Title: Approaches to governance of risks beyond first-tier suppliers

Authors: Deodat Mwesiumo; Bella Belerivana Nujen; Jens Gunnar Aspelund; Vetle Helland

Addresses: Faculty of Logistics, Molde University College, Molde, Norway ' Faculty of International Business, Norwegian University of Science and Technology, Ålesund, Norway ' Experis Ciber AS, 0561 Oslo, Norway ' DB Schenker, 0668 Oslo, Norway

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.

Keywords: risk governance; first-tier suppliers; lower-tier suppliers; risks beyond first-tier suppliers; sub-suppliers; procurement management.

DOI: 10.1504/IJPM.2022.121159

International Journal of Procurement Management, 2022 Vol.15 No.2, pp.160 - 181

Received: 07 Jun 2020
Accepted: 23 Aug 2020
Published online: 28 Feb 2022 *

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