Geopolitical disruptions and supply chain structural ambidexterity

Abstract

PurposeThis paper seeks insights into how multinational enterprises restructure their global supply chains to manage the uncertainty caused by geopolitical disruptions. To answer this question, we investigate three significant geopolitical disruptions: Brexit, the US-China trade war and the coronavirus disease 2019 (Covid-19) pandemic.Design/methodology/approachThe study uses an inductive theory-elaboration approach to build on Organisational Learning Theory and Dunning’s eclectic paradigm of international production. Twenty-nine expert interviews were conducted with senior supply chain executives across 14 multinational manufacturing firms. The analysis is validated by triangulating secondary data sources, including standard operating procedures, annual reports and organisational protocols.FindingsWe find that, when faced with significant geopolitical disruptions, companies develop and deploy supply chain structural ambidexterity in different ways. Specifically, during Covid-19, the US-China trade war and Brexit, companies developed and deployed three distinct types of supply chain structural ambidexterity through (1) partitioning internal subunits, (2) reconfiguring supplier networks and (3) creating parallel supply chains.Originality/valueThe findings contribute to Dunning’s eclectic paradigm by explaining how organisational ambidexterity is extended beyond firm boundaries and embedded in supply chains to mitigate uncertainty and gain exploration and exploitation benefits. During significant geopolitical disruptions, we find that managers make decisions in tight timeframes. Therefore, based on the transition time available, we propose three types of supply chain structural ambidexterity. We conclude with a managerial framework to assist firms in developing supply chain structural ambidexterity in response to geopolitical disruptions.