The influence of global value chain governance on supply network resilience

Abstract

Purpose

Diversity – or having a range of different options – is an important part of being resilient. Yet research has not considered how diversity in terms of the governance relationship types that exist within a supply base or across a supply network relates to resilience. By drawing on a well-established global value chain (GVC) governance framework, this paper aims to investigate how different relationship governance types influence resilience at the dyadic and supply network level.

Design/methodology/approach

This research draws on 27 embedded cases of buyer-supplier relationships within a network, studied through 20 interviews in 11 organizations across four tiers of the Australian Defence Force supply network, including the end customer perspective, during and after a large-scale supply chain (SC) disruption. Analysis is conducted at the individual dyad and aggregated network levels.

Findings

At the dyadic buyer-supplier level, a variety of different resilience strategies and practices are used across the relationship governance types. Consequently, at the network level, relationships characterized by market and relational governance created more vulnerabilities during COVID-19 than hierarchical and modular governance relationships.

Originality/value

The GVC framework is extended to the SC domain, providing a deeper understanding of how GVC governance types in SC relationships relate to resilience strategies at the dyadic and network levels. Given that different governance relationships draw on different resilience strategies, diversity in governance relationships helps enhance overall resilience. Meanwhile, the findings show that resilience requires relational aspects to be considered alongside economic aspects of the GVC.