Abstract
Globalisation, and its resultant complexity, has been called the most significant factor in the increase of supply chain risk. In this paper, we investigate the effects of supply base complexity that result from geographic dispersion and how that affects supply chain risk. Informed by several theories, an N-shaped theory for the relationship is hypothesised. A regression analysis that uses survey data from manufacturing firms operating in Finland is utilised to test the hypothesis. Contrary to our hypothesis, we find support for an inverse U-shaped association of supply base complexity due to geographic dispersion and the negative effects of supply risk. The possible causes of the result and how it can be reconciled with the N-shaped theory are discussed. Supply managers are advised to avoid international complexity creeping into supply and to engage in cross-functional discussion about the implications of supply base dispersion.
Original language | English |
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Pages (from-to) | 872-882 |
Number of pages | 11 |
Journal | International Business Review |
Volume | 25 |
Issue number | 4 |
DOIs | |
Publication status | Published - 1 Aug 2016 |
MoE publication type | A1 Journal article-refereed |
Keywords
- Complexity
- Geographic dispersion
- Global sourcing
- Internationalisation of supply
- Supply risk
- Survey