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Article
Publication date: 12 May 2021

Guillaume Carton and Julia Parigot

This paper aims to question the capacity of firms embedded in global value chains to manage their natural resources in a sustainable way. Thus, it offers guidelines for…

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119

Abstract

Purpose

This paper aims to question the capacity of firms embedded in global value chains to manage their natural resources in a sustainable way. Thus, it offers guidelines for more sustainable value chains.

Design/methodology/approach

While business strategies have focused on optimizing natural resource exploitation and on constructing global value chains to face sustainability issues, this study first explains why these strategies are not effective in preventing natural resource depletion. Second, it offers a model for anticipating resource depletion. The cut flower industry constitutes a central case to explain the model. Two other industry cases complement the demonstration.

Findings

To anticipate natural resource depletion and thus improve industry sustainability, firms must shift from the exploitation of endangered natural resources to the use of alternative local ones. This shift, however, encourages firms to reconstruct value chains and rethink how they create value within these new value chains. It also has an impact on firms’ growth strategy: they must replicate value chains on a local scale instead of taking part in global value chains.

Research limitations/implications

The findings rely on illustrations from the cut flower, fishing and textile fiber industries. Generalization to other industries may strengthen the argument.

Originality/value

This study offers a model of sustainable growth for firms willing to anticipate natural resource depletion by offering a shift in value chains. It consists of exploiting alternative natural resources and of rethinking the value offered to consumers. Thus, it goes against current models that merely focus on optimizing natural resource exploitation within global value chains.

Details

Journal of Business Strategy, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0275-6668

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Article
Publication date: 5 September 2008

Luciano Barin Cruz and Dirk Michael Boehe

The main purpose of this article is to identify some emergent issues when sustainability is introduced into global value chains. These issues deal with the conditions…

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6916

Abstract

Purpose

The main purpose of this article is to identify some emergent issues when sustainability is introduced into global value chains. These issues deal with the conditions under which a sustainable global value chain might gain international competitiveness.

Design/methodology/approach

An exploratory research was conducted, based on a case study. The main players of the JOBEK's Global Value Chain were identified and interviews were carried out with representatives of these players. A thematic content analysis was developed, supported by Atlas TI software, using interview data and documents.

Findings

Three main themes have emerged, which can be considered as underlying issues of an emerging concept that the authors call the “sustainable global value chain”. These are: bargaining power between the chain's players; a differentiation strategy along the global value chain; and a collaborative awareness‐building process along the global value chain.

Research limitations/implications

Although the findings result from a single case study, the characteristics of this case have allowed the authors to suggest an emergent concept for the field of international business: the concept of a sustainable global value chain. This has implications for the development of a new research field and for the introduction of some ethical concerns into this field.

Practical implications

Managers of organizations that participate in sustainable global value chains may consider the emerging concepts and their interrelationships as a guideline for strategic decision‐making. In particular, managers need to be aware of how the relationships between power balance, CSR product differentiation strategies and awareness building may influence the competitiveness of their sustainable global value chain.

Originality/value

The article proposes the emergence of a new concept that has important ethical implications for international business: the sustainable global value chain. The authors suggest that the further development of this new concept is likely to stimulate the development of an emergent research field.

Details

Management Decision, vol. 46 no. 8
Type: Research Article
ISSN: 0025-1747

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Book part
Publication date: 13 August 2014

Valentina De Marchi, Eleonora Di Maria and Stefano Ponte

This paper aims at enriching the literature on international business (IB) studies to include insights from Global Value Chain (GVC) analysis to better explain how MNCs…

Abstract

This paper aims at enriching the literature on international business (IB) studies to include insights from Global Value Chain (GVC) analysis to better explain how MNCs can orchestrate a global network organization. A first important contribution of the GVC literature is that it shifts the focus from single firms to their value chains, providing instruments to study how activities are split and organized among different firms at the industry level, and how MNCs can implement different governing mechanisms within a network-based setting. The GVC literature also highlights that retailers (as global buyers) often act as ‘lead firms’ in shaping the trajectories of global industries, while IB studies have so far focused predominantly on manufacturing firms. A fine-grained analysis of alternative forms of governance characterizing value chains can offer additional elements in explaining how MNCs can manage their network relationships in a global scenario. Finally, through their focus on upgrading, GVC studies suggest that knowledge flows and innovation dynamics taking place within value chains are as important as those taking place within the MNC’s organizational border. We conclude by arguing that these insights can help the IB literature to examine the challenges and opportunities MNCs face in engaging with suppliers and to explain the dynamic evolution of orchestrating global activities at the global level.

