality/value

This is one of the first studies that explore suppliers’ non-compliance with codes-of-conduct at the level of a relationship, rather than a single firm. In this way it proposes a theoretical framework grounded in agency theory on managing relationships between multi-principal collaborators and their suppliers.

Citation

Delbufalo, E. and Bastl, M. (2018), "Multi-principal collaboration and supplier’s compliance with codes-of-conduct", The International Journal of Logistics Management, Vol. 29 No. 4, pp. 1237-1254. https://doi.org/10.1108/IJLM-09-2017-0222