Approaches to governance of risks beyond first-tier suppliers Online publication date: Mon, 28-Feb-2022
by Deodat Mwesiumo; Bella Belerivana Nujen; Jens Gunnar Aspelund; Vetle Helland
International Journal of Procurement Management (IJPM), Vol. 15, No. 2, 2022
Abstract: This paper explores approaches to governance of supply risks beyond first-tier suppliers and factors that contribute to a firm choosing a particular approach. A multiple-case design was deployed to compare and evaluate firms with diverse characteristics. Data collected from six firms were coded, categorised, and aggregated into a delineation framework. The framework identifies four dynamic approaches that procurement managers can apply in governance of supply risks beyond first-tier suppliers, namely control, cooperate, trust and neglect. The choice of each approach is due to particular antecedent factors such as focal firm's ability to influence a first-tier supplier, its capability to manage risks in lower tiers, the ability of the first-tier supplier to manage risks in lower tiers, and trust between the focal firm and their first-tier supplier. The paper argues that procurement managers should primarily aim for the cooperation approach.
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