Details

Orchestration of the Global Network Organization
Type: Book
ISBN: 978-1-78350-953-9

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Article
Publication date: 21 June 2011

Yufeng Zhang and Mike Gregory

This paper aims to improve understanding of how to manage global network operations from an engineering perspective.

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4591

Abstract

Purpose

This paper aims to improve understanding of how to manage global network operations from an engineering perspective.

Design/methodology/approach

This research adopted a theory building approach based on case studies. Grounded in the existing literature, the theoretical framework was refined and enriched through nine in‐depth case studies in the industry sectors of aerospace, automotives, defence and electrics and electronics.

Findings

This paper demonstrates the main value creation mechanisms of global network operations along the engineering value chain. Typical organisational features to support the value creation mechanisms are captured, and the key issues in engineering network design and operations are presented with an overall framework.

Practical implications

Evidenced by a series of pilot applications, outputs of this research can help companies to improve the performance of their current engineering networks and design new engineering networks to better support their global businesses and customers in a systematic way.

Originality/value

Issues about the design and operations of global engineering networks (GEN) are poorly understood in the existing literature in contrast to their apparent importance in value creation and realisation. To address this knowledge gap, this paper introduces the concept of engineering value chain to highlight the potential of a value chain approach to the exploration of engineering activities in a complex business context. At the same time, it develops an overall framework for managing GEN along the engineering value chain. This improves our understanding of engineering in industrial value chains and extends the theoretical understanding of GEN through integrating the engineering network theories and the value chain concepts.

Details

International Journal of Operations & Production Management, vol. 31 no. 7
Type: Research Article
ISSN: 0144-3577

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Book part
Publication date: 16 July 2019

Ruth Yeoman and Milena Mueller Santos

Organizations are increasingly required to take up extended responsibilities for social and environmental outcomes, including in global value chains. To address these…

Abstract

Organizations are increasingly required to take up extended responsibilities for social and environmental outcomes, including in global value chains. To address these challenges, the organization must call upon stakeholders to engage, contribute, and innovate, and in turn, this requires the organization to have a stronger social basis for its relationships. An integrative model of global value chain management based on social cooperation shifts the focus from corporate reputation to value chain reputation, from a firm-centric view of corporate reputation to a multistakeholder conception of value chain reputation. This approach conceptualizes reputation as a dynamic and potentially vulnerable organizational feature which cannot always be managed by public relations but requires a more stable notion grounded in something more permanent in the organization’s character, history, and the quality of its relationships with stakeholders. We consider the prospects for attending to organizational integrity as a stabilizing force for its public reputation. Integrity may be adopted as a hypernorm for motivating stakeholders who share a concern for the organization’s reputation. Co-creating reputation depends upon a social bond of cooperation developed by stakeholders caring about the organization and in turn, the organization caring about its stakeholders. This socialized understanding of reputation-building is grounded in an ethic of care and manifested through joint purposes, boundary-crossing processes, collaboration practices, and a division of labor into which value chain members are integrated and brought into relation with one another. We propose a model of global value chain management that discusses organizational capabilities required for such an approach.

Details

Global Aspects of Reputation and Strategic Management
Type: Book
ISBN: 978-1-78754-314-0

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Article
Publication date: 2 August 2011

Liu Linqing, Tan Liwen and Ma Haiyan

Massive increases in international trade and investment extend industries beyond national borders, so states and enterprises have become the two critical players in the…

Abstract

Purpose

Massive increases in international trade and investment extend industries beyond national borders, so states and enterprises have become the two critical players in the boundary of industries. The purpose of this paper is to provide a new conceptual framework to analyze the role of states and enterprises in enhancing the industrial international competitiveness (IIC).

