Multiple supply chain adoption under uncertainty

Abstract

Purpose

The spatial and psychological distance within agri-food chains provides both profit and risk for supply chain members. Grounded on the transaction cost economics (TCE) and institutional theory (IT), the purpose of this paper is to test whether the adoption of multiple supply chains (MSCs), which adopt both traditional and shortened supply chains, can be used to manage uncertainty and mitigate the risk associated with a supply chain.

Design/methodology/approach

In order to test the hypothesis, matched questionnaire surveys were developed to collect the data from farm managers and consumers. Completed questionnaires were received from 112 respondents. The hierarchical regression analysis was performed to test hypotheses.

Findings

The result shows the positive effects of environmental and behavioral uncertainties on MSC adoption and represents the diminished moderating effects of institutions (industrial and consumption tendency) on the relationship between uncertainties and MSA adoption.

Research limitations/implications

This study only explored producers and their recommended consumers; future studies can undertake questionnaire designs (one producer-to-many consumers) and empirical analyses with analytic hierarchy process theory to reexamine the hypotheses proposed in this study.

Practical implications

MSC adoption is a way to manage uncertainties resulting from spatial and psychological distance in the supply chain. Producers and consumers show their risk preferences by SC adoption after considering pre-constructed societal norms. Therefore, the consumers’ and producers’ choice of a supply chain reflects a process of communicating risk. The adoption of a mixed governance mode (MSC adoption) and accessing information about common practices are two ways to decrease such uncertainties.

Social implications

There are multiple goals (traceability, fairness, efficiency, well-being) in the food supply chain that may be satisfied by MSC adoption. Therefore, policymakers should understand the different values of various supply chains and facilitate the development of various supply chain modes.

Originality/value

This study integrated the undersocialized and oversocialized perspectives (TCE and IT) to understand how uncertainties of supply chains may be diminished. Based on these perspectives, it found that the adoption of the mixed governance mode and accessing of institutional information are two ways to decrease such uncertainties.

Citation

Liu, C.-Y. and Lee, C.-Y. (2019), "Multiple supply chain adoption under uncertainty", International Journal of Physical Distribution & Logistics Management, Vol. 49 No. 3, pp. 305-326. https://doi.org/10.1108/IJPDLM-10-2017-0312