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Managing supply chain uncertainty with emerging ethical issues

Elliot Simangunsong (Department of Operations and Supply Chain Management, Prasetiya Mulya Business School, Jakarta, Indonesia)
Linda C. Hendry (Department of Management Science, Lancaster University, Lancaster, UK)
Mark Stevenson (Department of Management Science, Lancaster University, Lancaster, UK)

International Journal of Operations & Production Management

ISSN: 0144-3577

Article publication date: 3 October 2016

Abstract

Purpose

The purpose of this paper is to empirically investigate effective management strategies for 14 sources of supply chain uncertainty, with a particular emphasis on uncertainties or strategies that involve ethical issues.

Design/methodology/approach

Manufacturing strategy theory, underpinned by alignment and contingency theory, is used as the theoretical foundation. Multi-case study data are collected from 12 companies in the Indonesian food industry, including four focal manufacturers, four first-tier suppliers, and four first-tier customers (retailers).

Findings

Within the context of appropriately aligned management strategies to address 14 sources of uncertainty, three ethical issues are empirically identified: first, collusion amongst suppliers to ration supplies and increase prices; second, unethical influences on government policy; and third, “abuse” of power by large retailers at the expense of smaller competitors. Joint purchasing is argued to be a key strategy for combatting the first of these ethical issues.

Research limitations/implications

The study is limited to the Indonesian food industry, and so further research is needed in other cultures/contexts.

Practical implications

Management strategies that aim to reduce an uncertainty at its source lead to better overall supply chain performance than strategies that merely cope with uncertainty, which only have an impact on firm-level performance.

Social implications

The ethical issues identified have implications for fair negotiations between customers and suppliers.

Originality/value

This study is unique in its in-depth case study-based empirical investigation of the management of multiple supply chain uncertainties; and in its discussion of ethical issues in this context.

Keywords

Citation

Simangunsong, E., Hendry, L.C. and Stevenson, M. (2016), "Managing supply chain uncertainty with emerging ethical issues", International Journal of Operations & Production Management, Vol. 36 No. 10, pp. 1272-1307. https://doi.org/10.1108/IJOPM-12-2014-0599

Publisher

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Emerald Group Publishing Limited

Copyright © 2016, Emerald Group Publishing Limited