Design/methodology/approach

Being a research‐based paper, the topic is approached by theoretical analysis and conceptual development. The paper reviews IIC literature and argues for a rational study ICC in the context of global value chain. Next, the paper puts forward a two‐dimensional governance model and five typical governance systems of the industries of developing countries. Examples of typical governance system are given based the practice of Chinese industries, such as appeal, rare earths, automotive, etc.

Findings

This paper constructs an industrial two‐dimensional governance model of the developing countries in the context of global value chain based on the interaction between industry governance and market governance, and also presents five typical governance systems – free to market, public governance, industrial governance, joint governance and network governance. Different governance system reflects different roles of states and enterprises played in the global value chains and result in different IIC in the end.

Research limitations/implications

The limitation is based primarily on methodology. The two‐dimensional governance model provides target‐oriented guidance for foresting international competitiveness of different types of industries. Future studies should include more in‐depth case studies on different governance system.

Originality/value

The paper presents a framework of the industrial two‐dimensional governance model, which emphasizes the important role of both states and enterprise in the IIC in the context of global value chain.

Details

Nankai Business Review International, vol. 2 no. 3
Type: Research Article
ISSN: 2040-8749

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Article
Publication date: 4 December 2017

Weimu You, Asta Salmi and Katri Kauppi

This paper aims to analyze the roles that African suppliers play in global value chains and the strategies that foreign firms adopt to integrate African firms into their…

Abstract

Purpose

This paper aims to analyze the roles that African suppliers play in global value chains and the strategies that foreign firms adopt to integrate African firms into their supply chains.

Design/methodology/approach

The empirical research of this paper is based on a multiple case study and on interview data of foreign buyers and their entry into African supply markets: five Finnish companies and five Chinese companies were interviewed in 2014-2015.

Findings

The authors find that Finnish firms make relatively small investments and start sourcing operations on a small scale, whereas Chinese firms are running large infrastructural projects, relying on local sourcing. African firms typically only play modest roles with little value capture in the chain, supplying raw materials and simple products. The African infrastructural and cultural context makes it challenging for foreign firms to provide local suppliers with more strategic roles in their chains, thus hindering integration of local firms into global value chains.

Originality/value

This paper is one of the first to offer a comparison of Finnish (Western) and Chinese (other emerging economy) firms’ sourcing from Africa and provides understanding of the role of African suppliers in current value chains. The authors offer a qualitative exploration of why companies invest in African suppliers and of the scope of African presence in global value chains.

Details

critical perspectives on international business, vol. 14 no. 2/3
Type: Research Article
ISSN: 1742-2043

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Article
Publication date: 3 June 2014

Timo Seppälä, Martin Kenney and Jyrki Ali-Yrkkö

The purpose of this paper is to integrate the issue of transfer pricing and logistics costs to understand trade statistics and the operation of supply chains by using…

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2636

Abstract

Purpose

The purpose of this paper is to integrate the issue of transfer pricing and logistics costs to understand trade statistics and the operation of supply chains by using invoice-level data for a single globally sourced product of a multinational firm.Supply chains are central to understanding wealth creation and capture in an increasingly globalized production system. The increasing disaggregation and dispersal of supply chains is profoundly affecting the geographical distribution of value added, input costs and profits of multinational firms. This suggests that understanding supply chains and where the activities and accounting for these activities take place is crucial for understanding the causes and consequences of contemporary globalization.

Design/methodology/approach

By using a case study of a single product and invoice-level data, it was possible to capture the actual costs incurred by a firm using a relatively simple global supply chain. The authors show how corporate intra-firm transfer pricing determines which business unit and location captures profits. A single firm provided the core data in this paper, including product- and firm-level information on intermediate product prices and input costs for all internal transfers.

Findings

This paper advances interesting insights into trade in value added and shows that, though not often considered significant, transfer pricing is a critical issue for understanding the geographical distribution of value added. The authors conclude with some observations about the nature of global supply chains, the value of international trade statistics and a hidden advantage of an integrated firm operating on a global scale the ability to somewhat arbitrarily select the activities to which profits should be allocated. For nation states, as supply chains become more international and complex, critical measures, such as gross domestic product, worker productivity, etc., are becoming ever more imprecise. The economic geography of cost of inputs and profits continue to separate as multinational enterprises drive the disaggregation of value creation and value capture.

Research limitations/implications

The case study facilitates an understanding of complex supply chain issues, thereby extending and deepening findings from previous research. This case study of transfer pricing in supply chains will assist other scholars in better formulating testable propositions for their studies and sensitize them to the internal complexities corporate managers face when making operationalizing decisions.

Originality/value

The case study suggests that understanding the configuration of and accounting in supply chains is vital for accurately measuring any national economic statistics. This case study provides some bottom-up evidence that national accounts and international trade economics undertaken without a deep understanding of supply chain organization is likely to generate misleading results. The methodology of using invoice-level data can provide a more granular understanding of how supply chains are organized and where the value is added and captured. For practitioners, the data suggest that firms should think very carefully about which of their activities generate the most value, and value those accordingly.

Details

Supply Chain Management: An International Journal, vol. 19 no. 4
Type: Research Article
ISSN: 1359-8546

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Article
Publication date: 6 July 2015

Joonkoo Lee and Gary Gereffi

The purpose of this paper is to introduce the global value chain (GVC) approach to understand the relationship between multinational enterprises (MNEs) and the changing…

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3829

Abstract

Purpose

The purpose of this paper is to introduce the global value chain (GVC) approach to understand the relationship between multinational enterprises (MNEs) and the changing patterns of global trade, investment and production, and its impact on economic and social upgrading. It aims to illuminate how GVCs can advance our understanding about MNEs and rising power (RP) firms and their impact on economic and social upgrading in fragmented and dispersed global production systems.

Design/methodology/approach

The paper reviews the GVC literature focusing on two conceptual elements of the GVC approach, governance and upgrading, and highlights three key recent developments in GVCs: concentration, regionalization and synergistic governance.

Findings

The paper underscores the complicated role of GVCs in shaping economic and social upgrading for emerging economies, RP firms and developing country firms in general. Rising geographic and organizational concentration in GVCs leads to the uneven distribution of upgrading opportunities in favor of RP firms, and yet economic upgrading may be elusive even for the most established suppliers because of power asymmetry with global buyers. Shifting end markets and the regionalization of value chains can benefit RP firms by presenting alternative markets for upgrading. Yet, without further upgrading, such benefits may be achieved at the expense of social downgrading. Finally, the ineffectiveness of private standards to achieve social upgrading has led to calls for synergistic governance through the cooperation of private, public and social actors, both global and local.

Originality/value

The paper illuminates how the GVC approach and its key concepts can contribute to the critical international business and RP firms literature by examining the latest dynamics in GVCs and their impacts on economic and social development in developing countries.

Details

critical perspectives on international business, vol. 11 no. 3/4
Type: Research Article
ISSN: 1742-2043

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Book part
Publication date: 14 October 2015

Umair Shafi Choksy

The purpose of this research is to understand how power relations in global value chains (GVCs) shape the upgrading of offshoring service providers (OSPs). More…

Abstract

Purpose

The purpose of this research is to understand how power relations in global value chains (GVCs) shape the upgrading of offshoring service providers (OSPs). More specifically, the chapter addresses two questions: (1) How power asymmetry in GVC shapes the upgrading prospects for OSPs? and (2) How OSPs manage the power asymmetry in GVC and upgrade to a more favorable position?

Methodology/approach

The context for this study is the software value chain. Drawing upon relational economic geography and GVC literature, we build an analytical framework based on three conceptual building blocks: client power, upgrading, and upgrading practices. Based on the analytical framework and in-depth interviews, we design a case study of one OSP in the Pakistani software industry, referred to as OSP#A.

Findings

The findings reveal that GVCs exercise a high level of power on OSPs. This power is exercised through enforcing certain conditions to participate and coordinate in GVCs. However, it is found that OSP#A is not passive recipient of these demands. Instead, it actively manages the power asymmetry through building practices to adapt and collaborate in GVCs and attain relational proximity.

Originality/value

The chapter highlights the significance of upgrading practices and conceptualizing upgrading as a process of improving relational power in GVCs by attaining relational proximity.

Details

The Future of Global Organizing
Type: Book
ISBN: 978-1-78560-422-5

Keywords

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